UK: Malting barley, the No 1 cereal crop in Scotland, is again twice the value ruling last September
This year's Scottish cereal harvest is proceeding well, especially over the past few days when the weather has generally been favourable throughout most of the principal arable areas in Scotland.
Farmers certainly have something to smile about this year, with prices at or near to record levels. The Home Grown Cereals Authority in its latest weekly bulletin reported that a consignment of milling wheat delivered last week to Liverpool traded at Ј200 per tonne, though the more general level for bread making wheat is in the region of Ј185 per tonne, which is more than double the price available 12 months ago.
Malting barley, the No 1 cereal crop in Scotland, has also risen sharply in price, with top quality samples quoted close to Ј160 per tonne, which is again twice the value ruling last September.
Feed barley is currently trading at just under Ј130 per tonne-ex-farm. That will impact severely on the livestock sector.
There has been unprecedented pressure on futures markets all over the world with the London exchange seeing prices for what move up by Ј8 per tonne in one single day to a record high of Ј159 per tonne. The European futures also jumped by 10 (Ј6.80) to 236.50 per tonne for November. The largest market of all in Chicago soared by $20 (Ј10) to $266 per tonne for September. This latest rise in Chicago is being attributed to strong demand from Egypt and the Middle East.
The driver for this sudden surge in grain prices, most of which has occurred in the past month, is lower world supplies. The International Grains Council (IGC) has recently lowered its world wheat forecast for 2007-8 by seven million tonnes to 607 million tonnes. Global wheat demand, however, has also been revised downwards by three million tonnes to 614 million tonnes, which still means that demand will exceed supply.
The weather has been a major influence on the harvest, with the Canadian wheat crop forecast to be down by five million tonnes on the year to 20.3 million tonnes.
In Germany the latest prediction is that the wheat crop will be back from 22.4 million tonnes to 20.1 million tonnes. Reports from France also suggest that the harvest has been highly variable with maize yields down on the year.
However, there has been little change on the European futures market, with maize for November quoted at 230 per tonne. Large shipments of maize from Brazil are expected to fill the gap in the EU. However, world stocks of maize, at 96 million tonnes, will be at the lowest level since 1989.
World stocks of wheat have also been revised by the IGC to 111 million tonnes, which is the lowest since 1979. If next year's wheat harvest was to result in poor yields, then there is the prospect of a major crisis. Consumers now face the certainty of higher bread prices and increased costs for a wide range of foods.
30 August, 2007
