David Sheppard, Gleadell’s managing director, comments on the wheat market

The picture has been the same for many weeks now, with too much wheat chasing limited demand. Added to the mix is the prospect of Argentina freeing up wheat for export, with its new government promising to slash export taxes. In addition, Brazilian feed wheat is being offered to Asia in Panamax vessels at lower prices than UK or French origin. Last season the UK was a main beneficiary of export business to Asia, so new competition in this direction is not welcome.

UK export activity has picked up recently but remains well behind the rate required to remove our surplus. A similar scenario is seen in the EU, Russia and most markedly in the USA.

Mild weather across much of the Northern hemisphere has left winter drilled crops in good condition but with almost zero snow cover. Therefore a sudden extreme cold snap could result in winter kill – especially in Russia and Ukraine. At present conditions remain mild and no immediate threat is seen.

The fall in sterling against the euro, following the European Central Bank’s announcements regarding deposit rates and quantitive easing, has given some nominal support to UK prices – but buyers don’t seem keen to follow slightly firmer futures markets.