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

UK wheat prices have eased slightly over the past week with sterling continuing to be volatile.

Delivered premiums have also edged lower, as the two bioethanol plants appear to have bought significant volumes recently and have no immediate requirement for further cover in February and March.

Their absence from the market has a knock-on effect, not only in their natural supply area, but further south too.

Matif and Chicago futures markets have had a reasonably volatile week, due to a mix of fund short-covering, concerns over tensions between Russia and Ukraine, a number of international tenders and doubts about the availability of quality wheat in Europe.

There are no major weather scares at present, as adequate snow cover is present in vulnerable regions of the world.

Since 24 June, many traders have been talking about the currency inflation effect on today’s UK grain prices. The graph below shows a comparison between US wheat, US corn, French wheat, and UK wheat prices in US dollar terms since August 2014.

 In dollar terms, UK prices have traded in a very narrow range since June 2016, whilst in sterling terms, they have appreciated by £30+.