Farming: Wheat prices dip after double good news

A COMBINATION of rain eventually getting through to the main grain growing areas of the United Kingdom, along with decisions by both the Ukrainian and Russian governments to lift cereal export restrictions later this summer, yesterday resulted in the November wheat futures slipping back £4.50 to £188.50 per tonne.

Within the UK, it is estimated that some 20 per cent of all cereal crops are affected by the dry weather and one crop in five has been classified as "severely affected" with resultant loss of yield.

Border's farmer and industry commentator Doug Niven said Scottish crops were "not too bad" although those on light land were thin and overall he expected wheat yields to be back.

Yesterday, ahead of a meeting between politicians, supermarket chiefs and farm leaders to discuss the effects of the early season drought, Defra released a breakdown of the acreage of wheat planted for this year's harvest showing a 1 per cent decrease on the previous year. On yield the latest estimates for wheat production in the United Kingdom predict a 12 per cent drop on the 2010 figures. Despite the arrival of some rain into the south of England, experts are already comparing the current year with 1976 when grain ripened early but the peas were thin and quality was poor.

Although Russian premier Vladimir Putin's announcement that the export ban will be lifted on 1 July did remove some of the bull trade in futures, some analysts reckoned the move had more to do with the forthcoming election in December in Russia.