Irish grain traders look to increase storage to beat price rises

Irish Independent -- A number of merchants intend to significantly expand their grain-drying and storage operations this autumn rather than purchase the vast bulk of their stock off the combine.

In a move which reflects the current uncertainty and volatility in the market, merchants have told farmers that they will not get involved in the kind of "Dutch auctions" which characterised last year's harvest.

Where prices can't be agreed with farmers, compounders and traders have indicated that they will offer to contract-dry and store greater quantities of grain for growers. It is understood the move is motivated by the reluctance of merchants to commit to a harvest price in such a difficult market, and also by a desire from some growers to 'hedge' a quantity of grain until the trade settles later inthe year.

Meanwhile, the futures markets for wheat have settled over the last fortnight, with prices easing back from the high which followed the floods in the US midwest.

However, Matt Brazil of feed importers R&H Hall maintained that the uncertainty in the grain markets would continue right up to the end of the harvest at the very least.

He pointed out that, although 20pc of the European harvest had been cut, very little had been traded to date. "The market is balanced very delicately at the moment and weather conditions between now and the end of the harvest are going to have a huge bearing on how prices develop,"Mr Brazil said.

The recent poor weather has delayed the start of the Irish harvest. Farmers in Cork predict that it will be another week before the cutting of the winter barley crop gets under way.

Farmers in the south report very good crops of winter barley, with few farmers experiencing problems with disease. Crops of spring wheat and spring barley are also said to be progressing well inthe south.

However, spring barley crops in the northern half of the country are reported to be light, due to the drought in May.