Wheat Market Braces Itself

14/02/11 -- London wheat seems to be attempting to press on to new highs this week, judging on today's price action so far, but how much consumer interest in wheat will there be with May futures at GBP212/tonne?

Possibly not too much with summertime wheatfeed pellets offered at GBP150/tonne and falling. In fact 10% protein wheat is now GBP20-25/tonne dearer than 35% protein rapemeal and priced higher than just about every other ingredient in a compounder's ration barring 48% soya.

Export interest has slowed to a trickle, in fact there's more interest in buyers selling existing purchases back than booking fresh cargoes at these levels from what I am hearing.

The expected tightness in availability hasn't yet manifested itself in the physical market. It seems that there may be more people than you might think hanging onto wheat in anticipation of a making a last minute killing.

Meanwhile I fully expect feed demand from the livestock sector to fall off a cliff come May once current market levels are fully factored into finished feed prices.

When the only buyers are Tarquin and his paper-purchasing batty boy mates, it might be time to get out.