Grain prices continue to strengthen on the back of ever-decreasing output numbers for wheat and barley around the world. Futures and physical prices continue to react to the news that wheat production has been seriously affected by drought, especially in exporting countries. Global wheat production is now put at 721Mt, a 37Mt decrease year on year.

The strengthening in wheat prices has dragged maize prices up, but the prospects for a scarcity of maize is unlikely at the moment and this continues to provide a negative undertone in markets. That said, December MATIF wheat closed on Tuesday night at €204.25/t and this rose by another €3/t in early trading on Wednesday.

Oilseed rape prices also continue to rise as a result of reduced European production and rising soya bean prices. Logistics are also a factor.

Native grain prices are difficult to pin down, as most of the activity on the feed market is for straights. And buyers are slow to sell in a rising market.

It would seem that wheat deals are being done around €215 to €220/t, with barley generally €5/t lower. Some buyers are now offering over €185/t for green barley (20%) and local demand may drive this higher.

The recent rises are very evident in the UK, where delivered prices for feed wheat increased by £10/t last week and ex-farm wheat rose by £4.80 to £166/t, with ex-farm barley up £6.40 to £146/t.