April is the crucial month for wheat prices

Next month’s UK weather will hugely affect wheat prices, currently hovering around £192/t, as rising prices drive farmers to devote more land to cultivation, according to one crop marketing expert.

A record world wheat crop of 642Mt (up 3% on 2007, against demand of 611Mt) is being forecast for 2008 by the International Grains Council (IGC), which deals in the global grain trade.

But this might be overly optimistic, claimed Alastair Dickie, director of crop marketing at the UK’s Home Grown Cereals Authority (HGCA), speaking at a conference for processors last week in London.

“It’s one thing to plant crop; it’s another to get a bit of help from upstairs,” said Dickie. “We feel the IGC may be a little bit optimistic.”

Dickie reckoned the figure could range between 589Mt and 643Mt, dependent on yields and weather, even though more wheat was being sown around the globe and EU farmers made use of ‘set-aside’ land for planting.

Wheat production in the UK would be up 3.3Mt over last year, he said. However, the 2007 crop at 13.14Mt was 1.67Mt lower than in 2006 and the quality poorer because of wet weather and lack of sunshine last July. Just 11% met high quality bread wheat specifications, compared to over 40% in 2006, said Dickie.

Dickie also warned of low levels of intervention stocks in the EU and a decline in quality of Group 3 biscuit wheat varieties in the UK. “There is a lot of fragility out there and a lot of analytical hurdles we must get through,” he said. “The next hurdle is to get dry weather in April.”