The news is better looking forward to next winter but before we get there, current high demand in the UK and logistical problems in South America mean it is very unlikely we will see any price reductions into the summer.
Recent weather in the main US wheat growing areas has helped their winter crops and should mean better seedbeds for spring crops. Things are looking up in Russia and the Ukraine too and so forward wheat prices have dropped. However, the UK wheat crop is unlikely to be much bigger than 2012 so we will still be a net importer which keeps domestic prices higher. The recent drop in value of the pound will also make imports dearer.
In Brazil the waiting time for ships to load is now 40-50 days so short term soya prices have risen despite good crop yields in South America. Longer term prices are still forecast to drop in anticipation of huge US production. Rape prices are not going to drop seriously until new crop in August thanks to current high demand whilst biofuel distillers prices are largely mirroring rape.
So in summary, there is potential good news a few months out and it may well get significantly better than it looks today but, equally, it would not take much for markets to rise, either. With most world agri commodity stocks relatively low we are on a knife edge with this summer’s weather determining which way the market goes.