Weather worries grow for cereals
Prices on international grain markets started to climb this week as the prolonged dry spell across Europe made investors extremely nervous about the effect this will have on crops.
The EU received only 25pc of its normal rainfall over the past two months and soil moisture levels are falling by up to 5mm a day. Wheat crops across Europe are said to be showing increasing signs of drought stress and the market has reacted strongly as a result, according to analysts at Britain's HGCA, the cereals and oilseeds division of the Agriculture and Horticulture Development Board.
"With stocks of wheat in Europe looking tight after a strong export programme this season, markets are very reactive to the growing conditions of crops," said one analyst.
Forecasts of little rain for the coming week have given rise to concern that grain crops in parts of Europe could start to mature early, to the detriment of potential yield and quality.
On the LIFFE market, May wheat traded briefly at a record of £220/t, after opening the week at £209/t, while November 2011 wheat traded at £179/t and November 2012 at £159/t.
The LIFFE was following European markets upwards as the nearby Paris MATIF wheat moved up to around €255.50/t and November 2011 MATIF wheat reached €226.75/t.
While Irish crops are not at a critical stage yet, growers are concerned that the continued dry spell will begin to affect crops in the ground.
Less than 13mm of rain has fallen since March 1 and rain will be needed soon to ensure good growth is maintained.