Exceptionally high cereal prices on the spot market are being underpinned by the lasting impact of the Covid pandemic and the recent a war in the breadbasket of Europe.

At the moment grain prices look to have steadied in the last week, with the November wheat futures sitting at £255/t to £265/t. The spot price at the moment which is being underpinned by the May futures market is sitting at £290/t to £312/t.

The highest price heard by The Scottish Farmer was £330/t for wheat out of a Scottish shed. Farmers are often able to receive a premium if they are close to the grain’s destination whether feed mill or distiller. As a result, many farmers as seeing their stored wheat this winter rise over £100/t since the grain was put into the shed.

Feed barley this week is around £290/t ex farm which is near double the price at the start of harvest last year.

But one part which has not moved is the malting barley contract premium which is still £20/t over the November wheat futures. Since so many farms are involved in multi year contracts, unpicking this fee is unlikely unless feed barley prices jump well above wheat futures. Currently farmers signing contracts for feed barley should expect around £245/t which is still £10/t below November wheat futures.

“We have never seen anything like this in the markets and we may never see it again” commented Duncan Warnock of JDW Agri. “The high prices at the moment are being pushed by global trends and local pressures. There are some farmers who are still sitting on grain and hoping for continued rise, but the majority has already been traded.”

How the market looks going forward is still very open. Markets and traders are responding following the war in Ukraine to try and establish if the crops will be sown and with what level of fertiliser. If it looks like significant levels of cereal and maize exports will come from Ukraine after harvest then some traders as expecting a £40/t drop in prices over night. However if the war drags on with a poor planting campaign and inability to harvest and export grains then continued price rises are expected.