Farmers who grew feed wheat last year may be doing better than those who went for a quality crop, with milling wheat losing its discount in many parts of Europe.

In Russia, the prices of feed and milling wheat are "almost the same", Andrei Sizov, managing director of Moscow-based consultancy Sovecon said.

"Feeds grain prices have done relatively batter than feed - we have seen pretty good dynamics for corn and feed wheat," Mr Sizov told Agrimoney.com.

In the UK, Jonathan Lane, trading manager at grain merchant Gleadell, noted a similar trend, which had helped drive the price of London feed wheat up some 7% over the last two weeks to £98.50 a tonne, its highest since early February.

"It's a strange, strange market. Very odd indeed," Mr Lane said,

Selling dries up

Mr Lane attributed the rise in London feed wheat in part to a dearth of selling by UK farmers, after a busier spell earlier in the month.

"It may be they are out top dressing, it may be they are off ski-ing, who knows," he said.

However, he also flagged a squeeze on feed wheat supplies from Ukraine, where many farmers had sold all but milling grain, for which they were holding out of a premium.

"But the milling wheat market is a completely different kettle of fish," Mr Lane said.

"Many farmers do not seem to have come to terms with the fact that what they think of as milling wheat is in fact chicken feed."

'Paying the price' 

Nonetheless, many traders in Russia, which unlike Ukraine produces mainly milling rather than feed wheat, had been caught out by the failure of prices to fall further, as many investors had forecast when global supplies are so large.

Some Russian exporters are paying up to $10 a tonne above market prices to cover commitments, and avoid being landed with heavy penalties for leaving vessels in port past timetabled dates.

"Some exporters preferred to keep stocks low, and they are paying the price for that," Mr Sizov said.

The squeezed could potentially raise wheat prices in European Russia, although gains looked likely to be capped by competition from Siberian grain which, while expensive to transport to Black Sea ports, had been falling in price.