Vivergo could be set to reopen its doors in the UK, which could provide a boost in demand to support UK prices.
Global markets have been supported by dry weather across the US Plains.
And Russian prices have risen mainly due to logistical issues.
London May 2018 wheat futures closed on Thursday March 8 at £145.00 per tonne, a rise of £5.90 per tonne on the week.
Demand boost to support UK prices?
News filtered through earlier in the week that Vivergo was set to open its doors once again following several months of closure.
The news helped push old crop UK wheat prices a couple of pounds higher, in contrast to losses on Tuesday for wheat prices across the Channel.
While this ethanol plant is expected to operate at a reduced level for a period, and as we enter the final quarter of the season, the implications of its return for the domestic balance sheet may not be insignificant.
Perhaps 250,000 tonnes or more of additional wheat could need to be found in the old crop marketing season, from either domestic or foreign sources, perhaps bringing importance again to import parity calculations.
Looking ahead, basis levels are seen as a key indicator as Vivergo would need to compete with the strong demand pull of the compound feed industry, as well as from the other large ethanol plant, Ensus, in Teeside.
However, the plant’s reopening will again provide volumes of its byproduct to the market, something compounders will readily absorb to the detriment of grains.
Feed barley prices continued their relentless trajectory higher, supported by very robust demand, notably from the compound animal feed sector.
The discount of barley to feed grade wheat has all but vanished for many sellers, while rapeseed prices have weakened, making £300 a tonne hard to achieve for most farmers.
Rupert Somerscales, ODA
Matif finds support in global markets
Paris’s Matif wheat market has firmed since our last report, supported by rises in global markets, international tenders and gains in Russian wheat prices, mainly linked to logistical issues.
The return in earnest of winter conditions has disrupted and slowed Russian shipments. European Union markets took some comfort in becoming more competitively priced, especially in the more recent Saudi and Algerian tenders.
It is reported that German and Baltic wheat are likely to fulfil the Saudi business, while the recent rise in Argentinian prices should allow France to take the Algerian trade.
This more positive export outlook is much needed, with current shipments being more than 20% lower year-on-year.
However, reports of warmer temperatures, which should free-up Russian logistics, may point to the likelihood of increased Russian exports and potentially lower prices.
Much debate will now take place over the recent severe freeze and its impact, although most of the European and Black Sea crops have come through the winter in relatively good condition.
Increased inventories should provide a level of security against potential crop losses, both in the EU and Russia.
Although it is likely some damage has occurred, major crop losses over the past years have been more as a result of adverse summer weather, rather than winterkill issues.
For the wheat market to turn from a spike to a long-term bullish outlook, a major crop failure or two may be needed, which leaves weather and upcoming US spring plantings key factors to monitor.
David Woodland, Gleadell
UK consumers debating crop number
Funds currently hold a very similar long position to this time a year ago which was then reversed to a similar size short by early July.
Closer to home, the relationship between Paris rapeseed and Chicago soybean futures has narrowed, putting both commodities at a more normal relationship, with rapeseed now trading at a much smaller premium to soybeans.
Consumers of meals and oils have certainly been shopping around for the cheapest alternatives while rapeseed values were so high earlier in the season and this is being shown through ration compositions.
Moving forward, UK consumers will be debating the crop number and trying to work out if the UK is likely to be net long of old crop rapeseed at the end of the season - and whether a small increase in UK exports to the EU could tighten the situation in the coming months, or if imports from Australia keep a lid on things.
Cecilia Pryce, Openfield