UK wheat exporters are finally seeing signs of business picking up.
Falling grain prices and a weaker pound are making UK wheat more competitive, a turnaround from earlier in the season when sellers struggled to compete in a global market awash with grain. Shipments climbed to more than 250,000 metric tonnes in December, the highest in 10 months, according to customs data distributed Thursday by the Agriculture & Horticulture Development Board.
"We’ve definitely seen a bit of a pickup," Helen Plant, a senior analyst at the AHDB in Kenilworth, England, said by phone. "Competitiveness may have continued into January. We will see, but it’s a bit more promising."
Feed-wheat futures traded in London have tumbled to the lowest since 2010 after bumper harvests in the last two seasons left a grain surplus 24 per cent larger than last year, according to government estimates. Exports in December rose 12 per cent from a year earlier, bolstered by sales to Spain, Algeria, the Netherlands and Tunisia, customs data show.
The drop in prices widened the discount of British wheat relative to corn, which can be used as a substitute in livestock feed. May feed-wheat futures are €21.6 ($24.35) cheaper than June corn futures on Euronext in Paris, the cheapest ever for those contracts, according to Bloomberg calculations.
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