In a report published last week, the HGCA said little rain had been seen in parts of southern Brazil for up to 45 days, while Argentina had had a prolonged dry period. Meanwhile, from 16-30 December, May 2012 LIFFE wheat prices in the UK rose by £10 per tonne, to £154p/t, but by 6 January had fallen back to £152.50p/t.
David Eudall, senior analyst, cereals and oil seeds, HGCA, told British Baker the main impact on the UK wheat price was coming from the maize and soya bean crops in South America. "A little rain is forecast for this week, but then it is due to return to hot, dry weather," said Eudall. "These crops are moving through their key growth period, so it's uncertain what the end yield will be."
He said quite a lot of damage had already been done to the Brazilian and Argentinian crops, but that the Argentinian crop developed slightly later, so had more chance of recovery if the rain came. He said this had the potential to affect UK wheat prices on a long-term basis. "For bakers and millers, the key is to monitor what's happening in the global market and set steps to manage that price risk," he added.