The UK May wheat futures price is up by £3 per tonne – its highest level since October 2011 – as the recent dry weather in South America takes its toll.

According to the HGCA’s latest market report: “Pre-Christmas economic uncertainty has been washed away as dry weather in South America heightens concern for developing crops.”

The report, published this week, said that little rain had been seen in parts of southern Brazil for up to 45 days, while Argentina had experienced a prolonged dry period.

From 16-30 December 2011, May 2012 LIFFE wheat in the UK gained £10 per tonne, to £154p/t and, at 1pm on 3 January, was up to £158p/t.

The HGCA said volatile currencies were expected in 2012, with the main players all trying to devalue to boost exports.

• In related news, the total UK wheat crop, from the 2011 harvest, was put at 15.257Mt, down 0.106Mt, according to Defra’s final UK crop production estimate, published on 22 December.