Briefs: U.K. wheat yields lowest in a quarter-century

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London / reuters Wheat yields in Britain this year have been the lowest since the late 1980s.

The National Farmers Union estimates the U.K. wheat harvest at 13.25 million tonnes, with a yield of 6.7 tonnes per hectare, down from five-year averages of 14.92 million and 7.8 tonnes respectively.

“This is something not seen in the U.K. since the late 1980s,” said NFU crops adviser Guy Gagen.

High levels of disease and a lack of sunshine during the key grain fill period are being blamed for the drop.

The NFU forecast the U.K. rapeseed crop would total 2.8 million tonnes, 25 per cent higher than the five-year average.

Futures market signalling to sell sooner: AARD specialist

The market may be signalling farmers not to hold grain this winter, says David Wong, market specialist with Alberta Agriculture and Rural Development.

In an Agri-News release, Wong says that in most years of normal harvest, nearby futures prices are lower than those for deferred months.

“This is normal, and provides an incentive for farmers to store their grain to wait for that higher price,” Wong said.

However this year futures have been “inverse,” with nearby futures higher than those in distant months.

“The first factor was the great demand for these products last year, creating very low year-end stocks of these products. Then, drought in the U.S. devastated their crops, resulting in even tighter grain supplies,” Wong said.

“The bottom line is that buyers need the product now and are willing to pay a premium for the assurance of supply in the near term. The market signal in this ‘inverse market’ is to sell your product now, do not store it.”

Holding grain will put you at the mercy of basis and price risk, Wong said.

“Simply put, you will be speculating on either basis improvement, futures price improvement, or both. There is no ‘carry’ in the marketplace to help cover your storage costs.”

U.S. futures regulator targets commodity speculation

washington / chicago / reuters The top U.S. futures regulator says he would support appealing a court ruling last month that struck down his agency’s attempt to place limits on speculation in commodity markets.

Gary Gensler, chairman of the U.S. Commodity Futures Trading Commission, said his agency drafted the original rule at the direction of U.S. Congress. The rule, which was to have taken effect this month, limited the number of contracts traders can hold in 28 commodities, including oil, coffee and gold. However, critics, including Wall Street banks and Republican lawmakers, said the law did not clearly order the CFTC to impose those limits.

U.S. District Court Judge Robert Wilkins threw out the tough new rules last month, saying the CFTC needed to prove the curbs were necessary to rein in excessive speculation.

“Congress mandated us to do this,” said Gensler. “I’m looking with my fellow commissioners and the lawyers at all of our options of appeal.”

But four leading Republican lawmakers say the court’s decision raised serious questions about the agency’s rule-writing process.

“We are very concerned… CFTC staff are using limited resources to pursue ideological and political goals,” they said.

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