THE CEREAL markets remain quiet and only investment funders are supporting agricultural commodities at present, but recent financial concerns in Dubai could be worrying somewhat.

Another factor depressing wheat markets, according to the International Grains Council, is a re-forecast of the global wheat tonnage – up, yet again, this time to 668m tonnes. This would leave world stocks up from 165m tonnes in 2008 to 191m tonnes.

One factor helping prices in the UK, though, is the weakness of sterling and lack of any ex-farm selling. The dollar set a 15-month low against the euro and was at its weakest level against the Japanese yen for three years, which is making UK crop look bit tastier for export.

The IGC’s re-forecast for 2009/10, puts the wheat trade up 2.1m tonnes to 117.7m tonnes – but that is still 13% down on 2008/09, so that news might also help goad the market and keep fund managers interested in buying commidities.

It’s been a slower start to EU exports than last season, too. Soft wheat export licences in the EU now total 7.1m tonnes, compared to 9.6m tonnes last year.

In the UK, there are still 2m tonnes of wheat to export and, with the current export programme, it is expected that this total will be cleared before next harvest. The new ethanol plant at Teesside, which is now coming on steam, will help to tidy up any surplus as well.

There are some world-wide weather issues that are now giving some cause for concern, with quality problems for Australian farmers, where the harvest is 40% cut with heavy rain hindering progress. Similarly, Argentinean farmers have only harvested 11% of their wheat area, again due to heavy rains. In Bulgaria, Romania and Hungary, farmers are also getting behind with their wheat and barley planting due to excessive moisture.