EC WHEAT RELEASE UNLIKELY TO SATISFY U.K. DEMAND

  The European Commission's decision to
  release an additional 300,000 tonnes of British intervention
  feed wheat for the home market will provide only moderate
  relief in an increasingly tight market, traders said.
      Some operators had been anticipating a larger tonnage,
  pointing out that at this week's U.K. Intervention tender the
  market sought to buy 340,000 tonnes but only 126,000 tonnes
  were granted.
      The new tranche of intervention grain is unlikely to
  satisfy demand, they said, and keen buying competition for
  supplies in stores is expected to keep prices firm.
      The release of the feed wheat followed recent strong
  representations by the U.K. Grain trade to the Commission.
  There has been growing concern that rising internal prices,
  triggered by heavy exports, were creating areas of shortage in
  interior markets.
      The latest EC authorisation will add 70,000 tonnes at the
  April 14 tender and a further 30,000 tonnes later in the month.
  The remaining 200,000 tonnes will be made available in May and
  June.
      News of the release produced an early downward reaction in
  local physical markets, but by midday some sections had halved
  early two stg losses while others were unchanged.
      Ministry of Agriculture figures for March indicate 1.85 mln
  tonnes of wheat and 1.74 mln tonnes of barley remain in the
  free market. However, some traders believe these figures are
  overstated and, while some may still be held on the farm, the
  bulk of wheat is already sold. Some of the grain is also off
  the market in futures stores.
      A total of 2.10 mln tonnes of intervention wheat has been
  sold for export or to the home market since the season started
  July 1, leaving an unsold balance in intervention of about 1.59
  mln tonnes.
      Intervention barley sales have reached just over 1.0 mln
  tonnes, leaving about 753,000 tonnes, traders said.
      This season's U.K. Export performance has surpassed all
  early expectations and has created the present nervous
  situation in domestic markets where the fear now is free market
  supplies may not last out until new crop becomes available in
  August.
      The market is sticking to its recent prediction of total
  barley and wheat exports of around 10.5 mln tonnes, a new
  record and nearly double the previous record of 5.9 mln tonnes
  achieved in the 1984/85 season.
      Traders expect U.K. Wheat exports to reach 6.0 mln and
  barley around 4.50 mln tonnes.
      The Soviet Union has booked a record total of 2.5 mln
  tonnes of British wheat and barley this season, but only 1.28
  mln had surfaced in Customs export figures by March 25, traders
  said.
      Other EC countries have bought large amounts of British
  grain and for the July 1/March 25 period had taken 2.59 mln
  tonnes of wheat and 2.06 mln tonnes of barley. This compares
  with 1.28 mln and 868,700 tonnes last season.
      The market is expecting prices, particularly wheat, to stay
  buoyant for the remaining few months of the season. If supplies
  become more difficult and prices strengthen further, feed
  compounders may increase cereal substitute usage, traders said.
  

