Hungary's grains market is at a standstill with last year's meagre crop by and large exhausted and this year's fairly good one still three weeks away because of cool and rainy weather, traders said on Monday.
"There is consensus out there that the crop is going to be good, but there are increasing concerns about potential damage to quality," said Janos Szojka, trader at grains brokerage Swap.
Last week the Agriculture Ministry forecast an above average wheat crop of 5.3 million tonnes this year, but significantly better than last year's drought-hit 2.93 million tonnes.
But the abundant rains instrumental in this fairly good crop also delayed plant development, another trader said.
"Traditionally the wheat harvest starts on Peter and Paul day (June 29) in southern Hungary, but I gather there is an about one week delay, so harvesting should start in the first 10 days of July," said Robert Vajo, trader at brokerage Agrokont.
Both traders said that buyers offered around 23,000 forints ($108.6) per tonne for milling wheat, which was largely in line with the EU intervention price of 101 euros per tonne, with storage and financing costs discounted.
That price, however, was way below farmers' expectations and they were in no hurry to sell. On the other hand, mills were still sufficiently stocked not to be pressed to buy.
"Farmers say that they can always sell at this price later, and with their stores empty, there is no pressure yet to get rid of anything," Szojka said. He added that because of the low prices farmers were reluctant to pay for pesticides, further increasing the already present danger of diseases.