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Wheat yields disappoint as harvest nears completion for most >7th September 2010
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John Edgar Trust 2010/2011 Awards >20th May 2010
More news >OpenviewSeptember 11th, 2009
Wheat futures
| 10.09.09 | 7 Days | 30 Days | 90 Days | |
|---|---|---|---|---|
| Nov 09 | £92.25 | -5.75 | -9.00 | -31.75 |
| May 10 | £99.25 | -6.25 | -8.50 | -31.75 |
Currency
| £/$ | 1.6697 |
| £/Euro | 1.1436 |
| $/Euro | 1.4599 |
Interest rate
| Base | 0.50% |
International
- Futures markets trade at new contract lows
- Physical trade slow in front of USDA report
- EU issues 671k wheat export licenses
New contract lows were set for four straight sessions in the CBOT wheat pit as traders seek a value that will bring the consumer to the trough. There was some activity in North Africa with both Morocco and Algeria holding wheat purchase tenders for home grown supplies whilst Tunisia bought 92K of French supplies for April and May shipment. The price was so sharp that it lent more momentum to an already weak EU wheat market. Intra EU trade was routine. Spain & Portugal have full stores whilst Ireland have been buying for autumn shipment due to concerns about the output of their domestic crop. Following last weeks French sales the export licenses taken this week were an impressive 671K taking the cumulative for the year to 3.55 mln although we have now slipped behind last year.
Wheat
- New contract lows
- Harvest draws to a close
- Milling premiums improve
There has been a succession of new contract lows in wheat markets, not just in the UK but across the World. As sterling has weakened UK supplies have caught up a little in the EU feed matrix but the domestic premium is still £3 to £5 over export parity depending on proximity to the coast. The annual crop estimate season is upon us and some traders have estimated the UK wheat crop at 15 mln mt which may well prove correct, but with at least 10 days harvesting left in the north of the UK it is difficult to know.
Milling premiums have improved as the feed base has declined with full specification group 1 wheat now valued at £25 over feed at the point of delivery, although premiums in the south are slightly lower. Outlook:
Although there has been some modest reduction in the domestic premium more work needs to be done!
Oilseed Rape
Matif nearby contract has given back €4.50 to the time of writing. The domestic market has fallen back £3 over the same period. UK values would have been lower if it were not for the weakness in STG this week and the narrowing of the spread between spot and November markets. STG has firmed significantly against the USD$ following economic data releases earlier in the week and investors willingness to assume greater risk. This helped support crude oil although this only had a limited positive impact on other markets. Palm oil was one commodity that did not benefit from the uplift in the oil market as stocks rose to a six month high and more worryingly a large decline in export numbers. Big news this week was the release of the USDA Supply & Demand figures today. As expected the report confirmed the industry estimates of a significant increase in US soybean production for this year, up 46Mn bushels to a total 3,245Bn bushels this year, from its August estimate, a fact that had been weighing on the market this week. As at the present time the report is seen as neutral to supportive for the market whilst the market digests fully the report. We have also seen a report that mentions a possible hike in soybean export taxes in Argentina to either 40%-45% from the current 35%, a level which has caused the recent round of farmer strikes, something we will be watching closely in the coming months, as knock in implications of further strikes or possible switching into other commodities could be large. Some supportive news came from the one of the coalition partners of the German government who today said that they would not bend on their zero tolerance of GMO product into the EU. Trade estimates put an increase in rapeseed crush at over 1Mn tonnes, to fill the void left by the lack of soy imports as the blockade on GMO soy remains in place. Bank of England monetary policy committee met today and left interest rates unchanged at 0.5% with no extension on the £175Bn quantitative easing programme, a fact the market appears to have picked up on as STG has strengthened over 1.2% on the day.
Malting Barley
Markets continue to come under pressure with price levels drifting by €5.00 on export markets during the week. Buyers remain absent from the market and only appear with interest to resell their forward purchases back to the trade. This only reinforces the extent to how severely the recession has impacted raw barley demand. Old crop barley deliveries still dominate many UK maltings intakes and this trend looks like continuing until the turn of the year. However, post Christmas we may see the cycle change with most consumers acknowledging that they do expect to be a buyer to a degree. We live in hope!
Pulses
Beans, prices have remained static this week despite external market pressures with merchants sorting out quality samples from those that are feed. Samples seen across the desk are better than those earlier in the season with a noticeable reduction in Bruchid damage. Egyptian demand is being fulfilled with some UK product which will help support prices in the short term although this support could tail off as the requirement is fulfilled. Peas, blues have had a hard week with values easing back £15-£20 as supplies exceed current demand in comparison Marrowfats remain well supported.
Oats
Market is suffering from a lack of short term support while yields remain healthy and quality is average.
Feed quality samples remain a worry to market with values reflecting the overhang that remains in the market. As has been the case for some time export opportunities remain out of reach and with the recent strength in STG, the situation looks set to remain for now.
Fertiliser
Careful thought over the Autumn needs to be given to Sulphur requirements for Spring 2010, the sulphur market is behind this time last year. Some of the reasons are due to carry over of N:S stocks in certain areas due to poor establishment of Oilseed Rape crops in Autumn 2008. A natural caution as a result was understandable in booking cover fertiliser this summer as Nitrogen, but it would be easy to forget Sulphur when topping up in the Spring. We offer a large range of Ammonium Sulphate containing fertilizers which is important as elemental Sulphur cannot be taken up directly by crops because plants only take up Sulphur in the Sulphate form. Sulphur is a very leachable nutrient and where large amounts are required it is advisable to split the recommendation. And finally Sulphur deposition is no longer measured, due to such low levels.
Disclaimer
While the information contained herein is believed to be reliable, Openfield makes no representation as to its accuracy or completeness. Any statement non-factual in nature constitutes current opinion, which are subject to change.
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