News

A hard frost throughout much of the US mid west propelled Corn prices higher, dragging wheat along with it. The frost was then followed by a band of rain delaying further harvesting of the row crops; consequently any damage that may have occurred will not be known for a few more days. Values eased through out the week as anxiety declined. International trade has been slow, Algeria passed on all offers and is to re tender while the results Turkeys sale of white wheat are yet to be declared. Egypt bought 180K of French wheat in three cargoes. The French market fell on the news although the price the Egyptians paid was in excess of $20 higher than there last purchase. Exports from the EU continue at around 400K per week, which with EU price levels can be viewed as constructive. Outlook: In addition to the vagaries of the weather some index funds have been talking about grains being bought as an inflation hedge as the economy recovers. There is no clear consensus on the economy; but if things are perceived to have bottomed out, wheat in particular looks good value.

Wheat

Volatile grain markets
August exports disappoint
Milling premiums slip

It has been a very volatile few days in UK cereals. Sparked by sterling loosing ground against the Euro there was a buying frenzy as traders chased a reluctant producer and value advanced strongly. The £100 ex farm level was briefly available for December collection, but the majority of trade took place for February and March. Both feed compounders and exporters joined in the fray with shipments trading to the Iberian peninsular and the Low Countries for shipment through to the summer. August export data was issued mid week showing just over 100K being shipped of which Spain took half. Imports stood at 146K leaving the UK as net importer. Milling premiums slipped as values failed to rise as quickly as the feed leaving full spec group 1`s at £20 over feed at the point of delivery, but it was an active market. Outlook: Sterling gyrations will continue to cloud grain fundamentals.

Oilseed Rape

Nearby Matif has gained €6.25 to the time of writing with the domestic market remaining fairly flat gaining £2 over the week. The disparity between the two currencies highlighting the movement in STG over the latter part. The week has been dominated by currency and harvest weather in the US. A record crop has been expected for sometime the issue has been physically getting the crop to market with poor weather hampering harvest efforts. This short term pressure helped to support the US soybean market at the beginning of the week and this helped Matif gain €8 over the first half. STG as mentioned earlier has played a part touching six month lows against the Euro reaching €/£0.9450 earlier in the week on the back of poor economic data, predominantly unemployment figures. STG reversed this weakness on comments from a monetary policy committee member suggesting that the bank €`s quantitative easing programme is working and will be reviewed next month, with the exchange rate touching €/£0.9140. Matif was dragged lower intraday yesterday along with US soybeans as rumours emerged that China had cancelled some bean cargoes and that some meal demand had been switched to South America, matif later recovered closing just in positive territory. Crude oil has reached a 1 year high following a surprise drop in US gasoline inventories prompting further buying although it appears that this drop can be attributed to a reduction in refining capacity which can easily be reversed. Oilworld has also increased the size of the EU27 crop to 21.1Mn tonnes, up from 20.3Mn tonnes last month following further gains in both the French and German crops. Australian canola harvest was reported to be 5% larger than anticipated no figuring at 1.8Mn tonnes, although we see limited impact on the domestic supply and demand figures following revisions to the EU27 production number. Key news items for next week will be the result of the EU meeting on GM contamination due to start on Monday, with Soybeans and Linseed imports into the near continent affected, news on any decision will be watched carefully.

Seed

Openfield spring seed availability listings are now available from you local Farm Business Manager or UAP agronomist to allow you to look at the options of more winter wheat vs spring barley or breaks. Many premium buy backs are available for premium spring wheat`s linseed and pulses. We also continue to offer buy backs for our range of winter wheats.

We have already started processing Zircon spring wheat which can be drilled from now until March and attracts a healthy premium for a 74 kg feed wheat specification and a human consumption Don. Zircon is UK bred and HGCA listed.

We have floor stock of most popular winter wheat dressed and ready to go, we also have recleaned wheat in bins which can be dressed to order.

Malting Barley

Old crop markets remain quiet with limited buying interest in the nearby. A general grains rally during the week sparked brewers to tentatively price forward markets at £3 over nominal intervention barley levels but this proved to be short lived once sterling reversed to strengthen in the latter half of the week. New crop has seen more action in the last week than it has done for some considerable time. French markets led prices up by €8 unable to stimulate sellers in any sort of volume. In real terms UK export grades are now worth £110x for the Oct - Nov 2010 positions equivalent to £13/t over feed.

Fertiliser

After a long period of flat prices the fertiliser market has picked up in activity over the last week. Currency fluctuations and energy market corrections have put upwards pressure on Phosphate and Urea markets. Blenders have been keeping stocks very low and have found replacement values firming. Potash prices however stubbornly refuse to move downwards as growers and trade have anticipated.

On the Nitrogen front, the flat market conditions are unlikely to continue forever. Now is a good time to discuss any outstanding GrowHow Nitram and Sulphur products this side of Christmas, please speak to your Farm Business Manager for details.

Pulses

Beans, market had made some headway this week but today have given back those gains following the wheat market lower. Spring premiums have narrowed with the fall in prices and are now £7-£8 depending on location. In the short term both feed and premium homes are now satisfied with indicative values of £116-£120 ex farm for feed and £125-£130 ex farm for springs, dependant on location. We have not seen any export business completed even with the recent weakness in STG suggesting export homes have fulfilled nearby requirement. Peas, quiet week again this week with little changing in the market place. Marrowfats remain well supported; trading at £320+, growers with quality samples are encouraged to contact their Openfield buyer.

Oats

Market had witnessed uplift in prices following the news last week of a return of the miller to the market place and this week`s gains in the wheat market, a move that has been undone with today`s falls in commodity markets. Spot deliveries are now full following this recent interest and price gains meaning that December is now a more realistic window for movement.

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.