News

US corn harvest has restarted albeit slowly. In Illinois harvesting is the slowest since 1964 with an estimated 20% delivered to silos. Indiana farmers are 25 days behind normal with their autumn field work. The moisture content of the corn (5% above the 5 year mean) is challenging the dryers which are all working at full capacity but intake in some areas has been delayed. Drilling of the soft red winter wheat crop is also well behind the optimal planting date. Intervention support has opened in the EU and Russia. The situation in Russia is likely to have disappointed farmers as of the 7.2 mln mt offered, only 55k was accepted. Initial offers in the EU have been slow, 245k has been offered in Germany, France has 8k offered. It is believed that the UK also has offers but details are not yet available! Egypt has been in the market once again, buying 120K for early December shipment. French and Russian wheat is to be supplied. The quality terms have been tightened again with the Egyptian authorities now attending vessels at load. Outlook: The grain markets continue to trade anything but fundamentals but for the record corn & wheat prices are a touch higher.

Wheat

Grain markets moribund
DEFRA issue first crop 2009 supply and demand
Intervention support opens

It has been a dreary week with cereal values largely unmoved. If plotted in Euro terms there have been modest gains. Physical trade has been dire, both domestically and on the export market. With the advance of sterling, Danish supplies in the EU feed grains matrix are starting to look attractive again. Shipments of UKP and UKS are still going strongly but as supplies close to ports are shipped it will become increasingly more challenging to source stem as higher transport costs eat into the premium. DEFRA has issued their first supply and demand estimates for crop 2009. There are few surprises in the wheat with an estimated 2.1 mln mt being available for exports. This estimate takes no account of the new ethanol facility that is due to start taking wheat in January or February and this could be a swing factor of 500K. The barley forecast shows an exportable surplus of a little over 2 mln mt an increase of 148% compared with last year which will take some exporting! The possibility to offer grain for sale into intervention opened on Monday. At the time of writing no announcement has been made about the level of offers, but it seems highly likely that some will have been made. Outlook: The market is still trading anything but the fundamentals; but the downside for wheat seems limited. Not something that can be said of barley however. Intervention can be the only real floor to the barley markets.

Oilseed Rape

Matif has given back €1 to the time of writing with domestic values reducing by £2 due to gains in STG over the week. As has been the case for sometime STG movements have affected prices and domestic prices have traded over a £5 range. Crushers have been focusing on pre Christmas deliveries with New Year business taking a back seat. Weather again has figured in the market place with the US harvest report this week at 50% complete versus the average 87% at this time. This translates into 3-4week delay. The poor weather that has been hampering harvest has now started to cause concern over its potential impact on yield. Report issued yesterday contained the first reduction in estimates for the US soybean crop with Informa reducing their production estimate by 1.5Mn tonnes. USDA is slated update the market next Tuesday with market focus on their numbers. South America has not been immune, Argentinean production estimates have also been reduced this time by 2Mn tonnes following a spate of dry weather and the use of poor quality seed. US exports remain healthy with this week`s export figures above expectations which helped add some support to the market. USD$ has had a weaker run in the early part of the week and this has also helped support markets. The first week of the month also sees fresh money inflows from fund contributions and this combined with the weaker dollar has made dollar denominated assets more attractive. Crude oil has recovered well this week gaining over 4% to Thursday. Last trading day of the week sees the USD$ making some headway against other major currencies and this strength has just taken the shine off of dollar assets with Crude oil retreating setting a weaker tone to the close of the week. Bank of England meeting today saw the committee leave interest rates on hold at 0.5%, however they did announce an increase of £25Bn taking the programme total to £200Bn. STG did briefly weaken following the announcement but then rallied to recover those losses as the market digested the news that the increase was below the £50Bn some had thought.

Fertiliser

As mentioned in last week`s Openview, Nitram will very soon be in its 45th year of production.

To celebrate it`s birthday GrowHow will be offering customers the chance to win 45 (600 kg) bags, 27 tonnes of Nitram.

Anybody who takes delivery of a minimum of 10.2 tonnes of GrowHow products between 1st Oct and 31st March 2010 will automatically be entered into the prize draw. The prize will be drawn in April and the winner announced in the Farmers Weekly.

Seed

Seed growers are required for speciality wheat variety Burnham for the Warburton contract and Heraldo and Zircon white wheat for the breakfast cereal market.

Burnham and Heraldo are winter types. Good premiums paid, please contact your local Openfield or UAP business manager.

Winter wheat sales continue in most areas with Cordiale, Einstein, Grafton and Oakley the main varieties in demand. We still have stocks of these and other varieties with a choice of dressings available for prompt dispatch.

For those who may need to plant in the spring Zircon remains first choice for our breakfast cereal market and can be drilled through to March.

There is considerable interest in Linseed again with the recent surge in the product price and Human Consumption Pea contracts are becoming scare as growers move out of spring barley.

Pulses

Beans, following on from last week`s report shorts in the market place have helped to sustain market interest and levels have increased £4 over the week. A return of export interest has led to a widening of the premium for springs with business being conducted at £135-£140 ex farm level for spot positions. This recent move has led to a few more parcels of product coming to the market. With future requirement from these export homes uncertain, current levels should be considered as a selling opportunity. Peas, this week has seen an increase in business being done with bleached peas. Very bleached samples are fetching £140 ex farm with lower percentage samples trading at £160.

Oats

Oats, market remains stagnant. There are now limited movement opportunities prior to the Christmas break. As reported last week, trade discussions suggest that consumers have completed the vast majority of their marketing year requirement leaving approximately 25% to fulfill. With STG remaining firm against the €uro export opportunities remain firmly on the back burner for now.

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.