News

Trading has been routine and values largely unchanged with ex farm feed wheat changing hands for spring collection at £100. Daily price fluctuations have been due to a combination of changes in exchange rates and outside markets as there is a dearth of any new fundamental news. There have been a few export sales of feed wheat bought back, enabling shippers to upgrade the shipments to UKP and UKS, to meet ongoing demand from the Iberian peninsular. Domestic milling premiums are marginally lower, although trading is so light it is difficult to be accurate as bid offer spreads are wide. Notionally, full specification group 1 wheat is worth £16 to £18 over feed at the point of delivery and groups 2`s are at £8 to £10 over. The first wave of intervention barley offers in the UK has totaled a meager 5K. The delivered price has been confirmed at £90.96/mt a little lower than many traders had hoped for! Outlook: It is beginning to look like a long run into Christmas!

International

USDA World S&D`s neutral
Egypt buys 290K of wheat
EU intervention offers increase

The market has been looking for some fresh fundamental news to garner a view and start trading again. The monthly USDA supply & demand reports sadly did not give any inspiration. The wheat estimate showed an increase in production by 3.8 mln and a corresponding rise in the ending stocks. The wheat crop is now within 10 mln mt of the record crop from last year. With such a heavy balance sheet it is difficult to be optimistic for large price gains in wheat. The corn forecast showed lower production as the recent bad weather has reduced the yields in the US; this has reduced ending stocks down to a frightening 132mln mt! Egypt held a snap tender and bought 290k of Russian wheat for early December shipment but both the US and EU market shrugged off the business. In the EU case offers of French wheat were circa $10 above the Russian offers. Trading inside the EU is largely around logistics with the Irish selling back imported wheat and using domestic. The Dutch have been taking barges from France and Spain are looking for milling supplies. Intervention offers in the community have now exceeded 500K . Outlook: Weather & World financial events will continue to drive values.

RED FLAG: There have been reports of high levels of vomitoxin in US distillers dried grains (DDG`s), which are used in livestock feeding. If correct this could change the feed rations.

Oilseed Rape

Relatively quiet week with Matif gaining €3.50 to the time of writing helped by a strong Thursday afternoon. The domestic market gaining £2 helped by a weaker STG although we have seen that trend reverse today. Domestically trade has been quiet with few sellers at current levels. STG has moved out of the stronger range from last week and has not been helped this week by the Bank of England inflation report. This weakness counteracting more recent weakness in the Matif market. The big news event this week was the USDA supply and demand report that was issued Tuesday. The report showed an increase in production of US Soybeans to 3.319Bn Bushels up from the previous estimate of 3.250Bn bushels. An increase had been anticipated and built into the market, what surprised the market was the size of the increase, with trade estimates pegging an increase to 3.278Bn. This pushed the market lower but losses were soon recovered as the market rallied, helped by corn, to return to pretty much unchanged. Currency movements have again played a part both with €/£ and USD$ levels. As mentioned STG had weakened over the latter part of the week following this week`s inflation report in which the bank`s governor reiterated that the UK still faces tough challenges ahead, this coupled with a lower forecast for inflation figures hurt STG. The upside, as the report pointed out, is this would help UK exports. As mentioned above STG has strengthened over the course of today with ideas that the British Airways and Iberia merger shows optimism for the UK economy. The USD$ has weakened also over the week, driven by growing risk appetite which meant dollar assets became more attractive. This prompted fund buying across the board with better crude levels and Gold touching record high this week. South American focus sees Brazil continuing a pace with soybean sowing, with early maturing varieties remaining the popular choice. However concerns are now surfacing over the potential outcome of their sowing season with drilling equipment mainly left in the barn due to the parched soil conditions. If these delays remain then there could be a large impact on production with the knock on impact on supply and demand for latter part of this marketing year.

Seed

Seed growers are required for speciality wheat variety Burnham for the Warburtons 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.

Malting Barley

Market activity seems to be confined to the technical side with trade longs being washed out into paper transactions. Consequently physical grain remains on farm or in stores and in some cases sold as feed to alleviate the backlog of oversupply. This situation is mirrored across the EU with many malt houses delaying intake of raw materials from 2009 to well into 2010.

New crop trade remains thin with trade buyers reducing price ideas over the last week as French market levels drift down €2. Whilst values bid on the farm remain well below the cost of production, and planting indications point to a large swing away from spring malting barley to wheat. Sellers are understandable reluctant to trade forward.

Fertiliser

As we head into the winter months, it is the ideal time to catch up on some very important jobs. One key area to organise now is Spreader Calibration.

No matter how good the fertiliser plan, inaccurate spreading will result in higher environmental impact, reduced yields and lower profits.

The importance of maximising the effectiveness and value of fertiliser is well recognised by Openfield and with our close relationship with GrowHow we work closely with the calibration specialists SCS - Spreader & Sprayer Testing Limited who offer a reliable, well organised calibration service.

Accurate spreader settings, correct application rates and a thorough inspection of the machine make the service good value for money.

If you would like to organise a Spreader Calibration please call us on 01476 862790 or speak with your local Farm Business Manager.

Pulses

Beans, market has made gains this week with feed quality samples making £2-£3 more. Export interest has returned, with business being done and further sales now proving difficult to make, implying that a short term top end to the market has been reached. Indeed we have seen some resellers now coming forward further supporting the idea that market is overvalued presently, leading to a possible softening of levels in the short term. Peas, interest remains this week for bleached peas with very bleached samples fetching £140ex with lower percentage bleached samples trading at £170.

Oats

Oats, nothing new to report this week as the market remains flat. Movement opportunities prior to the Christmas break are now very scarce. As reported previously, trade discussions suggest that consumers have completed the vast majority of their marketing year requirement leaving approximately 25% to fulfil. The recent weakness in STG has not been enough to make export offers competitive against other European origination and hence 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.