News

As the US dollar has firmed against a basket of currencies commodities have seen a round of profit taking as we approach the turn of the year. Egypt took advantage of the dip buying 360K of Russian and French supplies. There are two interesting points to this tender, firstly Russia clearly feel comfortable with the new buying terms which were issued by the Egyptian buying agency GASC. They are including a minimum ship size of 60K and the presence of an Egyptian representative at load. The second is the amount of wheat that just missed out on the tender, which traded at $8 lower than the beginning of December. EU markets were disappointed with the outcome of the tender and values have drifted. The granting of 150K of third country maize imports into Spain and Portugal under the abbatimento scheme will keep the mills turning and will cap any gains in the short term. Outlook: Wheat fundamentals remain bearish, the corn market is tight and commodity index funds are likely to rebalance in the New Year. There is much to consider as the autumn sown crops overwinter.

Wheat

Euro weak
October export data issued
Intervention deliveries commence

A general lack of interest combined with a weak euro has seen UK grain values slip. Trading is understandably slow and £100 ex for feed wheat is now only available for spring collection with few takers. Customs data has been issued for October exports with 144k being shipped, the lions share going to the Iberian Peninsula. Imports totalled a little over 100K bringing the total for the season to 526k against total exports of 582K. As sterling appreciates against the euro the effective support price for barley declines in broad terms £0.80p per euro cent. Offers of barley to intervention have now reached 14K and deliveries have commenced. Exports of barley so far total 323K out of an estimated surplus of 2 mln mt. Clearly if there is not going to be a colossal carry over both intervention offers and/or exports need to accelerate in the New Year! Outlook: Both wheat and barley fundamentals look bearish; however the possibility of large capital inflows into commodities in the New Year is stopping traders shorting the market.

Seed

Oilseeds Mail-out: An apology.

We would like to apologise for any confusion or concerns caused by our mail-shot promoting new varieties of oilseed rape and harvest movement and storage offers. Some customers have received letters to the correct postal address but with a different trading name. This error affected a small percentage of the database used and occurred at the stage of printing the envelopes.

Please be assured that your essential account information is correct and unchanged.

We have had a good response to all aspects of business covered by the mailing, with a substantial area of the new high performing oilseed rape seed being covered on advantageous terms the offer remains open until Christmas Eve! Secondly our offer of harvest movement, cleaning and drying of the crop and pricing at a later date has provoked a lot of discussion. Finally for those who have not yet returned the OSR growers survey, there is still time to enter and have a chance of winning 6 ha of hybrid OSR seed.

OSR

Matif has gained €2.50 this week off of an intra week high of a €5 gain. Most of the gains coming in the latter part of the week driven by external markets. Domestically values have remained static over the week, with the Euro gains being tempered by a firmer STG currency. The catalyst to the move in our market this week had been the gains in the US soybean market which itself has benefited from a weaker USD$, support from continued purchases by the Chinese, another 116K tonnes on Wednesday alone and Soy crush levels above analysts` expectations. A report this week showed November crush to be 160.3Mn Bushels against an expected 153.4Mn Bushels. STG has been in a firming trend over the latter stages following some weaker than expected German economic data, leading to some concern over German banks and very late on news that Greece has had a further credit rating downgrade. There has also been talk that Greece, which has had to raise €2Bn to cover short term commitments, could be in receipt of indirect government support from the EU as the funds that Greek banks have lent could have been derived from the ECB. Elsewhere we have seen Argentina confirm that 18.2Mn hectares of soybeans have been drilled with the USDA maintaining their estimate for a 53Mn tonne crop. A report issued late yesterday shows that Australian Canola production has been revised downwards to 1.77Mn tonnes from previous estimates of 1.88Mn tonnes, this reduction will reduce export potential. We are also wary of the likely volatility in the market place following announcements this week that commodity funds will be re-weighting their funds in the coming weeks. This could lead to increased volumes in the market place over the period. Interestingly on the reports seen by us there seems to be a move to increase exposure to Soybeans at the expense of crude oil.

Fertiliser

There has been a sudden surge in phosphate replacement prices mainly due to a recovery of demand for phosphates in North America. The U.S in particular is a very influential user and producer of phosphate products so any change in market structure there is felt globally.

Potash still remains flat, however considering how much pressure the Potash producers have been under over the last six months to reduce prices ( and they didn`t ) it is highly unlikely that they will reduce prices now as we return to more bullish market conditions.

These two factors above combined with usage period in a couple of months, it is more than a strong possibility that prices will remain firm for the next quarter.

Early in January we shall be launching the GrowHow N-Min Campaign for 2010, details to follow in the first Openview of the New Year.

Many Thanks for your support during 2009 from all in the Fertiliser Team.

Pulses

Beans, prices remained supported this week in the face of trade ideas that values could have slowly eroded ahead of the Christmas break. Export market has been seen a slow down this week with buyers now likely to return in the New Year. Springs have also had a quiet week, with those who bag beans for export seeing the slow down as mentioned earlier. Premiums remain robust at £8-£10 dependant on location. Peas, market remains static. We also still have limited space on our blue pea buyback; please speak with your Openfield buyer for further information.

Oats

Oats, market remains flat. We remain open to offers of milling quality samples although opportunities are very limited. With the recent firmness in STG this has not helped our European competitiveness and hence exports are dead. Growers should consider any opportunity to review/reduce holdings as there is a high likelihood of a large carry over unless market changes in the medium term.

Openview over the Christmas period

Next week Openview will be posted onto the website on Christmas Eve.

Openview will not be posted in the week between Christmas and New Year and will return to normal on the 8th January.

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.