News

World grain markets have seen a sharp sell off this week, as index funds `re balanced` their portfolios following some surprises in the USDA stocks report. Wheat carry out stocks were increased by 5 mln mt due to a combination of increased production of 2.5 mln. This was mostly in Russia, due to the completion of the Argentinean crop, and a reduction in usage of 2.5 mln.

World carry out stocks are now forecast at 195 mln mt with the vast majority of the wheat in the main exporting countries.

The real shock was in the corn market supply and demand with most traders expecting a reduction in the crop, especially in the US where 5% of the crop remains in the field. This may not sound much, but it is 5% of a 330 mln mt crop. However the USDA surprisingly increased US corn yields and also forecast a bigger crop from Argentina. Whilst these amendments will increase ending stocks by 4 mln mt they remain critically low.

As prices fell, Egypt, Morocco and Jordan made purchases for spring shipment. The majority will be shipped from Russia, with small parcels from the US. The EU missed out and will need to come into line if it is to dispose of its surplus.

Wheat

Defra issues revised crop forecast
Cereal prices fall
Milling Wheat market moribund

Cereal markets have given back last week`s gains as a combination of factors weighed on the market. Grain prices fell as funds sold grains as a result of a bearish USDA stocks and production report.

More parochially the final DEFRA estimate of UK cereal production showed an increase in Wheat production of 200K, taking the total to 14.4 mln tm which will add directly to the exportable surplus. Exporters have had a frustrating week as Danish supplies undercut UK wheat into Northern Spain and Portugal although there are also reports of UK wheat trading into the Mediterranean.

Domestic markets have been routine with some feed wheat users taking advantage of the dip in values, buying supplies for late spring and summer delivery. The milling wheat market is slow and premiums remain at £18 over feed for group 1 wheat at the point of delivery. Low grade 1`s and 2`s in some areas are now the same value as feed.

Outlook; It has been a week where fundamentals have had a bigger influence on price discovery; however as long as there is the possibility of commodities being used by hedge funds, traders will not feel comfortable being too short and consumers will continue to increase cover.

Seed

The Spring Season has come suddenly with many niche varieties suddenly selling out.

Zircon and Paragon supplies are gone, although if growers are attracted to these varieties we are still looking for increased seed acreage for both.

Granary is now our main spring wheat, high yielding and Group 2 Milling quality, with better standing than Tybalt.

Kahuna and Sakura Human Consumption Peas are also sold out and Kabuki seed is in very short supply. However we are still able to offer buy back contracts an Genki Marrowfat Peas, Gregor White Peas and both Crackerjack and Prophet Large Blues.

Linseed contracts are proving popular particularly our Harvest movement buy back for Abacus. Speak to your Openfield Farm Business Manager for details

Spring Barleys are doing well with Quench and Concerto now selling as well as the lower yielding Tipple. Growers with large areas should consider splitting between two varieties as protection against poor weather at harvest.

Fertiliser

`If you can`t measure it, you can`t manage it`

That is the simple message from GrowHow Agronomist Allison Grundy, when it comes to Nitrogen Management for Spring 2010.

Every season throws up its differences that need careful consideration. Variable establishment; winter rainfall; pests and diseases all have an impact. Especially when we ask ourselves, how much nitrogen do these crops need this season?

GrowHow N-Min ® and GrowHow N-Calc ® are available from Openfield. Using this unique Nitrogen Soil Testing service will help gain optimum crop performance in yield and margin, and a lower environmental impact.

Please call Russell Davison on 01476 862787 to book a test, or for more details. Alternatively contact your Farm Business Manager.

Oilseed Rape

USDA report weighs on market.
Higher inventories and US economic concern knock crude oil.
Firm STG not supportive.

Matif has eased back €9 on the nearby contract, with the domestic market falling back £12 in the same period. The market has suffered this week from the bearish tone that affected most agricultural commodity markets following the USDA report issued on Tuesday.

The report showed that US Soybean production had been increased to 3.361B bushels up from 3.319B bushels in their December report and above trade estimates of 3.337B bushels. Soybean ending stocks were reported at 245M bushels, which were 10Mn bushels above trade expectations of 235M bushels.

South America also featured in the report with estimates for Brazilian production increased by 3% to 65 Million tonnes. With harvest now underway for the early maturing varieties we should very soon get a better idea of yield and quality.

Closer to home, DEFRA issued their crop production report on Thursday which showed total Oilseed Rape production was 1.95M tonnes which is a notional 1% below 2008, in line with trade estimates.

STG has strengthened this week following the falls seen in other commodity currencies, mainly that of the USD$, although there has been a significant move against the €uro this week also. Comments made earlier in the week from monetary policy maker Andrew Sentence, in which he intimated that the bank`s quantitative easing programme may soon end, have strengthened €/£ by 2%.

Pulses

The Beans market has bucked the trend this week remaining buoyant despite the falling wheat market. This support has been provided by those `shorts` in the market place looking to buy in their position. The export market for Spring Beans remains quiet with the trade awaiting the return of the Egyptian buyers to kick start interest.

With Peas the market also remains static this week. We still have both Beans and Peas in new crop buyback deals; please speak with your Openfield buyer for further information.

Oats

For Oats the market remains flat with small volumes being traded by the trade to guarantee movement slots, which we will now see out from May onwards. There is nil export interest currently and this is likely to remain the case unless there is a significant move in €/£, making us competitive against other European offerings. New crop demand remains nil.

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.