News

World grain prices have continued to fall as fundamental factors outweigh the inflation hedge support. Weekly trading activity has slowed as buyers become reticent fearing that supplies will be cheaper tomorrow. Iraq has bought 300k of Russian and US supplies for shipment February through to March. The tenders have taken place over the last few months but have only been confirmed by the state run grain board this week. EU trading remains slow, but it has been a constructive week for export licenses, as 581k have been taken. This takes the total for the year to 9.5mln.

The best buyer of EU Barley remains the EU Commission, with an additional 50k being offered to intervention this week, taking the total offered so far for the season to 2.7 mln mt. Outlook: Corn fundamentals are reasonably tight and the USDA is to re survey some states for yield and area, the results will be issued in March. Wheat has massive stocks, with a big crop on the way.

RED FLAG: The US winter wheat plantings are the lowest for 97 years; while there are ample stocks in the world, the insular nature of US index funds could see them buying if the weather is believed to be detrimental.

Wheat

Grain markets continue to fall
November UK export data issued
Sterling firm

There have been losses in grain markets as global rebalancing in commodities continues, and the benchmark £100 ex farm for feed wheat is only available for late summer collection. UK feed grains in the EU matrix is now less attractive than it was six weeks ago, as a combination of stronger sterling against the Euro and more aggressive Danish supplies undercut our quotes for spring shipments. In fact French wheat is close to parity with UK supplies for shipments to the Mediterranean. Export data issued from customs and excise showed November exports at 201K with over half the shipments destined for Spain. This takes total UK exports to the end of November to 785K while imports to the same point stand at 627K.

Barley values, which have been static for some weeks have also been under pressure, although supported by the intervention system. Because the buying in price is set in Euros` as sterling has appreciated the price has declined. Each Euro cent move changes the intervention price by £0.80p/mt. Intervention offers have now reached 35k as at mid January.

Outlook: Fundamentally it is difficult to be optimistic in the short to medium term. Any rallies should be seen as an opportunity to lighten stocks.

Oilseed Rape

Domestic market weakened by firmer STG
China increases borrowing costs
Weaker crude oil hurts sentiment

A quiet start to the week as the US was on holiday for Martin Luther-King day. Following last week`s falls on Matif, which were driven by the USDA report, the market appears to have found a level, making a small gain of €1.50 this week. The same cannot be said for the domestic market. With STG firming on the back of further issues in Euro land, Greece being a big issue with its funding deficits, while our domestic oilseed market has lost £1.

The big news today is the US banking story. U.S. President Barack Obama announced far-reaching plans to curb the activities of the biggest US banks late yesterday. The news caused stock and commodity markets to fall today, as concern grows that these measures will remove liquidity from these markets. If the plans go ahead then banks will be limited to assets they can invest in and could mean some will have to be broken up.

Overseas markets, particularly soybeans have been affected by the announcement from China that it had curbed bank lending and had increased capital requirement ratios for its banks. The move is seen as an attempt to stem inflation in the country following above expectation industrial production and economic data. Markets reacted in a bearish tone with fears over further funding for soybean purchases knocking sentiment. China accounts for 53% of all world imports of soybeans, importing a projected 42Mn tonnes this year.

Rain has been spreading across South America and although the short term impact is a delay to harvesting, longer term impact is seen as beneficial to the majority of the soybean crop helping to increase yields. This drove Chicago Soybeans to a 3 month low yesterday.

Crude oil started the week with a glimmer of support following the positive economic data release from China, mentioned earlier, which was seen as prompting demand for petroleum products. The firmer USD$ didn`t help and oil further weakened yesterday, following an inventories report which reflected a third straight week of gains in stock levels. It is under pressure again today following the US banking announcement.

Seed

Spring business remains steady rather than brisk as the weather continues to keep a break on sowing.

Many growers are now biting the bullet and booking their spring barley, still mainly Tipple, although orders for Quench and Concerto are coming in. Spring wheat supplies are tight. Openfield are now majoring on Granary as a high yielding Group 2 with good straw characteristics, the breeder rates the standing as 7/8 compared with Tybalt at 3.

New crop Linseed prices have slipped in the past week although Openfield are able to offer terms for harvest movement on the variety Abacus.

Peas for human consumption and micronising are selling well. Openfield have buy back terms with minimum price for both Crackerjack and Prophet Large Blues. We also have terms on the marrowfats Genki and Kabuki.

Details of our maize portfolio are now on the website. We are offering an early order discount and free soil testing on selected varieties please contact your local Farm Business Manager or UAP agronomist for details

Fertiliser

Despite the annual traffic problems the LAMMA show at Newark was very well attended this week. We had lots of interest and enquiries on our stand for the GrowHow N-Min® and N-Calc® service. This system is now recognised as the leader in mineral soil nitrogen testing. Sampling has now begun, so to book a test please call Russell Davison on 01476 862787 or speak to your Farm Business Manager.

Oats

The market remains weak with trade now being conducted for June, with all nearby demand fulfilled. Ex farm values are now indicated at £75-£77 dependent on location. Export opportunities remain lacking 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.

Pulses

Beans: The market has remained supported this week by the UK compounder. Exports have been lagging due to the stronger £, making UK origination more expensive on the continent. This suggests that prices could see some resistance to further gains in the short term. We have not seen any bids for Spring Bean this week-notionally, premiums have narrowed to £5, lack of buying interest reflecting the difficulty in secondary market. New crop values have eased back £2-£3 this week, again driven by the firmer currency.

Peas: The market also remains static this week. We have limited opportunities for both bean and pea new crop buyback deals; please speak with your Openfield buyer for further information.

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.