News

Following last week`s frenetic activity the world market has taken a breather. The release of the USDA world supply and demand estimates were seen as a reason to take stock. In the end the report was benign with only minor revisions. Wheat stocks were increased by 250k with higher production in South America being offset by an increase in demand. Corn stocks however continue to decline. Higher production compared with last month again from South America which was more than absorbed by higher usage, predominantly in the US ethanol industry. The corn scenario still needs a weather eye and there is due to be a revision of the production estimates in some major US states and stocks are very, very tight. The next report is published March 10th.

Intervention has not been a major factor over the last few years but in Russia intervention has worked well. Taking surplus grains off the market after a big harvest only to be released in 2007/8 thereby smoothing food price inflation. There have been news wire reports that the Russian authorities are about to start exporting the stocks, possibly with subsidies. This would be a deviation from the strategy that has been in place for some years, but it has been enough to stop the market in the Black Sea region. There is currently 7.4 mln mt of wheat in store. Intervention stocks are also increasing in the EU with 200k of barley offered this week, taking the total for the campaign to 3.3 mln. Trading has been slow as consumers stand on the sidelines.

Outlook: World & EU markets have been static, wheat stocks are high, corn stocks are low and some feed users are starting to switch from corn to wheat

Wheat

Trading moribund
Malting barley failures hit feed barley market
Milling wheat market slow

Cereal trading has been slow as producers are taking time to adjust to the new levels. Domestic consumers who have adequate purchases and slow off take are already looking to roll February contracts into March.

Exporters are frustrated with EU buyers, who are absent as they struggle with large port side stocks, whilst their buyers in turn suffer from slow usage.

Following last week`s flurry of milling wheat trade things have been more routine with premiums static. Low grade hard wheats however are now trading at feed prices. The feed barley market has been active and this is mainly due to malting barley downgrades as quality deteriorates. Intervention sales to date are at 68K but are only advancing slowly. The feed market is only £3 to £5 lower which after payment and quality differences are taken into account is even closer.

Outlook: Any rise in price should be viewed as a selling opportunity.

Oilseed Rape

USDA report seen friendly to market.
€/£ in the spotlight as EU summit progresses.
Reversal in Crude and vegetable oil values support market.

Nearby Matif has gained €4.25 to the time of writing with the domestic market reflecting £3 gain in the same period. A narrowing of the discount the domestic market has been trading at to the futures market had helped domestic values, however this has been largely undone with a firmer STG over the last couple of days.

The USDA supply and demand report was issued this week on time, there were rumours that due to the snow storm seen over the East Coast of America that it might be delayed. The report proved to be supportive for the oilseeds market, it showed that there was a reduction in Soybean, ending stocks by 35Mn bushels to 210Mn bushels; this was below trade estimates of 217Mn bushels. Record exports of 1.4Bn bushels and greater crush numbers were cited for the reduction in end stocks. Brazilian production was also raised to 66Mn tonnes, up 1Mn tonnes from the previous month due to better yields, although this figure was below other trade estimates which put production nearer 67Mn tonnes.

Crude values have had a better second half of the week, following a weak start after an inventories report showed large gains in stock levels. The support seen latterly has followed the issuing of a report by the International Energy Agency which raised its global oil demand forecast for 2010. The report showed that the growth was driven primarily by China and other Asian economies following higher GDP numbers. The firmer crude values have also helped vegetable oil values in Far East trading.

The main currency news this week has been the debt issues facing the Greek economy and possible contagion to other countries with high budget deficits such as Spain and Portugal should there be a debt default by Greece. The EU summit which started yesterday released a statement suggesting a deal had been struck to help the Greeks with their problems but stringent conditions would apply to any assistance. More detail on those conditions should be available next week at the Finance ministers meeting.

Malting Barley

Market remains moribund with very little or no trade being conducted in old or new crop. Premiums over feed values remain narrow. It is unlikely there will be any short term catalysts ahead of spring planting reports. Export opportunities have not been helped with the recent strength in STG.

Seed

The return of cold weather has again slowed interest in spring arable crops as growers wait to see how long the winter will last before making final decisions.

Pulse seed is now quite scarce with spring beans hard to find and human consumption peas sold out. Openfield still have good supplies of large blue peas Crackerjack and Prophet, these varieties being suitable for micronising and quality exports. Even at today`s lower prices peas are likely to give the best gross margin of any spring break crop.

Spring barley continues to sell slowly, Openfield have a seed buy back on Concerto in some regions for large scale evaluation by the maltsters. Please speak to your local Farm Business Manager for details.

Linseed supplies remain ok, but should the cold weather continue Linseed may become the crop of last resort, so if you have any planned it may be prudent to book your seed now while still available.

Openfield have now published their 2010 Game Cover Catalogue, the new range of Grass Mixtures, and Fodder Crops. Electronic copies will be available from our seed downloads page shortly; hard copies will be available from the seed offices next week.

Fertiliser

The main focus for next week will be product availability and delivery. With usage period very close, most orders are required for immediate delivery. Any requirements for Spring NPK; PK grades and Nitrogen; Nitrogen Sulphur grades should be organised as soon as possible to ensure delivery in good time. Don`t forget there is still time to book GrowHow N-Min ® soil tests, please speak to your Farm Business Manager or call Russell Davison on 01476 862787.

Pulses

The beans market continues to drift lower amid some buying interest for spot month parcels. There is little or no export interest at present. The trade is waiting for the return of spring bean bids, anticipated toward the end of the month. We have no new crop values this week as the market is void of bids for either feed or human consumption produce.

For peas there has been some interest in old crop peas and these are seen trading with a small premium. Our buyback offerings are now completed.

Oats

The market for oats continues to suffer from a surfeit of production and is unlikely to change in the near term. As a guide, nominal values see feed quality in the mid £50 region and top quality milling oats around the £75 level for May/June. We continue to explore export opportunities when available. 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.