News

New contract lows have been established in US wheat futures markets as a combination of slow exports and reallocation of capital by investment funds. US wheat has missed out on most International tenders for some weeks and stocks are starting to build up. Producers thus far seem relaxed as the area committed to winter wheat in the US is the lowest since 1947.

Futures markets are currently knocking on the lows set in October and February which if breeched look to be heading towards the 2006 lows. Paradoxically the EU market has seen a steady flow of export enquiries to exotic destinations as supplies from the Black Sea dry up. This has lifted MATIF wheat futures from the recent lows (last seen in 2006) by close to €10. Farmers, who on paper still have ample supplies to sell, still seem reluctant and are more concerned with land work and the cost of production.

Export licenses taken this week totaled 307k and intervention barley offers topped 150K. Outlook: Non agricultural capital flows are heading away from commodities, and wheat fundamentals look bearish as we approach the first of the Northern Hemisphere crops.

Wheat

Grain prices hold
Ports active
Milling market moribund

An active port programme is keeping physical grain prices underpinned. Ports are active as deep sea feed wheat enquiries spill over into the smaller ports which in turn is keeping domestic consumers honest. The buying interest is for export to third countries as Black Sea supplies dry up although timing will be everything as many of the destinations are only weeks away from their own harvests.

The milling wheat market is moribund; the rise in feed prices has squeezed the premium a tad to £15 to £17 over feed for full specification group 1 wheat at the point of delivery.

There has also been a limited amount of export interest for barley at levels that are only a small discount to the intervention parity.

Outlook: The market is underpinned in the short term, but rallies remain for selling!

Seed

Easter is coming and with it two, four day weeks. Deliveries always get congested at this time of the year so please think about your next two weeks work and order in time. As stated last week it always helps to select a variety that we at Openfield have under our own control or a stock item if speed of delivery is important. Current availability of arable products is listed below.

England

Barley: Concerto - straw and yield, malting in the east and north, Tipple - first choice malting, Quench - highest yield and malting
Oats: Firth
Peas: Crackerjack and Prophet
Linseed: Abacus
Rape: Ability with or without Cruiser.

Scotland

Changing fast as the rush is on, speak to your Openfield or UAP contact.

The Campaign for a Farmed Environment and the renewal date for the first wave of ELS schemes seems to be having a marked effect. Our suppliers have had to work overtime as last week`s orders for several items completely cleared the stock, we must be too cheap! On a serious note, the consequence of not supporting the campaign is a return to compulsory set-aside which is in nobody`s interest. If you are considering what to do, your Openfield or UAP contact will be able to offer or has access to high quality advice and products.

Oilseed Rape

Bio diesel usage forecast offers support
Early estimates suggest US plantings at record high
Possible deal on Greek rescue supports €uro

Nearby Matif has gained €8 to the time of writing with the domestic market making a healthy £5 in the same period. Old crop values have been supported by a tighter feel to the market of late. New crop values have risen less due to larger crop forecasts (2mt) for next year. There has been some positive news in the form of an increased forecast for bio-diesel demand in 2011. In line with this German group Bio petrol are eyeing a return to full capacity for its bio-diesel plants in the same period.

US Soybeans have been pressured this week following a strong USD$ which has meant all dollar denominated commodities have become less attractive. Soybeans have also not been helped by the advancing record South American harvest and ideas that US soybeans are now expensive (with the stronger USD$) against South American produce and hence some origination switching of buyers and cargoes. The USDA is due to release its planting intentions report on March 31, which historically has had some surprises within it. However it is widely anticipated to show a small reduction to 79.4Mln acres from the record soybean area announced in December.

South American news has been focused around harvest progress with Brazil now showing 56% complete up from 45% last week. Argentina has reported that harvesting is now underway, despite some regions still suffering from water logging following recent rainfall. Trade estimates are still calling for a 55Mn tonne crop in line with earlier estimates.

The main story this week has been the budget. Two statements that stood out within the speech were the growth forecast which has now been revised down in line with the `City` views and a note that UK borrowing was lower than previously anticipated suggesting a slightly better outlook. This was supported by some better retail sales figures which reflected another rise in January. The Greek budget deficit had weighted on the €uro at the beginning of the week and STG had been strong, this trend was reversed late Thursday following an outline announcement that Germany and France had agreed in principal to a rescue package for Greece that included help from the International Monetary Fund (IMF).

Pulses

The beans values have remained largely unchanged this week with market seeing some trade. Any trade has been focused on the spot month and bids have now moved into the May position although few growers are prepared to sell forward. We are now starting to see some spring interest following the return, albeit in small numbers at present, of Egyptian buyers. Spring values are indicated at £140-£142 ex farm dependant on location. New crop values are indicated at £115 ex farm, again dependant on location.

With peas we have seen a number of pale green peas ending up in the feed basket with feed values indicated at £130 ex farm. Rare bids for better quality peas are reflecting a £10 premium over feed values and again, dependant on location.

Oats

There has been very little trade this week with milling quality slipping a little with some buying interest for June, values translate back to an indicated £68-£70 on the farm. Feed quality oats are trading at a £7-£8 discount to milling with some movement opportunities for May and June.

Malting Barley

The UK beer industry came under attack from the budget as duty on beer will increase by two per cent above inflation, as per the duty escalator. This means an overall rise of around five per cent, the Chancellor said. With little to report this week domestically as the market remains moribund, trade has been very quiet as the fundamental over supply position remains, although some very small volumes have been traded for late on in the season. We have seen some export business done on the continent, this is likely bound for Brazil with the latest exports taking the season total to 700,000 tonnes compared to a total of 3.13Mln tonnes last year.

Fertiliser

Research conducted by ADAS for GrowHow suggests that winter barley needs more N than recommended by RB209. GrowHow`s Allison Grundy says this advice holds good whether grown for malting or feed. The research shows that for every tonne of potential yield above 7 t/ha, modern varieties need an additional 20 to 30 kg of N/ha to reach their full potential. Applying early will help deliver up to 0.4 t/ha more grain. This year applying the first split of Nitram in March is effectively early as crops are smaller than usual, applying early will also help reduce grain N for malting. It is important to follow a good plant growth regulator programme to counter any additional straw growth. With the lack of malting barley contracts this year, it is more important than ever to optimise yields.

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.