News

Rumours that China are about to start importing corn saw a strong rally in the CBOT futures market, albeit from close to contract lows. This in turn sparked a rally in the wheat pit (which had traded new contract lows on Monday) as the heavily short funds took some protection, by the end of the week values where off the top. The rumor of Chinese corn imports was initiated by rampant internal prices, which rallied $40 (£26) in 10 days. To cool the market Chinese officials are to release a touch over 1 mln mt from strategic stores spread around the country, which should discourage imports. Iraq bought 500K over the Easter weekend for June/July shipment. The wheat is to be supplied from Russia, Canada and 50K from the US. EU trade is split between normal inter EU feed exports to the Iberian peninsular and shipper short covering for feed wheat shipment to third countries; the commission issued 300K of export licenses taking the season total to 14.7 mln.

Outlook: We are on the cusp of the Northern hemisphere wheat harvest; Pakistan and India are already making positive noises and there have been no reported problems else where. Rallies remain for selling!

Wheat

Sterling make gains
Grain markets slow
Milling premiums unchanged

It has been a slow week in cereal markets, but values on the farm have edged higher due to export demand. This is in the face of strengthening sterling, which has gained against the US$ and the Euro. Each Euro cent is worth £1.05 in feed wheat terms and each US cent is worth £0.70p, which is a reasonable indication of the underlying buying interest. Feed wheat for summer collection has edged to £95, which has attracted an amount of producer selling. The domestic consumers remain on the sidelines, although they have taken note of the rising port prices. Milling premiums have held up well; full specification group 1 wheat is worth £16 to £18 over feed at the point of delivery, while group 2`s are valued at £11 to 13 on the same basis. Barley prices have also held up well and the free market levels are narrowing against the intervention calculation.

Outlook: The export interest which is supporting UK prices is to exotic destinations whose harvest is imminent; rallies remain for selling.

Seed

There is a surprising amount of activity in the arable market given the lateness of the season, the usual top up orders being interspersed with significant arable orders of spring rape linseed and peas. The rise in the new crop linseed market taking values back to over £300 / tonne for buyers call movement is providing a focus, but not everybody wants to harvest a late crop, so Ability OSR or Prophet / Crackerjack peas provide an earlier and easier to handle alternative.

NIAB seed stats show the decline in certified spring barley seed sales at a staggering 43% compared with the average of the 2007/08 seasons at the same time, unless the mobiles have doubled their workload (they say they haven`) there is still a significant volume of business to be done

In Scotland barley is still moving, but the market would now seem to be with the feed types. Speak to the seed offices for availability.

Game cover - As arable work is progressed thoughts start to move to Game cover, many of you will have received our booklet already, if not please ask. Our range is of the highest quality, priced competitively and some products are ELS compliant

Fertiliser

Results have been flooding in over the past few weeks from the GrowHow N-Min samples that have been taken over the last two months. As a reminder N-Min is a test for mineral nitrogen levels in the soil. What is interesting is that no assumptions can really be made as to a general statement on mineral N levels in the UK as would have been traditional in the past.

There are so many variables, such as previous cropping, soil types, organic manures applied as well as winter rainfall and soil temperatures on top of all this.

All this means it is far more important to test at individual farm level to get a clearer more specific idea on your own farm to help you calculate appropriate nitrogen applications.

If you have not been able to get a GrowHow N-Min sample taken, we can still help with Nitrogen calculations by using the GrowHow N-Calc service, using book values for residual nitrogen.

Please speak to your Farm Business Manager or call the fertiliser department on 01476 862730 for details.

Oilseed Rape

Domestic market still supported by tight old crop supply.
Brazilian soy harvest continues at pace.
UK interest rates remain on hold-STG remains firm.

The short trading week has seen nearby Matif gain €3.50 to the time of writing with the domestic market making just a £1 in the same period. As has been the case for a couple of weeks now, the firmer STG has held back domestic prices. The old crop market due to tight supply remains well supported, with new crop gaining some ground thanks to some better demand from the bio diesel sector, as rape oil falls back into favour with the increasing value of crude oil increasing blending rates.

US markets have been hampered by a firmer USD$ over the last couple of days. Crude oil had touched an 18 month high earlier in the week helping to drag soybeans higher however, there was also help from a rumour circulating the markets that China had bought 2 Mn tonnes of Corn. We have also seen a report that suggests China is happy to allow the Chinese Yuan to appreciate against other currencies thereby increasing import demand-supporting commodity markets. The USDA issued its April supply and demand report today, in which they increased South American Soy bean production by 1M tonnes and 500k tonnes for Argentina and Brazil respectively. There was no adjustment to carryout stocks.

Recent reports from South America show that the Brazilian harvest has moved ahead to 75% complete, up from 66% last week with CONAB, part of the Brazilian agriculture ministry, suggesting a 67.4Mn tonne crop is expected. We have also seen news this week concerning China allegedly banning Argentinean soy oil due to breaches of impurity levels. This has subsequently been denied, however there has been rule in place for six years which states a maximum 100ppm (parts per million) trace of particular solvents used in the crush process in soy oil, with Argentina regularly delivering oil at 300ppm. It now appears that this will be enforced going forward. Argentina has dispatched a representative to resolve the issue, which could be interesting for Soy oil markets as there is 600k tonnes of oil sold to China for the remainder of this marketing year.

STG remains firm against the €uro this week following the deepening concerns over the Greek debt situation and some poor European economic data. Greece announced earlier this week its intention to avoid IMF bailouts along with a fourth quarter GDP report which showed Europe`s economy stagnated in the period following 0.4% growth in the preceding quarter. The Bank of England monetary policy committee met today and as expected left interest rates unchanged at 0.5%. Although STG remained firm against the €uro some ground has been given back against the USD$ following a narrowing of the Conservative lead over Labour in the polls raising fears of a hung parliament and no clear mandate to resolve the UK`s budget deficit.

Pulses

The beans market has been quiet this week with the Easter break meaning many in the trade are away on holiday. Trade that has been conducted has been for late April/May with feed values for this period indicated at £131-£133 on the farm. We have seen no bids for springs this week and there is some concern that the expected bids could fail to materialise. New crop values are indicated at £112-£113 ex the farm for harvest with early premiums in the £5-£10 bracket with the abundance of French produce weighing on values. The peas market remains quiet with feed values indicated at £130 ex farm for May. Homes for better quality peas remain scarce but have been reflecting a £5 premium over feed value. All new crop buybacks are now full.

Oats

The market remains static. Milling quality product is indicated at £68-£70 on the farm for June. Feed quality oats have again seen a widening of the discount again this week widening £2 to £12, with movement opportunities now in June. New crop market remains void of bids and the firmer STG has all but quashed export hopes.

Malting Barley

Domestic market remains uninspiring for both old and new crop positions, with little trade conducted for either. European markets have been boosted by a weakening of the €uro against the USD$ which has prompted further sales to dollar denominated markets, whilst these sales are for new crop positions in general brewers/maltsters remain cautious over demand for 2010. With the dissolution of parliament came a reprieve for the cider sector with the removal of the 10% tax for now. Unfortunately the duty escalator on beers and spirits remains.

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.