News

Last Friday`s USDA report was largely neutral. The changes in the world wheat S&D saw the ending stocks decline by 900k; this was due to a higher consumption of wheat for feeding. The changes in corn were a little more meaningful with world ending stocks increased by 4mln mt due to production increases in Brazil (+1.5) and the US (+2.5). Consumption has been reduced modestly. The Chinese domestic corn tender was largely taken up in the North although not everything was sold in the Southern states. The National Grain and Oil Trade Centre (NGOTC) will continue to monitor domestic prices with a view to selling more stocks if prices start to rise again.

Saudi Arabia bought 550K of wheat for June to October shipment, the interesting thing is the origin of the supplies. Kazakhstan is to ship 5 cargoes, Canada 3 and the balance from Germany. Kazak wheat has a treacherous journey to get to a port and the government is to subsidise the rail costs. EU wheat business is routine, but the corn market has been strong, which in turn has spilled over into barley.

Outlook: The supply and demand outlook remains heavy, but much of this is in the price.

Wheat

Sterling choppy
Old crop wheat demand underpinned
Milling premiums hold

As has been the case for some weeks now export demand continues to support UK feed grains. Trade continues to Spain, Portugal and Ireland for prompt shipment which has been helped by erratic movements in the sterling Euro currency exchange rate.

Interest to third countries has waned, due to Black sea supplies becoming available, combined with sterling gains against the US dollar, which makes UK wheat less attractive. The domestic market remains slow with feed compounders seemingly comfortable, the best bids coming from shippers, who are switching stem into ports.

Ex farm feed wheat is changing hand at £93 to £95 for summer collection. The milling wheat market is notionally unchanged with full specification group 1 wheat worth £15 to £17 over feed at the point of delivery for summer movement. The market is however very quiet. Outlook: Although the market feels underpinned, there is still a surplus to be shipped or carried into new crop; rallies are for selling!

Fertiliser

The top-up Nitrogen market has been brisk this week. This does put pressure on logistics as there is now a narrow window of opportunity to deliver. Product availability has been a challenge in many parts of the country this season, mainly due to lack of raw materials at key times especially when we rely on importing some of those materials. However Nitram is readily available and full loads are currently turned around in a space of two or three days.

Oilseed Rape

Support remains for domestic old crop market
Weaker USD$ helps crude and soybean values
STG reacts to Greek debt issues and latest election polls

Nearby Matif has remained unchanged to the time of writing with the domestic market static, there has been a narrow £2 trading range thanks to movements in currency. Domestically old crop remains supported due to tight supply with the oldcrop / newcrop spread widening further. Recent reports show the UK rape area up 9.8% at 628,000Ha. There has also been an update from Germany showing that the crop had survived the winter cold snap largely unscathed, contributing to a total EU production now pegged at 21 mln tonnes, slightly behind last year`s record number.

US markets have been supported by a weaker USD$ over the last couple of days helping to support both crude oil and US Soybean values. There was also a US crude stocks report which reflected a drop on the month prompting some buying interest. Monthly soybean crush report issued earlier this week reflected an 8.2% increase over the same period last year. There has been a small boost to the market on the day as China signalled its intention to make further soybean purchases above expectations to cover the cancelled soyoil purchases from Argentina.

South American reports show that the Brazilian harvest has moved ahead to 81% complete. Argentina continues to suffer from the Chinese soy oil contamination saga as the news wires have reflected that China has now asked Argentina not to deliver shipments that were agreed before the start of the dispute. Paraguay, the world`s fourth largest producer of soybeans, has announced that it sees this year`s harvest at a record 7.4 mln tonnes which is double last year`s drought hit crop. This has since prompted calls for the government to impose a 10% export levy to help bolster government budgets.

STG remains relatively firm against the €uro today following the outcome of the live television political leader debate which indicated firmer support for the Liberal Democrat party and would suggest a potential hung parliament. To counter any weakness in STG we today have seen reports that Greece has taken the initial steps to activating the EU support package which was agreed earlier in the week. The package will see €uro zone countries and the IMF make approx €45Bn available for funding to the Greek government. Attention will be focussed on the EMU finance ministers meeting in Madrid today for further updates on the Greek situation.

Pulses

The beans market remains unchanged this week with trade conducted for May with feed values indicated at a level of £132 on the farm although the number of homes now available is falling as demand is met. We remain hopeful of seeing bids for old crop springs albeit with reduced volumes. New crop values are indicated at £112-£113 ex the farm for harvest with early premiums in the region of £5-£10.

The old crop peas market has reached saturation point with all homes now full. All new crop buybacks are now completed.

Oats

Small volumes have been traded this week with milling quality product trading at £70-£73 ex farm for late May/June movement dependant on location. Feed values have narrowed their discount to milling and is now indicated at a £10 discount. New crop market has seen interest from one buyer with values indicated at £70-£75 ex farm dependant on location.

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.