News

UK cereal prices have made solid gains this week, as trade short coverings have been competing with renewed shipper buying, which has moved the market forward. Ex farm prices have risen to £100 for feed wheat for summer collection as Shippers are buying to meet spot demand to Spain, Portugal and some deferred interest to Ireland. February`s export data was issued this week showing that 191K was exported in February of which 124K was destined for Spain. February imports totaled 65K the lowest figure for a couple of years. There were also a number of revisions of earlier data reducing the imports by 25K to the end of 2009.

Outlook: The market has caught up with the export parity and awaits renewed buying interest. The UK exportable wheat surplus now looks less burdensome but any sustained rallies remain a selling opportunity, especially for new crop.

Seed

Seed sales this week have been marked by diversity from lawn seed, fodder beet, maize, game cover, spring cereals, winter wheat to peas and everything in between, the late spring compressing the season.

However from Monday onwards we move into the autumn selling season. The Openfield Seed Selector will be sent out to members next week and is available now as a download from the seed section of the website. We believe our Oilseed Rape portfolio is the best in the industry and our range of technical seed treatments offer alternative ways to manage crops taking pressure off spray days. I would urge you to read through both sections carefully.

Our price / availability list will be published on Monday and trials days are forthcoming. As part of the winter wheat campaign we are offering a buy back contract on the new Group 3 Invicta, our farm business managers have details.

Fertiliser

It`s not so long ago that we were struggling under grey skies and fields covered in snow. So the current weather conditions across most of the UK make a refreshing change.

These conditions highlight some of the difficulties with our climate; we normally associate this month with April showers not clear blue skies and dust blowing. This is the key period now in crops taking up Nitrogen and careful thought must be given when applying bagged N. These conditions are by far the most challenging when using Urea in particular. Loss of effectiveness can be negligible in some circumstances but as great as 20% when the soil surface starts to dry out and the temperature rises.

Oilseed Rape

A strong domestic demand continues to support market
Crude oil reacts to volcanic ash story
STG firmer over the week as Greek debt woe continues

Nearby Matif has turned technical, gaining €15 on the week. The gain is due to the fact the contract will roll off toward the end of the month meaning participants need to transact to close out positions. The domestic market has made £7 in the same period as UK values are now being linked to the August contract. Further gains in domestic values have been tempered by the strength of the currency. A familiar pattern is now emerging, old crop remains supported due to tight supply with the oldcrop / newcrop spread widening further. Recent reports show an increase of 7% in canola plantings in Canada at the expense of Flaxseed areas.

US markets have been reacting to both moves in the USD$, following the recent revelations concerning investment bank Goldman Sachs, and the continuingly growing supply of soybeans from South America. The Goldman issue caused a flight to the USD$ as a safe haven as investor`s confidence was rocked. The firmer USD$ has made dollar denominated assets less attractive to overseas investors. This combined with the continuing harvest in South America and availability of soybeans initially weighed on prices, for it to then reverse on the back of climbing oil prices. Crude had traded lower at the beginning of the week as flight cancellations took its toll on oil consumption. The resumption of flights in the last 24h has reversed that trend, pushing oil higher and supporting soybeans. There were also some further export sales booked to China this week above expectations. China seeks to increase its domestic crush for oil, following suspension of Argentinean soyoil imports, and as it boosts its demand for feed stocks to support its increasingly westernised meat based protein rich diets. We have also seen Soybeans close above $10 a bushel last night, for the first time since January.

South American reports show that the Brazilian harvest is now 89% complete with a recent drier spell helping to push on Argentinean progress. The Argentinean soyoil issue continues to rumble on, China appears to be threatening a trade dispute over continuing trade protectionism, as they see it, from the South American company. China`s imports of Argentine soyoil would not be normalised unless Argentine exporters `increase the quality and safety of the product,` Xinhua quoted Vice-Commerce Minister Jiang Yaoping as saying in Buenos Aires. This could lead to continuation of the soybeans outside of South America as seen above.

STG has had another strong week this week thanks to some positive domestic economic data and the continuing saga of the Greek debt problems. A report issued on Thursday showed that Greece`s budget deficit was 13.6% last year which was higher than the government`s April forecast of 12.9%. This led to Greece formally approaching the EU/IMF for activation of the support fund following a further downgrade of its debt which effectively closed the bond markets to the government as a source of funding. The market is now waiting for confirmation of the terms of the support fund. UK economic data came in the form of the jobless claimant figures which reflected a 32,900 fall against an expected 10,000 fall. Banks had also increased the number of Mortgages granted last month to 52,000 which was 2,000 above trade estimates.

Pulses

The beans market has improved this week with the return of the Spring bean buyers. Prices for Springs on the farm are indicated at £143-£147, dependant on location. With the return of demand for premium beans the feed market has tightened and has subsequently been pushed higher by £2-£3. New crop indications reflect another small gain to £115 ex farm, dependant on location.

The old crop peas market has reached saturation point with all homes now full. All new crop buybacks are now completed. No indications for new crop at present.

Oats

We have seen a £2 gain in values this week following some shorts entering the market place with trade being done for the May and June positions. New crop values are indicated with bids at the mid £70`s level although we have not seen many offers as growers are looking for values to trade closer to parity with wheat. Old crop export market has been moribund and can be considered closed. We can continue to seek out new crop export opportunities.

Malting Barley

New crop markets have seen some support over the last week. Gains in feed markets have helped to push values a little better with export values benefiting the most as domestic values continue to be weighed upon by the firmer STG. Fundamentals remain unchanged and the latest DEFRA report on cereal stocks issued this week reflecting an 85% increase over the same period last year of barley stock held on farm equating to approx. 1.1Mn tonnes. There same report reflected that stocks in ports, with co-ops and merchants had risen by 55% to 848k tonnes. Old crop remains very quiet with the only trade being conducted by shorts in low volumes.

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.