News

The old crop market is still supported by tight supply with prices trading in a narrower range from last week, around £265 ex farm. Prices are likely to remain firm with the UK harvest 7 weeks away.

New crop harvest prices have been trading at £240 ex farm but have seen few sellers as concerns persist over crop quality, aggravated by the unseasonably high temperatures experienced over the weekend. However, with the recent showers in many parts of the UK coupled with cooler temperatures forecast taking pressure off the crop, and the approaching harvest, new crop prices are likely to experience downwards pressure.

The Matif has seen another week of volatility along with Equity and Currency markets. Deepening concern about sovereign debt risks in Europe, stunted EU growth and anxiety over North Korea led to a sharp fall in the markets followed by a recovery later in the week aided in part by China stating it remains a Long term investor in Europe. STG is firmer against the Euro, if the trend continues this could see pressure being put on the UK export market. At the time of writing, the Matif August contract is up €5 on the week.

Outlook: Old crop to remain firm. New crop is likely to come under pressure as harvest approaches.

Market News

US markets supported by short covering
China may increase corn import quotas
Ukraine forecast wheat crop down 15%
Europe wet in the centre, dry in the East and West
Egypt tenders to buy June wheat
EU awards 484 wheat licenses at weekly tender (cumulative 16.140)
Sterling at 11 month highs against Euro

Currency movements and their influence on outside markets have made grain markets difficult to predict this week. Sterling reached an 11 month high against the euro which remains pressured by sovereign debt concerns and the threat of contagion across the EU community.

US grain markets have performed well despite dollar strength with corn the driver on reports that China may increase its corn import quotas. Internal prices in China continue to make new highs despite sales of stocks back onto their domestic markets which are being mopped up. It is still significantly cheaper to import corn into Southern China than transport government stocks to the deficit areas. The size of the Chinese program and any potential weather problems in the US will be key.

Timely rains in hitherto dry areas of Europe have taken the steam out of the market although it remains generally dry in the east and west. Ukraine has forecast that their 2010/11 crop will be down 15% which could be replicated in Russia.

UK prices have eased on both old and new crop due to a combination of firmer sterling and forecasts for increased rainfall in the days ahead. Old crop export demand has dried up as sterling strength reduced UK wheat competitiveness against other origins including Bulgarian. The UK old crop balance sheet remains finely balanced although it appears domestic consumers are now well covered for June. We would not rule out a sting in the tail. New crop will be sensitive to weather developments and any confirmation of increased Chinese corn demand would be supportive to the Global feed grain market.

Pulses

The old crop Beans market has been hard work this week with the market just starting to come off of the top suggesting buyers are nearing completion. Current feed indicated values are £147-£150 dependant on location. New crop market remains largely unchanged this week with new crop spring premiums indicated at £8- £10 with feed values indicated at £120 ex the farm. The peas markets remain for June as compounders continue to include peas as a substitute for beans. We have also seen enquiries for marrowfat peas. Growers with marrowfats to market are encouraged to contact their Farm Business Manager. New crop market remains void of bids.

Oats

The market remains little changed this week again this week. Values are £78-£80 ex farm dependant on location, with the one buyer supporting the market at present. We see limited upside in values from here. New crop values are indicated around old crop values with bids seen in the mid £70`s region. We can continue to seek out new crop export opportunities but the continued firmness in STG is stifling opportunities at present.

Malting Barley

Markets remain moribund this week with old crop trade limited to some short covering in the market place, with spring values indicated at £88-£90 ex for June dependant on location. New crop markets have seen some short covering with a lack of sellers helping to support the market with values indicated at £104-£106 ex farm for Oct. Other news sees interest in malt purchases on a slight increase in the last couple of weeks as brewers are getting ready for the summer, industry sources report. We have also seen news that AB Inbev, the world`s largest brewer, is putting its UK beer brands up for sale. Names include Flowers, Boddingtons and Bass ale. The company said it wishes to concentrate energies on its Budweiser, Beck`s and Stella Artois brands.

Seed

Openfield and UAP are hosting various Winter Cereals and Oilseed Rape Demonstrations

for further details please contact Openfield seed offices

Midlands and Eastern 01476 862702 - Southern 01264 321572 - Northern 01937 848119

16th June - Openfield Winter Wheat Varieties - Wakerley Central Trials Site, Nr Wakerley, Stamford, Lincs LE15 8PA - Time TBA

23rd June - Openfield and UAP Winter Wheat and Oilseed Rape Varieties - interaction with nitrogen and fungicide programmes - Warren Farm, Crawley, Hants SO21 2PW, guided tours

24th June - Openfield Winter Cereals Demonstration - Hutton Wandersley, York YO26 7LL - 10 am

28th June - Openfield and UAP Winter Wheat Varieties - interaction with nitrogen and fungicide programmes - Rushbourne Manor, Hoath, Kent CT3 4JP various tour times

29th June - Openfield and UAP Winter Wheat Varieties - Woeful Lake Farm, Sherborne, Glous GL54 3PR various tour times

6th July - Openfield and UAP Winter Wheat Varieties / fungicide interations - Low Toynton, Horncastle, Lincs LN9 6JU - Time TBA

Fertiliser

No sooner does one season finish, and another one is almost upon us.

There is always speculation at this time as to where the price levels will be published; we are of the opinion that to make a decision one must be in possession of all the facts, both in terms of commercial information but also product quality and performance.

There has been some indicative levels discussed in the market for Granular Urea and Imported AN. Before too long we will have the structure and pricing from GrowHow this will put growers in a far clearer position to assess the value on offer.

Come along and visit Openfield at Cereals Event on 9th and 10th June stand 603

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.