News

After touching lows last seen at harvest in 2009 international wheat markets have had a sharp recovery. The recovery was prompted by two factors; firstly a 990K import tender to Saudi Arabia and secondly delays to the planting of the Canadian spring wheat crop. The Saudi tender is one of the biggest for years; for shipment between October 2010 and April 2011 to two ports in the Kingdom. The interest is for high quality hard wheat`s which will preclude many origins; results are due over the weekend. The buying interest has coincided with a prolonged wet period in Canada which is hampering the drilling of spring wheat; Canadian spring wheat is some of the best milling quality available in the Northern hemisphere. This combination has seen a strong recovery in US wheat futures markets especially on the Minneapolis and Kansas exchanges. EU trading is awaiting harvest; Germany may be in with a chance in the Saudi tender and third country exports where brisk this week.

Outlook: All eyes will be waiting for the results of the Saudi tender; the Canadian situation is about milling premiums.

Wheat

Cereal prices recover
April Exports brisk
Milling premiums hold

Cereal trading has been slow; new crop prices have edged higher after visiting contract lows last week. New crop; UK grains still look expensive in the EU feed grain matrix, with German and French barley undercutting UK supplies and Bulgarian and Romanian wheat looking better value into the Iberian peninsular. This is not the case with old crop; confirmation that a panamax vessel (60K) is currently loading feed wheat destined for the Far East is confirmation that old crop UK wheat is good value. There have also been some trades to Northern Europe. Export data issued by customs shows that 278k was shipped in April; the biggest taker was Spain followed by Portugal. Imports where impressive at 168K taking the season total to 1.08 mln mt, slightly higher than the last DEFRA estimate for the whole crop year! Milling premiums have edged higher to £20 over feed for full spec group 1 wheat at the point of delivery.

Outlook: Old crop July could be a long month in the EU; delays in harvesting in Spain are eating into stocks and Northern Europe feels tight. This should be enough to under pin values in the short term. New crop look likely to re test the recent contract lows.

Oilseed Rape

Values: June £270 ex farm, Harvest £248 ex farm
Old crop fundamentals unchanged
Concerns over Global Rapeseed crop persists

Old crop: The old crop still remains firm with little volume being transacted with the bulk of the 2009 crop now traded. Prices have been between the £265 and £270 ex farm mark. The next support level will be the harvest price

New crop: Harvest prices have been trading much firmer during the first half of the week in the £250 to £255 ex farm range with an £8-£10 carry to November. Ongoing concerns over Europe`s rapeseed crop, coupled with the deterioration of the production prospects of the canola crop in Canada have, in the short term, turned the new crop fundamentals bullish. However Friday resulted in the market giving back most of its earlier gains and saw the harvest price drop to £248 ex farm.

The nearby Matif has extended its gains with the August contract up €8 on the week at the time of writing. STG is marginally weaker against the €uro driven in part by higher than forecast UK unemployment figures. The weaker STG has made the Export market more attractive. The Canadian Canola futures are up 3.5% reaching a 10 month high off the back of planned Canola plantings being down 2-3 million acres due to the ongoing adverse weather conditions.

Outlook: Old crop remains firm. New crop bearish supply outlook to put pressure on prices in the long-term

Pulses

With interest waning on old crop and only the odd buyer coming to the market prices have dropped dramatically this week. As beans and peas are now being offered to clear stores the prices have fallen £20 since the top prices of 3 weeks ago. New crop is tracking wheat prices and have not really moved in the last 2/3 weeks. Some marrowfat buy backs for 2011 are available if required please ask your local farm business manager for details.

Oats

With the news of greatly reduced plantings in Canada we wait to see if this has any effect on our prices, however large carryover of stocks and reasonable plantings in the UK will probably mean no serious changes to the UK prices in the short term. Harvest movement is already looking as if it will be hard to accommodate as exports are not competitive with Baltic/Scandinavian oats at the moment and UK millers stores are full of old crop to use.

Seed

The Wakerley Wheat and Oilseed Rape trials held this week were very well attended, people saw just how well the Dimension, Grandia and Cabernet looked.

Sesame stocks; we are down to our last few bags please enquire if you have an interest.

Demonstration trials are still being held over the next few weeks and NRoSo points will be available on attendance for further details please contact Openfield seed offices; Midlands and Eastern 01476 862702 - Southern 01264 321572 - Northern 01937 848119

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 Varities / fungicide interations - Low Toynton, Horncastle, Lincs LN9 6JU - Time TBA

Fertiliser

The long awaited new season terms finally arrived this week. However this was greeted with some degree of resistance from growers. The disappointment over pricing is understandable given the farming press a number of weeks ago were predicting only slightly over June 2009 levels. The one area that was overlooked is that the stock levels of Ammonium Nitrate in Europe are at the lowest levels ever seen. The main AN producer in France is only able to operate at 75% capacity, and the Lithuanian plant is suffering similar production problems. Granular Urea is available and on paper competitive but it comes with a health warning, especially given three out of the last four years have been far from ideal conditions to get urea into solution for plant uptake.

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.