News

The grain markets had a busy time last weekend. The Saudi tender was confirmed and is to be supplied from Germany and Canada, the surprise was in the price which was lower than many had expected. Egypt also held a tender buying two cargoes from Russia and Kazakhstan for shipment by 20th July. Russian suppliers continue to face challenges with shipments to Egypt as another cargo is to be re-exported as it was described as unfit for human consumption due to bug damage and live insects being present.

US markets initially started the week on a positive note following comments from China that they are to allow the Yuan more latitude in foreign exchange markets. This was perceived as bullish for commodities and the CRB index rallied to the highest level for several months. From that point both grains and the row crops drifted as growing conditions remain benign. Outlook: The corn pollination period is imminent which will be the next talking point as we head into the wheat harvest; USDA report mid week.

Wheat

Old crop grains moribund
New crop trading slow
Sterling makes gains

Old crop: It has been a slow week which started brightly following an announcement that China is to allow the Yuan a little more flexibility in the foreign exchange markets. Initially prices were supported but as sterling gained against the Euro and US$ prices fell to the mid £90`s for spot collection feed wheat. There has been a limited amount of export trade to Northern Europe and at current market levels each Euro cent is worth £0.95p in grain terms. Domestic consumers and industrial users of wheat are still struggling to take delivery of their purchases which is keeping the market on the defensive.

Outlook: The old crop market remains finely poised and sterling aside, we are at export parity.

New crop: Trading has virtually ground to a halt. Initially futures markets were supported as a wave of optimism cascaded through all commodities but as the week went on and sterling advanced grains gave back the week`s gains. Exporters are currently standing aside citing cheaper offers from the Balkan states. Domestic consumers are relaxed expecting a big crop whilst the producer, having seen higher prices is prepared to wait! Outlook: It is difficult to be optimistic this close to the Northern Hemisphere harvest.

Oilseed Rape

Values: June £275 ex farm, Harvest £250 ex farm
Old crop fundamentals unchanged
Favourable weather conditions in Europe

Old crop: No change to the old crop fundamentals with prices remaining firm at £275 ex farm on the back of limited supply. Prices will begin to come under pressure with the harvest just 3 weeks away

New crop: Harvest prices have remained firm this week trading in the £250 to £252 ex farm range with an £8 carry to November, the potential gains limited by the firming of STG. The concerns over Europe`s rapeseed crop have waned slightly with both France and Germany experiencing favourable weather improving production prospects. Canada�uro;�s crop is still experiencing adverse weather conditions and is set to be 2.5 million tonnes down on the previous forecast. The outlook overall for the domestic crop remains bearish with the forecast for this coming harvest being in excess of 2 million tonnes

The nearby Matif has extended its gains with the August contract up €5 on the week at the time of writing. STG has strengthened against the €uro as the market responds to the Governments aggressive budgetary cuts. The firming of STG is limiting export opportunities. The Soybean market remains bearish with the lack of threatening weather weighing down on prices.

Outlook: Old crop remains firm. New crop bearish supply outlook to put pressure on prices

Malting Barley

Old crop has now been completed with attention turned to the upcoming harvest. New crop markets have been very quiet and values have eased back this week in line with the F.O.B market as this remains the driver for UK values in lieu of domestic consumer bids. The firmer STG has also eroded UK values. The debate now is over potential quality issues following the early dry spell and the wet weather we have witnessed over recent weeks.

Consumers remain risk averse with barley purchase made in conjunction with Malt sales. New crop values are indicated at £103-£105 ex farm for Oct. A report seen this week suggests that the Canadian barley harvest will be the lowest produced since 1965, the cause being some 2Mn acres that has not been drilled due to flooding following a sustained wet period across the prairies.

Beans

There has been little interest in old crop with few buyers coming to the market. The need to clear stores for this coming harvest has resulted in the bean and pea prices dropping from the highs experienced in early June. Some marrowfat buy backs for 2011 are available if required please ask your local Farm Business Manager for details.

Oats

In the short term the outlook is bearish as large carryover stocks coupled with reasonable domestic plantings are likely to keep UK prices stagnant as the impact of Canada`s reduction in plantings has yet to impact the domestic market. Harvest movement is looking hard to accommodate as exports remain uncompetitive.

Fertiliser

Despite the initial resistance to the opening new season AN prices, the June and July order books have been filled. August pricing shows a small carry from the July price and the hope from growers, who have yet to buy or are waiting until post harvest, is that the market will stay flat until December. Urea prices are forecast to climb over the new quarter and that should give some element of comfort to all early buyers that is has been a sensible business decision.

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.