News

The old Chinese curse of `may you live in interesting times` springs to mind as grain values accelerated throughout the World over the last week as a combination of factors conspired to spook buyers. Reports of continued delays and lower yields from Bulgaria, Romania and Greece sparked Iberian buyers into action, who are still awaiting their own crop. In France early barley yields have also disappointed, but it is early days. This was enough to lift EU wheat levels by €4 to €6 before the mid week release of the USDA quarterly stocks and planting report. The big surprise was in corn where the residual stock was less than trade estimates suggesting that either yields were overestimated or that the corn that was left in the fields late in the year was not harvested. Planting estimates also failed to meet traders projections and the net effect was a sharp rally from contract lows in the CBOT futures markets. This action still looks like a rally with a congestion area from a technical perspective.

Outlook: Volatilty is assured over the next few weeks.

Wheat

Sterling strong
Grains rally
Milling market moribund

Old crop: The market has been seeing mixed signals. Domestically the combination of slow off take by consumers and millers has been exacerbated by extra availability from the producer. As summer contracts have been lifted many producers have had more grain left in the barn than they had anticipated. Not a bad problem to have with ex farm prices close to or at £100 ex for summer collection. Fortunately there has been some export demand for prompt shipment into Northern Europe and the demand has been strong enough to pay for the advance of sterling against the Euro.

Outlook: The market feels underpinned in the short term.

New crop: Trading has been very slow. Values have advanced throughout the EU due to crop concerns as we enter the latter stages. Harvest has been delayed in Eastern Europe due to rain and the limited amount of barley harvested in Spain and Southern France has yielded poorly. It is early days and the main barley harvest may yet yield nearer the mean but consumers have low levels of cover and a small harvest could largely be stored by the producer.

Outlook: A degree of uncertainty has entered the market and it is difficult to buy physical grain.

Oilseed Rape

Indicative values: June £270 ex farm, Harvest £245 ex farm
High temperatures across Europe causing concern

Old crop: No change to the old crop fundamentals with very little volume being traded as harvest approaches.

New crop: Harvest prices remain firm trading in the £242 to £250 ex farm range with an £8-£10 carry to November. Weather continues to play a key role in the market place with the recent high temperatures and limited rainfall in Europe, with the exception of the south east, causing concern. Canada`s weather has improved but the damage has already been done with the prolonged rains preventing plantings.

The Matif August contract is €2 down on the week at the time of writing. The Matif has been volatile this week with the spill over from the Bullish USDA Corn stocks, and the downwards pressure on the equities markets from concern over weakening growth in China and lower than estimated U.S consumer confidence pressuring commodity prices. STG strengthened against the €uro in the first half of the week supported by concerns that European banks may again face funding difficulties but lost ground in the second half ending unchanged from the week before. Further strengthening of STG will make the export market less attractive.

Outlook: Old crop unchanged. New crop supply outlook to put pressure on prices in the short-term

Malting Barley

European new crop markets have seen a little interest this week following gains made in European feed barley markets. The domestic market remains void of interest for now. Continental interest in feed grains has been fuelled by news that the French harvest has started in the South with yields seen ranging between 5.5t/ha-7t/ha vs nearer 9t/ha last year. Adding further short term support is news that Eastern Europe`s harvest has been delayed following some wet weather squeezing the nearby market. New crop values remain indicated at £103-£105 ex farm for Oct.

Fertiliser

The June and July order book for GrowHow is now full, and we now turn our attention to August. It is understandable to look for alternatives as the market firms for the later months, however offers from importers for quality Ammonium Nitrate products are very limited and with strong demand from mainland Europe, August will represent a very competitive offer against the forward offers for Imported AN.

Large tenders for Urea around the globe will keep upward pressure on the price for the next quarter. Interest in Phosphate and Potash is starting to build, Potash producers remain firm in their resolve to increase prices heading into the Autumn.

Seed

With most trials now finished its decision time on varietal choice - we have the best OSR portfolio which suits all needs. Sesame and hybrid variety DK Expower ( replacement from Excalibur ) is now sold out. Both Dimension and Cabernet look full of yield whilst Grandia is attracting much interest as being the true replacement for Castille with a gross margin advantage of £120.00 per ha over the former national favourite. For those of you within 50 miles of Erith it makes sense to link in with our Blue-ng contract for Harvest 2011 - again ask for details.

We have buy back contracts for Harvest 2011 for Group 1 ,2 and 3 wheat varieties at min: or fixed price premiums all of which are linked to our own Openfield seed.

New wheat varieties Invicta & Warrior are in big demand -supplies are OK at moment but suggest early ordering to be prudent.

For further information on the above do please contact your Openfield FBM or the seed office at HPL 01476 862694

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.