News

In Canada the wet weather persists and the agricultural department has reduced the area committed to wheat by 3 mln acres and is forecasting the wheat crop at 20.9 mln mt down from the 24.22 mln estimate made in May. This will be the smallest crop in 3 years.

Things in mainland US are just beginning and harvest is slowly progressing. In the US, futures market prices have accelerated as funds rebalance their short positions and establish longs.

In the EU there is an East-West split. In the East, rain continues to delay harvesting and both Romania and Bulgaria have suffered crop losses. In the West the hot dry conditions continue to cause concern about the wheat output.

MATIF wheat futures have advanced strongly and producers and Co-op`s are reluctant sellers. Friday`s USDA report is perceived as a disappointment for the wheat bulls, with the reduction in wheat production less than the trade anticipated. It may be that there is some catching up to be done as the EU gets into the wheat harvest.

Outlook: Continued volatility.

Wheat

Grain prices firm
Trading brisk
Sterling drifts

Old crop: While new crop values rocket old crop prices have edged forward at a snail`s pace, with feed wheat changing hands at between £104 & £106 ex farm. This difference reflects the producer`s desire to clear stores for cleaning and the consumer`s position of having sufficient purchases. The grain that has been coming forward is destined for ports as Ireland, Germany and Holland continue to make spot purchases. The milling market remains moribund with group 1 premiums circa £18 over feed at the point of delivery.

Outlook: The discount to new crop looks set to narrow.

New crop: The market has followed through and grain prices have advanced to £119 to £120 ex farm for summer 2011 collection. As these prices show a positive return for the producer there has been a big change of ownership. Domestic users remain on the sidelines and seem relaxed. There has been some limited export trade to the near continent, although sterling has drifted against the Euro which will help exporters.

Outlook: The old trading adage `up like a rocket down like it`s a stick` springs to mind. While it has undoubtedly been both dry and hot there is now a significant weather premium built into the market. Many leading analysts have only made minor revisions to their crop forecasts, although the market will only believe it when the crops are in the barn. Timing is everything.

Oilseed Rape

Values: Harvest £262 ex farm, Nov £271 ex farm.
Dry weather continues to drive commodity markets.
STG remains weak, supporting UK values.

New crop: Harvest prices have moved up again this week as the dry weather continues to weigh on consumer minds across all commodity markets. Domestic values gained £5 on the day yesterday as the run in values continue following the USDA figures announced last week. It is still anticipated, as reported last week, that the UK crop is estimated at circa 2 million tonnes with domestic demand of 1.85 million tonnes. We have heard this week first news that the some crops have been swathed, we will not have long to wait to find out.

Matif has moved significantly over the last week with €19 gained. As briefly mentioned above the fallout from the USDA S&D report last week and very dry weather across most of Europe has prompted a lot of short covering and fund interest. There has also been support from early indications of French yields with total production revised down to 4.55Mn tonnes, a reduction of 17%. STG has weakened over the course of the last week as poor economic data from the US prompted investors to reassess the global economic picture.

Outlook: New crop values have increased significantly over the last week with short term direction governed by the current weather situation driving other markets.

Malting Barley

The continued dry weather in Western Europe which has added support to most commodities this week has lifted European barley values. With harvest around the corner all eyes will be monitoring crop quality for any indicators of production issues.

Domestic consumers remain on the sidelines with carry over of the 2009 crop offering a buffer in the short term; however the European interest, predominantly some short position covering has buoyed F.O.B values.

Nearby Matif malting barley futures have gained €12 over the week, albeit on limited volume as the market remains relatively illiquid. A weaker STG over the week has been supportive of the cross currency calculation and with the moves in FOB values, has seen £10 added to Oct values with indications at £112-£114 ex farm.

Oats

Old crop is all but done with odd loads trading in £82-4 range ex farm. As other products firm, with dry weather and yields come under pressure, oats have started to rise with harvest ex farm values trading at around £90. With a crop size slightly down in area from last year and lower yields to contend the large carryout could offset any worries on supply from the UK miller. The key for UK prices could depend on the export interest and if good then lower UK supply of oats could force the domestic prices.

Pulses

Dry weather seems to be stunting growth on beans with winters looking good but small and spring bean plants very small. Quality of human consumption beans are a fear with some people worried about beans being not filled properly and not suitable. Feed prices on old crop are around £120-£125 and November new crop @ £128-£131 depending on area. Premiums for Springs quoted around £10 per tonne with no business being done with the fears of quality already mentioned. An abundance of old crop peas with no buyers to be found is an annoying fact and they may have to be sold as new crop in worse case scenario. Everyone waiting to see what the sun is doing to the quality of peas but it does lead you to believe there will be bleached samples around (get them harvested early to get best colour you can)

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 for 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 we 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

Fertiliser

The August market is beginning to establish itself for GrowHow Nitram, offers are very limited for Imported AN however the levels that are indicated do not represent significant discount to Nitram.

Urea positions are being worked through and replacement prices are firming.

Phosphate and Potash prices have held over the last week, but as expected are showing no weakness. Soil Analysis is crucial this season to manage the price levels on P & K, a blanket application across every acre is understandably difficult to justify. Speak to your FBM or to the Fertiliser Department on 01476 862787 and we can supply you with Soil Analysis Kits to get started.

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.