The weekly report from Openfield

International

• MATIF wheat at contract lows
• USDA reports issued
• Egypt buy wheat

As traders awaited the midweek USDA report, international prices started to slide. The MATIF wheat contract established new lows as the March contract expired and futures levels are now the lowest since 2006. This did allow France to sell 60K to Egypt as the price was competitive with Russian supplies. As values fell the Russian government suggested it may restart intervention buying after suspending the programme in February. Only time will tell! The USDA report showed further increases in ending stocks wheat by close, to a million and corn up by a colossal 6 mln mt which has put pressure on the corn market. South Korea however continues to buy wheat in preference to corn buying 600k from Kazakhstan. Outlook: Technical`s, sentiment and fundamentals all point to further declines.

Wheat

• Grain values static
• Intervention barley offers advance
• Milling market moribund

It has been another slow week for grain trading as produces are busy on the land. Values are broadly unchanged with £90 ex farm for feed wheat being available for spring collection in most areas. This is not the full story however as for some the week`s main price driver has been domestic consumers, but as sterling has weakened exporters have slowly become the market makers. This interest is predominantly for ports that can load `handy` size vessels (>25K) although smaller ports are also in the hunt. Milling premiums are static; with full specification group 1 wheat`s valued at £16 to £18 over feed at the point of delivery. Low grade milling wheat is now valued as feed in the spot position and notional a £1 to £3 over for summer delivery.

Barley volumes have picked up, with 29k of barley offered for sale into intervention last week. The March intervention price has been confirmed at £92.49 delivered and deliveries into store have now reached 45K. Exports are ongoing but making new sales is difficult.

Outlook: The market has found a level but any rallies remain for selling.

Fertiliser

There is still a chance to win 27 tonnes of Nitram in the GrowHow 45th Anniversary prize draw. All March deliveries will be entered, and the winner will be drawn in April.

Nitram for top-up enquiries can be delivered promptly, the distribution network has been performing very well with deliveries to date 30% up on the same period last year.

Seed

Finally spring arrives! All the way from Hampshire to snowy Aberdeenshire seed is beginning to move in volume.

Spring barley sales remain muted, this week`s figures showing a staggering 80 % reduction in certification compared with last year`s total. Tipple remains the most popular with Quench selling on yield and Concerto on straw length as Westminster is pretty much sold out.

Wheat and spring beans are finished, but there is renewed interest in Prophet and Crackerjack peas. Maize and grass sales are currently above last year`s levels as mixed farmers increase the emphasis on livestock enterprises.

The later sowing window is causing interest in Abacus linseed accompanied by a harvest movement buy back and Ability oilseed rape, on the basis the rape price is less discounted than anything else.

This week Openfield have launched the winter Oilseed Rape NK Grandia, low biomass type with yields at the level of the best conventional varieties. Exclusive to Openfield and without the costs of advertisements in the national press, Grandia is priced to compete with farm saved low biomass varieties and provide a real value proposition for all growers. NK Grandia is currently in second year UK National List trials. There is only a limited area available for this season so speak to your Openfield or UAP contact soon.

OSR

• USDA report proves inert influence on European markets.
• South America soybean crop estimates continue to grow.
• Pound continues its weak run, helping values.

In a replay of last week nearby Matif has gained €1 at the time of writing, with the domestic market gaining £4 in the same period, helped by a dramatically weaker STG. There has been further export trade concluded this week as this has proven to be a better home than the domestic market.

The main event this week was the USDA supply and demand report which in the end turned out to be a non event where oilseeds are concerned. Total end stocks were reduced by 20Mn bushels to 190Mn Bushels. Brazilian production was increased by 1Mn tonnes to 67Mn tonnes (still below CONAB estimates of 67.6Mn tonnes). Overall the report reflected that there will be no shortage of beans as had been first anticipated earlier in the season. The trade will now focus on the planting intentions report which is due on March 31, which could prove to be an important barometer of pricing levels for the next marketing season.

As reported above, CONAB raised production estimates for Brazil following better yields as harvest progresses (reportedly 32% complete). Other news we have seen this week concerns India, the worlds 4th biggest oilseed rape producer (13% of global production) will see production drop by 3.3% due to lower plantings on the back of the worst monsoon in 37 years. We have also noted that further to last week`s report the US Senate has now voted to reinstate the tax credit on bio-diesel which should increase soy oil usage in the US but will reverse any positive news flow for European producers.

STG has remained relatively weak against the €uro as concerns over a hung parliament and the UK`s budget deficit linger in the market place. There are further signs that the UK economy is easing its way out of recession after the Bank of England`s quarterly survey reflected a rise in inflation expectations to an 18month high. This suggests that interest rates will have to rise sooner rather than later to keep the economy under control. A rise in interest rates should stimulate the currency and could lead to some strengthening of the currency against others.

Pulses

The beans market has been quiet with values remaining relatively static in the face of falling wheat values. Spring bean values are still indicated at a £6-£7 premium over the feed values, although the trade is still waiting for the return of the Egyptian buyers to the market place. New crop feed values are indicated at £110-£115 dependant on location. The pea market is very quiet and had been void of bids this week.

Oats

There has been some trade in feed quality produce but at very low volumes and with values reflecting circa £60 on the farm. We have also seen some very small old crop milling quality interest return for later on in the season, again at very low volumes and this has translated to £70 on the farm. New crop interest for milling oats has dried up following some activity last week. Export opportunities remain lacking due to the oversupply on the continent.

Malting Barley

There has been some activity in the domestic market however volumes are very low. There are no changes to the fundamentals and so the oversupply scenario remains. Export enquiries remain and some trade executed with the weakness in STG helping the exchange. The recent dry spell in the UK has seen many growers start the spring drilling campaign, with most of Europe making some headway at the beginning of the week. As reported last week the final spring barley area could prove to be a catalyst to the sector.