FEED WHEAT

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Egypt continued its habit of issuing tenders on dips in futures markets – they subsequently bought 225,000 mt of US hard wheat – at relatively high prices.

French wheat exports are moving at a very rapid rate. By Christmas there are reasonable expectations that France will have exported between 7 and 8 million tonnes out of a surplus of 9.5 mln t. In other words they will have removed all of their surplus by Feb / March 2011 – unless French prices move to make their wheat uncompetitive. UK exports have also started at a healthy rate of knots – with many UK consumers seemingly reluctant to follow recent price rises, or adopting an ostrich-like head in the sand avoidance technique.

The IGC latest report has lowered world wheat production to 644 mln t – from 651 mln t in July. They also lowered world wheat ending stocks by 8 mln t to 184 mln t.

This is still the 3rd largest wheat crop ever and ending stocks are 63 mln t above the level seen in 2007.

The UK wheat harvest is drawing to a close as we finally get a week of good weather. Whilst quality has clearly been impacted, particularly in the South, we are still seeing a lot of samples that will do a milling or quality job, either in the domestic or export markets. This may mean that currently available milling premiums are worth serious consideration.

Given the quality we have seen to date we expect exports from the South coast, and probably from the lower West coast too, will be mainly of feed wheat this season. On the other hand wheat quality in the East will enable quality wheat exports to provide a constant and attractive market for growers. Indeed the further north one looks in England the better the quality – with Lincolnshire, Yorkshire and the North West producing generally good quality.

Rumours abound of another large feed wheat vessel due in Southampton after the current ship eventually finishes loading sometime in September.

RAPESEED

Soybeans put in a rather disappointing performance this week finishing just 10c up on the week despite sharp gains in wheat, crude oil and equities along with a sharply lower dollar. The market seems to be ignoring these friendly outside influences following concerns that larger than expected supplies of South American soybeans would undercut the US into their key export destinations.

The European rapeseed market continues to be supported. The tightness in the EU balance sheet and the continued declines in the sunflower seed crop are combining to under-pin rapeseed prices. The EU-27 crop is now widely accepted as being under 20mln t (we are working with 19.7mln t). The Sunflower seed crop is also much smaller than previously hoped and as a result the multi-seed processing facilities will now be switching more capacity to rapeseed, especially given the current €40/mt crush margins!!

In conclusion, we still believe that this market may have room to go higher from today’s levels and potentially establish new market highs, but it will remain volatile and can test the resolve on days when the speculators want to bank their profit.

MALTING BARLEY

The last of the EU malting barley harvests of 2010 are now well underway in Scandinavia and Scotland. Scotland has had the best of the UK harvest weather and quality so far is very good, yields however are average at best. Scandinavia on the other hand has had relentless rain and quality is either excellent from the pre-rain crops or poor to very poor for the post-rain crops. They still have about 35% to harvest and maltsters are hoping that the later crops were not fit enough to be affected by the rains. It will be some weeks before we know the full picture but it is likely that supply from the EU will be far less then was hoped.

The next malting crop to watch is Canada which is about 10% through its harvest. The Canadian crop is very late this year and will be vulnerable to rains and frosts. The EU market is firm but very quiet. The reason for this is the continued absence of the Brewer from the market and the fact that the Maltster is covered into the New Year. 2011 contracts are very difficult to come by due to the reluctance of the Brewer to pay the price that the Maltster needs to secure the barley on farm. We do have some very attractive contracts available but these are limited. They include our premium over wheat futures Null-Lox spring barley varieties. Please contact your local farm trader for details.

OATS

The market has moved on with continued quality problems in Germany and a continued lack of offers from the supply areas of Sweden/Finland who themselves have struggled with a wet harvest.

The UK winter oat harvest is virtually complete with wheat admixtures in all areas up to Northumberland reported as the main problem. Yields to date suggest a 5% fall.

Spring oats in Scotland are being cut with quality holding to date.

Exports are taking place and in an already tight market prices should remain steady.

SEED

Oilseed Rape
With many people busy drilling oilseed rape around the country – growers may need to top up requirements over the next week – as we move into September growers may now switch to hybrid varieties with more vigour. We have most varieties of choice available for prompt delivery including Compass and Excalibur.

Wheat Seed
Early trial results have shown the two new group 3 soft wheats in good light – Invicta still remains the highest yielding group 3 variety on the 5 year rolling average, and Warrior has had good results to date.

KWS Sterling and Kingdom – two relatively new group 2 varieties both available with buyback contracts have again held their yield levels, scoring 2 – 4% higher than Cordiale and Einstein.

As we now move into the main drilling season, many growers have still yet to make their varietal decisions – and as we move later through the month certain varieties will become short and in some instances even sold out, therefore for the variety of your choice, delivered in a timely fashion, please contact your Gleadell Farm Trader to book your seed requirements as soon as possible.

FERTILISER

Following last week’s announcement by Yara and GrowHow that Nitrogen prices were to increase by £30/tonne for October deliveries, speculation in Europe is now intense as to where the next level of prices will be.

All October terms that were released were for limited tonnes only as distributors allocations continue to be ‘trimmed back’ in a very firm market.

CAN supply, the preferred nitrogen in much of Europe, is extremely tight and manufacturers are watching firming international Nitrogen prices before committing themselves to any new business.

In France/Germany further price rises of €20–30/tonne for CAN are forecast which will only add further fuel to Ammonium Nitrate prices.

Granular Urea demand in to all areas remains strong and on paper there appears to be a deficit for September/ October as producers are either sold out or are waiting to achieve higher prices.

Gleadell have best quality CAN to offer, Granular Urea and Lithan AN so are well positioned to suit all your Nitrogen requirements.

Low Phosphate stocks and firm demand from Europe, Asia and the Americas mean prices will remain firm.

Whether the BHP Billiton offer to acquire all issued and outstanding shares of Canada’s Potash Corporation is successful or good for the Potash industry remains to be seen.