FEED WHEAT

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USDA last Friday estimated 2008 World wheat production at a record 664mmt, allowing 2008/2009 ending stocks to recover to 133mmt, from 116mmt at the end of this season.

Australian attaché sees 2008 wheat crop at 22.4mmt, after USDA increased their estimate to 25mmt in the report released last Friday.

Egypt's GASC purchases 240,000t of optional wheat for September delivery, likely to be Black sea origin given lower prices and freight advantage.

Indian farm minister reports that the outlook for good 2008 grain harvest remains, and may release 6mmt of wheat into the local market to further ease prices.

SovEcon reports that Russian 2008 wheat output may be 52.5-54.2mmt, the highest since 1978.

APK-Inform revised its 2008 Ukrainian grain crop forecast to 42mmt, from 39.7mmt previously.

Strategie Grains raises its 2008/2009 EU grain crop forecast to 295.7mmt, up 15% on last year.

The increased production largely came from soft wheat, forecast at 131.7mmt, up 18% on last year.

Bearish USDA figures, lower crude oil prices, a record high for the Euro against the US$, and improved prospects for the 2008 World wheat crop have all combined to pressure prices lower.

Reports of higher production estimates and export availability from the Black Sea continues to pull markets lower, as recent tenders purchased on an 'specified origin basis' are likely to be Black sea based, especially with their current freight advantage.

MALTING BARLEY

The EU harvest continues and so far all the news is bearish for prices.

Yields are good and nitrogen’s low.

In the UK the first harvest results look very encouraging! Yields so far are excellent and nitrogen’s very low.

If this trend continues we will have a very big surplus which could be negative for prices. Prices have dropped around £10/t in the last week. As predicted harvest movement is a real issue.

OILSEED RAPE

The soy complex was lower again week on week. A sharp break in crude oil prices (down US$13 on the week) and better growing conditions took the market lower

The weather is still considered favorable for most soybean growing areas. Hot weather is forecast over the next two days, which should allow the crop to catch up. Conditions are expected to remain hot into next week, but substantial, widespread rain should alleviate any potential stress. Forecasters are also indicating that the 7-10 day forecast could be getting increasingly wet.

Back to Europe…. In France we are hearing that initial yields are equal to better than last year, with returns of 3 to 4 t / ha depending on the region. In Germany harvest is just starting, but yields so far have been described as average to good.

The Matif is down heavily on the week and with harvest now underway in France and the imminent arrival of Black Sea rapeseed into Northern Europe we wouldn’t be surprised to the market continue to drift.

SEED

We expect winter barley seed to sell out in the next few weeks as demand has been very high.

We have buyback contracts available.

Duxford and Oakley are also selling fast and should be bought sooner rather than later. On the OSR front we are starting to see good interest in the new semi-dwarf varieties. The new variety Epure is also selling well. Please contact your local farm trader for details.

FERTILISER

There is no Summer "lull " in the Urea market, prices have continued to firm rising by another $30-40 over the past week.

Big demand from Asia, North and South America is forecast to drive prices even higher over the coming weeks.

Continued purchasing at increasing levels are seen as clear signs that buyers will continue to pay more to secure product.

In Egypt the 3 main exporters are all committed for July and are now almost sold out for August.

July sales were concluded at $790 FOB, the asking price for August is currently $850 FOB.

The gap between Prilled and Granular urea continues to close.

Some Urea producers are now holding product back in the knowledge that prices are to go firmer, this action is being mirrored in the UK ammonium nitrate market as product allocations still fail to materialise.

Gleadell have Imported AN and Granular/ Prilled Urea to offer for immediate delivery.