FEED WHEAT

The firmer markets of last week continued for most of this week as weather concerns intensified. Reports of record low temperatures in Russia have raised concerns over potential crop damage, especially in exposed areas or with low snow cover. The production forecast for the Ukraine’s winter grain harvest continue to fall as crops, already stressed by drought, are now hit with extreme cold weather.

The market has its focus on the meeting due today where the Russian government will determine how much grain could be exported this season before it considers imposing a protective duty to secure supplies within the country. With approx 20mln t exported by end of January, and initial limits of 24-25mln t already declared, the current pace would likely reach the ‘target’ by the end of March.

Short-term, the bulls have had enough to move the market higher, although much of the bullish news is already in the market .Medium and long term price movement will depend on the severity of the current weather concerns and the impact upon actual crop production, as current stocks of wheat and coarse grains remain abundant.

Argentine government confirms it will not ban corn/soy exports, responding to talk that it might be due to a harsh drought.

Canadian 2012/13 grain output seen up 8% at 50.3mln t – mainly due to a return to drier planting conditions.

Ukraine’s 2012 maize crop could increase 10% to 25mln t – increase of area compensating damaged winter grains.

Russia could impose grain export duty from April 2012 – government to set target on 2nd Feb.

Russian state weather forecaster reports cold snap may have damaged winter wheat in exposed area/low snow cover.

Russian export wheat prices continue to rise as traders become hesitate about buying grain, fearing export duties.

Ukraine 2012 winter grain harvest could fall 42-58% to between 10 and 14mln t -- wheat crop may fall to 12mln t (22.3mln t in 2011).

CWB adds the Ukraine to list of countries which might impose crop export restrictions.

EU wheat touches 7-month high on concerns that bitterly cold weather in Europe may damage crops.

Ukraine’s January grain exports fell 27% to 1.9mln t compared with December – 11.6mln t exported so far this season.

RAPESEED

Soybean crop prospects have deteriorated further, fuelling fears for soybean production by major producers in the US and South America, with some traders reducing their figures for 2011/12 by 17mln t.

India could possibly increase their 2011/12 soybean imports by 0.5mln t due to poor domestic production.

Crude oil has continued to trade sideways whilst watching political tensions in Iran.

Canadian canola prices have rallied sharply in line with other oilseeds markets, Canadian canola exports are running high along with an increased domestic crush demand.

Rapeseed prices in Europe have rallied to a large premium over soybeans demonstrating a tight spot market in Europe. We have also seen Feb MATIF rapeseed futures rally to a 30€ premium over May before finally expiring at around 18€ premium. Although this can be put down to a technical squeeze between longs and shorts prior to delivery, it still demonstrates spot demand.

Poor crush margins along with rapeseed oil prices falling are making European rapeseed look expensive compared to other origins such as Canadian canola

No real change in macro-economic activity with the Greek debt still the main focus at this time.

MALTING BARLEY

The EU malting barley market continues to be underpinned by the quality problems in Scandinavia and the firm feed markets.

In the UK you can still find homes for both winter and spring barley with nitrogen acceptance levels up to around 2.05, depending on variety and location. Premiums are very attractive.

There is little brewer or maltster interest for crop 2012 at present with prices around £25 below this year.

There is still strong demand for Null-Lox and Propino, with various types of contract options available. We still have a limited tonnage of non-defaultable Null-Lox contracts which have the benefit of being at 1.92 nitrogen.

OATS

Feb/April positions into the mills have been filled, which means outstanding requirements move towards the end of the crop year.

The recent colder UK weather may cause a small demand spike but the prolonged cold spell creating huge demand, which started in November 2010 and lasted for close to three months, is not expected to be repeated.

Scandinavia and Ireland continue to supply cargoes into Europe and the main challenge for oat millers will be their carry over stock before new crop tonnages become available.

SEED

Spring 2012

We are interested in growers of spring peas and beans for human consumption, pulses should not be forgotten due to their rotational benefit and some attractive buyback contracts. The varieties of interest on peas include marrowfats, ie Kabuki, the large blue variety Daytona and the white pea Gregor. Spring beans are also available and we have the varieties Fuego, Pyramid and Fury to offer.

Many suppliers have sold out of their own stocks of Propino – this is causing them to buy from the as-grown market and, as a result, this is supporting prices. Concerto and Quench are sold out across the trade. Feed barley varieties are seeing limited demand and these prices are stationary.

Null-Lox seed continues to see demand and we are now busy delivering the seed around the country – this is resulting in top-up orders and is reducing stocks, particularly of Cha Cha.

Finally spring wheat is in short supply and this is lending support to prices, and spring oats are now sold out.

Autumn 2012

We have seen a lot of interest in the two new varieties Torch and Relay over the past two weeks. Torch is a very high yielding soft variety, with feed wheat yield and soft wheat quality, which will offer excellent returns to growers looking to make a premium over feed wheat values. Relay is a solid group 4 hard wheat performer with excellent 2nd wheat yields and a solid all round agronomic package. The variety would be well suited to go alongside KWS Santiago, spreading the yellow rust risk and maintaining yield.

Looking at winter barley we have the new variety SY Venture to offer along with the older varieties Cassata, Flagon and Pearl. Winter barley seed plantings were low again last autumn and, as such, availability will be limited.

We now have an early order offer on a wide range of OSR for Autumn planting – this includes DK Camelot, the new conventional Castille type from DEKALB but much improved yield and oil, as well as a wide range of other varieties. We have a very limited allocation of the new hybrid Avatar left also.

FERTILISER

Nitrogen

In Europe the market still remains relatively unchanged. Overall, the urea market is stable and there are expectations that the market will see another rebound in the second quarter. Several Baltic producers are under pressure to sell cargoes for February, meanwhile Black Sea producers admit sales have declined.

With Growhow UK lowering their AN price last week, very little has changed with imported AN. Levels being traded and seen on farm are unchanged this week and as grain prices continue firmed so could the price of Nitrogen.

Phosphates

On phosphates, market activity remains very slow. Several cargos have been sold by producers ex the Baltic and Northern Africa to various European destinations but these have all been traded at lower levels. Spring activity will pick up in Feb/March but any demand in this period is likely to be well covered in Northern Europe. Still considered as the “off season” for a lot of markets some UK blenders/importers have been reducing prices to clear stocks of phosphate. Gleadell have very good terms to offer on both TSP and DAP for February delivery.

Sulphur

The European/UK sulphur market remains stable/firm with a healthy demand in all areas. Gleadell have Granular 33N + 30SO3 PIAMON, which is a compound and guaranteed to spread to 32 M to offer for February delivery. If you have a pneumatic machine and still need to buy your sulphur product we also have some Ammonium Sulphate 1–4mm material to offer at a substantial discount to the 2–4mm material currently in the market. We have one vessel only so tonnage is limited, please contact your Gleadell farm trader to discuss further.