FEED WHEAT

IGC sees wheat crop for 2008/09 at 642mmt, up almost 40 mmt from this season.

Argentina re-opens corn/wheat registries, effective from today, limiting wheat exports to 2mmt (400,000t per month for the next 5 months).

Australian farmers, boosted by plentiful rains/soaring prices are expecting bumper wheat crops in 2008.

Ukraine considers raising grain export quotas, proposed increase from 1.2mmt to 2.4 mmt.

Old crop prices remain volatile as massive swings in Chicago caused by economic, financial and energy concerns rock the markets. Tightness in supply of high-quality protein wheat continues to support prices, with MGE (Minneapolis Grain Exchange – Hard US Milling Wheat ) achieving record levels in recent trading days.

However, EU feed wheat prices continue to be pressured by an over-supply of ‘feed-grains’ i.e. maize, sorghum and tapioca, and a general lack of buying interest.

OILSEED RAPE

After the turmoil of last week, this week has been relatively quiet. The US Soy futures in Chicago have ended higher in three out of the four trading sessions since our report last Thursday highlighting the volatility in this market at the moment, especially when you consider that at one point in the middle of last week soy beans were down 75c/bu and oil was down US$77/mt but have since recovered about two thirds of these loses.

The fall in the value of rapeseed oil and the recovery in seed prices have cut crush margins in the last few days (they are now around Eur30, down from Eur50). There are plenty of nervous long holders around who are more than happy to sell into any rally and whilst the supply and demand for rapeseed still looks tight for both old and new crop we might not see rapeseed prices return to the highs in the short term.

FERTILISER

GrowHow UK have confirmed that its Severnside unit will cease operations permanently from January 28th, now focusing all production at Ince and Billingham.

This news comes at a time when more land continues to be brought back in to cultivation and the need for more nitrogenous products in the UK is greater than ever.

This season’s demand is set to reach almost 2MT and with little or no imported AN arriving, the UK market is having to change so supply is now " king " - no longer price.

Gleadell have already secured product for future years, signing a unique supply contract with Alex Fert in Egypt which will guarantee a continued supply of the best quality Granular Urea on the market today.

The global Nitrogen supply picture suggests that even with new production capacity coming on stream it will be 2010 before supply once again catches up with demand.

The UK farmers dependence on a quality alternative to ammonium nitrogen will remain firm as product continues to be shipped to more lucrative markets than the UK.

Even with lower gas prices global demand will continue to dictate high prices and combined with record low world stocks of both Phosphate and Potash the days of cheap fertiliser are now probably lost forever.

Like the grain market, the UK fertiliser market has also changed and is now completely driven by global happenings so to discuss your fertiliser requirements phone Gleadell.

MALTING BARLEY

The problem for the EU market at the moment is that there is at least 100,000T of Argentinean malting barley set to arrive in the EU and Russia throughout February. This is obviously weighing heavy on the market.

There are also a lot of EU sellers who have barley unsold that they need to find a home for before the end of March. Buyers are well aware of this situation and are withdrawn from the market. New crop prices are also coming under pressure, following the sentiment of the feed markets along with the forecast for bigger malting barley plantings throughout the EU.