FEED WHEAT

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UK / EU futures have been influenced by very active US markets reflecting the strong trade in US spring wheat.

Yesterday we saw a movement on Chicago of 270c per bushel which equates to $99 or £50. Increased wheat margins and extended trading limits are seen as increasing market volatility and this will continue.

EU markets have seen some support for better quality wheat, on talk of switching of US sales to German origin and increased talk of wheat shipment defaults from Kazakhstan. Black Sea wheat restrictions are still in place, with Russia now proposing an extension of their 40% export duty from April 30th to July 1st. In addition, the Ukraine have proposed an increase in their export quota, from 1.2mmt to 2.8mmt, but this increase is all maize and barley.

Feed demand in the EU remains slow, as consumers are awash with imported feed grains and cheaper cereals, ie barley and oats. With the potential of South American new crop maize, especially from Brazil and Argentine, if GA-21 is approved for use within the EU, we expect the 'feed wheat' market to remain under pressure for the remainder of the season although to an extent influenced by the wild fluctuations in particularly US futures markets .

OILSEED RAPE

We have seen another wild week in the oilseeds markets! The damage to the Chinese rapeseed crop has been the catalyst to this latest rally and this has pulled fresh fund money into the market. The tightness in the old crop supply and demand and resulting carryout at the end of this season, means we need an increase in production next season and cannot afford to have any crop problems anywhere in the world.

This week has seen new contract highs in all sectors of the soya complex. Palm oil has recorded new contract highs, Matif hit new contract highs and not to be left out the UK delivered market traded at all time contract highs! With the weak £/Euro adding strength to our domestic prices and the bullish external influences driving the European futures market, prices look set to stay supported for the time being.

MALTING BARLEY

Malting barley plantings are forecast to rise significantly in Scandinavia and moderately throughout the rest of the EU in 2009.

Planting conditions are currently very favourable and large areas have already been sown. England is estimated to be around 75% complete.

Scotland and Scandinavia should start early March, which again would be well ahead of normal.

All of these factors are causing a bearish feel to the market.

That said, we still have some very attractive buyback contracts available.

Please contact your local farm trader for details.

SEED

We still have Cocktail and Tipple spring barley seed available for immediate delivery although quantities are very limited.

With the demise of set-aside, growers are advised to look to their autumn cropping sooner rather than later as the extra demand is bound to add to availability problems with the more popular varieties.

We are currently taking early orders for priced or un-priced tonnages.

Hybrid OSR varieties are starting to sell well. The main two varieties creating a lot of interest are Excalibur and the new variety Flash.

OSR prices are currently very strong for crop 2009 and we forecast that planted areas are likely to raise thus putting pressure on seed supply.

Please contact your local farm trader for details.

FERTILISER

There are a number of reasons why the price of potash is continuing to rise.

Supplies of potash fertilisers are struggling to keep up with rising demand around the world.

A potash mine in Russian has been out of production for several months due to a collapse caused by flooding, leading to a sharp increase in prices.

This situation is likely to persist until additional capacity comes on line, to set up a new mining operation which could take 2-3 years.

The current phosphate shortage is also causing major problems for the animal feed sector – what has caused this shortage?

The price of sulphur, an essential raw material in the production of phosphate fertilizers, has increased by 300% in the last 2 months.

All phosphate has to be imported into the UK and phosphates are in short-supply worldwide.

China, in particular, is short of supplies of phosphate because of strong demand for food.

Phosphate exports from China have dropped this year due to government policies to make more product available for local farmers.

Most Northern Europe/UK phosphate comes from North Africa, which in turn also supplies rock phosphate/phosphoric acid to other countries like Bulgaria and Poland to produce granular phosphate. Rising demand has meant prices have risen.

Brazil, this year alone will plough up 1.5 million acres of grassland for maize production which will divert 100,000 tonnes of diammonium phosphate away from Europe.

Think on – as these high P and K prices are here to stay.