FEED WHEAT

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US markets have firmed this week on increasing concerns that yield potential could be lowered with current weather problems in the US plains/mid-west. This follows last week’s 'commodity sell-off' over financial worries which triggered liquidation of long positions held by fund managers.

The EU, although influenced by the violent swings in the US markets have been less affected. We EU awaits demand from North Africa and the Middle East importing countries over the coming months.

Worldwide production prospects for 2008 remain positive, albeit with the current scare in the US. Black-sea wheat areas and production estimates continue to increase. In addition, analysts in Australia are looking at increased plantings and record production of 26/27mmt, given favourable rains in April and May. This all goes well for a crop approaching 640-650mmt, weather permitting, and a recovery in world stocks.

The world needs a bigger crop in 2008 given the expected increase in demand. Therefore, any potential weather scare or production issues which threatens the supply side of the equation would trigger buying interest. As one trader reported, 'this year we seem to have a drought in wheat supply, next year we could be swimming in it'. The weather will decide.

OILSEED RAPE

The volatility in the oilseeds sector is quite incredible! We saw prices fall sharply last week as fund mangers and speculators panicked, selling their positions as the global financial crisis bit into the commodity sector. On reflection, non-agriculture money had driven markets to record highs that were probably unjustifiable by the fundamentals, but the severity and speed of the correction witnessed last week was equally overdone.

Since the lows of last Thursday it would appear that the financial sector has done enough selling for the time being and prices have recovered £25/mt. In two weeks this represents a £50/mt trading range! These price movements have had little to do with any fundamental issues and it has made it almost impossible to assess the markets true value and make any informed trading decisions.

The USDA new crop plantings report is published on Monday and this will be the next key market driver. This report should indicate if the high prices have bought enough soybean acres from corn – if it hasn’t this market could take off again, but if the market deems the plantings to be enough we could be in for another steep decline. The only thing we can be certain of at the moment is that these violent price movements are not going away any time soon.

MALTING BARLEY

Spring barley availability is forecast to rise by 1MT in the EU for the 2008 crop, and by around 10% in the UK.

A lot more malting barley varieties have been planted than normal, due to the very high premiums.

Buyers are, for now, covered for sales that have been made and brewers seem relaxed. The market has actually fallen by around €25 in the last few weeks but the weakness of sterling has helped offset this fall.

Our view at the time of writing is that there is still some downward potential for prices and we continue to advise that growers should be committing a reasonable percentage of their crop at these levels for crop year 2008 and 2009. Especially if you need movement before the new year.

SEED

With OSR at over £300/T, now is the time to change those old OSR varieties for the new Winner + type variety, Epure. The average oil content of varieties on the HGCA recommended list is 43.6%. (Castille 43.7%) Epure is 45.5%. This equates to an extra bonus of around £9/T. Added to this Epure has the following benefits;

• Will have the highest seed yield on the Recommended list
• Will have the highest Gross output on the Recommended list
• Will be very strong in the field
• Will be the most profitable OSR variety to grow.

FERTILISER

India has bought 625,000 tonnes of urea over the past week, the speed and size of the purchasing has reinforced the bullish tone of the market.

Buyers worldwide are now faced with having to pay the "peak" prices seen in December but this was at the end of the Indian buying period. Today we are only at the start!!

Russia have announced an export duty on all fertilisers to take effect from the 19th of April. Nitrogen fertiliser is subject to an 8.5% tax.

UK top dressing is now in mid-season with "top-up" demand likely to be higher than normal creating potential delivery problems.

High new crop grain prices and low soil Nitrogen reserves will mean target levels for Nitrogen applications will be higher than normal.

Phosphate prices continue to rise, due to tight supply and high crop prices mainly, with an expectation is for prices to go even higher over the coming weeks.

A 5% duty on Russian Potash exports will continue to influence the direction of Potash prices.