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Crop Market Update from Gleadell
2012-11-29

FEED WHEAT

wheat

The story remains the same – the market continues to firm!

A further reduction in US winter wheat crop ratings (down another 1% point to 33% good/excellent).

Lower Argentine crop estimates and reports that an increased proportion of the Australian wheat crop will be only of feed quality have allowed the market to strengthen. Over the week LIFFE has risen £9 with MATIF up €7 and CBOT up $12 (MAY13 position) as a further tightening of Global stocks looks likely.

The EU market remains supported, even with the rumour that the Ukraine may extend their export limit on wheat from the current 5.5mlm t (5.2mln t already shipped). Overall grain stocks in the Black Sea region are seen falling 55% from last year to only 18.4mln t, and with export interest still apparent from North Africa, and even South America, European and latterly in the season, US prices should continue the firm trend.

In the UK, the initial supply and demand estimate for 2012/13 released this week, projected imports at just over 2mln t (although we believe this too low) and with an increase in domestic demand (ethanol plants) leaving an exportable surplus of just 0.75mln t. Also a lot of grain has been moved from farms over the past month and farmers have generally been disappointed with their balances left to sell, or indeed more disappointed still by significant shortfalls. This would bring into question the DEFRA crop figure of 13.3mln t and the reality could be much lower. With talk of only approx. 70% of the winter grain planted to date and the adverse weather providing no opportunities to begin drilling again, the likelihood for next season of a much reduced acreage and again below average yields becomes more of a reality and in this context it is not difficult to understand the strength of both the old and new crop futures markets. The drop - when it comes - could be dramatic and markets never look so bullish as when they are their top … but we may have a few £’s to go on the upside yet.



MALTING BARLEY

UK and EU malting values have moved higher this week – following the overall feed market firmer.

Malting premiums remain pressured, however the strong feed base is giving a strong value for both winter and spring varieties.

Export markets remain extremely quiet across the EU; UK values are still at a slight premium to Danish origin.

The main focus for domestic homes remains in Jan-Mar as maltsters are very well covered in the nearby. There is still some demand for distilling varieties in December, though homes are limited.

New crop values have also crept up this week in line with the overall feed grain picture.

Gleadell still have competitive Null-Lox contracts to offer for crop’13, including our non-defaultable Null-Lox Pool and premium-over-futures contracts. These are now available for Jan-Mar movement onwards.

Winters contracts are also still available on non-defaultable Pool terms and on a futures-related basis; which are both available for harvest, Oct-Dec and Jan-Mar.




RAPESEED

This week has seen the MATIF February rapeseed contract gain around €10/tonne (£8) closing slightly higher on a daily basis with ex farm prices trading around £378 per tonne. Again the price driver has been the soybean market with prices reversing the recent downtrend and staging a small rally throughout the week primarily on technical buying as opposed to any change in fundamentals.

There has been little fresh news this week but South American weather continues to be a prominent feature of market commentary and it is fair to say at present there aren’t any obvious problems which will drive prices near term. Chinese soybean demand and export sales remain strong, there is also a problem developing with low water levels in the Mississippi river which could hamper soybean logistics. The macros continue to influence markets with a new Greek deal bringing some confidence, all eyes are now on the US government to see whether an agreement can be found on the impending “fiscal cliff” (tax and spend policies of the US government).




SEED

Spring seed demand has remained high over the past week with the continued wet weather causing more issues in regard to autumn planting opportunities.

Spring cereal supply is now extremely tight. We currently have limited amount of spring barley left available – including a small amount of the new Null-Lox variety Cheerio, along with an attractive buyback contract and a small amount of Propino.

Spring wheat and oats are now sold out across the whole trade with a small chance that there will be further availability once the seed is processed and cleaned and correct tonnage known both from UK supply and from the continent.

Moving to the pulses complex we have now practically sold out of Spring bean seed – with a small amount of Pyramid left available. Following this we have availability of both large blue peas the main variety being Daytona which has excellent yield potential and sound agronomics. Daytona are available on a buyback contract which shows excellent returns and this is the same for the marrowfat pea Kabuki. Kabuki is a mainstay of the market, accepted by all end users due to its excellent quality and it is this characteristic which is most important when selecting a pea variety.

Gleadell also have access to a number of excellent choices on Spring OSR and Linseed seed, for either new areas or patching up of winter crops.

We are now also in a position to offer a range of Maize varieties both for bioenergy/forage and grain.

Next week we will be updating on the Recommended List decisions which are announced with a preview of the new OSR and Winter Wheat varieties that have been added to the list for the 2013-14 season.

Please contact your Gleadell Farm Trader for further details on any of the above.



FERTILISER

Gleadell Agriculture has been appointed as one of the main distributors for GrowHow UK, Britain’s only Nitrogen fertiliser manufacturer.

The addition of Gleadell to GrowHow’s existing range of Distributor Partners reflects the commitment by both companies to the UK’s food and farming supply chains.

Gleadell is a significant supplier of grain to millers, maltsters, feed compounders, oilseed crushers and other processors, as well as a major supplier of seed and fertiliser direct to farm. As such it is actively working with both farmer customers and grain consumers to build joined-up supply chains.

GrowHow UK has invested heavily in recent years to back up its high quality Nitrogen fertilisers with a comprehensive service package. In addition, the firm has a strong commitment to reducing the carbon footprint of its products in order to improve the performance of British farming.

“We recognise that GrowHow’s products and service have a strong appeal to our customer base, both those who grow the crops and those who use them,” says Stuart Shand, Sales Director of Gleadell Agriculture.

“Over the past five years we at GrowHow have invested heavily in our processes and abatement of greenhouse gas emissions to deliver products that are tailored to the needs of British farmers and their customers along the food chain,” said Mike Buchan, Commercial Director of GrowHow UK. “We believe that Gleadell will be a valuable addition in our ability to do this.”

market prices

For further information contact: Gleadell’s trading desk on 01427 421205
or go to www.gleadell.co.uk

NB:
1. Prices quoted are indicative only at the time of going to press and subject to location and quality.
2. Gleadell Agriculture cannot accept liability arising from errors or omissions in this publication.
3. mln/t = million tonnes, mt = metric tonnes, kg/hl = kilogram per hectolitre, k/t = thousand tonnes

link Soil & Water Live 2012
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