UK - The grain market

08 Jul 2012

FEED WHEAT

Markets remain driven by global weather concerns, with extreme heat in the Mid-west seen stressing US corn at a key development stage.

The wheat harvest is well under way in the US, with the biggest winter wheat producing state all but finished, limiting further potential losses.

Russian and Ukrainian grain harvests have just commenced with early reports indicating yields down on last year, confirming lower crop projections.

In Western Europe, crop prospects have improved with recent upgrades seen in estimates for the French and German wheat crops.

In the UK, wheat prospects remain favourable, although heavy rainfall and high humidity conditions during flowering continue to promote fusarium development and increase associated mycotoxin risk.

USDA reports US wheat harvest 59% complete, 48% last week and 27% average – key state of Kansas reported 96% harvested.

USDA reports spring wheat crop in good/excellent condition at 89%, up 2% on the week.

Trade sees USDA raising US soy, corn and wheat acres in Friday’s report.

Western Europe crops are mostly in reasonable shape as harvest starts – improving outlook for French and German crops.

Argentine government plans to allow 6mln t of wheat exports from the current crop being planted

Egypt has purchased an increased volume of domestic wheat this season – and won’t be looking to issue new international wheat tender until August.

The USDA report corn crop in good/excellent condition at 56%, down 7% on the week – weather is seen stressing the crop at key pollination stage.

Russia’s AgMin cuts outlook for Russian 2012/13 wheat harvest – projecting crop at 46-49mln t with exports at 16-16mln t.

Ukrainian 2012 grain harvest under way, early harvested yields seen lower than last year.

Canadian all-wheat plantings projected at 23.8mln acres, compared with previous figure of 24.3mln acres – still above last year’s area.

OATS

The grain markets have reacted strongly to North America temperatures but the oat market remains unchanged.

The key for the EU oat market remains yield and quality information from the supply countries which will eventually determine price direction.

The oat crop remains healthy and green and has benefitted from the wet conditions but to fulfil todays potential will need the required amount of sunshine sooner rather than later.

MALTING BARLEY

EU malting values are again slightly higher this week, following the overall grain market picture.

However, consumers are still mostly out of the market which is restricting any increase in malting values.

Harvest movement can still expect to be very tight in the UK as maltsters already have large malt stocks in their bins.

English winter and spring crops are looking very healthy with high yields likely.

Scottish springs certainly need more warmth from now if they’re to produce an average crop.

A ‘Stats Canada’ report has stated that Canadian barley plantings are expected to be 8% lower on previous estimates.

The UK’s crop’13 demand is still very positive, especially with the UK distilling boom.

Demand for Null-Lox continues to strengthen, with new varieties Chapeau and Cheerio.

Null-Lox is not in over-supply which is a key benefit over conventional spring varieties, that are currently in surplus.

RAPESEED

Weather has become the focus of attention in recent weeks with Corn and Soybean production being the biggest threat.

Soybean prices have rallied 150 cents on weather issues with continued hot and dry weather in the US Midwest forecast into next week.

We have the USDA quarterly acreage and stocks report out this week with traders looking for an increase in planted area although yield will be key in a weather market and this won’t be reported until the July 12th report.

Rapeseed prices continue to follow Soybeans although physical activity in rapeseed has been light with farmers content with their pre-harvest commitments.

Prices have rallied back to around £365 ex farm for harvest depending on location, if you add in quality bonuses these are still exceptional prices.

UK rapeseed exports are expected to be a record this harvest with continued strong demand from the German biodiesel sector and production deficits in Europe.

Wider economic factors continue to undermine the commodity markets with crude oil demand slipping and the Global economy slows down.

The Eurozone crisis continues to rumble on with no sign of light at the end of the tunnel, if fact the market feels worse now than 3 years ago with Spain starting to acknowledge their banking problems and Spain & Italy’s borrowing cost’s rising to unsustainable levels.

SEED

Spotlight on OSR

PR46W21 is in strong demand due to its consistent performance past seasons.

Other varieties in demand are the ever popular Compass and farmer favourite Excalibur.

For growers looking for strong phoma resistance the candidate variety DK ExStorm has solid gross output scores and benefits from a 9 score for resistance to Stem Canker.

There is a very limited amount of the highest yielding candidate variety Avatar.

Many growers are looking to spread some lodging risk by adding a percentage of the area in short hybrid varieties such as Thorin and the candidate variety Troy.

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

FERTILISER

Urea
At the beginning of the week the global urea market was still looking for a floor, Pakistan tendered on Monday buying only 100,000mt and the market continued to move downwards until it found some support yesterday.

There are no indications that there is still room for further declines but the demand outlook does remains weak for the time being.

India are yet to announce a fresh tender and Latin American buyers are on the side-line which could see a possible rebound in the market if tonnages of 1 -1.5 million tonnes are exceeded.

The current market situation certainly provides growers with a buying opportunity and Gleadell would recommend that some cover is taken for a Sept/ December delivery.

ALZON 46
Gleadell have launched a new product ALZON 46 which is a stabilised nitrogen fertiliser meaning that, depending on the weather and local conditions, it will delay the whole time sequence of nitrification from being applied to being available in a Nitrate form, unlike a Urease inhibitor.

Ammonium N is retained in the soil much longer and that the time conversion to being in a Nitrate form is extended which ultimately means that a more balanced N is available when it is required over a much longer period and not all at once.

Alzon 46 reduces “gassing off” when applied, reduces a luxury uptake of nitrate by the plant, reduces leaching when in a nitrate form and also reduces de-nitrification when in a nitrate form.

Alzon 46 is a more efficient, more environmentally friendly fertiliser and will be available to the UK farmer for October / November delivery.

Ammonium Nitrate
Ammonium Nitrate demand is slow for UK product and imported material with prices remaining stable.

The global situation is weak for ammonium nitrate and we could see producers cutting back on shipments to increase demand and push levels higher.

Phosphates
The phosphates market has slowed down its momentum and currently seems subdued compared with the last few weeks.

There has been little new global business concluded this week on quiet demand, however there is still DAP demand in India, but buyers are unwilling to pay the high prices being asked by producers.

Chinese sellers are firm on their price ideas of at least $560 per mt but Pakistan and Bangladesh are quiet at present, while Latin American buyers have also stepped out of the market.

Due to current high prices for phosphates, Gleadell offer an alternative product called P-grow which will increase your phosphate levels for a considerable cost saving.

Please speak to your local Gleadell Farm Trader.

Sulphur
Gleadell are offering “granular NS” a granular compound containing 27.5N/11SO3/6CaO as a little and often approach to the application of sulphur in the Spring.

All nutrients are in readily available form allowing easy uptake.

This approach to sulphur and nitrogen application will provide adequate supply of these nutrients at all the main growing phases and limit potential losses through leaching.

Guaranteed as 95% 2–5mm this is a high quality product and an excellent addition to the Gleadell range of fertilisers.

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

Meat Trade News Daily Supporting British Pig Farmers

Source: Argentine Beef Packers S.A.

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