Jonathan Lane, Gleadell’s trading manager, comments on grain markets.Wheat• USDA report increased corn ratings (24% good/excellent) – harvest estimated at 26% complete against 9% average. • Egypt’s GASC purchases wheat for November 21st-30th shipment – Russian wheat still offered and 120tmt sold. • CNGOIC sees China’s 2013 corn imports at 1mln t against estimated 5.5mln t for 2012. • Ukraine grain stocks, as of, 1st September, reported at 19.4mln t, down 11% year-on-year. • Exports, as of 17th September, estimated at 4.4mln t, including 2.13mln t of wheat (agreed export quota is only 4mln t of wheat).• Russian Ag Ministry reports country will produce 72-73mln t of grain this year, putting exportable grain surplus at 10-14mln t. Reports that Russia may double wheat imports (1.5-2.5mln t) due to drought – likely to come from the Ukraine/Kazakhstan. • French 2012/13 non-EU wheat exports expected to rise to 9mln t due to declining exports from the Black Sea region. • DEFRA reports English 2012/13 wheat area at 1.856mln hectares, down from 1.875mln previously – reduces UK crop by approx. 125,000t. SummaryThe UK harvest is now reported at 95% complete with the remaining areas mainly in Scotland. Yield expectations are now likely to be at the lower end of a range between 6.9 and 7.2t/ha and possibly even lower. Despite reports of ‘better specific weights’ as harvest has progressed northward, specific weight remains the main quality issue of this year’s crop, providing many challenges to all sectors of the UK grain industry. Global markets remain mixed, firstly supported by news of a US FED stimulus that originally supported values, only to be greeted by a commodity ‘sell-off’ as concerns over global demand triggered strong liquidation selling in US markets. Reports of increased harvest activity in corn, and better than expected yields in soybeans, also added to the negative tones. Long-term, markets remain supported. Black Sea wheat offers will soon dry up, Southern hemisphere wheat production is forecast 10mln t lower than last year, and a tighter EU surplus is seen replacing declining Black Sea exports. However, one must remember we are already at a high price, and any rumour of waning demand will encourage long-holders to ‘dump’ whatever the fundamentals may say. Oilseeds• The start of this week saw soybeans move considerably lower with a two day sell off knocking around £20/t off the price of CBOT soy in just two days! There were no real fundamental changes to the market and the sell-off was more to do with a combination of smaller factors. • Harvest is progressing well in the US, and there have been localised reports of better than expected yields and some farmer selling followed. There has also been speculation that the harvested acres figure will be revised upward by the USDA in October. But, in our opinion, the biggest factor has been a lack of new momentum and news to maintain what are historically high levels. • Despite this setback, the fundamentals for soybeans remain in a tight supply & demand situation with usage rationing needed. • Rapeseed has moved down, around £10/t lower over the course of the week - tracking the soybeans market. The domestic market has been fairly quiet as people digest the big moves in soybeans. • Rapeseed plantings have gone well in Germany and France - the biggest producers in the EU - and we estimate that UK plantings will be marginally down from last year. It is worth noting that prices for 2013 remain at excellent levels and we believe it is worth locking in a small percentage at today’s new crop prices.