Feed Wheat report from Gleadell

FEED WHEAT by David Sheppard

David Sheppard, managing director, Gleadell Agriculture said: "International Grains Council raises its 2008 global wheat forecast to a record 662mln/t, up from 608mln/t this season. Ending stocks for 2008/2009 were also increased to 144mln/t.

"The German Association of German farming co-ops raises its estimate of the 2008 grain crop to 47.7mln/t from 46.1mln/t last month. Wheat crop is expected to rise 17% to 24.4mln/t. Ukrainian Agriculture Ministry estimates 2008/2009 grain exports at 17.5mln/t, up from this season's 4mln/t. Russian 2008 wheat output seen at 53.5mln/t by the USDA attaché, up from this season's 49.4mln/t. Spain, the UK's key exporting destination, sees shipments of 250,000 tonnes of Black Sea wheat due to arrive in August at the port of Tarragona.

"Better weather prospects in the US regarding the corn and soybean crop, softer external markets (crude oil and commodities) and globally, increased crop production forecasts have all combined to keep wheat prices under pressure. In addition, quality concerns in Russia, Ukraine and now parts of Germany will increase the availability of 'feed wheat' into the EU, impacting onto EU and especially UK values. Weather will remain the key in respect to the UK crop, currently being harvested.

"In summary, markets continue to look bearish with further declines as harvest progresses likely. External factors that drove the market higher last year, whereas slightly on the 'back-burner' at present, still exist, and most would not bet against some bullish factor raising its head at some stage over the coming season – but markets will probably have to move lower first ," he added.