Latest Gleadell market update - Friday 2nd November 2007‏
FEED WHEAT
Old crop wheat remains a choppy market with no export interest, no domestic pre-Christmas buying interest and both farmers and consumers reluctant to trade forward months.
The latest Australian wheat crop estimate from ABARE is 12.1mln/t. Traders expect this could be higher than the eventual harvested crop figure.
Ukraine winter wheat plantings are reported as being complete at 6.2 mln/ha - 5% up versus last year. Russia is forecast to increase winter grain plantings by 5 – 6%.
Summary
We expect old crop prices to remain volatile and new crop to be affected by continued reports of increased plantings and, on the other side of the coin, any weather problems which would support prices.
OILSEED RAPE
Crude oil prices in both the US and London have hit record highs again this week. Crude oil stocks in the US are lower than previously anticipated; underlying conflict in Northern Iraq and the fall out from the sub prime mortgage have all combined to pull more speculative money from equities into the commodity sector. The bull run on crude oil has made bio-fuels look increasingly attractive and anticipated demand from this sector has pushed both the soy and palm oil market higher again.
The knock on effect has been higher rapeseed prices both new and old crop and only the increase in the strength of sterling versus the Euro has capped the rise. The medium and long term outlook is still for higher prices, but those who need pre-Christmas movement should sell now whilst the demand is there – but looking further forward we maintain that selling a little and often is probably the best approach on this market.
* FEED WHEAT by David Sheppard, managing director. Telephone 01427 421222 or email david.sheppard@gleadell.co.uk
* OILSEED RAPE by Jonathan Lane, OSR trader. Telephone 01427 421222 or email jonathan.lane@gleadell.co.uk
If the above contacts are unavailable please telephone Gleadell's trading desk on 01427 421205 or go to www.gleadell.co.uk
