Gleadell Grains and Market report 22/07/2011
GRAIN MARKETS - David Sheppard, managing director
WHEAT
Grain markets remain extremely choppy with various factors having contrary effects on price levels.
In Europe, the harvest has stalled from central France northwards as wet weather has stopped play. There are some concerns that quality may be impaired in northern parts of France. However, conditions remain very supportive for a large EU corn crop.
Recent crop estimates have raised the size of the EU soft wheat crop following rain in June and early July. With Russian and Ukrainian prices trading at significant discounts to EU levels it is clear that importers who can accept Russian/Ukrainian wheat will buy that rather than EU origin.
In the USA, extremely hot weather has raised concerns regarding the pollinating corn crop. Added to doubts as to the validity of the USDA’s planting estimates, this has supported Corn and wheat prices in US markets.
Ukraine’s farm minister raised the official estimate of their grain crop to 47mln/t. This is 4.6mln/t above the USDA’s forecast of last week. Egypt is also rumoured to be about to re-admit the Ukraine as a wheat supplier.
Actual market activity remains at low levels. We have yet to see any UK wheat cut and therefore quality and yield are unknown. Consumers are largely absent from the market – but so are farmers - whilst the macro-economic picture in the euro zone and in the US is a cause for concern. In amongst all of this the next price move is hard to call. Uncertainty breeds more uncertainty, which in the grain world equates to more volatility.
OILSEED MARKETS - Jonathan Lane, trading manager
Frustrating! This is probably the best way of summing up the rapeseed market this week. This should have been the week when we saw harvest really get going in many regions of the UK but the weather has beaten us. We were given one interesting statistic yesterday that summed the situation up very well.Rain fall in North West Cambridgeshire - 18th February - 18th July 48mm of rainfall, 19th of July 3.30pm - 4.05pm 32mm of rainfall !!!! - Nature generally seems to find a way to adjust.
The yields on the few crops that have been cut appear to be very good and most growers seem to be pleasantly surprised. We have subsequently revised our crop estimates back up to 2.5mln/t giving us a significant exportable surplus. However, even with the higher crop, the S&D for Europe is still very tight and we still expect to see a draw down in ending stocks that should ultimately support prices. But in the short term, especially given the relatively poor carry, we wouldn’t be surprised to see some harvest pressure.
New grain passports – please remember that all rapeseed deliveries must be accompanied by the new 2011 passport and that the crushers will not accept deliveries where section 8 of this new passport has not been fully completed!
