David Sheppard, managing director, Gleadell Agriculture said: "Coceral sees EU-27 2008/2009 grain crop at 289mln/t, with soft wheat crop estimated at 130.3mln/t, up 17%. India sees record wheat crop of 78mmt allowing early release of stocks to ease domestic prices. Recent rains in Eastern Australia boosts prospects for winter cereal crop."
US winter wheat harvest is seen as 22% complete, early cuttings indicate good yield/quality but reduced proteins. The recent US weather has, and will, continue to drive prices for the coming weeks. A drier spell allowed the market to drift lower, but with reports of a wetter weather pattern to arrive in the next few days the market bounced higher yesterday. Harvest is steadily moving north into the key US producing states with good yields being reported.
Harvest has also started in the Southern EU and Russia and will soon start in quantity in the key EU countries of Germany, France and the UK. As the potential of bumper crops remain in the EU, FSU and other major producing regions of the world, exportable availability will increase and therefore cereal prices could come under pressure as harvest accelerates.
On Monday, the USDA release their planting and quarterly stocks reports, which the trade will closely monitor. Currently the USDA are trying to assess the extent of plantings lost to the extreme weather conditions in the US this year and many believe that the full extent of this report will not be available until July/August, leaving the market open to speculation," he added.
OILSEED RAPE
"The European rapeseed market remains torn between the influence of high crude oil prices and the perception of growing demand from the bio-diesel sector, coupled with concerns regarding US soy production, and the prospect of a record production in both rapeseed and sunflower seed." said Jonathan Lane, Gleadell oilseed rape trader.
With all of these factors influencing the market it is very difficult to give a definite long term view. However, with huge rapeseed crops about to be harvested throughout Europe and the Ukraine and farmer's requirements of cash flow and space (there's a big wheat crop on the horizon), we expect the market to come under pressure as the combines start. We have already seen the market carry between July/Aug and November start to widen and we believe this will widen further," Mr Lane added.
