Market Report

FEED WHEAT

Egypt's GASC purchased 490,000 tonnes of wheat in recent tender, purchasing from the US/Russia and Kazakhstan.

Indian officials report they are 'in no hurry to import more wheat' as production for 2008 is estimated at 75mmt despite lower acreage planted to date (27.4 million hectare against 28.0 million last year).

Russian wheat is receiving a 'major push' to export prior to the introduction of 40% export tariff at the end of January.

The market remains very volatile, mainly driven by external factors. The recent uncertainty over global economies, fluctuations in exchange rates, crude oil prices and the action of fund managers are all combining to overshadow the fundamentals of the grain market.

In the UK consumers seem well covered in the nearby months, and are only encouraged to purchase forward when covering sales. New crop remains a weather scenario, however, with no major problem to talk about, the potential for a 'bumper' wheat crop indicates current prices are good value for the grower.

OILSEED RAPE

Rapeseed prices have got caught up in the global equity crisis that saw £77bln wiped off the value of the London stock exchange on Monday and as equities plunged investment mangers needed cash to finance their positions and chose to liquidate their commodity positions.

The soy market in Chicago has posted near limit losses in 3 out of 4 trading sessions this week in all areas of the complex. European rapeseed futures prices have has lost Eur27.5 since Monday morning and UK prices have lost £20/mt.

These latest price movements are totally against the fundamentals, but, for the time being, the fundamentals mean nothing and as long as non-agricultural money wants out prices will keep falling. However, once things have settled down and the trade is able to focus again on the real drivers in this market we should see some sort of price recovery.