Gleadell Market Report
FEED WHEAT: EU (French and UK) exports continue at a pace defying the balance sheets … OILSEEDS: ..The oilseed market continues to see unprecedented volatility
FEED WHEAT
FAO sees more wheat in 2011/12 as plantings increase in response to higher grain prices, but warns that the World must remain on alert for supply shocks.
Egypts GASC purchases 175,000 tonnes of US wheat for January 21-31st shipment. This brings the total wheat purchased by GASC (French/US/Canadian/Australian/Argentine origin) since the 1st July 2010 to 3.42mln/t, compared with 5.53mln/t purchased in the 2009/10 season.
Russian Grain lobby reports the country will need to harvest at least 80mln/t of grain in 2011/12 to cover domestic needs. This compares with the drought-stricken crop this year of 60.5mln/t, and the bumper 2009 crop of 97mln/t. Analysts see Russia keeping wheat export ban until late 2011 the weather will become the decider.
UkrAgroConsult cuts the Ukrainian 2010 crop forecast to 39.24mln/t from 39.52mln/t previously. Within the report, wheat production was cut from 17.46mln/t to 17.2mln/t with barley and maize crop left unchanged (8.7mln/t and 11.6mln/t).
Toepfer International sees wheat acreage increasing in 2011, with only Russia of the major northern hemisphere producers expecting winter wheat sowing to fall from last season.
UK wheat area to rise 3% on this year to 1.98mln ha, according to a survey for the HGCA.
China seen selling corn/wheat reserves at weekly auctions in an attempt to pressure domestic prices lower.
Following the Chinese bank move last week (raising banks reserves requirements), which initially pressured prices, the markets have recovered. Despite US winter wheat crop ratings increasing, they are still well behind last years and, as the crop enters dormancy, are less able to survive any excessive adverse weather conditions. Concerns in South America over weather conditions in relationship to corn and soy crops have also added support to US markets, given the tightness in current supplies.
EU (French and UK) exports continue at a pace defying the balance sheets. The UK differential against French values has continued to narrow, and will continue to do so. The UK surplus is hard to replace from other origins and importers may not find it easy to replace UK wheat later on in the season . Domestically, the market has seen topping- up as end-users look to cover pre-Christmas requirements, although post-Christmas buying interest remains patchy, with most believing good volumes are still to be covered, into an ever-decreasing availability.
OILSEEDS
The falling Euro has also helped to prop up the Matif rapeseed market as the Euro US$ continues to weaken. The Euro initially tried to stage a recovery as the Forex market seemed happier to have the IMF in Ireland, but this was short lived, as there are still plenty of question marks about which Euro zone economy will be next! The supply and demand situation for European rapeseed is still very tight, there will be some complicating factors (i.e., sustainability) but the overall picture remains a friendly one.
For further information contact David Sheppard, managing director, on 01427 421222 david.sheppard@gleadell.co.uk
Jonathan Lane, trading manager, on 01427 421222 jonathan.lane@gleadell.co.uk
1) Prices quoted are indicative only at the time of going to press and subject to location and quality.
2) Gleadell Agriculture cannot accept liability arising from errors or omissions in this publication. 3) mln/t = million tonnes, mt = metric tonnes, kg/hl = kilogram per hectolitre, k/mt = thousand tonnes.