Gleadell Market Report
GRAIN MARKETS –
David Sheppard, managing director
Ukraines 2010 clean weight harvest is likely to exceed 40mln/t compared with 46mln/t in 2009.
Ukraine has exported 5.9mln/t of grain so far this season, including 2.4mln/t of wheat, 2.3mln/t of barley and 1mln/t of maize, and the government reported that exports would not exceed 13mln/t this season, compared with 21.3mln/t in 2009/10.
Analysts see Ukraines 2011 winter wheat harvest rising to about 21mln/t, from 17mln/t in 2010, with farmers likely to harvest 6.5mln hectares of winter wheat, with yields that could reach 3.23t/hectare.
Russian grain harvest for 2010 reported at 60.925mln/t, down from 97.11mln/t in 2009. Wheat output fell to 41.49mln/t from 61.7mln/t a year earlier, due to a severe drought that cut output of all cereals.
Markets over the festive break have been volatile, as weather concerns support the long-term view and funds banking profits following market rises for wheat and corn to 2 year highs.
Flooding, after excessive rain in eastern Australia has impacted onto wheat quality, with now approx 40% of the national crop being of feed grade only. In addition, colder weather is set to enter the US plains and, with crop ratings at a historically low level as the crop entered dormancy, this leaves the crop vulnerable to damage.
In summary, the bulls currently run the market with enough weather problems to underpin prices, with traders believing that current supplies are not matching the current rate of demand. Traders are also aware of profits built up on the strong market rally, and this could leave the markets open to dips on profit-taking.
Fundamentals are still seen to be supportive, with the only hopes for the bears being a problem-free 2011 growing season and harvest, but that scenario is a long way ahead, and very much in the laps of the gods!
OILSEED MARKETS –
Jonathan Lane, trading manager
The festive period has been a good one for the markets – since our last market report the Matif rapeseed market has appreciated by some 15 and, with the weakening :, UK farm gate prices are up 16-20! The reason for the rally hasnt changed the tightness in seed supply for the European market continues to underpin prices, crush margins are still good and processors continue to operate at or near maximum capacity which, frankly, is unsustainable given the volume of available seed.
Further support for rapeseed stemmed from the US soy markets that have also been trading sharply higher. Dry weather has been threatening the developing crop in Argentina, and the world desperately needs all global producing areas to have good crops. This fundamental support has been added to over the last three weeks by gains in all commodities as significant amounts of investment fund money poured into metals, oil as well as agricultural commodities. The current medium term outlook would point towards the market continuing to move higher. However, we are seeing increasing volatility in all markets so, for those who havent sold yet and want to sit it out, they might be in for a bumpy ride.
GRAIN market information contact David Sheppard, managing director, on 01427 421222 david.sheppard@gleadell.co.uk
OILSEED market information contact Jonathan Lane, trading manager, on 01427 421222 jonathan.lane@gleadell.co.uk
1. Gleadell Agriculture currently has offices in Full Sutton (Yorkshire), Hemswell (Lincolnshire), Swaffham (Norfolk), Lyndon (Rutland) and Warminster (Wiltshire)
2. Gleadell Agriculture Ltd is equally owned by Toepfer International – based in Hamburg, who trade in all agricultural products globally; and InVivo – based in Paris, who trade agricultural products on the international markets and operate major grain storage and handling facilities.3. Prices quoted are indicative only at the time of going to press and subject to location and quality.4. Gleadell Agriculture cannot accept liability arising from errors or omissions in this publication.5. mln/t = million tonnes, mt = metric tonnes, kg/hl = kilogram per hectolitre, k/mt = thousand tonnes.