Gleadell Market Report
GRAIN MARKETS – David Sheppard, managing director
WHEAT
US markets have rallied strongly since last week following the bullish corn stock report. Since last Thursday morning, old crop US corn futures have risen $1 per bushel (approximately $40 or 25 per tonne).
With the likelihood of continued price rationing for US corn, feed producers will be forced to replace corn with wheat, and therefore, wheat markets have followed higher, rising 60c/bu in the same period.
EU wheat values have also firmed over the week supported by the firmer US corn market and weather concerns, both in the US and the EU. Winter wheat crop rating for US wheat showed a marked deterioration in the HRW areas. However, crop ratings for SRW areas improved and white wheat areas were stable.
The Russian Agriculture Ministry raises its 2011 grain crop forecast to 85-90mln/t, and export is a possibility.
The Ukrainian Agriculture Ministry reports 93% of planted area as of March 31st in good/satisfactory condition.
UkrAgroConsult reduces its estimates for the 2011 Ukrainian grain crop to 44.72mln/t, wheat lowered to 20.5mln/t.
USDA attach sees Australian 2011 wheat plantings at near-record level at 13.8mln hectares, although Rabobank report drought and parched soils in western Australia, historically the source of 40% of the national wheat output, could again crimp production this year, reducing the chance of a record Australian wheat crop.
In summary, it remains a corn-led market, with wheat being dragged along for the ride. The corn planting season has only just commenced and, therefore, over the next few weeks the market will remain nervous and volatile.
The USDA is due out this week, with the already-announced lower corn stocks likely to appear on the US balance sheet and it could be a buy the rumour, sell the fact report. Market fundamentals remain bullish, but presently its all about corn, with wheat getting the award for best supporting role!
The bullish USDA stock data last week has resulted in firmer prices. The tight US soya complex has added support to rapeseed markets, as importers are caught between limited US bean supplies and new crop South American beans harvest, delayed by recent wet weather.
European markets for old crop are done and dusted, with interest now driven by the short-market as crushers seem well covered until new crop. European and UK values have been under pressure as the strength of the and Sterling against the US$ raises origin values.
Tight supply and balance sheets for US beans and EU rapeseed should keep prices underpinned and, like the grain markets, weather issues remain in relationship to new crop prospects in the EU and US. Therefore, markets will remain volatile and under the influence of outside factors, such as rising oil prices.
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
- Gleadell Agriculture currently has offices in Full Sutton (Yorkshire), Hemswell (Lincolnshire), Swaffham (Norfolk), Lyndon (Rutland), Warminster (Wiltshire) and Bilsborrow (Lancashire).
- Gleadell Agriculture Ltd is equally owned by Toepfer International – based in Hamburg, who are one of the largest global traders of agricultural products; and InVivo – based in Paris, who are the leading provider of goods and services to their partner cooperatives and one of the largest traders of European grain.
- Prices quoted are indicative only at the time of going to press and subject to location and quality
- Gleadell Agriculture cannot accept liability arising from errors or omissions in this publication.
- mln/t = million tonnes, mt = metric tonnes, kg/hl = kilogram per hectolitre, k/mt = thousand tonnes.