Gleadell Market Report
GRAIN MARKETS – David Sheppard, managing director
WHEAT
Russia may lift its ban on grain exports earlier than 2012 if it revises its cereal supply estimate upwards. Russian grain stocks as of April 1st were reported at 26.2mln/t, down 20% from a year earlier.
USDA attach report Kazakhstans 2011 wheat production will rebound to 14.5mln/t, assuming normal weather. Wheat exports are forecast at 7mln/t, an increase of 2mln/t on the 2010 estimate.
Ukrainian Agriculture Ministry has raised its 2011 grain forecast to up to 45mln/t from 42-43mln/t, and expects a jump in exports. The ministry sees 2011/12 exports at 19-20mln/t, including 8-9mln/t of wheat and 5-6mln/t of barley.
Rain and snow stalls western Canadian crop planting, with less than 2% planted, against a normal progress of 10%. Plantings remain about two weeks behind due to extensive flooding and melting of snow on already saturated ground.
Good weather conditions and high global prices are expected to increase Argentine wheat plantings by 10-15%.
A crop tour of key HRW winter wheat states (Kansas, Oklahoma and Texas) has commenced, with reports of variable yields across Kansas, with analysts projecting the smallest Kansas wheat crop in 9 years, and the smallest wheat crop for 40 years in Oklahoma. Traders await the final reports later this week, as these states are the main HRW growing areas.
Spanish grain stocks in ports and warehouses are declining as traders and consumers wait to see how the domestic wheat and barley harvest fares next month. Even in bumper years, Spanish harvests are never enough to meet domestic demand and the country needs to import at least 10mln/t of cereal a year.
USDA report corn plantings at 13% complete, up 4% on the week. Spring wheat plantings were 10% complete, also up 4%. Winter wheat crop conditions continue to decline, with now only 34% of the crop rated in good/excellent condition.
Weather remains the key factor, with adverse weather in the US either hampering corn plantings or continuing to distress the HRW wheat crops. Harvest in the southern US states is a matter of weeks away and many believe that the damage has already been done; any rain now will only stop further declines. China and Northern Europe remains dry, with reports that the German crop is now stressed due to the lack of rain, with potential yield losses.
In the UK, rain is expected in the next few days although the amount due to fall in the dry east and south is hard to determine. However, on the flip-side Societe Generale has followed Goldman Sachs in warning of tougher times for commodities prices, and the suggestion that the commodities bull run may run out of steam. This has encouraged long holders to liquidate positions and bank profits, and sharply lower oil prices have not helped ag commodities.
OILSEED MARKETS – Jonathan Lane, trading manager
European oilseeds were surprisingly lower, despite agreement that all of all the European crops hit by the weather winter cold and spring drought – rapeseed was definitely the worst. The majority of this weakness is rumoured to be due to fund selling and a shift in the global macroeconomic picture.
Soybeans continue to be pressured from lack of demand from China, the Worlds top soy buyer, trimming of risk premiums built into the market following the death of Al-Qaeda leader Osama Bin Laden and spill over weakness from the broad weakness across all commodity classes by investors booking profits.
The conclusion of the second round of quantitative easing, in which the US Federal Reserve has been pumping money into the economy through bond purchases, could signal the end of easy money and add further pressure to commodity 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.