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Gleadell Market Update


Wheat markets have been extremely quiet over the last week, with futures levels in the US, EU and the UK virtually unchanged from a week ago.  US markets continue to find support from funds, and the weaker US$ improving the outlook for US commodities, says David Sheppard, managing director, Gleadell Agriculture.

Rain across south-eastern Australia is preventing growers from harvesting their best wheat crop in nearly a decade and fuelling worries about quality as production recovers from years of drought conditions,

The IGC last week raised its global estimate for 2009/2010 wheat production to 668mln/t.  Stocks at the end of the 2009/2010 season were projected at 191mln/t, the highest since 2002.  (US stocks are set to reach a 10-year high of 24mln/t).  In the report they also projected 2010 global wheat area at 222mln hectares, down 1.5mln from 2009.

A Higher than expected harvest in Kazakhstan will allow grain exports of 10mln/t in the 2009-2010 marketing year, higher than the previous forecast, reported a senior Agriculture Ministry official.  The Government is also looking to subsidise the high transport costs of grain exports to make them competitive on the global markets.

US winter wheat is now 96% complete as of 29 November.  The winter wheat crop is rated as in 63% in good/excellent condition.

About 98% of Ukraine’s winter grain sown to the 2010 harvest had sprouted as of 26 November, with 85% in good/satisfactory condition.

In summary, with northern hemisphere crops now made and the southern hemisphere wheat crop being harvested, the market focus will soon switch to planting progress and development in the north. At present, the majority of the crops look in favourable condition and, unless we witness a major crop problem during the winter months, the reality of another 650mln/t+ wheat crop looks a strong possibility. With demand set to increase only slightly (less feed but increased human and industrial use), a crop of this size could well see further stock building with global stocks at the end of the 2010/2011 season approaching 200mln/t however there is a long way to go before any certainty can be applied to these figures Mr Sheppard adds.

by David Sheppard.  Telephone 01427 421222 or email


The market is aware that the production figures for Global rapeseed are mildly bearish despite the recent upturn in non-food rape oil demand.  The US soy crop is now safely in the barn and has realised the record crop that was required.  In South America, plantings are progressing at a reasonable pace. However, despite these fundamentals, the market is not showing any signs of weakening, says Jonathan Lane, Gleadell trading manager.

The support for these markets is not coming from commercial traders or processors – the market is currently being driven by outside influences. Fund money is flooding into agricultural commodities and over-riding what appear to be mildly bearish fundamentals.  For the time being prices look like they will continue to be supported but, when these funds decide they want to bank their profits, they wont find a raft of commercial buyers to stop the market plunging lower.

As a cautionary note, we would state that we are currently in dangerous waters the market has seen a period of relative stability in recent weeks but, when the investments funds say ‘lets get out’, you dont want to be the one left holding the baby, Mr Lane adds.

by Jonathan Lane.  Telephone 01427 421222 or email

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