Gleadell Market Update

FEED WHEAT

THE MARKET HAS GOT OFF TO A SLOW START AFTER THE EASTER HOLIDAY

• UAC report Ukrainian grain exports are likely to rise to about 1.4mln/t in March from 1.1mln/t in February. With approx 500,000t of wheat, 400,000t of barley and 400,000t of maize.

      Turkeys TMO sells 150,000t of wheat and 160,000t of barley in an export tender.

• Egypts GASC purchases 60,000t of Russian wheat for early June shipment.
• Kazakhstan plans to increase shipments through Iran by launching a terminal in an Iranian port and building a new railway link.
• UkrAgroConsult has revised upwards the 2010 Ukraine grain crop to 43.62mln/t from 43.31mln/t previously. Within the report, wheat was increased to 18.48mln/t (18.05mln/t), but barley was lowered to 11.25mln/t (11.35mln/t). However, earlier this week UkrAgroConsult reported that the state of the Ukrainian winter crop had worsened with the share of crops in poor condition rising to 14.6%.
• Australian ACF raises its estimate for 2010 wheat production to 22.5mln/t, up from 21.7mln/t previously. In the report, ACF noted that good rains ahead of planting across key-growing areas had boosted prospects.
• Algeria expects a good grain harvest this season and is likely to match the record crop of the pervious season.
• Iraq has purchased around 500,000t of wheat (300,000t Russian, 150,000t Canadian and 50,000t of US) for May/June shipment.

World, EU and UK wheat balance sheets still look heavy and, with weather prospects remaining favourable for new crop, price pressure could return later in the season. In the short-term, it appears there are more buyers than sellers, and this may encourage growers to hold out for better prices. However, if the balance sheets are correct, the better prices may already be in the market, says David Sheppard, managing director, Gleadell Agriculture.

In summary, the market has got off to a slow start after the Easter holiday with no signs of increased selling activity by the grower. Demand is still apparent in the market, both for export and domestic requirements, and this is underpinning values in the spot market even allowing for the rise in sterling against the Euro. Tomorrow sees the USDA release their monthly US and world supply & demand estimates but, based on the stock figures released last week, traders are looking for US stocks to rise again, especially corn. Mr Sheppard adds.

OILSEED RAPE

THE GLOBAL OILSEEDS FUTURES MARKETS HAVE BEEN PRETTY QUIET THIS WEEK

The Global oilseeds futures markets have been pretty quiet this week, says Jonathan Lane, Gleadell trading manager. There was little fresh news to inject any excitement into the soy complex, and the market fell back to trading off weather forecasts and the expectation of a series of rain systems moving across the midwest and northern plains in coming weeks – which would suggest planting delays in corn might shift some acreage into soybeans.

In Europe, the market remains underpinned in the nearby positions by demand from the continent and the recent rally in crude oil prices. Crude is now trading over US$86/barrel on the back of renewed ideas about the speed of the global recovery and the release of, better than expected, US jobless numbers last week. However, crush margins are now coming under pressure and some of the multi-seed facilities in Europe are now switching back to processing soybeans, which could result in a significant reduction in rapeseed processing at the end of the campaign.