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Gleadell Market Update

FEED WHEAT

ABARE raised its estimate of the Australian 2010 wheat crop to 22.14mln/t. While Strategie Grains raises its 2010 EU-27 soft wheat production forecast to 133.1mln/t, but lowered barley and maize estimates, reporting that dry spring weather had cost the EU 2mln/t in grain output, says David Sheppard, managing director, Gleadell Agriculture.

Coceral trimmed 2010 EU soft wheat crop to 132.2mln/t, down from 133.5mln/t in their March forecast. With smaller estimates for Spain, Denmark and Austria partially offset by upward revisions for Germany and the UK.

Argentine Agriculture Ministry raised its area forecast for the 2010/11 wheat crop to 4.4 million hectares.

Saudi Arabian purchased nearly 1mln/t of wheat of Canadian and German origins for 2010/11 season, European traders reported that the spilt was 880,000 tonnes from Germany and 110,000 tonnes from Canada.

Statcan estimated Canadian all-wheat plantings at 22.72 million acres, down 7% from last year. However, due to recent weather concerns, the trade and analysts believe these estimates are overstated, especially with the CWBs forecast of the smallest all-wheat plantings in 39 years at 19.15 million acres.

The week has been dominated by the higher quality wheat market, with the woes in Canada and the purchase by Saudi Arabia. While these are supportive to the quality market and the MGE complex, it is worth noting there appears to be no shortage of feed grains across the globe. The potential of higher than expected US corn plantings, increased harvest activity in the US and southern EU, and favourable weather prospects for Australia, Argentina and US, spring crops will just increase the availability and pressure prices lower to attract buying interest, Mr Sheppard adds.

OILSEED RAPE

Rapeseed prices continue to be supported with the story for higher prices still well and truly intact, says Jonathan Lane, Gleadell trading manager.
Canadian Canola planting will be slashed due to the wet weather that has prevented drilling. Yesterday StatsCan reported that Canola plantings would be down 10.5% versus last year at 17.9 million acres. However, the information that was gathered for this report was done prior to the significant heavy rains and this could mean a further downward revision in acreage on subsequent reports. These crop problems have pushed prices in Canada sharply higher and, despite them still  needing to export an albeit diminished surplus, they have managed to price themselves out of all of their traditional destinations. This situation is bullish for European rapeseed.
In theory, EU rapeseed has come close to calculating to Mexico, and Black Sea rapeseed continues to trade to Pakistan, so with the EU needing to import 2-2.5mln/t it cant afford to see this rape leaving the European continent, Mr Lane adds.

For further information contact David Sheppard, managing director, on 01427 421222  david.sheppard@gleadell.co.uk

Jonathan Lane, trading manager, on 01427 421222 or email jonathan.lane@gleadell.co.uk

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