December 31st

**MARKET REPORT**

Our market reports are opinion based and are not instructions to trade. You are responsible for your own trading decisions.

WHEAT
Wheat values have continued to decline as there is little bullish news to support values.

New crop wheat has fallen c. £7 in the last 10 days as indicated by nov 13 futures. The fall in old crop has been even more dramatic with little buying interest.

The bearish sentiment has been fuelled beneficial weather to crop potential.
The U.S corn crop is now 95% planted and the moisture that was previously a problem could now be a benefit.

World grain stocks are predicted to increase significantly as a result of the 2013 world corn crop.

USDA report issued tonight could give market direction.
The cereals event taking place in U.K today and tomorrow often has an impact on market trends. A concentration of growers and trade looking at market fundamentals could lead to increased selling.

The Ukraine harvest is due to start in the next few days and if yields are favourable offers of relatively cheap grain may increase.

With current values still £15 more than this time last year and production looking favourable you would feel there is more downside than upside in current circumstances.

The French market keeps testing the psychological 200 euros (matif nov) and if this gets broken further falls are likely.


BARLEY
Feed barley has followed feed wheat down and remains at a hefty discount. Despite the fall in prices U.K barley is finding little buying interest.

To get some demand going some ‘big boat’ business needs to happen.

Malting barley prices have fallen but not to the same extent as feed grains, this has meant premiums have actually increased. With tight European stocks markets are supported until tonnage is actually in the barn. Despite relatively good prices growers are reluctant sellers.

East Anglia is the centre of good demand for spring barley and if the market is starved of sellers a ‘short’ market may develop.

Winter malting barley trade is neglected with minimal buyers, quality will be the important.


OSR
Market still being led by prospects of a big soybean crop in US and Brazil increasing global 13/14 production 18%. US stock must be running very tight now as the year’s export figures have already

passed USDA’s estimate, which is evidently reflected in old crop soybean futures price. Fairer weather in the US has allowed for soybean planting to catch up, although 71% planted vs 5yr avg 84%. Commentators/analysts are forecasting that due to delays in corn plantings (95% complete) as much as 3M acres will be switched to soybeans – question is will the weather allow for US growers to complete planting campaign. Today’s US weather reports show a severe weather warning over the Midwest (hail, tornados and thunderstorms) which is likely to have an impact. The market will surely remain volatile until there is more surety over planting figures.

Rapeseed estimates are for EU production figure to increase to 19.72MMT up from 19.31MMT last year as large German crops and eastern EU will offset poorer crops in France and UK. Large crops expected from Poland, Czech Republic, Denmark, Romania, Hungary and Slovakia.

The current OSR picture feels bearish; although tonight’s USDA report will be crucial to the trend of the market as any surprises to the stock figures will undoubtedly get an aggressive reaction.


STORAGE
We are currently allocating harvest storage space to a range of stores. If you would like to reserve space (on a priced or price to be agreed basis) please contact the office. We can guarantee efficient harvest movement and are able to handle seasonal quality variables.


author: Andrew Dewing