FEED WHEAT

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International Grains Council raises its estimate for 2008 world wheat production to 658 mmt and also raises 2008-09 ending stock levels to 143 mmt.

Dry weather seen delaying wheat plantings in Argentina, estimated at 41% complete

Russia had harvested 1.4mmt of grain a/o 30 June, with full scale harvesting to commence over the next ten days.

UkrArgoConsult raises its estimates of Ukraines’s 2008 grain crop to 43.452mmt, with wheat estimated at 21.83mmt. Grain exports are forecast to reach 8.2mmt of wheat and 5 mmt of barley.

EU has agreed to permanently end the requirement that farmers leave part of their land unplanted under the ‘set-aside’ rule.

USDA report released on Monday estimated quarterly wheat and corn stocks higher than trade expectations. Additionally, with corn acreage (87.327mln acres) at the high range of estimates and reports of improving corn and wheat crop conditions, this was enough to see strong selling earlier in the week in Chicago, dragging European markets lower.

Wheat harvest is now in full flow in the Ukraine, with latest estimates putting the wheat crop at 22mmt, allowing 8mmt of exports for the 08/09 season. Recent buying tenders have been mainly ‘filled’ by Black sea wheat, and with export restrictions now fully removed, greater export volume will keep pressure on European wheat prices, given the expected 130mmt+ soft EU wheat crop.

OILSEED RAPE

Volatility rules again in the US soy markets with prices surging higher in one moment and giving it all back again the next.

The November soybean contract made new all-time highs last night on the back of ideas that hot and dry weather will develop in the western corn belt into the middle of next week and last for at least a week or more (which seems odd as it was wet weather that was doing the damage last week!).

In Europe, the combines will be starting in the south this weekend and harvest has begun in Eastern Europe where the yields are being described as better than average.

The prices that are trading in the Black Sea represent values delivered to the North European crushers that undercut UK prices by some eur4-5/mt and this could put some pressure on UK prices once harvest gets underway.

MALTING BARLEY

The French winter barley crop is 25% complete with low moisture and under 1.75 nitrogen.

Expected 6 row yields were 10t per hectare but are nearer 8.5t probably due to lack of sunshine.

German 2 row barleys are similar on moisture and nitrogen with 85% retention.

These results will give the maltster a comfort factor until the spring barley qualities appear.

Danish spring barley has suffered a yield penalty where it is not irrigated but the increase in plantings should help to compensate expected higher nitrogen and screening levels.

Overall a big Southern European crop is expected.

FERTILISER

The news of further sales to India has meant that Prilled Urea prices have now corrected themselves.

Granular Urea prices have also firmed and the Urea market is now poised for another price run up in the weeks ahead.

The UK Nitrogen manufacturers continue to restrict allocations of ammonium nitrate and genuine supply concerns now abound.

Supply of any alternative nitrogen sources remains an issue, a resurgence in buying interest from the FSU states where product appears to be competitive is now on the cards.

Imported Ammonium Nitrate from these areas will arrive into the UK at some stage to fill the gap now emerging.

Sulphur products remain hard to source with any offers "few and far between", Ammonium Sulphate will arrive to these shores but the quality is likely to be 1-4 mm NOT the 2- 4mm material that the UK market has received in the past.