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Market Report |
| Home-Grown Cereals Authority | 28 November 2005 / Volume 01 Issue 01 |
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| Major EU sugar reform agreed EU agriculture ministers agreed on a major reform of the EU sugar regime last week. The reform includes a 36% cut in the sugar support price over four years. Farmers will receive a 64.2% compensation from 2006/07 with decoupled direct aid payments conditional on cross-compliance rules being met. The reform casts uncertainty over the future of the EU sugar beet planted area, with cereals being a potential substitute crop. The reforms could also have an impact on demand for cereal-based products. EU isoglucose quotas will be raised by 0.3Mt over three years. |
Wheat export prices  |
MATIF wheat futures Fell by E1 to E1.25 /t for nearby positions, as last week’s open market restitutions disappointed and transport problems on the Rhine and the French railways continued to disrupt supplies. However, forward positions were just 0.50 to 0.75 /t lower, as some underlying support was derived from a strong $ versus and firmer Black Sea markets. |
| Summary of the week |
| Event | Possible impact | Price effect |
| Intervention offers at 3.8Mt | Support to EU market | Bullish |
| IGC raises grain forecast | More grain globally | Bearish |
| Ukraine exports at 1.6Mt | Export expected to slow | Bullish |
| Lower water levels limit ex | Benefit to UK exports? | Bullish |
| Australian canola crop rise | Still less than last year | Bearish |
| CBOT wheat futures Lost up to $2.30 /t last week, mainly on fund-selling activity. CBOT maize was as much as $1 /t down, generally following soya futures markets lower and reflecting concern for US feed demand, offsetting supportive weekly maize export sales and firm cash markets. US crop conditions in the southern US plains for hard red winter wheat remain too dry, but are favourable for soft red winter wheat. US crop conditions in the southern US plains for hard red winter wheat remain too dry, but are favourable for soft red winter wheat. |
The IGC Raised its forecast for the ‘05/06 world wheat crop by 1.4Mt to 610.7Mt this month, which still remains some 13Mt below the ‘04/05 crop of 623.4Mt. Raised its forecast for the ‘05/06 world wheat crop by 1.4Mt to 610.7Mt this month, which still remains some 13Mt below the ‘04/05 crop of 623.4Mt. Global coarse grain production is estimated 5.5Mt higher compared to last month at 958Mt (1,009Mt in ‘04/05). This increase is mainly due to a 5.1Mt higher world maize crop of 676.9Mt (706.3M), mirroring a 4Mt increase to the US figure. See www.igc.org.uk |
| UK delivered prices as at Friday 4 November 2005 £ per tonne |
| East Anglia | Liverpool | Avon | Yorkshire | C Scotland | ||||||
| Spot | change | Spot | change | Spot | change | Spot | change | Spot | change | |
| Bread Wheat | 77.50 | -0.50 | 77.50 | -0.50 | 77.50 | -0.50 | 77.50 | -0.50 | 77.50 | -.0.50 |
| Feed Wheat | 69.50 | -1.00 | 69.50 | -1.00 | 69.50 | -1.00 | 69.50 | -1.00 | 69.50 | -1.00 |
| Feed Barley | 70.00 | -0.50 | 70.00 | -0.50 | 70.00 | -0.50 | 70.00 | -0.50 | 70.00 | -0.50 |
| Oilseed Rape | 145.00 | +1.00 | 145.00 | +1.00 | 145.00 | +1.00 | 145.00 | +1.00 | 145.00 | +1.00 |
| May'06 | change | May'06 | change | May'06 | change | May'06 | change | May'06 | change | |
| Bread Wheat | 77.50 | -0.50 | 77.50 | -0.50 | 77.50 | -0.50 | 77.50 | -0.50 | 77.50 | -.0.50 |
| Feed Wheat | 69.50 | -1.00 | 69.50 | -1.00 | 69.50 | -1.00 | 69.50 | -1.00 | 69.50 | -1.00 |
| Feed Barley | 70.00 | -0.50 | 70.00 | -0.50 | 70.00 | -0.50 | 70.00 | -0.50 | 70.00 | -0.50 |
| Oilseed Rape | 145.00 | +1.00 | 145.00 | +1.00 | 145.00 | +1.00 | 145.00 | +1.00 | 145.00 | +1.00 |
| EU intervention update During the first three weeks of EU intervention, EU farmers offered about 3Mt of grain, including 1.5Mt of wheat, 0.77Mt of barley and 0.8Mt of maize. Germany offered 0.9Mt, Hungary 1.1Mt and Poland 0.5Mt. UK intervention update A total of just 1,000t of barley were offered into UK intervention stores last week, bringing net-offers so far this intervention season to 12,980t. The UK intervention season opened with just 16,022t of barley in stores on 1 November. See www.rpa.gov |
USDA soyabean estimates The USDA kept world 05/06 soyabean production at 222Mt as estimates for US, Argentine and Brazilian production were all unchanged. World ending stocks were seen revised up by 1Mt, to 48Mt, following an increase in forecast US stocks. Record canola crop The Canadian 05/06 canola crop has been placed at a record 9.7Mt by Statistics Canada. This new estimate sees the crop up 1.2Mt from the previous estimate, 2Mt from the 04/05 crop and 1Mt from the previous record, set in 1999. The significant estimate rise was born from a larger harvested area and significantly increased yields. |
| Prices |
| UK corn return ex-farm prices £/tonne as at Friday 25 November 2005 |
| Wheat | Barley | |||||
| Bread | Other | Feed | P Malting | Other | Feed | |
| South East | - | 65.30 | 63.70 | - | - | 65.40 |
| South West | - | 65.30 | 64.50 | - | - | 63.90 |
| Midland | 73.70 | 66.40 | 64.20 | - | - | 62.90 |
| Eastern | 71.50 | 66.50 | 65.20 | 77.40 | - | 63.10 |
| North East | 76.10 | 66.80 | 65.20 | 76.30 | - | 65.10 |
| North West | - | - | 66.50 | - | - | - |
| Scotland | - | - | 70.50 | - | - | 65.10 |
| Northern Ireland | - | - | - | - | - | - |
| United Kingdom | 72.70 | 66.20 | 65.00 | 76.70 | - | 64.10 |
| Change on week | +1.20 | -0.70 | +0.60 | +0.10 | - | unch |
| Export prices Fob/tonne as at Friday 25 November 2005 |
| $ | change | Month | Basis | ||
| Premium Milling Wheats | Canada No 1 CWRS | 201.71 | -2.97 | Nov | St Lawrence |
| US DNS No.2 14% | 189.60 | -2.90 | Nov | Portland | |
| Good Milling Wheats | US HRW No.2 | 164.90 | -3.70 | Nov | US Gulf |
| Other Milling Wheats | US SRW No.2 | 130.10 | -1.80 | Nov | US Gulf |
| French, subsidised | 129.60 | +0.70 | Nov | Rouen | |
| Ukraine, Milling Class 3 | 122.50 | +2.00 | Nov | Black Sea | |
| Other Wheats | Ukraine, Feed | 110.50 | +2.00 | Nov | Black Sea |
| UK, Feed subsidised | 121.50 | +3.60 | Nov | East Coast | |
| Maize | US No.3 Yellow Corn | 95.20 | -0.60 | Nov | US Gulf |
| Futures prices as at Friday 25 November 2005 |
| LIFFE Wheat | MATIF Wheat | MATIF Maize | MATIF Rapeseed | ||||||||
| £/tonne | change | €/tonne | change | €/tonne | change | €/tonne | change | ||||
| Jan | 70.50 | +0.50 | Mar | 111.50 | -1.25 | Mar | 127.75 | -1.75 | Feb | 231.75 | -4.25 |
| Mar | 72.50 | +0.60 | May | 113.00 | -0.50 | Jun | 130.50 | -1.50 | Jul | 243.00 | -4.00 |
| May | 74.50 | +0.85 | Sep | 112.25 | -0.50 | Nov | 129.25 | -1.50 | Nov | 243.00 | -4.00 |
| Chicago Wheat - SRW | Minneapolis Wheat -DNS | Kansas Wheat - HRW | Chicago Maize | ||||||||
| $/tonne | change | $/tonne | change | $/tonne | change | $/tonne | change | ||||
| Dec | 109.12 | -1.84 | Dec | 133.73 | -2.11 | Dec | 127.76 | -3.86 | Dec | 74.70 | -0.59 |
| Mar | 114.72 | -2.02 | Mar | 134.28 | -2.94 | Mar | 129.60 | -3.40 | Mar | 79.82 | -0.98 |
| May | 117.84 | -2.30 | May | 132.91 | -3.21 | May | 127.67 | -3.58 | May | 83.17 | -0.79 |
| Chicago Soybeans | Chicago Soyameal | Chicago Soya Oil | Malaysian Palm Oil | ||||||||
| $/tonne | change | $/tonne | change | $/tonne | change | $M/tonne | change | ||||
| Jan | 133.73 | -2.11 | Dec | 127.76 | -3.86 | Dec | 126.75 | -1.75 | Dec | 116.00 | -2.00 |
| Aug | 134.28 | -2.94 | Jul | 129.60 | -3.40 | May | 127.75 | -1.75 | Mar | 122.10 | -0.60 |
| Sep | 134.28 | -2.94 | Sep | 129.60 | -3.40 | Jun | 127.75 | -1.75 | Apr | 122.10 | -0.60 |
| Currency as at 18 November 2005 |
| £1=$1.7137 | down | |||||||||
| £1=€1.4674 | up | |||||||||
| £1=£1.1679 | down | |||||||||
| $=$M3.80000 | unch |
| UK feed ingredient prices |
| full information available online |
| Intervention price |
| full information available online |
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