Market Forces

Last week brought a plethora of crop reports and announcements and the overall effect was a softening in old crop grain values. Grain exports from both the US and EU were well down on previous weeks suggesting that buyers are adequately covered for now and keen to stretch existing stocks until new crop arrives. Spain is just 6-8 weeks away from start of harvest and North Africa is even closer. The recent warmer weather in southern Europe helped France to report an increase in corn plantings from 4% to 29% in the week. Last year's figure at this stage was 65%. French winter wheat was rated at 67% Good/Excellent –up 2 points in the week and 2 points up on this time in 2012. Spring barley was rated 81% G/E compared with 87% at this stage in 2012. Ukraine announced that they would come to the market with more old crop wheat and Russia hinted similarly while also increasing their grain harvest prediction. LIFFE May wheat lost £5 on the week to close at £191(€227) while November lost £4.40 to close at £182.25 (€216). MATIF May lost €3. The bird flu problem in China continues to affect demand for animal feed and has caused ripples through the grain markets. This is because many people who switch away from poultry meat cannot afford pork or beef, instead opting for a diet of rice and vegetables. The Argentine soya bean harvest is 50% complete but farmers have continued to hold onto stocks as a hedge against rampant inflation and as a protest against the 35% export tax levied by the government. Sales are at 26% compared with 46% at this time last year. CBOT soya bean prices were flat on the week while meal moved up 1.3%. US planting reports are due tonight which will give further direction to markets.

Mike Shields

Trident Ireland