FEED WHEAT

• French Farm ministry trims its ending stocks by 80,000t to 2.15mln/t, against 3.4mln/t at the end of 2009/10.  Higher estimates for non-EU exports, increased domestic usage and lower imports account for the change.
•  Strategie Grains raises its estimate for the 2010 EU-27 soft wheat crop to 127.9mln/t, up 700,000t from its previous estimate, due to higher projected yields, mainly in Germany, Poland and the UK.
• Ukraine’s grain stocks as of October 1^st were estimated at 17.9mln/t, down 25% from the same time a year ago. The Ukrainian Government has adopted a resolution to impose a 2.7mln/t grain export quota (2mln/t maize, 500,000t   wheat and 200,000t of barley) for this year – allocation of export quota seen by November 3^rd.
• Egypt’s GASC purchases 290,000t of US, French and Canadian wheat for December 21-31st shipment.  Since the start of the 2010/11 season, GASC has purchased about 2.86mln/t of wheat, compared with last season’s total of approx 5.5mln/t.
• UK’s August wheat exports were reported at 202,224t bringing the season to date figure to 468,259, up 76% from the same period last year. Trade estimates for the end-September figure are placed at 700-800,000mt.
• The market rally seen after this month’s bullish USDA S&D report has slowed, with US$ movements leading prices.  The record pace of US corn and soybean harvests has also weighed on the market, leading to some profit-taking. Favourable weather has also allowed US winter wheat plantings to exceed the 5-year average pace (now 80% complete).
• Global wheat markets continue to be a follower of US corn, and with a historically low stocks-to-use ratio in the US, this should continue. With the lack of Black Sea exports, and the EU exporting at an unsustainable pace, sometime in the next few months the US wheat market will have to come to the party, and control global wheat prices.
• The battle for acres in the US has commenced and, with low stocks of corn/soybeans and attractive forward prices this should entice higher acreages in 2011. A record corn crop will be needed in 2011 to stop further eroding of US stocks, and therefore, any sights of increased demand of perceived supply problems will encourage buying activity.
• Wheat has its own fundamentals and market forces, but at present, keep your focus on the corn market! 

  OILSEED RAPE

• It has been a funny sort of week in the oilseeds market.  US soybean futures are up on the week, but the market has been rather volatile.  Prices initially came under pressure on the back of a rally in the US$.  This was sparked by China's Central Bank's surprise increase in interest rates, the first time since 2007. The news raised fears the biggest importer of US soybeans may cool its aggressive import pace. But these fears were short lived, and Global demand for US beans isn’t going away, and prices look likely to remain supported in the short to medium term.
• In Europe, the rapeseed prices are up €4 on the week.  The German Agriculture Ministry said on Monday that they would not change their policy or timing on the implementation of the sustainability legislation, so all eyes are now on the next round of meetings in Brussels, scheduled for early December, when most will push for a more logical solution to this policy issue.  Overall, market prices look set to remain supported in the short to medium term. There is still some uncertainty regarding the impact of the sustainability legislation on bio-diesel demand after January 1^st, but today for the UK farmer it is all about the falling £:€. Our Chancellor's austerity measures appear to have sent a ripple of concern through the city about the UK slipping back into recession. This has seen Sterling fall to £:€1.1256, and this has pushed UK ex- farm values to year highs. We are not saying that this is the top of the market, but it represents an excellent opportunity to lock into some great prices, especially with the uncertainty regarding the sustainability legislation overhanging the market. 

FERTILISER

• The short window of opportunity, seen recently as Urea prices traded sideways and then downwards, is now closed as prices have rebounded in all areas. 
• The US market is suddenly flying and prices have traded almost $30/tonne higher in a week. Traders and buyers now appear convinced the market will go firmer following the positive USDA corn report on October 8^th. 
• More tenders in India and Bangladesh are still to happen late October/early November helping further to push prices upwards. 
• Ammonium Nitrate in Europe remains extremely tight, and in the UK both GrowHow and Yara keeps moving prices up and keeping merchants on a very tight rein on allocations. 
• Lithuanian product, the preferred imported nitrogen product of many UK farmers, has also firmed. 
• News from the US this week that they may increase the percentage of ethanol used in gasoline from 10% to 15% will raise the demand for corn, which is a crop hungry for both Nitrogen and Phosphate. 
• DAP/MAP demand in the US is growing and supply is tight, so a Phosphate market which, at one stage, appeared to be faltering has once again been fuelled and is now unlikely to turn around in 2010. 
• Potash, not wanting to be left on the sidelines, has started to follow other fertiliser prices upwards and the € 12/tonne price rise in Europe is now starting to be mirrored in the UK.