Gleadell Market Report

Immediate – 19 February 2016

David Sheppard, Gleadell’s managing director, comments on the wheat market

Despite a firmer US dollar and a bearish export outlook, Chicago wheat values have manged to gain $2.50 on the week. The release of the CBFT report showed fund managers shorter than anticipated, which has supported the small rise.

Although a better week for US exports, these were still behind the average needed to achieve the USDA projection. Import demand is expected to slow as the harvest approaches, so the likelihood remains that US stocks will increase further.

In the EU, the Matif is down €2 on the week, pressured by a very bleak export outlook. There is still a level of uncertainty regarding Egypt, and although that country’s agriculture ministry sent an official letter confirming 0.05% ergot tolerance, nothing has been confirmed from the quarantine office.

Even with a better shipping line-up this week, crop bureau FranceAgriMer has reduced its non-EU export projection, lifting French soft wheat closing stocks to a 17-year high of 6 mln t.

UK markets are up 50p on the week, continued to be driven by short covering, mainly by shippers. Spot-delivered premiums continue to rise as demand intensifies into an apparent ‘supply squeeze’, although in the deferred positions demand remains absent.

While the spike has supported firmer ex-farm prices, the need for the UK to stay competitive would justify a retracement from current levels. Importers will become more relaxed as harvests nearand export competition is expected to increase.

In summary, less gloomy economic reports coming out of China and Japan have triggered a small bounce in most markets – equities, commodities and crude oil. Knowledge that the US funds are also shorter than initially thought leaves the Chicago market open to technical support, although global markets are past caring what the US does.

Fundamentally nothing has changed, there is still too much supply chasing too little demand, but that doesn’t seem to be the fact if you need to buy some spot wheat.

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Jonathan Lane, Gleadell’s trading director, comments on the OSR market

CBOT soybeans have firmed over the week, trading towards the top of the recent range. There is little new fundamental input but we see some fund short-covering as grain markets gain some support from firmer crude.

Matif futures have traded higher, supported by a weaker euro/dollar rate, crude and firmer soybeans. We also see a short term reversal on the Matif, which has probably encouraged some short-covering in the futures market.

The UK physical market is quiet; we have again reached target farmer levels of £260/t for old crop, but only small volumes came forward. UK crushers remain reluctant buyers and export business increases with German crushers buying old and new crop UK seed.

The euro/sterling rate remains volatile. UK ex-farm values have lost £2-3/t purely on currency, offsetting the slight reduction in futures values.

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For market information contact Jonathan Lane, trading director, on 01427 421221 or

Press queries or for further Gleadell contacts call Robert Harris Communications on 07768

Notes to Editors

Gleadell Agriculture Ltd is an independent major trader of grain, seed and fertiliser in the UK with offices in York, Hemswell (Lincolnshire),Swaffham(Norfolk), Stamford (Lincolnshire) and Warminster (Wiltshire).Gleadell is jointly owned by ADM and InVivo, the leading provider of agricultural goods and services in the EU.

Any prices quoted in this release are indicative only at the time of going to press and subject to location and quality.Although Gleadell takes steps to ensure the validity of all information contained within this release, it makes no warranty as to theaccuracy or completeness of such information. Gleadell will accept no liability or responsibility for the information, or any action or failure to act, based uponsuch information.

mln t = million tonnes, t = metric tonnes, kg/hl = kilogram per hectolitre.