Market Report - Sept 2012

Market Report up until September 2012

Weather conditions continue to play a major factor on market prices for grains whilst Crude Oil rebounds amidst worries over instability in the Middle East.

Exchange Rates

Against the $, Stirling opened the month at 1.594 and is at 1.567 as of 13th August.
Against the €, Stirling opened the month at 1.270 and is at 1.272 as of 13th August.

Fats and Oil

Soya bean oil prices rose 2% on CBOT and 3% in Rotterdam despite improvements in the US crop prospects. Sunflower was up 3% whilst Rapeseed fell 1% due to high production levels in Europe. Palm Oil declined in Rotterdam by 2% on expectation of high 2012/2013 global output. Virgin Olive Oil rose sharply at 17% as Spanish production forecasts reduce 37% year on year.

Wheat  

Drought in the US continues to cause concern over crop quality and yield.  Maize rose by 26% on CBOT as estimated production volumes fell to 274Mt. Milling wheat also rose by 22% CBOT and 14% LIFFE as reports show a decline in yields through the Black Sea countries. USDA reported a 6Mt reduction in Russian Wheat production taking their volume to 43Mt. There is still a tightening of supply in the UK as this year’s harvest has been delayed due to weather conditions. Early indications are mixed as to quality and yield.

Dairy 

Dairy prices have started to firm as milk supplies start to decline. Butter prices rose across the EU whilst PSA stocks reach their highest level since 2009 at 114k tonnes. Dairy powder also rises on the back of low availability with Skimmed Milk Powder ending up 3% in the EU.
UK Cheddar eased back 2% whilst the Liquid Egg Market saw the biggest movement falling 15%. This may well be short lived as Wheat and Soya feed prices lift.

Dried Fruit

There are mixed feelings towards the Sultana market for new season as crop estimates are revised down by 20Mt. Buyers have been holding off as expectation was for a degree of price easing on new season crop but this may not  now be the case as futures firm up. 2011 crop Currants are now almost exhausted and carry over looks negligible, 2012 crop is developing well and harvest should commence late August. Current estimates are for year on year growth in the region of 3000Mt.

Fruit

Apple prices in the UK are up 19% due to reports of poor yields as a result of earlier frosts followed by unfavourable weather conditions.

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