Grain markets stable for now

February 22nd, 2011 - Grain markets remained well supported over the past period as a result of the immediate grain demand out of the Middle-East countries due to the unrest there. A further element of support came from ongoing healthy demand for quality grains such as milling wheat, for which this season there are only two supply sources available, namely the EU27 and the USA. Pressure on the already low stocks levels will thus continue.
The first forecasts of the crop 2011 for the EU27 is positive. Wheat will see a substantial increase in production. Barley will also increase, but not to the same extend. For malting barley this implies that a clear premium over feed barley and milling wheat shall be warranted.
Reports on Russia and Ukraine for crop 2011, the second region to go to harvest after West-Europe, are mixed. Although the crop is assumed to recover form last season's disaster, plantings appear to be less due to the very dry autumn conditions and are presently at risk of winterkill due to the very low temperatures there.
In view of the low stock positions in several leading export regions, the larger 2011 crops shall be needed to replenish stock levels, serve intern needs and have volume available for the world market. Substantial downward price pressure may thus only be assumed after good arrival of these crops.
For the time being, we will first need to await the spring plantings and how the weather will develop. Any adverse conditions will be badly absorbed by the market.

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The above information is for general purposes only. Any reliance you place on the given information is therefore strictly at your own risk.

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