Market Report

Thursday 14 November 2019

Wheat

  • US wheat prices are down about $3/t on the week, despite a fall in US stocks, continued export demand and talk of colder conditions that may threaten recently emerged winter crops.
  • USDA provided few fireworks in last week release, as they marginally trimmed US wheat stocks – global stocks were marginally increased, as crop reductions in the US, Australia and Argentina were offset by increases seen in the EU, Russia and the Ukraine.
  • Wheat in the south of Argentina’s growing area could suffer further yield damage if it does not receive significant rainfall over the days ahead, cited the BAGE, as they lowered their 2019/20 wheat estimate to 18.8mln/t.
  • Russia’s total grain crop or 2019 is expected to be 121.1mln t, according to agricultural consultant SovEcon, with the country expected to produce a wheat crop of 75.6mln/t.
  • SovEcon also sees a promising 2020 harvest saying that the area to winter wheat is estimated at a record 16.7mln ha, up from 15.8mln t a year ago.
  • Ukraine’s 2019 grain crop is likely to rise to a record 74mln t, from 70mln t in 2018, the ministry of economy reported, with the wheat crop increasing to 28.1mln t.
  • French cash values remain underpinned by the continued strong pace of wheat exports.
  • French farm ministry reported sowings of soft wheat for the 2020 harvest were 67% complete a/o 8th November, up from 54% the previous week, but considerably lower than the 85% planted a year earlier.
  • UK futures prices are firm on the week, as current weather and field conditions keep producers away from much needed fieldwork and winter sowings. In the UK, and to an extent in the EU as well, the main focus remains on the weather, and its continued impact upon winter grain sowings. With additional heavy rain in the forecast, the likelihood of a much-reduced winter planted area, and a much increased spring area, especially in the UK, is increasing by the week.

Malting Barley

  • Old crop malting prices have firmed over the last week bringing sellers to the market.
  • The price rise was mainly down to merchant shorts which will not take long to cover.
  • Maltsters are well covered into the new year.
  • Brewers and Maltsters are discussing crop 2020 but the likelihood is that they will buy as much of this crop as they can due to prices being much lower.
  • Please speak to your local ADM Farm Trader for details of the contracts we have available.

Feed Barley

  • Feed barley origination is slow, and spot barley prices have remained stable to slightly firmer on the week supported by shorts in the market covering nearby requirements.
  • The rally in ICE feed wheat futures has widened the discount of feed barley to feed wheat, making barley more attractive to the UK consumer in the New Year, however buying interest is still very thin.
  • A firmer sterling is pressuring FOB values, whilst export destination buyer’s ideas remain level to slightly lower, although seller’s ambitions have followed the wheat market higher ruling out the likelihood of any trade.
  • UK Winter barley plantings for crop 2020 have been disappointing, however the trade is expecting a much-increased area dedicated to spring varieties, leading to a relaxed attitude from new crop buyers.

Rapeseed

  • CBOT Soybeans struggled to get inspiration from last Fridays USDA report trading sideways before more recently trading lower.
  • Optimism of a U.S /China trade deal briefly keep the market supported before talks broke down yesterday.
  • Soybean harvested area reported at 85% vs 75% last week, 87% last year and 92% as 5-yr average.
  • Palm and Soy oil both saw a correction from recent highs which given the recent move we have seen the markets were starting to look overdone and a short-term correction was due.
  • In Canada the canola harvest is almost complete though some crops are still covered in snow, these will now be harvested in the spring. As a result, it wouldn’t be surprising to see crop production estimates being reduced. Farmer selling is still slow with farmers optimistic that China will return to the Canadian market.
  • The Australian canola harvest is now 18% complete. The weather looks favourable so harvest should now gather momentum.
  • EU rapeseed prices hit contract highs this week with continued strength coming from biodiesel margins and veg oil demand. Palm oil reached near 2-year highs before seeing consolidation.
  • Here in the UK prices farm gate prices are capped with Sterling firming against the Euro.

February 2020 Matif Rapeseed Chart

 

Oats

  • Persistent wet weather is adding to winter drilling woes in the UK. Oat farmers seem a bit more relaxed as the belief is that they can drill Mascani up until February/March. However, millers are keen to dissuade farmers from late drilling winter oats as the later the drilling date the worse the hulling losses are at the mill. However, weather and soil conditions will be the key factors which determine when oats can be planted.
  • On old crop ex farm values for feed and spring oats remain unchanged, however in light of the current winter drilling situation the market has seen some firmness in values for Mascani as consumers look to take advantage of supply whilst they can.

Seed

  • Another week has passed with little to no drilling opportunities across the country for winter cereals and pulses, putting more pressure on spring seed supply for 2020.
  • Spring wheat – EU Imports are available, speak to your farm trader for more info.
  • Spring barley – Laureate and RGT Planet remain very tight, these two premium varieties will soon be withdrawn. LG Diablo remains available for those looking for a high yielding spring barley.
  • Combinable peas remain a popular option as growers look for alternative spring break crops – buyback contracts and seed are getting booked up fast.
  • A limited amount of spring bean seed remains available.

Fertiliser

  • Global urea prices have weakened as European and US buying remains slow. India is to tender for another 1mln/t for December shipment which may offer the beginning of support for what could be a strong Q1 sales period.
  • Gas prices have risen close to the highs of 2019 and could begin to impact FOB levels for 2020 if prices remain firm as suggested by some independent reports.
  • In the UK, domestic markets continue to be quiet with the ongoing wet weather.
  • CF announced new terms at the beginning of the week seeing price corrections on NPKs.
  • Whilst the market is quiet, buying opportunities before Christmas across CF fertilisers and other imported fertilisers exist before a potentially busy spring.
£/€ £/$ €/$
1.168 1.284 1.099
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Nov 19 119-124 135-143 179-189 322-327
May 20 125-130 143-151 185-195 328-333
NB: Prices listed may vary depending on area.

NB: Prices quoted are indicative only at the time of going to press and subject to location and quality.

“Although ADM Agriculture take steps to ensure the validity of all information contained within the ADM Agriculture Market Report, it makes no warranty as to the accuracy or completeness of such information. ADM Agriculture will have no liability or responsibility for the information or any action or failure to act based upon such information.”

ADM Agriculture cannot accept liability arising from errors or omissions in this publication.

ADM Agriculture trade under AIC contracts which incorporate the arbitration clause.

Terms and Conditions of Purchase.

On every occasion, without exception, grain and pulses will be bought by incorporating by reference the terms & conditions of the AIC No.1 Grain and Peas or Beans contract applicable on the date of the transaction. Also, we will always, and without exception, buy oilseed rape and linseed by incorporating by reference the terms & conditions of the respective terms of the FOSFA 26A and the FOSFA 9A contracts applicable on the date of the transaction. It is a condition of all such transactions that the seller is deemed to know, accept and understand the terms and conditions of each of the above contracts.

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