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  • Thursday 28 March 2024

    WELCOME TO THE ADM AGRICULTURE WEEKLY MARKET REPORT

    Wheat

    • Chicago prices rose, although gains were limited by bearish global news and outlook.
    • Chicago wheat prices have risen 2.5 cents/bushel ($0.91/t) w/w, although a lack of bullish news limited the upside. Russia continues to offer wheat below other origins, and the US export pace is still trailing the current yearly projection, which stood at 73.3% a/o March 21st, with just over two months of the season remaining. US crop ratings remain above last year, although talk of potential ‘late freeze’ damage in the plains may provide some support heading into the long weekend.
    • European prices have also edged higher, with MATIF gaining €1.75/t on the week. EU soft wheat exports were reported as down just 2% y/y, at 22.788mln t a/o 23rd March, with now 1.675mln t being shipped to China. Continued Russian export offers will keep EU prices in check, especially with reports that Russia’s 2024 wheat crop is getting bigger, now seen at a potential 94mln t mainly due to below-average winterkill levels. EU is proposing adding import tariffs on grain imports from Russia and Belarus, whilst agreeing to extend trade benefits to Ukraine, which may not please farmers in some member states, despite the recent changes to EU farmland use.
    • UK prices are also higher, up £1.70/t w/w, supported by slow producer selling. UK wheat imports have reached 1.25mln t a/o end-January and are on course to reach over 2mln t for the season, and with demand far from lacklustre, this will probably lead to a further increase in carry-out stocks. Delivery premiums are still firm, although showing signs of easing slightly as demand wanes into the summer months.
    • Tonight we see the revised release of US grain plantings, which are likely to show US all-wheat sowing down y/y, but slightly higher than the projection released in February. With March 1st stock also expected to be higher y/y, tonight’s report is deemed not to be bullish wheat, although trade will be more closely watching the corn and soybeans numbers!  

    Malting Barley

    • The weather talk continues for another week and remains the key watchpoint for the market. The UK had a better weekend with some dry and sunny, albeit cold, conditions nationally, which enabled growers to make some much-needed progress with spring plantings. At this stage, it is unclear how much has been planted, but we estimate that around 35% of the UK crop has been drilled, with more set, although heavier rains set in towards the weekend, which will once again hamper progress. Heavier soils will need to see prolonged dry weather before growers can even think of planting, however going forward, the weather outlook remains mixed, with further unsettled weather on the cards – one to watch.
    • Overall markets are quiet, and demand is still not showing interest in pricing, meanwhile, farmer selling across Europe is nowhere to be seen.

    Feed Barley

    • Old crop markets are very thin and still, we see disappointing levels of farmer selling and good coverage in the nearby positions from consumption. Some interesting price dynamics are appearing, with the carry from May to Nov mirroring the futures at circa £20/mt following the new crop basis rally of recent weeks, which will no doubt help to support old crop values if demand comes forward.
    • New crop continues to see cautious sellers, with slow farmer selling and a reluctance from the trade to lock in basis at ‘soft’ levels.
    • Export demand is still muted as wheat and corn are proving competitive vs barley in nearby EU destinations.
    • Spanish new crop prospects are at this stage looking good with circa 7.5mln t forecast against the current season of less than 4mln t. Rainfall over April/May is always an important watchpoint, but with wheat and corn looking more attractive, we don’t see demand from Spain pushing in the short term.
    • The Moroccan government issued a domestic tender for just over 500Kmt AMJ shipment, which will take place on 4th April. EU Black Sea origins are starting to run dry, which will put some demand back into north EU FOB markets. This shouldn’t be of great consequence to the UK market which cannot participate in Moroccan tenders due to paperwork restrictions.

    Rapeseed

    • The main focus for the trade this week is the upcoming USDA stocks and acreage report, released today. The report usually creates volatility, andthis one is expected to be no different, with both higher stocks than the previous year as well as higher plantings than last March’s report. This led to increased fund activity which will look to reduce risk exposure ahead of the long weekend, month-end, and quarter-end. Consequently, the price positivity that we have seen over the last week or two has partially been taken back.
    • In Argentina, recent storms are thought to have had a large impact on the crop, impacting 10-15% of the total soybean area, although it is some of the most productive land in the country. The soybean estimate has been left unchanged for now while we await further information surrounding potential crop damage. As for Brazil, soybean crop forecast rises due to area expansion.
    • Energy markets are higher again this week, although after dropping off at the end of last week we did not reach nearby highs again, as this week’s EIA report showing a 3.1-million-barrel increase kept prices relevantly suppressed. Expectations for next week’s OPEC+ meeting are for no change in policy. Russia has said it intends to reduce production to meet existing OPEC+ targets.
    • Amspec Agri estimates Malaysian exports of palm oil between Match 1st and 25th are up 11% from the previous month.
    • Canola has taken back last week’s gains and more with crush margins retreating to underlying support, while the Canadian canola industry maintains a record pace – 9.5% ahead of last year.
    • In the EU, MATIF rapeseed is also lower ahead of today’s report, with funds positioning themselves, as well as pressure from outside markets. It is worth considering that the market does look to have found a bottom around €406, however direction from here will likely be decided in the reaction to the figures released by the USDA.

    Pulses

    Beans

    • Beans continue to struggle for competitiveness in the ration and continue to formulate themselves out due to their comparatively high pricing compared to the other interchangeable commodities out there. We have again heard of additional de-formulation from livestock rations this week as they struggle to find mainstream demand, but there is still some limited demand underpinning it. New crop beans remain largely undiscussed, which is unsurprising considering the current pace of spring plantings. It is worth discussing what homes and contracts are available and the best way of marketing them.
    • The international market has been near silent this week, with a combination of Ramadan keeping Egypt out of the market, and the near continent has seen fewer players ahead of the coming Easter Bank Holiday across most of the EU. Ultimately, to paraphrase Led Zeppelin’s 1973 record; the song remains the same… As we are seeing on the domestic front here in the UK, beans are struggling for a place in the ration due to their relative value, and the Egyptian economy continues to struggle.
    • Easter is upon us, and the end of the drilling window nears. The sun is (mostly) shining and drills have been reportedly running around the UK as the spring drilling campaign comes alive. It looks like we are in for plenty of rainfall after the Bank Holiday, with average temperatures for this time of year. If you are wondering what to drill last minute or are planning on drilling beans but aren’t too sure what to do with them, our CY24 bean pool is still open, but with it due to close imminently, it is worth considering putting your beans in the pool as a separate marketing option.

    Peas

    • Prices remain attractive for those with any open market peas of any quality, be that feed or human consumption. With India continuing to import a strong number of peas, it is leaving gaps in European markets, as well as domestically, due to large exporters shipping their peas to India. Please get in touch with your farm buyer for a competitive bid.
    • We still have 2024/25 buyback options available. Peas are a late drilling commodity and can be drilled through April should you have space within the fields, possibly looking for a last-minute gross margin opportunity. Please get in touch with your farm buyer for more information.

    Seed

    • As we approach the last gasps of the spring barley season, we still have access to small parcels of Laureate and Planet barley seed along with a few spring beans. Peas are getting tighter by the day as rotations change due to the weather. We still have marrowfats, large blues & yellows to offer, all with the opportunity to have a buyback in place at the time of drilling.
    • Autumn seed is looking very tight for 2024 due to the crop condition. If you have a specific variety in mind, get some covered before supplies run tight. We have a great portfolio of products to offer.
    • Oilseed rape remains in everybody’s mind looking forward. We have limited amounts of establishment schemes available at this time. Talk to us about the available options.
    • Have you signed up to the Countryside Stewardship or Sustainable Farming Incentive Scheme. At ADM we have a vast portfolio of mixtures available to suit the various scheme requirements, including winter bird feed, legume fallows and more. We can also offer bespoke mixtures, tailored to your request.
    • If you are planning on drilling OSR this year, why not drill a companion crop alongside it. Companion crops are a great option to help aid establishment of the oilseed rape plants.

    Fertiliser

    • Granular urea has traded lower over the past week, but prices in the UK have potentially hit a floor for this application season.
    • Inhibited urea is now a very viable option to consider, given the DEFRA Urea Option 4 coming into force on 1st April.
    • We have Egyptian granular urea, coated with a urease inhibiter, available for distribution now. Using SKW Piamin, this 2-NPT technology is found in our integrated products, Piagran Pro and Alzon neo-N, and ammonia losses are ruled out almost completely.
    • Ammonium Nitrate availability is relatively limited, but CF Nitram terms for both April and May delivery are available from ADM.
    • UAN and UAN+ATS pricing has remained relatively stable this spring in line with AN pricing. Deliveries from NitraSol through ADM are available alongside AdvaNshield pre-mixed and in canisters or IBC.
    • N18 foliar products for milling wheat remain available for May delivery.
    • Potash and TSP remain readily available, and pricing remains stable as spring demand increases.
    £/€£/$€/$
    1.16951.26201.0790
    Feed Barley £Wheat £Beans £Oilseed Rape £
    May 2024145-155168-183240-255355-360

    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.