Market Report

Thursday 23 May 2019

Wheat

  • US markets remain supported as spring crop sowings continue to drag due to wet, cold conditions. Planting rate is reported at lowest since records commenced.
  • US administration announces aid package for US growers to offset losses from the trade war with China.
  • China’s President Xi commented that the country is embarking on a ‘new long March, and we must start all over again’. The remarks are interpreted as a clear sign that China is not going to cave in soon over the trade talks with the US.
  • Coceral raises EU 2019 soft wheat and maize crops but lowers barley and rapeseed crop forecasts.
  • EU all-wheat exports reported at 19.65mln t as of 19 May, down just 3% year on year.
  • UK old crop values remain pressured, although new crop prices have moved higher as global prices recovered. Continued uncertainty over Brexit and speculation over the PM’s future have sent the pound sharply lower.

Malting Barley

  • We are still in a weather market, with below-average winter and spring rainfall throughout the EU.
  • Following recent rains in Europe, and with more rain in the overall forecast, the outlook is positive for winter and spring crop development.
  • UK prices are being held back by the lack of export opportunities after October due to Brexit.
  • We have craft winter malting barley contracts available for crop 2020, please speak to your local farm trader for details.

Rapeseed

  • A mixed week for CBOT soybeans after profit taking last Friday. Volatility continued throughout the week on the back of rumours that the second round of farm aid payments could give farmers up to $2/bu for soybeans based on the 2019 planted acreage, which would undoubtedly skew planting intentions. USDA says intention is to implement a programme that will not skew planting intentions for corn or soybeans.
  • US Midwest weather continues to look wet until the end of May, stalling planting progress, though dry weather is expected in early June. Soybean planting progress reported at 19% complete (up 10% from last week and 53% last year) vs. the five-year average of 47%, the slowest planting progress in 30 years.
  • President Xi prepares China for a drawn-out trade war with the US. Whilst Chinese officials indicate they are ready to resume talks, any previous agreement may now be void. Suggested sanctions on Chinese technology in the US may prolong trade talks.
  • Canola plantings in Canada almost complete. Reports of frost damage in some areas which may mean some replanting but no major concerns.
  • In Australia, rain has helped in the south, but central and eastern parts of Australia remain dry. Farmers are holding out for more rain before continuing drilling.
  • European rapeseed futures were supported on the back of firmer soybeans. The rain across Europe has helped stabilise crops in some areas, though most parts of northern Germany and northern France remain very dry.
  • EU crop estimates are still being reduced – Coceral estimates 17.9mln t (previously 18.5mln t). Oilworld 17.7mmt (18mmt previously).
  • In the UK, the pound weakened over Brexit negotiations and pressure is on the government to finalise an agreement. Sterling will continue to have a large impact on prices.

Pulses

  • Old crop beans are unchanged on the week. Demand is very limited, as is supply, with virtually all old crop traded.
  • New crop beans are firmer on the week as a result of weaker sterling. All demand is for export for the aquaculture market. Domestic demand is limited due to the relatively expensive price of feed beans relative to other proteins.
  • On the whole, bean crops look very well in the UK and reasonable in Europe. Crops are being sown in Australia into dry conditions and production estimates out there are wide ranging, depending on rainfall received during the growing season and final planted figure.
  • Pea crops in the UK look very well and yield potential is significantly above last year. Demand for UK peas is limited currently, as most buyers are confident in the crop and feel prices will drift lower.

Seed

  • Firefly Group 3 winter wheat looking excellent in the field and getting close to selling out – secure your requirements now.
  • ADM has exclusivity on the Hybrid OSR variety Dualis, available for those growers wanting vigorous establishment and reduced inputs costs.
  • Delayed payment terms are available across our main portfolio OSR varieties. Call your farm trader for more information.
  • Grass and cover crops are in strong demand and prices are expected to increase for the autumn. There is an opportunity now to get seed at the current lower prices.

Fertiliser

  • Supply of granular urea globally remains tight, which is supporting prices. Both Egyptian and Algerian traded above $270/t fob last week. The Pakistan tender of 100,000t for June shipment could firm prices further as it squeezes an already tight supply.
  • Numerous markets face uncertainty from political tensions which are having an adverse effect on market conditions. New season urea in the UK will inevitably be higher than 2018 where prices had bottomed out at $222-225/t fob North Africa.
  • The performance of sterling over the last month and continuing bearish attitude has meant that granular urea in the UK is currently being sold closer to replacement values. For granular urea enquiries, please contact your local farm trader or the fertiliser desk.
  • The ammonium nitrate market awaits new season CF terms which will give price direction for imported ammonium nitrate also. Tight supply and current market conditions, with potential of a 6.5% import tariffs if a no-deal Brexit happens, indicate firmer reset prices than last year.
  • Enhance Pro is a unique nitrogenous foliar fertiliser which increases milling wheat proteins. Those looking to increase their milling premiums should enquire on Enhance Pro as it performs similar at 50 litres/ha to equivalent products that would need 200 litre/ha application rate.
£/€ £/$ €/$
1.1355 1.2645 1.1135
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
June19 115.00-125.00 147.00-157.00 242.00-252.00 308.00-313.00
Nov19 124.00-132.00 142.00-150.00 192.00-202.00 315.00-320.00
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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