Market Report

Friday 13 September 2019

Wheat

  • USDA reported wheat stocks unchanged on the month. Corn stocks are marginally higher, due to increased opening stocks and reduced domestic industrial usage offsetting a lower yield projection.
  • USDA reported global wheat stocks 1mln t higher on the month, with global corn stocks reduced by 1.5mln t.
  • US prices are about $8/t higher on the week, as the market continues to find support from lower production estimates for other key competing regions (Canada and Australia).
  • EU Matif (Paris) prices are up €4/t on the week, following the former global trend, and UK futures prices are up £1.50/t on the week, as short-covering led by the possibility of a Brexit extension created some additional export demand.
  • In summary, the USDA did little to dismiss the overall bearish supply fundamentals, with no change in US wheat stocks and higher global stocks. However, markets have received support from lower crop estimates recently from within Canada and Australia. This, plus lingering weather concerns in Argentina, is providing some short-term optimism.

 

Malting Barley

  • There is a big EU and UK surplus of malting barley and prices have drifted slightly lower over the last few days.
  • Some of the spring barley samples arriving in our laboratories this week are showing signs of weathering.
  • Intakes around the country are reporting some samples with lower germination and higher pre-germination.
  • Laureate has again produced the lowest average nitrogen at 1.69%. Planet averages 1.71, and Propino the highest at 1.79.
  • Buyers are beginning to talk about contracting for crop 2020.

Rapeseed

  • US soybeans rallied on Thursday, following news that 10 cargoes of US beans were traded to China for Oct-Dec shipment – the largest Chinese purchase of US origin soybeans since June.
  • USDA September WASDE report highlights:
    • 2019 US soybean yield 47.9 bushels per acre (48.5 previously, 47.2 average trade estimate).
    • 2019/20 US soybean ending stocks 640 million bushels (755 previously, 661 average trade estimate).
    • 2019/20 world soybean ending stocks 99.2mmt (101.7 previously, 101.6 average trade estimate).
    • 2019/20 Chinese vegetable oil imports to grow to a record 10.4mt (5% higher than the previous record in 2012/13. Indian vegetable oil imports expected to grow by 4% to a record 16.3mt.
  • In Canada, rain continues to delay the canola harvest, but despite this StatsCan increased its production forecast by 5% to 19.36mt (21mt last year).
  • Earlier in the week, ABARES reduced its 2019/20 Australian canola production forecast to 2.3mt (2.6 previously, 2.2 last year). This is below most trade estimates of 2.6/2.7mt.
  • In Europe, rapeseed production estimates are settling around the 17mt mark (USDA 17.5, Oilworld 17.11). Nearby, the large import programme of Ukrainian seed is keeping crushers well supplied. Longer term concerns remain over the supply squeeze post-Christmas.
  • As with Europe, imports are easing the pressure on our own tight S&D, whilst stronger sterling has taken the edge off domestic prices.

Oats

  • The European Commission has released its latest EU balance sheet and production details by member state, and the forecast for the EU-28 oat production is up 5% year on year and 2.6% above the five-year average. With quality expected to be a vast improvement on the 2018/19 harvest, EU millers will be well supplied, and the market expects prices to remain at current levels.
  • This story has been mirrored in the UK, where production is expected to exceed 1m t. Even with very variable quality (especially in spring oats), it is believed there is enough milling quality in the domestic production to meet miller demand, and prices remain unchanged.

Pulses

  • At current prices, beans still do not feature in most domestic feed rations, as they are too expensive against other mid-range proteins. This leaves a large exportable surplus of feed for the UK to ship.
  • We are still waiting to see bean samples cut in the north of the country. Most samples seen remain above 10% insect damage, adding to the feed surplus.
  • Pea samples seen over the last week have shown higher levels of bleaching, but on the whole, the quality of this year’s green pea harvest has been very good. Pea buybacks are available for harvest 2020.

Seed

Winter wheat

  • Large volumes of winter wheat seed have been traded over the past fortnight, with Gleam looking the first of the main varieties to sell out for the second year running.
  • LG Skyscraper won’t be far behind in selling out, as it has yielded extremely well again in its first commercial year.

Winter Barley

  • Hybrids have massively out-performed the two-rows again this season, with SY Baracooda sitting top of the pile on yield. SY Baracooda is still available in small quantities for this autumn, with all other hybrids sold out.

OSR

  • Early establishment reports are mixed. It’s not too late to patch up with a decent hybrid variety. Contact for your ADM Agriculture farm trader for availability.

Fertiliser

  • The North African urea market rallied this week and further European buying could continue to firm prices, as could increase global demand from markets such as Brazil as they enter peak season.
  • Natural gas levels have been rising from August lows. These firmer autumn gas prices will impact Q3 nitrogen production costs, and with little global surplus this could add to the upward trend for nitrogen prices.
  • All the above is excluding any impact that UK political circumstances and consequential currency swings may have on the UK domestic market, including the potential for import tariffs. ADM Agriculture advises speaking to your farm trader on risk mitigation and understanding the current fertiliser market situation to make your procurement decisions as informed as possible.
  • ALZON® neo-N is available for Oct-Nov delivery. This market-leading dual inhibited urea performs as well as ammonium nitrate and has integrated active agents, guaranteeing consistent performance of the product. With ammonia emission reduction strategies potentially being implemented in 2021, why not try ALZON® neo-N this coming season? Our exclusive product has been produced by the same company that created AdBlue, SKW Piesteritz. Please click the link for more information ALZON neo-N, or speak to your local ADM Agriculture farm trader.

£/€ £/$ €/$
1.122 1.246 1.11
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Nov19 112-115 125-133 175-185 333-338
May20 116-118 131-139 181-191 339-344
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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