Thursday 9 March 2023

Malting Barley

• Malting barley prices have pulled back slightly on the week, on weaker futures and much-needed rainfall arriving over key growing areas in Northern Europe, which will benefit the developing crop.
• Demand remains low as consumers are well covered against requirements, and we have not seen additional pricing from the brewing sector. UK spring barley plantings continue to progress, but farmer selling remains limited for a further week. 

Rapeseed

• The bullish sentiment for the US soy complex has continued, with consecutive sessions of gains for soybeans across all contracts at the start of the week after the USDA report, volatility in the US dollar, and question marks around global supply and demand.
• The key soy story of the week is extreme weather conditions in Argentina, where key production areas have experienced hot temperatures and dry conditions that look to persist throughout the first half of March.
• This will weigh on Argentina’s production, with official production forecasts for maize and soy set to fall. Brazil and the US could well benefit, with record production of soybeans potentially filling the void.
• The weather looks to have taken its toll in South America with Wednesday’s USDA report trimming Argentina’s production figures from 36.8 million tonnes to 33 million and left Brazil is unchanged at 153 million tonnes. Export estimates for both Brazil and the US were increased due to the shortfall. 
• One point that could potentially derail this rally for soy in the long term are question marks around China’s consumption of oilseeds. China announced a rather unambitious 2023 GDP target of 5%, its lowest in decades, with comments from Beijing focusing on economic stability and self-sufficiency. As a key commodity consuming nation this was not positive news and did cause prices to dip, although this looks to be a more long-term development as commodity imports continue this year.
• China is the world’s biggest oilseed buyer and has stepped up purchases recently with imports up 16% on the year. Although soybean imports rose, other commodity imports are lagging. Combined with the meager GDP target, this does call into question China’s long-term pattern of consumption.
• European oilseeds fared less well compared to soybeans, with prices on the May down over €30 from last week. Losses extended rapidly towards the end of the week and, with a key downside target of €520 broken, it looks like losses will be sustained for now. Prices are being weighed down by a stronger euro, a fall in the price of alternative oils and a decrease in energy markets across the Continent.
• UK prices remain tied to our European counterparts. Whilst a drop in sterling offered some support, it was not enough to offset the losses in Matif rapeseed values, which look set to continue.

Pulses

• There has been little movement from last week’s report. Feed peas are trading sidewards, and we expect further demand to come into the market during the next quarter as consumers are currently covered.

• Human consumption green pea demand is ramping up for both old and new crop. We are keen buyers of any old crop parcels as well as looking to book up further area on the new crop. With buybacks still available and the option to drill peas into April, green peas are a great break prior to the next wheat crop. Prices are historically high for large blues, so please contact your farm buyer if you are interested.

Fertiliser

• Sole UK ammonium nitrate manufacturer CF issued updated terms for April delivery this week with small justifiable increases, citing logistical tightness for March.
• Imported AN prices are relatively stable but offers remain limited. Demand in Europe has picked up reducing volumes available for export.
• ANS compounds remain in short supply at present and consideration of what products to use for sulphur requirements for 2023/24 season should be given some consideration. Some ANS products will not be available.
• ADM can offer Nitrasol liquid grades for delivery this spring with spot UAN prices at Rouen having now stabilised.
• Granular and prilled urea remains relatively stable at present, but the threat of potential increases is on the horizon if US dollar strength persists, and AN pricing maintains current premiums.
• ADM can offer granular urea for 2023/24. Product is also available with urease coating 2-NPT for forward purchases to fit in line with new regulations for urea and UAN starting 1 March 2024.
• Phosphate activity is reportedly limited in Europe, but prices remain stable at present. Looking over the month, prices have weakened on average by $50/t on DAP and TSP in some markets.
• Potash markets mirror phosphates, with particular focus on Chinese exports and Brazilian trade. There is minor change to report in European markets.

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.