Thursday 6 April 2023

Malting Barley

• We are seeing some parcels of old crop malting barley looking for a bid. Buyers are difficult to find and again prices are lower on the week due to the lack of demand.
• New crop values are fairly static and there is very little first-hand engagement. 
• New crop malting premiums are looking attractive. We have a variety of contracts to suit all risk appetites – please speak to your local farm trader for more information.

Rapeseed

• In a mixed week for outside markets, politically there is still a lot going on which is determining market direction, not least Russia/Ukraine and NATO expansion.
• Last Friday’s USDA stocks and acreage report ended the week on a bullish tone. Whilst some private estimates increased the soybean planted area for 2023, USDA kept its forecast at 87.505 mln acres, 730,000 acres below the average trade estimate.  Stocks were reported at the lower end of trade estimates at 1.685 bln bushels vs the average estimate of 1.728 bln bushels.
• Weather in the US is starting to look warmer and drier as we head into April, ultimately becoming more favourable for upcoming plantings.
• South America is little changed from the end of last week, with some rain forecast for this week in Argentina and isolated showers in Brazil.  The Argentinian government announced plans for further preferential currency rate to help growers to sell beans. Meanwhile, in Brazil, StoneX increased its soybean production estimate by 3mln t to 157.7mln t, above USDA’s 153mlm t. Given some private estimates are still 1at 51mln t, the variance between crop estimates continues to widen.
• Whilst USDA announced a 276,000t sale of US beans to an unknown buyer, Chinese buyers remain absent, although we did see them swap 1mln t of Argentinian purchases to Brazil at the end of last week.
• Energy markets firmed again last week following the ongoing issues with Iraq blocking shipments and the surprise announcement by OPEC to cut oil production by 1.5 mln barrels per day. Oil markets seemed to have dismissed the large drawdown on stocks reported this week, with demand fears pressuring prices once again.
• Canola and Matif rapeseed both traded sharply higher at the end of last week into the start of this, taking back all the losses made earlier in the week.
• However, both struggled to hold on to those gains on Tuesday, tracking sharply lower as the week wore on. Position squaring ahead of contract expiry, funds’ profit taking and large EU ending stocks all contributing to the sell-off.
• Looking towards the 2023 harvest, Strategie Grains cut its EU rapeseed forecast yesterday to 19.5mln t due to drier weather conditions across eastern Europe, down 100,000t from its last report (19.4mmt last year).

Pulses

• Old crop bean values have been stable on the week, as farmer selling has slowed significantly at these lower prices and shippers have some nearby requirements to cover.
• Beans remain good value against other mid-proteins and we expect to see some domestic demand return for the summer positions when consumers start covering their requirements.
• Demand from Egypt remains limited. Stock levels remain high in the destination and Australian origin beans are still the cheapest origin by some way into North Africa.
• New crop beans continue to follow new crop wheat futures and are currently a reasonable carry against the old crop market, encouraging growers with old crop left to carry them to new crop.
• Supply of old crop peas left on farm is tight and values remain firm as a result. We are keen to buy any remaining old crop blues or yellow peas left on farm.

Fertiliser

• The Easter Bank holiday weekend could mean the two four-day weeks build a small backlog/bottleneck for fertiliser deliveries.
• Some warmer, drier weather at the beginning of the week saw some more applications happening and, as weather improves, we expect to see a lift in top-up and grassland demand.  
• Granular urea prices have adjusted down in the April and May delivery windows, slowly closing the gap between current spot offers and 23/24 delivery prices.
• Global phosphate and potash markets remain weak, driven largely by global demand destruction.
• In the UK NPK and PK blend markets, prices have dropped significantly since the start of April.
• UK farm delivery timescales continue to close and the window of opportunity to get product ordered and delivered in time for applications of NPK and PK blends is reducing.
• Sterling had risen this week to levels not seen since June 2022 breaking through 1.25 earlier in the week.
• Cold weather and an OPEC+ unannounced output cut has seen UK natural gas jump at the beginning of the week. It has since fallen back to levels seen at the end of last week.

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.