Thursday 18 May 2023

Malting Barley

• The downward trend on old crop values continues. Parcels of ex-farm barley are looking for a home, but buyers are absent.
• New crop domestic markets have seen little to no trade this week with the market struggling to find a value based on a lack of consumer interest and little farmer engagement.
• There is a feeling that prices will soften, following confirmation of the extension of the Black Sea grain export initiative.
• FOB new crop has seen some interest this week with values trading lower than last reported.
• We still see attractive malting barley premiums and have new crop contracts available to book.

Rapeseed

• It has been an interesting week for outside markets. US stocks rallied hard as the government neared an agreement to raise the debt ceiling, crude oil rallied as the US reported higher usage, reducing stocks, while China’s GBP forecast fell four points to 5.5% for 2023.
• This week’s big news for the market had to be the two-month extension on the Black Sea grain export initiative after most had given up hope of that happening.
• US weather still has decent rains across the Plains for the next 10 days, with temperatures in the north/northwest rising above average over the last few days.
• CBOT soybeans struggled to find any friends over the last week; $15 beans are a distant memory. Whilst prices look oversold, beans are struggling to buy demand at current levels.
• Crush margins may have improved US soybean plantings, which were reported ahead of normal at 49% against the 32% five-year average and 27% last year. However, progress continues to lag in North Dakota due to poor weather and is only 2% complete. Additionally, last week’s USDA report and subsequent heavy balance sheet continues to pressure prices.
• There is little to report out of South America. Private estimates from Dr Cordonnier raised Brazil’s soybean production to match the USDA’s 155mln t, but kept Argentina’s crop at 23mln t, compared with USDA’s 27mln t). US beans are still trading at a premium to South American beans which is adding price pressure. An outbreak of bird flu in Brazil will be one to watch over the coming weeks.
• Energy markets traded higher following yesterday’s drawdown in stocks, which gave crude oil prices a lift. Veg oils struggled given the fall in agricultural commodities; soy-oil prices dropped through key support levels to levels not seen since February 21.
• Canadian canola prices continue to drift. Weather is now improving enough for those who are behind on plantings to catch up. Private estimates are now calling for a bigger 2023 crop of potentially over 20mln t.
• Current weather patterns and decent soil moisture levels should provide early drilled crops with some yield benefit.
• MATIF rapeseed fell to trade at below €400, which we have not seen since 2020. As with beans, some thought the market may have bought some demand at these lower levels, but that has yet to happen. Given the large EU carryout technically the market could continue to drift from here.
• Sterling traded at 1.1500, which again added pressure to UK prices.

Pulses

• We are still seeing old crop peas appear even in the month of May. Our Long Sutton processing facility is running all the way through to harvest, so we can offer swift movement options post-purchase. Please contact your farm trader for more information.
• Our 2024 Peas Buybacks are likely to launch next month. Growers are continually looking for break crops between their wheat and given the high on-farm prices for peas, so they are a great option to get into! With free agronomic advice and a closed supply chain with ADM, why not become a VIPea today and join our pulse growing group.
• Feed pea demand is very thin with consumers looking covered until the new season. Export-wise we do see some demand in Spain appearing in the coming months. The country is enduring the hottest and driest April on record, leaving crops looking poor.

Fertiliser

• Granular urea has moved lower marginally from prices seen two to three weeks ago. Wheat prices continue to come under pressure globally and traders are seeking levels that could spur demand.
• European nitrate availability continues to support a premium for the product over urea in the UK. Manufacturers with ammonia import capabilities are turning to other regions such as the US and Egypt for ammonia supply.
• However, US dollar strength and dwindling sterling strength over the next month is working against lower imported fertiliser prices in the UK.
• The current outlook indicates that urea prices should rise but the wider outlook across agri-commodities suggest that this might not be possible immediately.
• Phosphate prices have seen a regional spread emerge once again in the UK. Potash prices have remained relatively stable over the past couple of weeks.
• Alternative PK products that cost less than traditional PK products are available from ADM this harvest. Secondary and trace elements are also present in grades which help maintain indices and provide important micronutrients.

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.