Thursday 3 August 2023

Malting Barley

• The malting barley market has been extremely quiet over the last month, although the theme has generally been supportive on quality concerns. Despite this, demand from the brewing industry is not looking bullish.
• The winter barley quality was overall good despite some early retention concerns, however, some parcels remain in the field still and are starting to suffer with sprouting.
• So far, the early spring barley samples we have seen look excellent, although the question is how much damage will the rains do to the crops that are ready to harvest.
• The market remains paralysed and is waiting to see how the bulk of the spring crop fares. Premiums have kept pushing higher throughout the month and now stand at a very respectable £85/mt – if a supply-side issue doesn’t materialise, then this premium could quickly be eroded. However, with a tight EU balance sheet, if the UK spring crop fails to make the grade then we could see continued support to premiums.

Rapeseed

• CBOT soybean prices saw a sharp correction in the last week. A combination of liquidating fund positions and better weather prospects. Temperatures across the Midwest are cooler than previous weeks, with all of the heat moving to the south and added rain in the forecast, which will cap price gains and give the chance of improved crop conditions. Yield prospects are likely to be 1bpa below the USDA’s estimate of 52 bpa. Crop ratings in the US fell 2% 52% good/excellent from 54% last week (60% last year).
• The USDA announced another 900,000 mln t of new crop US soybean sales which struggled to offer much support. Reports that China will auction off 461,400 mt of state soybean reserves this week will put pressure on domestic prices but equally will leave space for further new crop purchases.
• Brazilian exports for July were reported at 9.9 mln t just shy of the 10.2 mln t record in 2019, but behind the 13.9 mln t exported in June.
• Energy markets are higher again on the week. Crude oil being supported by OPEC cutting production in June by 840,000 barrels per day, with further reductions promised by Russia and Saudi Arabia. Palm oil is lower week on week. India’s edible oil imports were sharply higher in July at a record 1.76 mln t vs 1.3 mln t in June.
• Canola values are down week on week. Canada still looks very dry in key growing areas such as Saskatchewan, leading to crop conditions dropping again this week to 15% good/excellent. If this continues, we are likely to see crop estimates reduced to 16 mln t. Harvest is likely to start early this year following hot and dry weather, both yield and oil expectations are being pulled lower.
• In Europe, a decent weekend for harvest progress. Some EU countries are nearing completion now, with parts of Germany and Poland to still catch up from recent rains. Here in the UK, we managed to get a break in the rain, which should have helped us get above 60% complete, but has since been a slow week with rains returning. The start of the week heard rumours that Russia may be prepared to resume participation in the Black Sea Grain Corridor, although the news was quickly dismissed, with further missile strikes by Russian forces on port facilities on the Danube.
• In summary, we saw a month-end sell-off for most commodities this week leading to MATIF rapeseed falling to a support of €440. Prices were also pressured by EU harvest progression and growing export interest. Seed in some areas is struggling to find a home which will also pressure basis.

Pulses

Peas

• Old crop complete. Line six, our main processing line, is going to be on planned maintenance for the next couple of weeks, so the line is in tip-top shape ahead of the new season!
• New crop price direction indicates high historic levels for open market marrowfats and large blue peas which we are keen buyers of. Please get in touch with your farm trader for more information.
• A handful of crops have been cut in short dry spells this week. Quality is holding up quite nicely, with insect damage managed well. We will report further when samples arrive at Long Sutton for testing.
• Yields look to be down year on year on the small sample size we have seen. We would expect this to change drastically over the next two weeks – the wet weather has of course impacted yields negatively.

Beans

• Old crop is complete. The inverse between old and new crop remains large. Please make sure to book any old crop as soon as possible if there is remains on farm.
• Average early yield reports are slightly down year on year. Winter beans @ 3.9t/ha and have heard some good reports on quality. Spring beans look quite impressive in the fields despite the recent weather – yield expected @ 2.6t/ha.

Fertiliser

• Granular urea pricing continues to increase into the UK for Q3/Q4 shipments. Supply options into the UK remain relatively tight despite vessels arriving through the summer period.
• Forward prices for Egyptian urea have increased and replacement values are beginning to be reflected in the UK market. Meaning, urea discounts to AN on a £/kg N basis have reduced slightly this week.
• UK AN manufacturer CF has issued new terms which are competitive against other imported AN options. Nitram delivery is available for 2024, offering alternate options and good value in what appears to be a tightening market.
• MOP prices have lifted slightly. Sterling has weakened from the highs of 1.30 in mid-July to lows of 1.268, negatively impacting purchasing power and supporting prices for imported products bought in USD.
• TSP and DAP are relatively unchanged, although if GBP/USD continues on the same trajectory, all imported fertiliser prices could be expected to increase slightly.
• Alternative PK products remain available from ADM if a window for spreading becomes available this harvest, please speak to your ADM Agriculture farm trader on availability.

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.