WELCOME TO THE ADM AGRICULTURE WEEKLY MARKET REPORT
Wheat
- Despite a week driven by a lack of fresh, fundamental news, the markets have managed to firm week on week on dry weather concerns relating to US spring crops. Talk of a hot and dry period over much of the US corn belt is perceived likely to cause some damage as crops become stressed, although with the corn crop further along its development stage, any potential damage may be limited. However, with the bean crop entering a key developmental stage, the hot and dry conditions could cause more damage, limiting yield and final production, on what is an already tight US balance sheet.
- Again, the EU markets followed the trend from Chicago, trading slightly higher week on week. EU exports have got off to a slow start this season, down 20% at just over 4 mln t, as demand for EU supplies remains limited. Russian crop estimates continue to rise, and therefore, so does the export potential, which may be of use as there is increased talk of an Indian / Russian trade deal due to a weather-related lower crop. Talks continue to try and get all parties together, aiming to resurrect the Black Sea export deal, amidst continued attacks on Ukrainian export facilities, and on the Danube River.
- UK prices have moved up and down this, ending up just over £1/t w/w. The delayed harvest had allowed the ‘spot premium’ to extend, albeit not as high as over the previous weeks. The general lack of consumption demand, and export activity have gone hand in hand with reduced farmer selling, especially as markets weaken, and as we move out of what has been a ‘discounted harvest position’, we remain very much uncompetitive on price for export.
- In summary, the US weather is now seen driving the markets, and coinciding with talk of lower Australian and Canadian production, has provided some buying impetus to the market. Black Sea production and availability continue to rise, and this will have an impact on the demand for EU exports. In the UK, the ‘spot premium’ has given provided growers another reason to sell, although as supplies start to improve, the realisation of the UK’s current market dilemma will soon hit home. The UK balance sheet remains ‘top-heavy’, and we need to get priced into the export market, sooner rather than later!
Malting Barley
- The market is still very strong, although it is drifting back by the day. Recently, the malting premium has been propped up by Danish farmers being forced to wash out contracts due to low yields/poor quality, combined with a lack of farmer selling across the continent.
- Industry demand is still subdued as maltsters in general think premiums are overvalued, and they can afford to be proud with lower beer demand and high malt stocks.
- Meanwhile, the industry in northern Europe has started to buy French six-row winter to plug gaps in the spring barley S&D caused by lower Danish production.
- In summary, premiums are very strong and look overvalued amid low demand, and at these levels the market is quickly finding the flexibility to fill in any supply-side issues.
Feed Barley
- Global barley news is quiet. We have seen a few international tenders, but buyers passed as they didn’t like the prices or could buy other products at better value, which dominates the theme for the market at the moment.
- Closer to home, the weather has been reasonably settled and harvest is progressing well.
- Overall, barley is getting a lot trickier to find, with harvest winding up for most of the country, and farmers very much focussing on other things than selling for now.
- Attractive levels in the domestic market are helping demand to keep pricing into feed rations, which is keeping us from pushing into the export flow too hard. As a result, we don’t calculate for export vs other origins. Even if we did, demand is quiet and buyers are happy to wait for lower prices.
Rapeseed
- We have seen another mixed week for Ag markets as the US Pro Farmer Tour (PFT) has kicked off, so far reporting higher soybean pod counts compared to last year. The more eastern soybean growing regions have so far been higher than the three-year average, however, western regions such as South Dakota and Nebraska are below the three-year average, but still above last year. Soybean crop conditions are unchanged on the week, still at 59% matching this time last year, although the trade was expecting a 1-2% decrease following the heat we currently see in the US.
- CBOT soybeans are down this week following the bearish PFT we have seen so far but have been supported by weather to take back some losses. Soyoil has nearly taken back all of last week’s gains following both soybeans and other veg oils.
- US weather has given key growing areas temperatures as high as 43°C this week and is looking like we will still be seeing 40°C plus into the weekend. This may not be as negative for crop quality as some think as we are approaching soybean harvest at the end of September, so may have come too late to do any damage. Fortunately, the forecast looks to cool off at the start of next week, but still no sign of any significant rain in the next 6-10 days.
- Russia and Ukraine have continued with drone strikes on both Moscow and Odesa, however, Ukraine is looking closer to reaching a deal with Lloyds of London to insure vessels carrying ag products through the Black Sea.
- USDA has announced one sale of 159,650mt beans this week to unknown.
- Energy markets have had another negative week so far following growing concern from last week’s announced reduced Chinese energy demand. Chinese imports of Saudi oil are also expected to drop in the third quarter. Veg oils have been negative this week, with palm dropping 97 ringgit so far. Malaysia maintains export tax at 8% and southern peninsular mills step up production.
- Canola markets are quiet at the minute, mainly following soybeans slightly positive along with weather premium remaining until we can see some significant rain across the Prairies.
- MATIF rapeseed has followed veg oils slightly lower this week with little news outside the soybean complex to drive prices.
- Sterling is unchanged at 1.1700.
Pulses
Peas
- Peas took a back seat to wheat and barley over the first three weeks of August. We would say that harvest is now firmly underway for human consumption peas and parcels have started arriving at Long Sutton for processing as of Monday.
- Quality on the sample results we have seen thus far look impressive, with low insect damage, below-average cracked seed coat, and good bleaching scores leading to bonuses vs buyback contracts. We remain quietly confident about this season. Yields are around the five-year average for large blue peas, marrowfats slightly below, and yellow peas exceeded expectations, with the feedback we have received indicating yields well above the five-year average.
- Price-wise, marrowfats still sit at a high-level open market ex-farm for good quality and low bleaching. Large blue pea prices have risen sharply on farm in recent weeks due to a number of factors. One is a shift in large import country’s requirements such as India & China for the upcoming season, meaning there will be large gaps to fill across Europe as those countries look to fill importer’s demands. Please get in touch with your farm trader for the most up-to-date prices and for a competitive bid.
Beans
- Quality and yields are extremely variable. Similarly to peas, not many growers have finished cutting their beans as we stand. Samples through the lab indicate there will be some good human consumption beans to move over the next few months, which has been a concern recently.
- Beans remain good value vs other mid proteins. The price of feed beans vs feed peas means a lot of the feed ration is likely to go into beans for pulses in the UK.
- Export-wise, beans are not as competitive into Europe vs the Baltic nations. Demand coming out of Africa has picked up over the last week, which we will look to capture.
Seed
- The hybrid barley varieties are performing exceptionally well in the AHDB trials results published, and will no doubt be a consideration on most farms this autumn for their added benefits with grass weed suppression. Kingsbarn in particular is looking to be the pick of the bunch, with consistently high yields and a good all-round agronomic profile. Candidate two-row LG Capitol also looks to be performing well and could potentially enter the list as the highest-yielding conventional. There is limited seed available for Capitol for this autumn’s drilling campaign.
- Our seed processing lines are now busy processing cereal seed and our first winter barley deliveries are already making their way on to farm. Availability is still good across most key varieties, but I would expect demand for Champion, Crusoe, and Caravelle, will be greater than the seed available in the marketplace.
- We have a great portfolio of rapeseed varieties fully loaded with traits that are available for urgent delivery. We also have select varieties available on sale and return offers and establishment schemes, allowing you to share the risk of ordering and establishing OSR seed.
Oats
- European oat markets have seen a mixture of trades over the last week with some consumers looking to take cover into EU destinations.
- Spain continues to be the main market participant buying both feed and milling grades for Q3 and Q4 with the UK being the most likely suppliers.
- Further rain is forecast in Scandinavia and the Baltics in the coming week which will only delay any progress of crops that may be fit for harvesting.
- Continued availability of feed-grade wheat looking for a market out of the Baltics is increasing the premium of feed oats vs feed wheat, something that is rather unusual.
- Here in the UK, harvest has progressed to approx. 50% complete thanks to a break in the weather for most areas.
- Quality of the winter varieties and early planted spring crops remains fair with samples through our lab averaging 51kg/hl, however, first samples of late drilled springs are 42-45kg/hl and this could be a sign of things to come.
- Bottom line, an increase in consumer activity is helping to support both feed and milling oat prices at a time when farm suppliers seem to be more focused on harvesting their crops instead of bringing them to market.
Fertiliser
- Granular urea has seen a slight downward correction in the UK this week, reflecting the typical seasonal lull during harvest time.
- Forward prices remain supported as European gas trades at around $13/mmBtu equivalent, whilst US gas trades at around $2.5/mmBtu.
- European AN producers, such as CF UK, that are able to utilise global ammonia markets, are able to produce at levels that are not substantially more expensive than urea. The northwest Europe spot ammonia contract has risen $38/t week-on-week though.
- Raw material costs for those that can’t access ammonia easily, could potentially see production capacity curtailed as we go into winter, tightening the AN markets in Europe once again.
- However, Europe gas storage is ahead of schedule and lessons learned from last year could cap any significant gains on global nitrogen markets as break-even ratios begin to widen.
- Potash and nitrogen remain most at risk from supply shocks, whilst phosphate supply is relatively robust.
- PK markets are currently the most active in the UK. ADM is able to offer traditional bagged products and alternative PKs for immediate delivery.
AIC offers downloadable flyer ahead of ammonium nitrate fertiliser photo ID requirements
New government legislation will come into force on 1st October for the sale of products containing AN product over 16%. Please be aware and ready to provide ID when asked. Please click here to view and download the flyer.
| /€ | £/$ | €/$ |
|---|---|---|
| 1.1670 | 1.2640 | 1.0830 |
| Feed Barley £ | Wheat £ | Beans £ | Oilseed Rape £ | |
|---|---|---|---|---|
| Sept 2023 | 160-170 | 180-190 | 210-220 | 360-370 |
NB: Prices quoted are indicative only at the time of going to press and subject to location and quality.
“Although ADM Agriculture takes 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.
