Market Report 13 July 2023

Malting Barley

• The first samples of winter malting barley have been seen, and the market is becoming nervous about the low retention scores being reported (mostly in the 65-75% bracket). It is early days however, and we need to see more samples before we make any firm conclusions. In the past we have seen maltsters relax their retention spec in order to accommodate a thinner crop. Other than this issue quality on the whole looks fine with most Nitrogen levels comfortably inside the required 1.85%N brewing spec.
• Markets are rather illiquid as traders focus on the incoming quality, and farmers still do not have the confidence to sell. Although, flat prices are drifting slowly lower as the N. EU harvest progresses.
• For another week, the market waits for the quality of the all-important spring crop to become known, and whilst there are potential quality concerns appearing, malting barley premiums in excess of £60/mt are certainly worth consideration by growers as a very good level historically, which could be quickly eroded if the harvest arrives in good condition.

Rapeseed

• The U.S Dollar dropped to a 15 month low on the back of lower than expected CPI data whilst energy prices bounced higher.
• Markets continued the uptrend for most of the week following the USDA stocks and acreage report at the start of the month Whilst areas of the US received rain it remains dry across the Northern Midwest and Northern Plains with temperatures in some regions rising next week. Crop conditions improved but only 1% to 51% good/excellent vs. the expected 2-3%.
• It wasn’t long before the trade focused on last night’s USDA WASDE update which evoked some position squaring.
• In the lead-up most went into the report with the opinion the USDA would reduce ending stocks and yields close to pipeline supplies however this month’s update fell in favour of the bears. The USDA kept yields the same at 52 bpa, production fell basis the lower area. However the USDA made sharp revisions to new crop demand by cutting export and crush figures by 135 mbu. Ending stocks were reported at 300 mbu which came in a long way above trade estimates.  Global ending stocks rose to 103mmt (+1.6mmt) which again was above expectations.
• In South America, the USDA kept production the same at 25mmt for Argentina and 156mmt for Brazil.
• Energy markets closed higher again this week. Seems the oil markets were able to shrug off the recent bearish global economic outlook. Lower than expected CPI data indicated the U.S Federal Reserve may not have to increase interest rates again in the next update. Malaysian palm oil prices which increased by 2.3% due to strong July exports, lower than expected stocks at 1.72mmt and lower oil yields.
• In Canada, weather still has thunderstorms in the forecast for the rest of this week, the key will be if Saskatchewan receive rain or not. Soil moistures area still being depleted so any rain will be beneficial to stressed crops which may lead us to see crop ratings drop back given that up to 75% is now in flowering stage. Temperatures are cooling.  Canola prices began building in some weather premium until they see some rain.
• Matif rapeseed prices trade higher on the week, tracking the wider complex. EU harvest gathers momentum which may bring with it some additional hedge pressure. Sterling  trades at  1.1700 this morning which pressures UK prices

Pulses

• Feed peas on old crop are finished, new crop customers have been very quiet as we stand despite being valued at an inverse to feed beans, we expect demand to pick up after/during harvest where total volumes will become more readily available.
• Old crop human consumption is now complete, we are still buyers should there be any open market parcels be offered.
• Some areas in the south are expecting to harvest peas over the next week or so, this would be growers which planted quite early and got the seed in the ground ahead of the rainy spell the U.K. saw at the end of April and beginning of May. Most will be expected to be cut during first or second week of August. Quality wise the crop looks well in areas such as Lincolnshire and East Anglia. With the planted area for peas up 2% YoY we are optimistic for yields particularly on Large Blues and Marrowfat peas.
• New crop values open market are firm, please ensure you get in touch with your farm trader should there be peas to market, our Long Sutton facility will test and assess the product with swift movement options available.

Fertiliser

• Granular Urea has seen further upwards moves (+$5-8/t from previous trades at the start of the week) for August shipments FOB Egypt.
• In Europe, Yara’s CAN and AN prices have reportedly increased by 15€/mt for September delivery despite nitrate prices carrying significant premiums to urea already.
• AN prices in the UK remain flat in the spot and forward positions. Nitram continues to look an attractive offer in a firm and tightening European AN market.  
• Alternative PK prices are available with offers on July movement alongside Jul-Sept delivery terms.
• UK TSP prices are flat, as are MOP prices, although anticipated demand could push UK prices up on the 46P and 60K products as we enter the Autumn.
• Brazilian potash prices have firmed over the last week and India secured 50kmt DAP in a recent tender, slight rises have been seen in some global Potash and Phosphate markets.

NB: Prices quoted are indicative only at the time of going to press and subject to location and quality.

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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.