WELCOME TO THE ADM AGRICULTURE WEEKLY MARKET REPORT
Wheat
- The US market has continued its weak trend, trading down $12/t week on week, and taking out the previous 2-year low as the market traded below $6/bushel.
- The market is still watchful of ‘weather premiums’ being built into spring crop prices, although as mentioned before, this is mainly related to later developing bean crops rather than corn.
- However, further declines in US spring wheat crop ratings and Stats Canada’s projection of an almost 15% year-on-year fall in spring wheat production may provide some support.
- European prices have also weakened, with MATIF down €5/t week on week. Reported EU exports continue to drag last year’s pace, down 29% year on year at 4.5mln t a/o 27 August. However, the market took some comfort from the recent GASC (Egypt’s state grain buyer) tender which saw French and Romanian wheat both successful in securing business. This, especially in relationship to the French trade, was mainly because of the recent Russian ‘price floor’ being adopted stopping exporters from selling below $270/y FOB, and while the ‘price floor’ was adhered to, there were plenty of offers showing Russian willingness to export!
- UK prices while weaker, only fell £2/t week on week, as the supply squeeze continues. Slow producer selling and current market spot premiums have resulted in a market inverse, with many growers now more interested in fieldwork rather than trading.
- The UK remains uncompetitive for feed, and low-grade exports, and while the supply issue is producing high prices into the north, and northwest of the country, this will be a short-lived scenario, given the volume growers usually, and have sold into the OND position. Without a significant increase in export activity, UK consumer demand is seen not sufficient to absorb the volume, leaving the possibility of a flat, or even declining UK market going forward.
Malting Barley
- The malting market continues to see firm values and strong premiums to feed barley.
- Maltster demand is lacking on the back of high malt stocks and lower beer demand with the feeling that the premiums are overvalued and not sustainable at these levels.
- With the current strong price levels, we are seeing good farmer engagement and would encourage growers to lock in some tonnage at these levels.
Feed Barley
- Another week of limited farmer selling is keeping barley supported relative to wheat both in the spot and further forward positions.
- Consumer demand in the UK is present but not significant with barley basis putting many off buying long runs for winter/spring.
- Export demand is similarly lacking although there are reports of nearby coaster business being written into Ireland for October
- Bottom line is the market is at somewhat of an impasse with growers holding on to grain until their next selling window to meet cash flow concerns.
Rapeseed
- The complex struggles to make any significant moves as we near the end of another month.
- Fighting escalates in Ukraine which saw further damage to sun-oil terminals at the start of the week. Though President Putin has reported he will speak to Turkey regarding the future of a grain corridor agreement it’s not known if any agreement will be met.
- After a sharp rally at the end of last week and the start of this, CBOT soybeans struggled to hold on to the heights. Above-average temperatures and little rain are forecast across the Midwest for the next 7-10 days adds some weather premium back into prices. The recent Pro Farmer tour reports yield estimates below the USDA, with a yield of 49.7bpa vs USDA 50.9 and production at 4.110 billion bushels vs USDA 4.205. Crop conditions have only dropped 1% to 58% after the extreme heat we have seen in the Midwest.
- The USDA did announce several new sales of US soybeans in recent days, all to unknown buyers.
- Energy markets edged slightly higher again yesterday following the large drawdown in US stocks. There remain concerns over supply given storm threats on offshore rigs. Veg oils initially followed the rally before easing back on weaker ag markets.
- Canadian Canola prices markets tried to edge higher this week but struggled to make new gains. However, did widen the spread against Matif OSR. Stats Can reported canola production estimates for 23/24 is currently at 17.56mmt – 6.10% down from this time last year.
- Matif rapeseed traded slightly lower this week struggling to break nearby resistance. EU harvest is complete now and those longs needing to find homes have largely moved what they needed to though the market seems to be waiting for a new story to trade on to push us back to nearby highs.
- Sterling trades at 1.16686.
Oats
- Milling oat markets have gained fresh support over the last week with fresh figures released by Stats Canada for their 2023/24 oat crop.
- Stats Can estimate production of 2.429Mmt (lowest in 32 years) which is a 53.5% drop vs last year and 40.1% fall on the 5-year average. This reduces exports by 23.6% vs 5-year average and will leave a carryout of 438kmt which is down 25.4% vs 5-year average.
- Australian oat production is also expected to fall significantly this year following the lowest area in over 23 years, with production estimated at 1.111mmt which is 25.% down on the 5-year average (according to ABARES).
- Buyers in Spain continue to show demand for feed oats with some cargos trading over the last week for Sept/Oct positions.
- Milling buyers in the EU remain largely absent from the market waiting for firm buy orders from their retail customers.
- Here in the UK, millers continue to be buyers for the nearby positions, however, farmer selling remains relatively light with many growers still focussing on completing arable harvest.
- Domestic feed demand remains light but given most samples have made a milling grade so far, we are not seeing the selling pressure to generate demand.
- Sample analysis of UK oats processed through ADM’s lab shows an average of 50.8kg/hl and 51.3kg/hl for winters and springs, however we anticipate the springs average to deteriorate in the coming weeks once the later drilled crops are harvested.
- Bottom line, global oat supplies will be lower in 2023/24, however with EU prices already a significant premium to wheat, only time will tell if they push higher with millers likely utilise lower grades in order to satisfy their needs.
Pulses
Peas
- With 85% of the pea crop now cut, we are beginning to get a broader picture of yield and quality compared to last week. New crop yields have been relatively poor, particularly in the South of England across our 3 main pea commodities. Yellow peas have performed the best out of the 3 above their 5-year average. Blues are down year on year and marrowfats are also below their 5-year average.
- The encouraging sign about the crop however is the quality, with marrowfats looking strong and bleaching much lower first expected. Insect damage is also much lower year on year and cracked seed coat figures are also sharply. Large blue peas are in a similar position, the bleaching figures have not stayed as strong, and average at the moment is at 13%, we are awaiting more samples at Long Sutton to provide a clearer picture. All other results look positive.
- Price direction is being driven by the shortage of good quality green peas across Europe and in Canada. With prices historically high for Green peas on farm in the UK it is a great time to get in touch with your farm trader to receive a bid. Marrowfat prices remain in a very strong position despite some good quality available. Weaker yields will keep the prices underpinned at the moment and demand will continue to be strong.
Beans
- Prices have been relatively stable week on week as the market continues to follow London Wheat. Farmer selling has picked up considerably as we have seen many more crops cut, the crop is around 75% complete.
- Similarly, to the peas, bean yields are also down year on year – late harvesting and the extremely variable weather has attributed to that. Human consumption parcels have been few and far between as insect damage is high on the samples, we have seen through the lab thus far. If your beans meet human consumption levels, we would be keen buyers in the Oct/Nov/Dec position into Long Sutton, please contact your farm trader for more information.
Seed
- We have begun our winter wheat seed production, with KWS Dawsum currently making its way through the plant. KWS Dawsum has performed exceptionally well on farm this year, with good grain quality and high yields.
- Winter barley seed is now making its way on to farm, and we would expect market leader KWS Tardis and new variety LG Caravelle to be under demand this autumn.
- For any last-minute plans to drill rapeseed, we have stocks located around the country for collection or quick delivery.
- Currently, SFI schemes are a huge topic of conversation. At ADM we have a range of mixes available to suit various schemes, including legume fallow, cover crops and herbal leys.
- Our Legume Fallow mix provides food for farmland wildlife and improve soil health, along with various other benefits to the land and environment.
- We have a wide variety of cover crop species available to suit the multi-species winter cover scheme. With our mixes helping to protect the soil surface and benefit the soil structure.
- Our Herbal Ley helps to improve and maintain the soil structure and health. ADM keeps things simple by aiming to provide the best quality and value of mixes as well as the option of bespoke mixtures upon request.
- We can tailor to specific requirements by offering bespoke mixtures across our small seed portfolio.
Fertiliser
- Granular urea is stable-soft in the UK with slightly lower FOB prices seen on global markets. Demand is relatively lacklustre as the UK harvest draws to a close.
- Markets remain unchanged and until further demand appears, little price appreciation is expected. The UKAN product Nitram is offered currently for delivery in Q1 2024.
- Inhibited urea is also available for Q4 and Q1 delivery with urease inhibitor 2-NPT. The Break-Even Ratios for the two products stand at similar levels for nitrogen applications after 31st March 2024.
- As the UK drilling season commences PK demand could be expected to increase. Pricing in the near term is seeing some slight increases whilst further forward prices remain at similar levels for those that can apply in spring.
- ADM have alternative PKs, TSP, MOP, DAP and PK blends available for spot and forward deliveries.
| £/€ | £/$ | €/$ |
|---|---|---|
| 1.1665 | 1.2680 | 1.0870 |
| Feed Barley £ | Wheat £ | Beans £ | Oilseed Rape £ | |
|---|---|---|---|---|
| Sep 2023 | 160-170 | 178-188 | 215-225 | 355-365 |
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.