Market Report 22nd June 2023

Malting Barley

• Malting barley markets remain supported following the recent weather market caused by dry conditions in Scandinavia. It does however feel as though the rally is running out of steam following some rains in the region and the onset of harvest in France.
• Local commentators in France are optimistic about crop prospects. Yield forecasts for both winter and spring crops are 10-15% over average in many regions.
• Meanwhile in the UK, recent rains have benefited spring crops in particular, and many growers remain optimistic about the coming harvest.
• The malting barley market has been the biggest riser of all over recent weeks. As a result, premiums over feed look like excellent value to growers, well in excess of £60/t – we would recommend locking in some premiums at these levels.

Rapeseed

• Russian forces continue to target Kyiv along with other western regions of Ukraine; in return, Ukrainian forces sent drones toward Moscow. The US and China still have underlying tension following US officials visiting China last week.
• CBOT Soybeans continue to rally this week with the trade seeing little change in the US weather situation. Though some areas saw rain across the Midwest over the weekend, it wasn’t deemed enough to improve conditions. Further showers are in the forecast for the South/South-East next week, but equally, the trade is still apprehensive that rain will materialise.
• As expected, US soybean crop conditions fell, but were reported below trade expectations at 54% good/excellent yesterday down from 59% last week,. The average trade estimate came in at 57%.  Dr Cordonnier lowered his US yield estimate by 0.5 bushels per acre to 51 bpa.
• Whilst soybeans rallied back to highs, soy oil traded sharply lower following the US Environmental Protection Agency’s decision on biofuel mandates for 2023 onwards, which fell below trade expectations.  As a result futures traded limit down all of yesterday’s session and are again lower today.
• In South America, with harvest nearly over in Argentina, Dr. Cordonnier lowered his crop production estimate to 21mln t from 22mln t last month, compared with USDA’s figure of 25mln t.
• Crude oil prices seem to have found a trading range in the short term. Oil is still flowing from Russia to China, which may lead Russia to increase production. That may mean Russia selling to Iran, Iraq, and others.
• Canadian canola and Matif rapeseed markets both hit nearby highs on the recent weather market and lack of farmer engagement at lower levels. However, weaker oil markets in the last few sessions have pressured prices as we get closer to EU harvest.
• Here in the UK sterling traded down to 1.16000 in expectation of higher interest rates being announced today, which supports domestic prices.

Pulses

• Peas:
• The old crop pea market is completely done, with no farmer selling and feed peas in very short supply/demand.
• New crop-wise, the rain this week in England will have done no end of good for the UK pea crop after the prolonged dryness we saw through the first half of June and the majority of May. Independent agronomist Keith Costello has told us he expects the rain to have a positive impact on yields and provide the crop with much-needed moisture ahead of the next crucial stage.
• With the crop well established now, it is key for growers to manage insects which can prove harmful to quality. This is why I recommend any pea grower to visit the PGRO’s YouTube channel to watch the organisation’s video on how to effectively manage pea moth during this period, particularly while the UK continues to get warmer through the remainder of the summer when pea moth is more prevalent.
• Beans:
• Old crop appears finished as farmer selling is very quiet.
• New crop wise we have seen a slight increase on farmer selling week on week. This could be due to the winter bean crop looking impressive at this stage.
• Quality varies significantly across the country and field to field. Spring crops predominantly do not look great, however, this could depend on when they were drilled. Later drilled crops appear to have suffered more than those that went in earlier.

Fertiliser

• The focus this week in the European nitrogen market is the assessment of the immediate impact of the reimposition of the 6.5% tariff on urea being imported into the EU from other origin destinations and a 5.5% tariff on ammonia imports.
• Options become limited for traders into the region, although some North African producers have the most attractive terms due to their Free Trade Agreements with both the UK and EU.
• North African FOB offers have reportedly seen increases of $10-20/t following the news and increased sales.
• Ammonium nitrate remains relatively flat at present with a premium still being seen on the products on a £/kg N basis.
• Both urea and ammonium nitrate at present offer attractive Break Even Ratios against the current wheat price which has seen some more interest in nitrogenous products this week.
• ADM has high-quality compound from SKW Piesteritz – Piamon 33N 30SO3 still available, highly suited to OSR applications. Speak to your ADM Farm Trader today to secure your requirements.
• Alternative PK options from ADM provide secondary and trace elements at a discount to traditional bagged products, whilst also reducing machinery and labour workload at harvest, Speak to your ADM Farm Trader today for more information and grades available.

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

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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.