Market Report Thursday 8th June 2023

Malting Barley

• Old crop malting barley is quiet, with only small parcels trading on the farm.
• New crop markets have sprung into life, with FOB markets rallying by circa €15 as dry weather sets in in Scandinavia, leading to reduced crop prospects in the region. With the poor Spanish crop and a subsequent heavier import requirement, we are sure to see good demand across the Continent and buyers are starting to feel more wary about supply.
• As always, all eyes will be on the development of the crop and the quality at harvest before we establish further direction for malting markets, although sentiment has shifted over the last week and the market is feeling increasingly nervous.

Rapeseed

• Obviously, the big news for outside markets had to be the Kakhovka Dam explosion which caused widespread damage to homes, drinking water, and putting the nuclear power station at risk. In addition, while the increase in the US Debt ceiling was approved the market awaits next week’s Federal Reserve update.
• Another choppy week for US Soybeans this week. Whilst prices have tried to appreciate in the last few sessions, they struggle to break nearby resistance. Yesterday USDA reported record imports of US beans into China last month (12mln t), but the market struggled to find any significant support.
• Soybeans plantings have progressed to over 91% complete this week vs the historical average of 76%. Crop conditions were reported at 65% good/excellent in their first reporting of the season.
• In the short term the market will focus on any weather developments. Whilst there is a possibility of rain in the next 72 hours across most areas it is not confirmed how much each region will get. The trade will also be positioning itself for tomorrow’s USDA update and the potential changes to the soybean carryout figures and South American production.
• The only sale to be reported this was 165,000t of US soybeans to Spain, otherwise the market remains quiet leading into the report.
• It has been a volatile few week’s for energy markets as they battle weak economic data out of the EU and lack of improvement in the Chinese economy. Prices tried to recover on the backing of OPEC’s efforts to stabilise prices by cutting production but the overall bearish sentiment towards demand caps and major prices gains. Veg oil prices followed although soy-oil rallied earlier in the week on improved crush margins.
• In Canada, scattered showers moved across the major growing areas over the weekend, amounts per area varied but it certainly helped soil moistures. Showers remain in the forecast for the next week before temperatures start to build again.
• Meanwhile in Australia, ABARES cut its 2023/24 Canola production forecast by 41% due to El Nino concerns.
• Matif rapeseed managed to find support at the start of the week to close back at recent highs. After pushing to new contract lows last week prices managed to trade above €430 this week before tailing off. Whilst the EU carryout still looks burdensome,  drier weather in Europe and the recent price fall made rapeseed look attractive vs other products.
• In the short-term it will all be about Friday’s USDA report, then back to the weather and nearby coverage.

Fertiliser

• Granular urea has weakened further as anticipation for a heavily contested Indian tender builds.
• The Indian tender is for 800,000t and with a short shipment window. With muted sales globally, manufacturers could be keen to clear space to build new stock in preparation for demand expected to return globally beyond September.
• ADM can offer granular urea for spot, post-harvest and Q4 movement to accommodate the UK farmers logistical needs.
• UK AN manufacturer CF has issued later movement offers providing further options for growers. Both AN and urea at current wheat prices calculate around or below the 5:1 Break-Even Ratio as suggested by AHDB and the RB209.
• ADM now have an additional tonnage of SKW Piamon NS, a granular compound 30N + 33SO3, to offer to the market for Sep/Oct and November delivery.
• TSP, MOP, and DAP all have seen significant reductions of over £50/t from previous weeks as world markets try to entice demand.
• ADM can offer alternative PK products that come in a variety of grades and contain a wide selection of secondary and trace elements making them more beneficial than traditional bagged fertiliser. They are also have a lower carbon footprint.
• UAN terms remain available from ADM, alongside spot foliar products for quality wheats. Speak to your Farm Trader for more information.

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.