Market Report

Thursday 17 September 2020

Sampling – Harvest 2020

Knowing the quality of crops is especially important this year so if you have not already done so, please contact your farm trader to arrange for sample bags to be sent to you. Once you have samples ready, we will collect them and the results will be available via our online portal, ADM 365, or from your ADM farm trader.

Wheat

  • USDA last week brought in a generally “as-expected” report for wheat.
  • Headline figures for 2020/21 were:
    • World wheat production increased 4.46mln t to 770.49mln t, with Russia unchanged at 78mln t, Australia up 2.5mln t at 28.5mln t along with some minor tweaks elsewhere.
    • World wheat ending stocks increased 2.58mln t to 319.37mln t, with starting stocks down 1.13mln t and consumption up 0.76mln t. Note 51% of stocks located in China and 10% in India.
    • World maize production reduced by 8.65mln t to 1162.38mln t as US yields were reduced 3.3bu/ac to 178.5bu/ac. All in global ending stocks reduced by 10.67mln t at 306.79mln t.
  • US wheat prices are unchanged on the week with little fresh fundamental news to stir markets. Meanwhile US maize edged up about $2.5/t on the back of the USDA figures.
  • Egypt bought 175,000t Russian origin wheat and 60,000t Polish origin wheat this week for delivery mid Nov20, paying about $9/t more than its previous purchase two weeks beforehand.
  • The US export pace continues as forecast/slightly below.
  • SovEcon has raised its forecast for this season’s Russian wheat crop to 82.6mln t, up from 81.2mln t previously.
  • Ukraine’s Grain Trade Union sees the country’s 2020 wheat crop at 26.6mln t, while maize output is expected at 35.3mln t. Exports are forecast to hit 17.5mln t and 29mln t respectively, while dryness for current planting remains a concern.
  • UK futures have fallen back £2-3/t from last week’s highs. Domestic supply has picked up and the pound has appreciated from recent lows.
  • UK wheat values have followed other markets despite the readily available imported feed wheat now arriving on UK shores.

Malting Barley

  • There is little change to EU or UK malting barley markets.
  • Currently there is a lack of demand from brewers and next to no export interest.
  • The spring barley harvest is nearly over in the UK with the later English crops badly hit by the wet weather.
  • A lot of barley has unfortunately sprouted or has poor germination.
  • Scotland has a big surplus of good quality, low nitrogen barley, which is now finding its way into England.
  • We now have crop 2021 buybacks available. Please contact your local farm trader for details.

Feed Barley

  • The dry weather has continued in the UK and most farmers have now managed to conclude their barley harvest, with the exception of a few patches in the north of the country.
  • Having seen a firmer start to the week, sterling has regained some lost ground and barley values have slipped back slightly. However, competition, particularly in the nearby positions, remains strong.
  • Both Saudi Arabia and Tunisia are tendering for barley tomorrow, with requirements totalling 615,000t for Q4. It will be interesting to see how an injection of demand affects values going forward in an otherwise thin market.

Rapeseed

  • The market has reacted favourably to last Friday’s neutral to bullish USDA report.
  • Production estimates fell in line with trade expectations, but US ending stocks for 2019/20 and 2020/21 were lower than expected, as were world ending stocks for 2020/21.
  • Weather wise it looks mostly dry across the corn belt, with some showers appearing next week as a result of Hurricane Sally. Temperatures are cooling to slightly below average which isn’t a cause for concern. Harvest has started and given this dry weather it should gather momentum fairly quickly.
  • US soybean ratings declined a further 2% with good/excellent now reported at 63% which is slightly under the five-year average. That said there are concerns about Hurricane Sally, which is moving across the delta, and the heavy rains it brings with it.
  • Soybeans hit season highs this week, trading over $10. The market been overbought for a while now demand is coming forward from China, which seems to be in the market every day for US soybeans.
  • It’s also rumoured that China purchased new crop Brazilian soybeans at a premium to US prices. The US have sold approximately 3.6mln t of beans since the start of September. Managed funds are still heavily long on soybean futures, estimated at around 193,000 contracts.
  • China report an increase in the national pig herd, up 31% from last year, sows in particular were up 37%.
  • Crude oil recovered from the recent lows that we haven’t seen since mid-June. The American Petroleum Institute reported lower stocks last week of 1.271 million barrels, which saw WTI prices trade back to $40.
  • Veg oil markets continue to rally. Palm oil is trading higher on lower production and recovering demand. Soy oil firms on higher soybean prices, whilst sunflower oil trades at seven-year highs in Ukraine. High in demand, but short in supply, as a result of a poor season leaving a tight market.
  • Matif rapeseed rallied beyond the recent resistance level of €385 to touch €393.25, a level not seen since the start of the year. Tight veg oil markets help support prices and persistent dry weather across the EU and Ukraine is also affecting new crop rapeseed plantings, which farmers are trying to get in before the end of September cut off. Whilst indications are that markets are overbought, and we may see some short-term correction, that doesn’t mean we couldn’t trade higher.
  • UK prices followed the rally higher but were capped by the rise in sterling. The British pound rallied over one cent against the euro in yesterday’s session and performed well against other major currencies after its heavy sell off last week.

Oats

  • Quality on spring oats has proved very positive in comparison to previous seasons, with the majority in this harvest making milling spec. This has helped to counteract yield reductions and paints a more positive supply picture for milling oats this marketing season.
  • In conjunction with the above statement, millers have reported that milling yields on springs oats are vastly improved on previous years. Consequently, prices have drifted sideways on the week with no fresh bullish news coming to the market.

Pulses

  • There has been reasonable faba bean harvest progress on the week, with the national average thought to be in the region of 60% complete. Spring bean yields have been very variable, ranging from 1t to 5t/ha.
  • Quality remains poor, with high levels of insect damage seen in both spring and winter varieties, and few samples making the grade for human consumption. However, the lack of supply of human consumption beans is being met with little demand, with cheap offers from the Baltic and Australia continuing to price the UK out of the Egyptian market.
  • Farmer selling has increased significantly this week as a result of the harvest progress. This, combined with firmer sterling, is keeping a lid on values which are virtually unchanged, unlike most other commodities.

Seed

Winter Wheat

  • Winter wheat stocks are changing quickly now with limited availability on some key varieties.
  • Quality wheats are well sold but there is still availability of most feed wheat seed.

Winter Barley

  • Hybrid barley remains tight with small amount of SY Baracooda left
  • Conventional barleys are in the same position with the exception of some KWS Gimlet.

OSR

  • We still have LG Aviron available for late sowing for those intending to drill late OSR. LG Aviron has the top combination of vigour and yield currently available.

Fertiliser

  • Granular urea remains relatively unchanged on both the global and domestic markets, with Nov/Dec options looking favourable.
  • For those looking towards an inhibited product, PiagranPro is the only integrated urease inhibitor on the UK market and is now available for Q4 delivery.
  • CF spot terms have been withdrawn and October terms for nitrogen and nitrogen sulphur products remain the same as before. NPK(S) terms are unavailable at present.
  • Ammonium nitrate markets look well supported through to spring. This is likely to support urea values in the UK as nitrogen demand is realised through autumn due to large winter cropping areas.
  • Spot PK business is active. Those thinking of taking a PK holiday should consider the alternative PK products we have available.
£/€ £/$ €/$
1.0917 1.2884 1.1797
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Nov20 132-141 170-180 201-206 345-355
NB: Prices listed may vary depending on area.

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.

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