Market Report

Thursday 30 July 2020

Sampling – Harvest 2020

As many of our farmer customers already know, ADM Agriculture will not be sending samplers out to farms for the forthcoming harvest. We need to be able to test the crops we buy, and it remains our intention to do this in as efficient manner as possible, whilst reducing the risks associated with this service. 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

  • US prices are virtually unchanged as talk of declining global production supports, although favourable weather for US spring crops, provides resistance.
  • US maize prices have drifted lower, as near-ideal weather conditions during the pollination stage of the crop, would support talk of higher yields, and production.
  • USDA has confirmed that China recently purchased 2 cargoes of US SRW wheat, which has supported prices on ideas that China could be a further buyer of US wheat this season.
  • Dryness in Northern/Central parts of Argentina is affecting development of the recently planted wheat crop and may result in further declines of the estimated planted area.
  • Official data showed that Russia planted a record 29.4mln ht to wheat for the 2020/21 season, the highest level since records commenced 25 years ago.
  • IKAR raised its forecast for Russia’s 2020 wheat crop to 78mln t, after recently reducing it down to 76.5mln t, mainly due to reports of improving yields in some areas.
  • Kazakhstan has raised its 2020 grain crop forecast to 20.5mln t, up from 18.0-18.5mln t previously.
  • Condition of the French wheat crop improved in the w/e July 20th, with harvest reported as being 71% complete, vs 47% w/w and 55% y/y.
  • EU’s crop monitoring unit MARS has again cut its estimates of this season’s EU soft wheat crop to 5.54t/ht, down from 5.6t/ht in June, although maize and barley yield were increased.
  • Agritel sees this season’s French soft wheat crop amongst the smallest in 25 years, at 29.2mln t, after adverse weather impacted upon both area and yield.
  • In summary, over the week we have seen prices drift marginally lower, as harvest progress limits the potential upside. US market continues to be balanced between trade talk of increased Chinese buying, versus a favourable weather pattern for US spring crops. A declining US$ has made US products look more attractive onto export market.
  • In general producers remain reluctant sellers, and this has underpinned cash levels across much of the EU/Black sea region, and especially in Russia, where exporters remain short against shipments.
  • In the UK, we have seen some harvesting, although limited in volume. Merchant short covering has supported spot delivery premiums, as farmers remain concentrated on harvesting, rather than selling. However, as harvest activity increases, and supplies become more freely available, spot premiums will erode as domestic demand from all sectors continues to look sluggish.

Malting Barley

  • Brewers remain nervous around buying too much, due to the rise in world Covid 19 cases.
  • EU malting markets moved slightly lower this week, mainly due to good early results from the French spring harvest.
  • The spring crops in Scandinavia and the UK look well considering the weather we have had.
  • The UK winter malting barley harvest continues slowly, with below average yields and higher nitrogen.
  • Maltsters are starting to talk about contracting crop 2021. Prices and premiums will be higher than the current crop.

Feed Barley

  • Nearby markets unchanged on the week, with the slow pace of harvest and lack of available winter barley keeping values underpinned.
  • Export demand remains sluggish, with bid-offer spreads still several Euros apart into nearby EU destinations.
  • Yields on the winter crop are still being reported as below average, though moisture and test weights are still very good on average.
  • We have seen an increase in consumer interest this week, though demand is still limited and mostly focused in the nearby positions. Buyers are still reluctant to commit to the forward positions.
  • Tunisia tendered for 100kmt feed barley for Aug’20-Oct’20 delivery, likely to be priced basis Black Sea origin at this stage.
  • We anticipate the spring barley harvest to get properly underway in the East over the next week to ten days, which should bring a fresh wave of supply to the picture.

Rapeseed

  • Despite the continued tension between the U.S and China, CBOT Soybeans were once again supported by Chinese buying for the 10th day in a row, further new crop parcels being announced at the start of the week. Prices were pressured in the last few days as Chinese buying dried up and favourable weather led to an improvement in soybean crop conditions, up 3% this week to 72% g/e vs. 69% expected. 43% are setting pods vs. the usual 36%.
  • Mineral oil fell with WTI falling to $41, but Palm oil fell sharply two days in a row, with traders profit taking from its recent rally. As a price comparison Palm oil had extended gains against soy oil over recent weeks and the spread between the two looked overdone. Meanwhile Indonesia estimated 2020 biodiesel demand to be 2.19 billion gallons vs. 2.54 billion gallons two weeks ago.
  • In South America 14 confirmed cases of coronavirus have been confirmed in Argentinian ports and plants in Rosario. These facilities will now be closed for 72 hours and cleaned.
  • Harvest has made progress in Europe. August futures go off the board at the end of the month, November Matif rapeseed futures still trade within a €5 trading range and are struggling to break the trend. Whilst veg oil prices were pressured, the bio-fuel market has seen increased demand over the last week, but with variable yields being reported, farmer selling is slow.
  • UK prices were back at highs, but pressured yesterday by the small uplift on sterling, which closed above 1.1000 for the first time in 4 days.

Pulses

  • The first pea samples seen are a nice colour, but smaller than usual. Early yield reports have been reasonable at around 3.5t/ha, but little has been harvested to date. The early cut winter beans have yielded between 2.5t-3.5t/ha.
  • The bean market remains very quiet with little interest to sell from growers, which is maintaining prices for the time being. With no production issues in the other major origins and demand from North Africa still subdued, prices are expected to come under pressure once harvest is in full swing and farmer selling increases.
  • New crop pea and bean buybacks are available. Please contact your farm trader for further information.

Seed

OSR

  • TuYV resistant hybrids continue to impress in early trial results. ADM have Aurelia, DK Excited and Voltage all available for immediate dispatch as top performing TuYV resistant varieties.

Wheat

  • Certain key varieties are now getting well sold, our advice is to make sure cropping plans are made good and early, to make sure your 1st choice of variety is available.

Winter Barley

  • Hybrid varieties are maintaining a strong yield advantage to the conventional varieties in the early AHDB trials results. ADM have top performing SY Baracooda and SY Kingsbarn available for this autumn sowing. Latitude has shown massive benefits over the years, treated onto Barley and especially hybrids with the lower seed rate and cost saving per/ha. With most Barley being sown into the 2nd and subsequent cereals slots, Latitude seed treatment is money well invested.

Fertiliser

  • Granular urea has reportedly traded at $260/t FOB Egypt this week, up $15-25/t on previous trades. Short supply for August from North Africa and Indian/Brazilian demand is keeping prices firm. UK urea prices have reacted and are up circa £10/t from last week, with global supply and demand being the key market driver at present.
  • The UK’s only fully integrated urease inhibited urea, PiagranPro, is available for buyers looking to reduce volatilisation and improve nitrogen use of efficiency and prepare for potential regulations to be imposed in 2021/22.
  • UKAN terms are yet to be released, although firm global markets indicate price rises on the UK and Imported produced Ammonium Nitrate for all later movement periods.
  • Liquid UAN will continue to track any rise, so with spring fill terms available today, taking some cover now may be advisable.
  • P & K requirements are being booked up and supporting current prices. With some firmness in straight PK products, alternative PK products look even better value. August and September deliveries are available.
£/€ £/$ €/$
1.107 1.3015 1.1755
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
AUG 20 123-130 158-173 203-213 328-333
NOV 20 130-137 163-173 203-208 338-348
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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