Market Report

Thursday 15th August

Wheat

US prices are down $5/t on the week, as a bearish USDA corn report exerted ‘spill-over’ pressure into the wheat complex – US wheat stocks were increased, despite a 25mln bushel hike in exports, currently running 28% ahead y/y

Paris wheat futures fell to a new contract low of €170.75/t (Dec19 position) before stabilising, as focus remains of the potential higher EU crop and exports running 30% lower y/y

Russia’s Ag Ministry does not see any significant risk for the grain harvest this year despite several regions declaring states of emergency over extreme weather

Russia’s SovEcon raised it estimates of this year’s wheat crop to 74.4mln t, up from 73.8mln t previously, as yields on late-harvested crops have improved slightly

Russia has received the go-ahead to supply wheat to Saudi Arabia, due to the Middle Eastern state’s relaxing their quality specification, which could have a major impact upon German and Baltic exports

Ukrainian farmers have almost completed the 2019 wheat harvest, threshing 27.9mln t from 98% of the sown area

Germany’s 2019 wheat harvest will increase 17.5% y/y to 23.81mln t despite an early summer heatwave which stressed crops, the association of arm cooperatives (DRV) commented, although the crop size is lower than initially projected

2019 UK crop prices are trading £3.50/t lower on the week, and within 25p of the contract low seen back in May, as global weakness and the UK’s uncertain future (Brexit) weighs on prices

In summary, the trade wasn’t expecting a bullish wheat report, and it didn’t get one! However, the very bearish corn report released has resulted in liquidation by long-holders.

The almost 15% drop in US corn values has ‘spilt-over’ into the wheat complex, driving the market lower, both in the US and Europe.

The wheat report just confirmed the fact that there is no shortage of wheat, just an apparent lack of demand, and with most exporters showing crop increases y/y, the pressure is starting to build

Of interest, with Paris set a new contract low this week, and London is only 25p/t away, the US market is still sitting about 35c/bushel, or $12-13/t above its low, showing that it may still has room to fall lower

 

Malting Barley

The UK winter barley harvest is near complete and we are approximately 50% through the English springs

Scotland has just started their spring barley

Yields are generally excellent

Winter malting barley quality is very good

Spring barley quality is also very good to date

Laureate, Planet and Diablo are averaging below 1.70 nitrogen with good screenings levels

Propino is again much higher in nitrogen than the other varieties

Moistures are higher than the last few years due to the recent wet weather

Growers (especially in the export areas) should dry their barley ASAP to avoid quality problems

The trade believes we already have enough English malting barley to meet domestic and export demand

Premiums continue to be under pressure

Rapeseed

  • Monday evening saw the shock USDA report which lowered the soybean planted area 3.3 ml acres from the June report . Demand was also reduced due to the ongoing ASF problems in China.
  • CBOT Soybeans initially traded lower on the back of a bearish corn report but have since been trading the weather market.
  • U.S weather across the Corn Belt now looks less threatening with rain now appearing in the forecast for the next 6 to 10 day with the possibility of more in the 8 to 14 day forecasts. It’s not known how much rain crops will get but temperatures are cooling which alleviates some stress on crops and any rain will help.
  • Despite recent conference calls between U.S / Chinese official there is still no sign of an agreement or “goodwill” purchases of U.S Soybeans. The U.S  will delay implementing any further tariffs until Dec 15th  by which time President Trump will have met with President Xi to try speed up the agreement progress.
  • In Canada there remains very little activity, farmers selling is slow as they approach harvest. Crop conditions are unchanged.
  • In Australia crop conditions remain mixed depending on how much rain they have received. Though some farmers believe that a few more showers should be enough to get the crop to the stage where it might achieve an average yield.
  • Here in Europe harvest is virtually done with a few northern German and Scandinavian farmers left to get things finished off. Yields and oils have improved but the overall crop size is still around 17mmt, some estimates are seen falling just below this figure.

Pulses

Demand for feed beans remains limited. Shippers continue to buy into the ports but it is difficult to sell beans on the export market with most buyers for either the dehulling or compound feed market sitting on their hands and waiting for lower prices. With limited buying interest and sterling off the lows we have seen feed beans weaken on the week. 

The Baltics are likely to start their harvest in the next few weeks and we will likely have a better idea regarding the quality of the UK crop then too.

Some of the more recent pea samples seen have higher levels of bleaching. Anything left in the field is likely to be heavily bleached so values for lower quality material could come under pressure.

 

Seed

OSR

Aurelia is topping all the yield trials showing when you combine top genetic traits including RLM7 (phoma resistance), pod shatter resistance and TuYV resistance they all work in harmony to protect yield potential and provide additional yield over varieties without them. Aurelia also benefits from hybrid vigour and as we move into the second half of August growers should be looking to use hybrid over conventional varieties. Having a good root structure and strong canopy going into winter is crucial to set up the crop for top yields next harvest, without that the crop will never reach its genetic yield potential while being more exposed to pest damage. We’re more likely to see the hybrid vigour effect show a difference from planting hybrids over conventionals from now on. The Turnip yellows virus (TuYV) resistance is the newest trait to appear in mainstream hybrids and has shown fantastic results this season. We know there was a high infection rate of TuYV this growing season and all varieties with resistance have shown their worth in yield trials. ADM will look to have this trait in their whole portfolio of hybrids over the next few seasons as the benefit to the grower and crush are plain to see.

We have in stock for immediate delivery all major hybrid varieties including Aurelia, please ask your farm trader for more information and stock locations.

Fertiliser

  • Granular Urea globally is trading around $260/t FOB Egypt, which is down ~$20-30/t from the highs, following the Indian tender in July and low market liquidity.
  • Europe will soon return to the market following their summer break along with buyers from North and South America surfacing in September. This ,with India anticipated to tender again in late August-early September ,will likely provide support for prices in late Q3 entering Q4.
  • Sterling is offsetting weaker FOB prices, maintaining a relatively flat market in the UK.
  • UK urea markets are estimated to be < 25% covered currently which compares to a typical ~50% covered at this point. The wait and see approach being adopted today could cause potential future logistical problems for prompt delivery and timely application. Urea today is still the cheapest form of N/kg available so taking some cover is recommended.
  • UK AN has remained flat since new season, October terms are still available. Imported AN will be subject to 6.5% tariffs post October 31st in the event of a no deal which would also potentially impact the AN price for November.
  • Fibrophos & P-Grow, a UK produced ash-based fertiliser with secondary and trace elements, are a haven for those looking for a cost-effective alternative to imported Phosphate and Potash that can be impacted by weak currency. Contact your ADM Farm trader or the fertiliser desk today to enquire on any products on offer.
£/€ £/$ €/$
1.0855 1.2105 1.115
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Aug 19 116-120 126-140 N/A 327-332
Nov 19 120-124 132-140 190-200 338-342
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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