- Last week’s USDA report estimated 2019-20 global wheat production at 777.5mln t, up 6.3% y/y.
- Maize production was also raised, to 1,133.8mln t, up 1.3% y/y.
- This bearish report plus an apparent breakdown of talks between the US and China helped push commodity markets to contract lows earlier this week.
- Markets have since rallied, mainly on continued concerns over delays in US spring sowings. These had spurred some short-covering, especially in the corn and soy complexes, providing spill-over support into wheat markets.
- Australia is expected to import its first shipment of wheat in more than a decade. Drought conditions have slashed domestic supplies.
- EU prices have followed the global trend. Prospects remain favourable for crop development.
- UK old crop wheat remains pressured by lacklustre demand, not helped by maize imports for the season reaching 2.1mln t.
- New crop prices have been slightly protected by another dip in sterling.
Thursday 16 May 2019
- Good rains across Europe have left the malting crops looking in good condition.
- Both buyers and sellers are reluctant to put any more tonnage on the books at present for crop 2019.
- Maltsters are showing some buying interest in winter malting crops for 2020. We are offering a variety of contract options – please speak to your local farm trader for more details.
- The USDA report raised US soybean 2018/19 ending stocks to 27mln t vs. April’s 24.4mln t.
- World soybean 18/19 ending stocks were reported at 113.18mln t (April – 107.36mln t).
- Argentinian soybean production estimates for 2018/19 reported at 56 mln t (April – 55mln t.
- Brazilian soybean production estimates for 18/19 remains at 117mln t.
- German Co-op Association (DRV) lowered the German rapeseed acreage to 887 tha (down 28% YoY).
- Despite extended talks last week, no agreement has been reached on US/China trade talks.
- USDA lowered China’s soybean demand due to African Swine Fever (ASF). China’s agricultural ministry estimates April hog herd is 20.8% lower than last year. 2018/19 imports were reduced 2mlnt to 86mln t, but some estimates are closer to 83mln t.
- All markets started off the week with a bearish tone after digesting Friday’s USDA report. Soybeans continued slide to over a 10 year low before finding support and bouncing off oversold levels as wet weather continues to hinder planting progress.
- Weather in the US is forecast to remain mixed or wet. Soybean planting is estimated at 9% vs the five-year average of 29%.
- In Europe, rapeseed prices followed other markets lower for the first half of the week. Improved weather across Europe over the weekend has helped stabilise the crop conditions.
- In the UK, markets followed European prices higher. This week sterling fell over 1% against the euro. Whilst this helped farm gate prices, Brexit uncertainty will keep currency volatile for the foreseeable future.
- The old crop oat market seems to have run out of steam.
- There is no real demand for feed or milling oats from end users – intermittent supply is hard to place.
- Recent rains (and more in the forecast) appear to have quashed any real previous concerns over new-crop crop prospects here and elsewhere in Northern Europe.
- The old crop bean trade is all but complete. Due to the large inverse to new crop growers are advised to market beans before harvest 2019 commences.
- New crop UK bean markets are unchanged on the week despite the volatility in many other commodity markets.
- Shippers are looking to cover existing export commitments and a weaker pound is supporting the market.
- Fresh demand for new crop feed beans is difficult to find, being too expensive for compound feed rations. Cargoes are offered and not bid on the export market.
- Most UK bean crops look very well. We have seen some farmer selling this week – any volume may push the market lower as demand is absent at present.
- Hybrid barley is already out, or very nearly out in ear across the country, with all varieties looking strong. SY Baracooda is exclusive to ADM Agriculture – a Bazooka type with more yield and improved mildew resistance.
- HOLL OSR – an exciting opportunity to add a premium for no extra work. HOLL contracts are still available with a limited amount of new variety V353OL available, which has increased autumn vigour over V316OL.
- KWS Firefly is remaining in strong demand and one to get covered ASAP.
- Winter beans are expected to see an increase in area this autumn. There is not enough seed to meet expected demand, so requirements should be covered now.
- Over 600,000t of granular urea was sold last week to India. The demand from Pakistan will be the next indicator for price direction. Although global prices remain flat, they equate close to £270/tonne on farm.
- UK granular urea continues to sell below replacement values to clear stock. For enquiries, please contact your ADM Agriculture farm trader or the fertiliser desk.
- A stable to weak outlook for sterling would further support the globally firm prices and a higher start price for new season is definitely on the cards.
- AN producers in Europe have announced new season prices, ranging at levels €20-25/t higher than last year’s June start prices.
- CF continues to service the busy grassland areas. Terms have remained flat throughout April and May and this is likely to continue.
- ENhancePo is ADM Agriculture’s unique foliar product to increase milling wheat proteins and maximise premiums. Available in IBC and pump-off options to be applied at growth stage 69-75. Please contact us for more details.
|Feed Barley £||Wheat £||Beans £||Oilseed Rape £|
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.