Market Report

Thursday 1 July 2021

Wheat

  • The latest USDA report released on Wednesday suggests that US farmers have sown less corn (maize) than the trade expected.
  • Although higher than USDA’s March figure, the 92.7mln acre forecast is about 1mln acres below most predictions.
  • With almost half the corn in what are described as drought-stricken states, concerns continue to rise over final harvested yields.
  • The weather situation in Canada continues to be of concern as strong winds and drought conditions are affecting crops. Stats Canada reported 2021/22 all-wheat sowings at 23.357mln acres, roughly unchanged from their March estimate, but still down 6.5% on the year.
  • Elsewhere, prospects look good. SovEcon is now pegging the Russian 2021 wheat crop at 84.6mln t, as improving prospects in the southern region could result in near-record yields.
  • It’s a similar situation in the Ukraine. Estimates for the 2021 wheat crop have been raised by 300,000t to 29.2mln t, while the country’s corn crop is now seen at 38.3mln t, due to higher plantings and favourable soil/moisture conditions.
  • Sowings in Australia and Argentina are benefitting from ample moisture.
  • In summary, the lower-than-expected US corn acreage and talk of potential further corn production losses in Brazil will prompt some short-covering, providing spill-over support into the wheat market.
  • However, global wheat inventories are more than ample, and apart from the US, other wheat markets may react more slowly as harvest commences.

Malting Barley

  • The weather continues to favour EU crop development, although drier, warmer weather is now needed.
  • Beer sales have been negatively impacted by the cool wet weather which is damping demand.
  • Prices have dropped over the past few days in line with the feed markets.

Feed Barley

  • Another week goes by and harvest does not appear to be much closer. Old crop prices remain supported as consumers/trade buyers hold onto stocks and look to add further cover to see them through.
  • We have seen a few more enquiries from Spain for harvest feed barley ex UK, although the freight market remains extremely difficult and commitments are difficult to come by, which is preventing much further trade. Demand from other nearby destinations is muted.
  • Tunisia bought 4 cargoes/100,000t at tender for last half July/first half August shipment, which traded ex Black Sea where FOB prices have seen considerable harvest pressure in recent weeks.
  • Given the lack of demand and pressure from firming freight prices, we still expect to see prices come off at harvest when origination picks up. However, the wider moves in the market will still be dictated by developing global grain stories.
  • Consumers in the UK domestic market are still happy to sit and wait in anticipation of better values after harvest.

Rapeseed

  • Another volatile week for the oilseeds complex. Funds juggled positions accordingly ahead of the month-end, quarter-end and Wednesday’s USDA report.
  • The bullish report very quickly pushed soybeans up to 90 cents higher on the day. US soybean acres for 2021 were estimated at 87.55 mln acres, slightly down on the last report but well below the 88.9 mln acres that the trade expected. However, there are still some acres to be planted as of the survey date.
  • The forecast is for rain in the Midwest and Delta, but for dry weather in the Plains and West-Midwest. Temperatures are set to get hotter next week onwards, which will be closely watched
  • It was rumoured that China was back in the market for US soybeans, but nothing has been reported.
  • Oil markets are all firm, with Asia following the US higher.
  • Temperatures in Canada remain at record levels. Crops in the northern and west-central parts of Alberta have good soil moistures, but crops in south Alberta and Saskatchewan are becoming stressed. Temperatures are set to cool as the week progresses, but yield estimates are likely to fall.
  • Matif rapeseed recovered very quickly from the losses we saw at the end of last week, trading close to €40/t off the lows to levels not seen since the start of June. UK prices have recovered but remain off season highs.

Oats

  • Minimal buying interest remains for old crop oats with buyers reporting to be covered until new crop, but a delayed harvest could bring some opportunities given the inverse on most commodities.
  • The weather over the last week has been mixed, with many seeing showers and mild temperatures. Although this allows for crops to maintain their vegetative state, we will need more sunshine in order to properly realise the crops potential. If things stay as they are, we may see poorer quality with low specific weights and small grains. Consequentially, consumers are waiting to see the quality before taking any more cover. Millers are well covered with futures related contracts so are happy to wait.
  • Export bids into Europe remain below UK domestic prices due to more aggressive Scandinavian sellers and large freight rates. Still all to play for.

Pulses

  • Trading of old crop beans is coming to an end, with limited volumes coming forward from farm and limited demand.
  • New crop bean prices continue to track wheat futures with premiums unchanged on the week.
  • There is increased confidence in UK crop production, with forecasts suggesting the crop could be as high as 700,000t, up to 40% higher than last year. With Australian production likely to be lower, the UK should regain some market share in North Africa this season. This increased export demand is unlikely to be enough to absorb the increased UK production and therefore we will need to see increased domestic demand.
  • New crop marrowfat pea buybacks are available for harvest 2021. Please contact your farm trader for further information.

Seed

  • As we edge closer to harvest, many growers will have made the most of the multitude of trials days around the country. If you are struggling to get across to view any trials, visit our ADM YouTube channel, where we are showing a quick review on varieties across the AHDB Recommended List over the next couple of weeks. Click here to see last week’s video focusing on Group 2 wheats.
  • Wheat: Seed availability still looks good across the board, barring limited availability on a few of the newly recommended varieties. Get in touch with your farm trader for our full availability.
  • Barley: Hybrid Baracooda, an ADM exclusive, offers all you expect from a hybrid and more. Yielding on par with Kingsbarn, but with a taller straw.
  • OSR: ADM have a great OSR portfolio, including Matrix CL, DSVs quad layered OSR, stacking four complex traits together – a Clearfield variety with TuYV, RLM7 and pod shatter.

Fertiliser

  • Reports show India managed to achieve just under 800,000t from its 24 June tender, which is 500,000 tonnes short of what the country requires for July and August. It will therefore need to generate a new tender, which will continue to fuel this firm global market. ADM has stock available for both Q3 and Q4 delivery.
  • Norwegian fertiliser producer Yara has raised its asking price for CAN 27 in Germany and Benelux. The price, which applies to August deliveries, rose by €16/t from the offer that Yara set for July sales early this month.
  • UK AN producer CF returned to the market this week showing an increase of £16/t for N and NS products, with varying increases on NPK Compounds for spot delivery. September NPKS terms have currently been withdrawn.
  • Phosphate and potash prices continue to firm. ADM Agriculture Ltd has access to excellent value alternative PK fertilisers that reduce carbon footprint and environmental impact. Please contact your ADM Agriculture farm trader for more information.
£/€ £/$ €/$
1.1625 1.3795 1.187
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
July21 145-150 (new crop a/a) 193-208 240 442-447 (new crop a/a)
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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