Market Report

Thursday 11 March 2021

Please click *here* for this week’s grain market update on the ADM Agriculture YouTube channel.

Wheat

  • The market was looking for guidance in this week’s USDA report, but an unchanged outlook for US wheat and lack of market assistance from corn or soybeans saw wheat prices drift lower, down $4-5/t over the week.
  • USDA trimmed global wheat stocks by 3mln t compared with last month’s forecast, although this was mainly driven by a 4.5mln t fall in Chinese stocks due to higher domestic wheat feeding. China has more than a years’ worth of supply in storage.
  • The market focus is now on the US planting report due out at the end of the month. Until then weather will be the driver and, with a more favourable outlook for the US winter wheat region, some expect prices to drift lower.
  • Soft wheat exports from the EU had reached 18.23mln t as of 7 March, down from 22.51mln t cleared by the same week last season. However, against the backdrop of last year’s smaller harvest and rising internal demand mainly due to lower maize imports, EU wheat prices are expected to remain firm.
  • France’s farm ministry maintained its forecast of non-EU French soft wheat exports at 7.45mln t, while increasing its forecast of 2020/21 ending stocks to 2.7mln t from 2.5mln t last month.
  • UK prices are mixed on the week, with old crop marginally lower and new crop marginally higher, as a stronger pound/euro exchange limits upside in prices.
  • Market actively remains sluggish, although market dynamics still project the need for the UK to import a considerable volume over the remainder of the season, against the backdrop of declining EU supplies.
  • The Food and Agriculture Organisation said that worldwide cereal harvests remain on course to set a record in 2020, adding that early indications pointed to a further increase in production during 2021.
  • Egypt’s strategic wheat reserves are sufficient to cover four months of consumption, according to the country’s supply ministry.
  • A mild Russian winter has dramatically improved the condition of winter grain sowings, which were previously hit by the dry autumn, signalling brighter prospects for the country’s 2021 crop.
  • France’s farm ministry estimates that 88% of the country’s soft wheat crop was in good/excellent condition, up from 87% last week.
  • Argentine wheat sowings are likely to fall this year as farmers calculate the risk of state intervention in the market, while new Chinese demand for barley is expected to induce some growers to switch crops.

Malting Barley

  • Malting barley markets are supported with strong demand and firm feed prices.
  • France has completed spring barley sowing into good seed-beds.
  • Germany is 35% through its plantings.
  • Sowing in England has stopped due to the recent rains, but it is thought that 45-50% has been planted so far.
  • Winter malting barley crops look well in most areas.
  • Please contact your local farm trader for crop 2021 contract options.

Feed Barley

  • Saudi Arabia (SAGO) tendered for Apr-May’21 arrivals at the end of last week, although this was of little consequence to the market in northern Europe with Russian barley proving most competitive into the Red Sea and Australian into the Persian Gulf.
  • German FOB prices have fallen on the week as demand dries up in the domestic market. Coastal stocks are released to be offered for export.
  • The firm freight market continues to cause problems for spot UK barley exports and is keeping this side of the market quiet. Anecdotally, this situation appears to be easing, and UK barley has traded into the Netherlands/Belgium this week.
  • Domestic markets are once again quiet, with a notable buying presence from trade shorts as origination remains slow. We still anticipate demand to come forward in Q2 with barley trading at attractive prices vs other products.
  • New crop markets are seeing pressure as sellers look to get sales on the book ahead of the expected spring farmer selling window, and while UK barley still looks too expensive for export.

Rapeseed

  • Another volatile week with soybeans touching contract highs earlier on. The focus was on the release of the March USDA report and, whilst this was not expected to contain big changes, it did highlight the tightness of the supply and demand balance sheet.
  • US soybean ending stocks were unchanged at 120mln bushels (about 3.27mln t), but world ending stocks were increased from 83.4mln t to 83.7mln t (average estimate 82.7mln t).
  • USDA increased Brazilian soybean production to 134mln t from last month’s 133.2mln t, but reduced the Argentinian soybean crop to 47.5mln t from 48mln t.
  • With the USDA report out of the way, the focus is back on South American weather developments, which remains supportive. Rain is still causing delays in the northern and central parts of Brazil. Mato Grosso declared a state of emergency with 3mln ha of crop being hit by severe flooding.
  • South Brazil into Argentina remains dry. Rosario grains exchange reported 20% of the soybean crop in the central parts of Argentina looking very poor. Buenos Aires Grain Exchange reduced crop conditions down to just 10% good/excellent vs 44% last year.
  • China remains quiet with no new soybean purchases to report.
  • Mineral oil prices spiked $2 at the very start of the session on the back of an Iranian drone strike on a Saudi oil facility. Prices were quick to come down again as the attempt failed and priced closed lower.
  • Veg oil hit highs again, briefly following mineral oil up, but also led by firmer soy oil. Malaysian palm futures played catch up after closing lower on Friday, touching a 10-year high at 3883 ringgit. Chinese veg oil futures also traded higher at the start of the week before slipping post USDA.
  • Canadian canola futures rallied with the Matif, but closed shy of the $800 mark on the May, which seemed to be a target for funds to take some profits.
  • Matif rapeseed futures closed higher for the tenth session in a row, to touch a record high before retracing after the USDA report.
  • In terms of the UK, prices remain just shy of contract highs despite firmer sterling.

Pulses

  • Old crop bean prices have weakened slightly on the week as export demand remains absent and domestic bids start to dry up.
  • New crop bean prices continue to track wheat futures with premiums unchanged on the week. New crop planting progress is estimated at 70% complete with much of the crop planted into significantly better conditions compared to the last two seasons.
  • Old crop green pea values continue to slide with little fresh demand for either domestic or export markets. With a large inverse to new crop, its likely that old crop values will continue to depreciate.
  • The recent wet weather that has delayed some spring plantings has resulted in a number of enquiries for peas. Contracts for peas remain available. Please contact your farm trader for further information.

Seed

  • Spring barley – ADM has spring barley varieties Laureate and Planet on the floor ready for immediate dispatch.
  • Peas – Large blue pea seed is now becoming very limited. Get in touch with your farm trader now to avoid disappointment. Marrowfat pea seed is in good supply with agronomically strong Kabuki available on ADMs market-leading buybacks.
  • Spring oats – There is still good spring oat availability. We have Elyann, Isobel and Canyon to offer.
  • Winter OSR – ADM have a great portfolio of winter OSR varieties, including joint highest yielding on the AHDB Recommended list, LG Aviron. LG Aviron shows exceptional autumn vigour with the N-Flex trait, as well as TuYV resistance, Pod shatter and RLM7.

Fertiliser

  • Granular urea pricing remains solid and traded at $400/t FOB Egypt at the beginning of the week. This is $5/t up from the last reported sale.
  • North and South American markets remain firm, although here in the UK values remain below replacement and so are still offering excellent value for those buyers looking for nitrogen today.
  • UK ammonium nitrate prices have corrected to remain competitive against imported values. However, following further price rises in Europe this week, these levels could be short lived once demand picks up further.
  • UAN levels for spring fill is unchanged. Deliveries remain good for all UAN/UAN and ATS grades.
£/€ £/$ €/$
1.1685 1.379 1.1955
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Mar21 162-172 202-212 223-228 426-431
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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