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Market Report

Thursday 11 November 2021

Subscribe to the ADM Agriculture YouTube channel for the latest grain, seed & fertiliser market updates and much more!

This week: Can seed treatments help enhance your winter wheat establishment? Click here to see the effects on establishment of different seed treatments on winter wheat.

Wheat

  • US markets regained their impetus following Tuesday’s USDA supply and demand report that indicated increased import requirements globally and declining export availability.
  • The bullish slant from the USDA report, plus talk that Russia will soon announced its restricted export quota for the new year, was enough to trigger a fresh wave of speculative buying on all markets.
  • The current unsustainable export pace seen currently in both the EU and the Ukraine is also expected to keep wheat markets underpinned.
  • EU soft wheat exports reached 9.8mln t as of 7 November, and may be higher given the reporting delay on French exports. But the EU does not have the capacity to replace the tonnage that might be held back by Russia this season. Wheat demand will need to be rationed, possibly by consumption switching to maize, and this will need watching over coming weeks.
  • The UK is basically following global markets higher. 2022 prices have also reached season’s highs, albeit at a hefty discount to 2021 levels. This gap will have to be closed and the likelihood is that, despite higher UK plantings, new crop should appreciate against old crop sooner or later.
  • Current high prices may be with us for some time and we probably need a couple of good harvests globally and domestically to replenish inventories.
  • Adding to the bullish tone, continued heavy rain in Australia, especially over the eastern side of the country, is threatening the overall quality of this season’s wheat crop.
  • Ukrainian analysts talk of the driest autumn for 20 years, which means half the country’s winter wheat crop is not well established.
  • On a brighter note, Buenos Aires Grain Exchange reported that recent rains in Argentina would help propel corn sowings and development of the wheat crop.
  • French soft wheat plantings were 80% complete as of 1 November, compared with 75% last year.

Malting Barley

  • The malting barley market is firmer this week, mainly on the back of the rising feed markets.
  • In the UK, farmers have been actively selling old crop this week at prices most have never seen before.
  • We have also seen an increase in growers booking contracts for crop 2022.
  • We have a good choice of contracts available to suit most growers risk appetite, including pool, fixed price, premium to wheat futures, min max and non-replacement contracts.
  • Please contact your local ADM Agriculture farm trader for details.

Feed Barley

  • Despite a bit of a pick-up in farmer selling, the old crop barley market remains in short supply and prices continue to find support.
  • Demand from EU importers is slowing, as corn now outcompetes barley in feed rations. Though this is all largely academic and despite a pullback in freight rates for larger classes, coaster availability is poor in northern Europe, which is prohibiting UK barley exports.
  • Domestically, regional spreads are widening, as logistical pressures limit the flow of grain around the country and prices in the north in particular have climbed sharply on the week.
  • Farmer selling on new crop positions has started to pick up as winter crops are established. Meanwhile demand from consumers is limited.

Rapeseed

  • Oilseeds values surged following the surprisingly bullish USDA world supply and demand report released on Tuesday, moving UK rapeseed towards £600/t.
  • Chicago soybean values closed 21 cents/bushel higher at the end of Tuesday’s session, 14 cents off the high but 28 cents up off the low. Meal and soy oil also rose.
  • Soybean prices continued to strengthen on Wednesday, closing out Wednesday 6 cents off the high on the November position. Most months held on during trading on Thursday morning, though the front month slipped about 3 cents.
  • Canadian canola futures rallied to close over $1000, a level the market has been targeting for the past few weeks.
  • In turn, Matif rapeseed rose €11 yesterday to a new contract high. This put UK rapeseed close to £600/t ex-farm on the shorter hauls, which may well meet many sellers’ aspirations.
  • Malaysian palm futures rallied 2.85% to highs, but slipped this morning following last night’s €3 fall in crude oil values, triggered by an increase in US inflation and the stronger dollar. USDA announced a sales of 22,000mt of soy-oil to an unknown destination which lent some support.
  • In more detail, the USDA report reduced US yields to 51.2 bushels/acre compared with trade expectations of 52 bpa, lowering estimated output.  Exports were reduced, but US and global ending stocks came in below expectations.
  • Brazilian soybean production was left unchanged at 144mln t, while Argentinian output was cut by 1.5mln t to 49.5mln t.
  • South American crop prospects are looking favourable. Plantings continue at a rapid pace, which will push new crop beans onto the market earlier in 2022. AgRural estimates Brazilian plantings at 67% complete, compared with 52% last week and 56% last year.
  • USDA left soybean crush and oil demand unchanged, soy oil stocks were increased, but rapeseed output was left much the same as before.

Pulses

  • Feed bean prices have been stable on the week due to a lack of demand on the nearby with consumers covered.
  • Human consumption bean prices remain well supported as we see the premium over feed gap widen. Demand continues to be strong coming out of Egypt.
  • Demand for human consumption peas continues to rise. If there any available marrowfats, large blues or yellows left on farm we offer competitive pricing.
  • Pea buybacks are still available for harvest 22. With preferred delivery of pre-Christmas spaces running out, please speak with your farm trader to check availability.

Seed

  • We have marrowfat and large blue peas available on our market-leading buybacks. Pea seed availability is currently good, but we expect to be in high demand with high nitrogen prices. If you would like more information on the benefits of growing peas in your rotation, watch our YouTube video here.
  • For any last minute cropping changes, we have a limited amount of Tundra winter beans available for immediate dispatch. Our winter stocks are now very limited across the board, but we do have availability of some key late drilled winter wheats, including RGT Skyfall.

Fertiliser

  • Granular urea continues to rise on the world market, breaking historical levels as it does so each time.
  • Urea pricing in the UK continues to chase the higher replacement values, with lower valued stocks now dwindling.
  • Egypt is rumoured to be looking at restricting export of fertilisers due to concerns of domestic food supply. This is in addition to Chinese restrictions already in place and more recently a Russian cap applied to the export of all fertilisers.
  • UK AN pricing is expected to return to the market this week. Prices will move on once again when desired tonnages are sold.
  • Fibrophos and P-Grow – a cost effective alternative renewable and carbon neutral PK fertiliser, to be spread onto the seedbed prior to spring drilling – is now available for Nov-Apr delivery at buyers call.
  • AHDB has published guidance on the effect of current high fertiliser prices on nitrogen recommendations developed by ADAS. This has made it evident that provided fertiliser purchasing has been spread across the season so far (and cereal and oilseed prices remain high) application rates could remain largely unchanged. Click here to see the full report.

£/€ £/$ €/$
1.1685 1.3405 1.1475
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Nov21 200-215 209-224 250-255 599-604
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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