Market Report

Thursday 15 July 2021

Wheat

  • Markets have firmed over the past week as weather concerns continue to threaten global corn and wheat production.
  • Ongoing dryness in the US northern plains, Canadian prairies and parts of the Black Sea region is continuing to threaten spring crops, while rain in the EU and western parts of the Black Sea region is raising concerns over final quality.
  • With further downward production estimates expected for Brazil’s corn crop and the slow pace of the Argentine harvest, extra demand is seen potentially coming back into the US, placing greater emphasis on new crop weather.
  • Early reports from Russia show yields are lower than expected, leading analysts to begin trimming back production numbers.
  • EU harvests have started around 10-14 days later than normal. This has delayed shipment of new crop supplies into the UK, causing spot premiums to firm as domestic supplies tighten.
  • UK new crop is now all about weather, how crops yield and overall quality. Increased domestic demand should provide price support, but talk of a larger percentage of the EU crop potentially only being of feed quality could pressure UK market.
  • In more detail, USDA projected a lower-than-expected US wheat crop in this week’s report as a sharp fall in spring/durum production more than negated a slight rise in winter wheat. The carry-out for 2021/22 is seen at a 13-year low.
  • CONAB reduced its estimate of the Brazilian 2020/21 total corn crop to 93.4mln t, as drought and frosts continue to threaten.
  • BAGE reported Argentine wheat sowings as 91% complete as of 8 July, with an expected area of 6.5mln ha seen producing a 19mln t wheat crop.
  • Ukraine’s 2021 wheat crop is now expected at 29.5mln t as recent precipitation has helped the crop, although excess rains in some areas could herald a larger proportion of feed quality wheat.
  • Russian farmers have harvested 2.5mln ha of wheat as of July 13, with average yields seen at 3.28t/ha, down from 3.36t/ha this time last year.
  • The amount of France’s soft wheat crop reported as in good or very good condition held at 79% in the week ending 5 July. The country’s soft wheat crop is expected to rise 27% on the year to 37.1mln t.
  • Grain harvests have started in Germany, but have been stalled repeatedly by heavy rainfall. Harvest output has been trimmed to 44.2mln t, included 22.8mln t of wheat.

Malting Barley

  • France and other areas continue to receive heavy rains which is delaying harvest.
  • No quality problems are confirmed as yet, but prices have risen slightly.
  • The winter malting barley harvest has started this week in England.
  • Early reports point to above average yields.

Feed Barley

  • Another week without any volume of new crop coming forward has kept the spot market interesting. Although prices have come off as the weather improves, there is still a healthy premium available for spot movements.
  • Otherwise markets are very quiet and domestic barley prices continues to track feed wheat, although the spread between the two is slowly starting to creep out as the barley market struggles for volume demand.
  • We still have buying interest from Ireland and Spain/Portugal. However, little is trading, not helped by a stronger pound and firmer freight market again on the week.

Rapeseed

  • Another week of big moves for agricultural commodities. The Canadian weather situation is now the key driver, with crop conditions worsening by the day with little to no rain hitting the main growing regions.
  • Temperatures are still soaring and the level of soil moisture available for crops is a big concern. There is now talk that the Canada could lose up to 5mln t of its canola crop if rain does not arrive soon.
  • Prices traded limit up on several sessions, despite trading limits on the exchange being extended. Price spreads are now trading at all-time highs against soybeans and there is a big premium against Matif rapeseed.
  • Soybean values remain firm, although the US weather is less of a concern than it was, with rain moving into South Dakota and the Western corn belt this week. Crop conditions were unchanged week on week at 59% good/excellent compared with 72% last year.
  • Matif rapeseed naturally followed canola prices higher touching new contract highs this week. Europe’s harvest is still delayed, although progress is expected to gather momentum this week. Weather forecasts are calling for a break in showers which will help.
  • UK rapeseed prices touch back close to highs once again. Sterling has firmed to 1.1700, breaking its recent range, but the move in the Matif has outweighed the loss the currency move would have caused.
  • This week saw the release of USDA’s global supply and demand report, which failed to excite the bulls into another significant rally. CBOT soybeans were already firmer on the back of higher oil markets. Report highlights:
    • US 20/21 soybean ending stocks unchanged at 135 mln bushels which matched trade estimates.
    • US 21/22 soybean ending stocks unchanged at 155 mln bu vs the 140 mln bu trade estimate.
    • World soybean ending stocks were higher at 94.49mln t vs 92.57mln t trade estimate.
    • US 21/22 soybean production unchanged at 4,405 mln bu with yields at 50.8 bu/acre.
  • Chinese imports for 2021/22 were lowered by 1mln t from 103mln t to 102mln t. USDA kept the Brazilian soybean crop unchanged at 137mln t vs trade estimates at 136.3mln t.
  • There were reports of Chinese purchases from Brazil for September shipment, but these remain unconfirmed.
  • Oil markets were mixed. Crude oil traded high briefly, before falling $3 in the last few sessions. Malaysian palm oil closed lower at the start of the week with stocks reported at a nine-month high but prices are firmer since following soy-oil prices higher.

Pulses

  • Supplies of old crop beans remain relatively tight and, with the new crop harvest likely to be delayed by a few weeks, values are holding up well.
  • New crop beans prices continue to follow wheat futures and are therefore slightly firmer week on week.
  • Demand at these levels is very thin, with limited interest on the export or domestic market. Farmer selling remains very slow, but as it picks up, it’s likely bean prices will depreciate relative to wheat.
  • Confidence in the UK crop size continues to increase with current conditions considered good for crop development.
  • The Lithuanian crop area for harvest 2021 is up 33% year on year, with yields expected to be unchanged, as revealed by the government data released last week.
  • The main production areas in Australia continue to receive good rainfall . There are currently no production concerns in the major origins.
  • New crop marrowfat peas buybacks are available. Please contact your farm trader for further information.

Seed

  • OSR: We have a great portfolio of OSR varieties to offer including DK Excited. With market-leading traits including TuYV resistance, pod shatter resistance and RLM7, DK Excited is also supported by a £100/pack credit on any crops that fail to establish.
  • If you’re looking for a new feed wheat, we can offer very stiff-strawed Astound. Astound narrowly missed out on recommendation last year, but yields 102% and has a very attractive disease package, supported by its impressive untreated yields.
  • Click here for our 2021/22 seed varieties information guide.

Fertiliser

  • Chinese urea prices are rising as traders buy available tonnage ahead of the Indian tender for 1 mln t, shipment end of August.
  • In other regions, prices remain stable, as spot buying demand has eased. Indian demand and restricted Chinese supply is maintaining speculation of still-higher forward prices.
  • European producer, Yara, increased its 33.5 ammonium nitrate price by €20/t last week. Higher raw material costs for production are underpinning these higher prices.
  • UK AN pricing could increase further on the back of higher European prices once again. Current prices remain stable.
  • Phosphate and potash markets remain firm. ADM Agriculture are able to offer an alternative renewable PK range of fertilisers as well as traditional bagged products.
£/€ £/$ €/$
1.1735 1.387 1.182
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
July21 140-150 (new crop a/a) 195-208 235-240 445-450 (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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