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Market Report

Thursday 16 December 2021

This will be our last market report in 2021. The next edition will be published on Thursday 6 January. We wish all our readers a very merry Christmas and a healthy, happy and prosperous new year.

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

This week: Freddie Humfrey looks at the current grain market & Beth Moses looks at the benefits of companion cropping alongside OSR

Wheat

  • Global markets remain starved of fresh bullish input as global concerns over the spread of the Omicron covid variant keeps long-holders in liquidation mode.
  • The traditional pre-Christmas slowdown has also quietened markets.
  • All major exchanges have seen values fall over the past week. Chicago May 22 futures are down $8-10 and Matif has lost €6-7 over the past 7-10 days.
  • London feed wheat futures followed the trend, with May 22 losing around £4 over the past week and almost £20 from the highs reached on 23 November.
  • Seasonal logistics may provide some selling opportunities for UK growers.
  • Further out, the global market still remains fundamentally well supported, due to a shortage of mainly quality wheat in particular.
  • Both the EU and now Australia have struggled to meet import specs of key North African and Middle Eastern countries, and Russia simply hasn’t the volume to meet its usual export tonnages.
  • Russia’s agriculture ministry has left 2021 harvest figures largely unchanged at 76mln t, with total grain production pegged at 123mln t.
  • An announcement on the country’s planned wheat export restrictions between February and June is expected next week, with a figure of 9mln t already priced into the market.

Malting Barley

  • Old crop malting barley markets remain well supported despite the drop in feed values.
  • Maltsters are still keen buyers of Jan/March 22.
  • New crop markets are also firm, although trading at a large discount to current levels.
  • A good choice of contracts is available for harvest, Oct/Dec and through into 2023.
  • Please contact your local ADM farm trader for details.

Feed Barley

  • The feed barley market has come under some pressure over the last week, driven largely by lower wheat futures.
  • We have seen some ‘cheap’ barley trade out of France into Ireland, also undermining UK prices into what was the only viable prospects for nearby exports.
  • Although feeling softer on the week, ownership is still extremely difficult and consumers in the UK still have open positions in the new year, which keeps the UK supply and demand feeling tight.
  • New crop markets are quiet with little activity to be seen from buyers or sellers. New crop barley is trading at a roughly £15 discount to wheat.

Rapeseed

  • CBOT soybean prices were strongly supported by this week’s rally in meal, which was supported by reports of low meal yields and tight supplies just as usage is starting to ramp up.
  • The National Oilseed Processors Association’s crush figures weren’t anything to write home about. November US crush figures came in at 179.46 mln bushels, below expectations, but the market brushed it off.
  • South American weather showed showers this week before turning dry with little rain in the two-week forecast. Weather will be closely watched as we head into 2022.
  • There have been rumours of 12 cargoes trading last week out of the US and Brazil to China..
  • Malaysian palm oil futures dropped sharply this week, with prices falling 4.5% yesterday before bouncing in this morning session. All oils traded lower at the start of this week, with crude oil values bouncing this morning along with soy oil.
  • Canadian canola traded below $1,000 this week. Nearby prices have fallen over $50 recently to hit the $1,000 key support level. These prices brought with it some renewed buying interest late in yesterday’s session.
  • Matif rapeseed traded lower once again, briefly touching levels below €700. Markets have bounced today with firmer oil values and seed supply still remains tight for the rest of the season.
  • UK prices have slipped slightly from recent highs.

Oats

  • Over the course of the last week we have seen a further fall in global wheat markets with London futures falling by a further £8/t (week on week at the time of writing). This negativity, however, has not spilled over into the EU oat market where prices are largely unchanged. Buyers are trying to bid at lower numbers, but sellers are not willing to follow the market lower given the tight global oat supply and demand. Scandinavian offers are hard to come by which leaves the UK as the main supplier into the EU currently. Chile, which imported 200,000t of oats last year from Canada, continues to suffer from a lack of rain. If this weather pattern continues, the country may need to import 125-175,000t, which will only add further tightness to the balance sheet.
  • Bottom line, buyers are trying to force oat prices lower, however a lack of sellers and the tight global balance sheet is keeping the oat market supported.

Pulses

  • Harvest has progressed quickly in Australia since last week’s report and is now at 50% completion. Grower selling over there has picked up resulting in Australian values dropping quite sharply.
  • Old crop bean values continue to gradually appreciate for both feed and human consumption quality as shippers continue to fulfil existing commitments and look to build quantities for future opportunities as demand across Europe remains strong.
  • Human consumption peas remain in strong demand across the UK. Marrowfats are still extremely tight while blues & yellow peas remain in good supply. Demand for blue peas has increased over this past week.
  • Buybacks are still available for harvest 22. Please contact your rep if you’re interested. Spaces are now limited on pre-Christmas movement and it will be on a first come, first served basis.

Seed

  • Peas – We have Daytona or Bluetime seed available on our market leading large blue buybacks.
  • Spring barley – Availability is good. We have agronomically strong RGT Planet – the most widely grown cereal variety in the world, as well as dual purpose variety Laureate to offer.
  • Maize – Don’t miss out on our early maize offers available on selected varieties. Contact your farm trader now for more information.
  • OSR – Watch our latest YouTube video looking into the benefits of growing an OSR crop alongside our Shielder companion crop here.

Fertiliser

  • European natural gas prices are soaring again. Europe’s main trading hub for natural gas futures, the TTF in the Netherlands, is trading at its highest level in more than a decade, eight times above year-ago values. This is supporting nitrogen prices as we head into Q1.
  • Ammonium nitrate prices in the UK were withdrawn without notice from UK producer CF on Monday. The company is hesitating before presenting a further offer.
  • Globally, urea is still trading close to the $1,000 FOB mark. However, as we head into the Christmas period UK business has slowed as many wait to see what 2022 brings. More of the same is forecast and in advance of spring, ADM has a further urea vessel due to arrive in January to cater for this requirement.
  • ADM also have a vessel of quality compound Piamon, 33N 30SO3, arriving at the beginning of 2022 to service any high sulphur requirements where a shortage is likely in the UK.
  • Fertiliser raw material prices are continuing to rise, while shipping freight costs and haulage availability in the UK are becoming increasingly concerning. The next three months are going to be very challenging for agriculture and we suggest planning ahead for any crop nutrient needs.
£/€ £/$ €/$
1.1735 1.326 1.13
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Dec12 203-215 215-227 258-263 604-609
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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