Market Report

Thursday 16 July 2020

ADM Erith

Over recent weeks there have been rumours circulating within the industry and farming community that ADM Erith will be closed indefinitely following the recent fire. Whilst the damage is extensive, and at the time of writing we cannot confirm a reopening date, we can confirm that work is well underway to bring the plant back into operation.

Over the past few weeks by harnessing ADM Europe’s extensive crushing facilities, logistics, and ability to react quickly, we have ensured that customers have received all their oil and meal requirements when they wanted them. This is a tremendous achievement and one that very few, if any of our competitors, could have achieved.

Rest assured that during harvest and into the future we will continue as a group to be competitive for the rapeseed that you can buy on farm.

ADM Erith will be back.

Wheat

  • US market firms to its highest level since mid-April on new speculative buying, following rumours of China buying a few cargoes of US SRW.
  • US weather forecasts remain favourable for development and yield potential of US spring crops, as the corn crop enters its key pollination stage.
  • Russia’s agriculture ministry sees the 2020 grain crop at 122.5mln t, including 75mln t of wheat. Grain exports projected at 43mln t for the 2020/21 marketing season.
  • Russia’s agriculture ministry confirms its intention to purchase 2.5-3.5mln t of grain for its new state stockpile, but no purchases will be made before 1 July 2021.
  • Ukraine has harvested 6.3mln t of grain from 1.9mln ha as of 9 July, including 2.9mln t of wheat and 3.0mln t of barley.
  • Ukraine’s agriculture ministry sees a 2020 grain crop of at least 68mln t, although this would still be lower than last season’s record 75.1mln t.
  • Egypt’s state buyer, GASC, purchased a further 114,000t of Russian wheat in its latest international tender, as the country continues to purchase buying its domestic harvest.
  • Strategie Grains trimmed its estimates of this season’s EU soft wheat crop to 130.3mln t, compared with their previous figure of 130.9mln t and last season’s 147.2mln t.
  • German Farm Cooperatives forecast the country’s 2020 wheat harvest will fall 2.6% year on year to 22.5mln t.
  • In summary, the market continues to be on ‘weather-watch’ and although current conditions in the US remain favourable, talk of declining crop estimates from other key exporters continues to provide support to the global markets. Recent purchases of soybean and corn, and rumours of wheat by the Chinese, has provided additional support to ignite new speculative buying.
  • The UK market, supported by the surge in global prices and a weaker currency, continues to drive new crop values higher. Ongoing Brexit talks and the release of negative economic data has resulted in a dip for the pound. Producer selling has notably slowed over the past weeks, and with the UK wheat harvest set to set in a few week, delivery premiums remain supported.

Malting Barley

  • World beer sales do not seem to be recovering as quick as some experts were hoping.
  • The EU malting barley harvest continues slowly with mixed yield but with good quality.
  • The recent reopening of UK pubs has led to an increase in demand for malt/malting barley.
  • The first results from winter malting barley grown on lighter land point to lower yields and higher nitrogen than normal.
  • The market for crop 2021 malting barley looks promising with much better prices and bigger premiums.

Feed Barley

  • A week of mixed weather has caused a catchy start to the UK barley harvest. As a result, markets remain illiquid and difficult to define. We expect more volume to be cut over the weekend and into next week.
  • A weaker sterling, combined with a continued lack of origination, has helped keep barley prices supported, particularly in the nearby position where demand is greatest. Spot values are particularly attractive as shorts struggle to cover immediate requirements in areas where harvest has not commenced.

Rapeseed

  • Tensions between the US and China are still running high, although President Trump has indicated that he does not want to aggravate the situation any further, ruling out any further sanctions on top officials for now. Chinese officials said they would return to the US market for agricultural goods under the phase 1 agreement, but further sales from the US to China have been reported this week. A phase-2 deal looks to be postponed for the time being.
  • US soybeans recover from the week’s lows. Weather remains a concern with thunderstorms in the 1-5-day forecast, but there is plenty of time for crop conditions to improve as beans are generally made in August. USDA announced a further 389,000mln t of sales to China.
  • CBOT Soybeans closed lower on Friday after the latest USDA report. The USDA report as of 10th July:
    • US soybean ending stocks were reported at 425 mln bu vs. 395 in June.
    • US soybean production 20/21 were reported at 4,135 mln bu vs. 4,125 mln bu in June.
    • Soybean world ending stocks 19/20 were reported at 99.67mln t vs. 99.19mln t in June.
    • Soybean world ending stocks 20/21 were reported at 95.08 mln t vs. 96.34 mln t in June.
  • Crude oil dropped back from recent highs but seem to have found a level around $40 on WTI. World veg oil prices were also supported by firmer oil prices and tight supplies. Palm oil leading the rally followed by soy oil.
  • In Canada, crop conditions are said to be excellent with “Canola Insight” reporting the good/excellent figures at 72% in Saskatchewan and 76% in Alberta.
  • In Australia recent rains have been disappointing, with most of the expected rain falling in Western Australia. There is more forecast over the next eight days so how the weather unfolds will be watched very closely.
  • Matif rapeseed November futures rallied €5 on the week. EU harvest is behind its normal pace but is slowly gathering momentum. Harvest in Ukraine is also behind normal with yields also below expectations.
  • UK prices rise on the weaker sterling. Even with some gains being eroded with the pound trading over 1.1000, farm gate prices are close to season highs. In the past 48 hours sterling has seen sharp falls against most major currencies. Ongoing Brexit negotiations, rumours that the Bank of England will cut interest rates below zero and lack of investor interest are all contributors.

Pulses

  • The UK pulse market remains quiet, categorised by little demand and little farmer selling.
  • The current weather conditions in the UK should be beneficial for the bean crop and there remains no weather concerns in the other major origins.
  • Egypt remains well stocked with old crop beans and demand remains subdued. Whilst the importers continue to check UK new crop values, most appear very relaxed and are focusing on accumulating beans from Australia, which are trading at only a small premium to UK beans, but considered a better-quality product.
  • New crop pea and bean buybacks are available. Please contact your farm trader for further information.

Seed

  • RGT Saki and KWS Extase are in high demand with limited seed available, so orders should be placed now.
  • Winter barley seed is in a similar situation to the above. Discuss your full autumn seed requirements with your farm trader now to avoid disappointment.
  • We have a great portfolio of OSR varieties to offer including DK Excited. With market leading traits including TuYV resistance, pod shatter resistance and excellent autumn vigour. DK Excited is also supported by a £100/pack credit on any crops that fail to establish and is available NOW for immediate dispatch.

Fertiliser

  • PK requirements are now at the forefront as combines get moving. However, it has been a relatively subdued week in many major phosphate markets with only a few new spot deals reported. Nevertheless, the firm tone of the market in recent weeks does appear to have continued, allowing sellers to achieve higher levels in markets such as India and the US. Alternative PK products remain consistent – Fibrophos and P-Grow have added value thanks to secondary and trace elements and a fair price point.
  • Nitrate producers across northern Europe continue in their pursuit of higher prices. Earlier this week, Yara introduced a new AN 33.5% price in France of €238 cpt bulk for September deliveries, replacing the €236 cpt bulk it announced mid-June for August.
  • The urea market this week discusses concerns regarding availability and potential prices for the India tender tomorrow (17 July). With that looming, the market has tightened, and trade is taking place for other markets at increased prices. ADM are well positioned to lock in prices now for late 2020 delivery for granular urea and our enhanced product range including PiagranPro.
  • Liquid spring fill terms are still available, but with the firming UAN market in Q4, prices are likely to rise. UAN 30% prices firm to €155 fca in France.
£/€ £/$ €/$
1.0995 1.2555 1.141
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
July20 123-130 156-166 208-213 331-335
Nov20 131-138 162-172 203-208 341-346
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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Watford WD25 7GS.

Company Number: 904957