Market Report

Thursday 16 September 2021

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Wheat

  • Major wheat futures have all risen in the past week as the generally tight feel in the wheat market continues.
  • Nov21 ICE London wheat is up £4.10/t, Dec21 MATIF wheat is up €6.50/t,and Dec21 CBOT wheat is up 1.5cents/bushel.
  • The UK wheat harvest, one of the most challenging for a long time, is now all but done. ‘Variable’ remains the best descriptor, with significant volumes of wet wheat being present and a broad spectrum of analysis and a lack of samples/analysis still hampering movement.
  • Consumer demand remains stunted. Broiler placements are down about 8-10% due to a lack of manpower. This trend is being echoed elsewhere in the livestock sector.
  • Looking to Europe, the final French quality numbers were released on Wednesday. Only 25% of the crop is deemed to have met the minimum requirements for the Euronext MATIF milling wheat specification. Despite this, the EU export pace remains strong at over 45% ahead of last year’s figures.
  • USDA released its latest world supply and demand estimates on Friday 10 The report was slightly more bearish than anticipated, although the stunted reaction from the market would suggest the larger stocks were already priced in. The main highlights were:
    • World wheat production increased from 776.91 to 780.28mln t for 2021/22 compared to 775.83 mln t for 2020/21.
    • The increased global wheat production (+3.37mln t), coupled with an increased global wheat beginning stocks (+3.73mln t), more than offset increased demand (+2.96mln t), to leave the ending stocks +4.16mln t heavier at 283.22mln t. That’s about 4mln t more than the market consensus prior to the report.
    • US wheat beginning stocks and production remain unchanged, whilst imports are slightly reduced and domestic consumption is increased, leading to a slightly reduced ending stock figure of 16.73mln t.
  • The Russian wheat harvest is now pegged at over 87% done, with the main growing regions complete. Domestic prices continue to rise, impacting the floating tax structure and limiting the competitiveness of Russian wheat into the global market, helping maintain an air of tightness to the global stock sheet, despite the increased ending stocks from the USDA.
  • The market continues to assess the impact of the latest Statistics Canada numbers. Tuesday’s update posted a further 1.2mln t reduction in Canada’s wheat production, reducing 2021 output by 38.3% to 21.7mln t, compared with 2020’s 35.2mln t.

Malting Barley

  • The world malting barley supply situation has tightened as Canada revises down its yields.
  • The demand from the EU is strong but Oct/Dec FOB sales are becoming more difficult to make.
  • UK sellers are still hard to find and prices remain firm, especially into the new year.
  • Buyers attention is turning to crop 2022 and prices and premiums look very attractive.

Feed Barley

  • Another week with little activity in feed barley market.
  • Prices remain generally supported, and as a result, barley is looking increasingly unattractive in domestic feed rations, which is rationing demand.
  • Export markets are equally subdued once again, and we remain over €10 away from pricing into the Netherlands compared with other neighbouring origins, with a similar lack of interest being shown from Spain and Ireland, with ample domestic stocks being traded.
  • UK barley looks broadly competitive now into some North African destinations, although demand is slow to come forward, and difficult freight markets are proving tricky to negotiate.

Rapeseed

  • CBOT soybeans were mixed this week, but have currently traded off recent lows. Funds are winding out of their long positions ahead of harvest. Facilitates in the Gulf seem to be struggling to get back online after Hurricane Ida, delaying soybeans exports from the region.
  • Rain is spreading across parts of the US, following storm Nicolas, whilst other states remain hot and dry. Tropical storm Nicolas has now become a hurricane. This will bring wet weather and potentially further damage.
  • In China, delayed US exports out of the Gulf have pushed Chinese buyers to purchase eight cargoes of soybeans from Brazil for October. USDA also reported cancellations of 196,000t to China and 132,000t to an unknown destination.
  • Crude oil prices bounced on lower US production and stocks at two-year lows. Palm oils prices rebounded on increased exports out of Malaysia 1-15th of September.
  • Soy-oil bounced late in yesterday’s session. NOPA estimated soy-oil stocks at 1.66 billion pounds, which was above trade estimates resulting from higher crush figures. Malaysian palm rallied again following lower production.
  • In Canada, StatCan shocked the trade by lowering production estimates by nearly 2mln t to 12.78mln t, 1mln t below trade estimates. Futures reacted by trading sharply higher post report, before settling in the afternoon session. Harvest continues despite some rain delays in some regions, and reports of high winds threaten any unharvested crops. Prices moved up again, but remain off highs.
  • Matif rapeseed touched new contract highs for the third session running this week, with prices now at season highs. Sterling has firmed, which pressured UK prices slightly.

Oats

  • The UK oat harvest is virtually complete with growers reporting 5-15% lower yields in a number of areas. Despite this we will still have an exportable surplus to market. Question marks remain over the feed usage figure, especially the amount consumed on farm. However, given how cheap feed oats are in comparison to barley, it will not be a surprise to see consumption in line with, if not higher than, that achieved last year (384,000t AHDB/DEFRA).
  • Milling oat buyers into Europe remain non-committal, with the only sellers of 50-52kg/hl indicating Nov/Dec prices that would equate to prices €30 higher than trades 4-6 weeks ago.
  • Our winter oat sampling averages have fallen since last week. However the springs are slightly better thanks to northern samples testing higher.
  • Export buyers into Europe remain keen for 45kg feed oats, with prices calculating around £140-145DD Oct’21 to UK ports. Milling oat values are too far apart to give a clear value, but certainly higher than previous trades.
  • Bottom line, the oat market looks well supported.

Seed

  • Winter Wheat: Winter wheat seed is making its way on to farm. The late harvest, combined with haulage issues, has meant some delays for seed breeders, so please bear with us as we do our best to get deliveries on to farm in a timely fashion. Availability is now limited on a few key varieties, including KWS Extase, SY Gleam and SY Graham. Please get in touch with your farm trader now to avoid disappointment.
  • Winter Barley: ADM Agriculture has good availability of Valerie. Valerie has superb grain quality with big, bold grains, a high specific weight, and the lowest screening losses on the winter barley RL.
  • Rapeseed: It’s not too late to order OSR. We have two extremely vigorous varieties that will excel in the later-drilled spot. Duplo and LG Aviron are both in the top three for vigour in this year’s AHDB trials and are loaded with traits, including TuYV, pod shatter and RLM7.
  • Don’t forget ADM Agriculture can cover all of your stewardship and cover crop needs. Get in touch with your farm trader with any enquiries.
  • Click here for our 2021/22 seed varieties guide.

Fertiliser

  • CF Industries Holdings Inc. announced this morning that operations at its UK plants, Ince and Billingham, have been halted due to high natural gas prices. At present, the company is reviewing its position and there are no indications as to when it will resume production.
  • Natural gas prices have reached record highs in Europe this week and many European fertiliser manufacturers are also reluctant to offer any new terms, meaning imported product is very tight.
  • Granular urea has also traded higher this week as the US, South America and Europe enter the market. Values in Egypt have now moved up a further $30/t over the week.
  • ADM Agriculture has discharged a granular urea vessel in Immingham this week with a further cargo arriving in October. We have terms and this offers value and delivery security for 2021/22 nitrogen requirements.
  • Piamon 33N 30SO3 is also available for January delivery – a high quality compound very well suited for OSR crops.
£/€ £/$ €/$
1.1737 1.3816 1.1769
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Sept 21 169-174 178-185 220-225 497-505
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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