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Thursday 17 June 2021
- The market has pushed lower this week as forecasts for rains in the US northern plains and other regions outweighed any current long-term fundamental support for corn and wheat.
- Talk of lower Chinese demand for corn has added to the pressure.
- While these factors have ended the substantial recent global wheat rally that was driven by dry weather which hit Brazil’s corn output, the long-term outlook for grains remains underpinned.
- There is still talk of further reductions in Brazil’s corn crop. Indeed, first shipments of Argentine corn have begun to arrive in Brazil, as record high prices and high demand have made end-users turn to imports.
- And, in the longer term, China will also remain a major importer of both wheat and corn.
- Back to the present, and US crop ratings for winter and spring wheat, as well as corn, all slipped on the week as dryness intensified across much of the northern corn belt. This makes the forecast rain all the more welcome.
- In Europe it a different picture. Russia now puts its total 2021 grain crop at 127mln t, including over 81mln t of wheat, about 1mln t above the recent IKAR estimate due to improved weather. USDA puts it as high as 86mln t, around last year’s level.
- France’s agriculture ministry reported 81% of the country’s soft wheat crop was in good/excellent condition as of 7 June, up one point on the week and well above the 56% seen in the corresponding week last year.
- German farm co-operative DRV expects the country to produce 23mln t of wheat this season, slightly above last year. However, the next two to three weeks are crucial for plant development as crops have not yet reached the grain-filling stage.
- UK crop conditions continue to improve. Growers are putting more confidence in improved forecasted yields, and are potentially looking to market more at are current values, which historically remain better than average.
- EU malting barley crop prospects continue to look good to excellent.
- EU prices have drifted lower again this week.
- The UK has had near perfect weather over the last few weeks and it now looks like we have the potential for a significant exportable surplus.
- Old crop feed barley prices continue to drift as sellers grow increasingly cautious of the looming old crop to new crop inverse. Meanwhile demand from consumption remains quiet.
- New crop values are following the same trend as wheat, due to pressure from falling futures and a firmer pound.
- UK barley looks overpriced for harvest in particular, where bids from northern EU importers are below current replacement levels. However, farmer selling is still slow, which is limiting downside for the time being.
- We do expect the UK market to move lower to find this level over the next few weeks leading to harvest, particularly considering the winter planted area is up 33% on the year, which should increase the urgency for movement at harvest.
- Crop conditions remain good, and many are bullish about yield prospects for the coming harvest.
- CBOT soybeans have traded sharply down on the week so far, as improving weather conditions and forecasts in the US continue to pressure the market.
- Talk that President Biden may adjust the biofuel mandate weighed on soy oil, which is now trading back below the 40-day moving average. This could suggest that we are moving into a downtrend.
- Malaysian palm oil continues to trade at the lower levels, seeing the lowest close since 24 May on Wednesday this week. All this has put further pressure on soybeans.
- US soybean plantings are now reported to be 94% complete compared with 90% last week. USDA has dropped the crop ratings from 67% good to excellent to 62%.
- Matif has followed the downward trend. August 21 has shown a sharp reduction, trading at €490.50 compared to last Thursday’s €534.50.
- UK rapeseed crops continue to look well, but ex-farm sales remain limited. The crush continues to buy imports, with rapeseed still coming to the market in the German Baltic region.
- Old crop is reaching the end of the season, but occasional loads are still being placed. Growers should consider offloading remaining parcels – with a near £90/t inverse there is no reason to carry any seed into the new season.
- The old crop continues to bumble along. There is limited volume trading for July as the focus turns towards new crop.
- Crop conditions for 2021 harvest are reported to be in good order. UK millers are not really buyers as they have cover on existing futures-related contracts and are happy to run it closer to harvest before putting new crop bids in the market.
- Export bids for 2021 do exist, however they do not appear attractive vs last new crop feed oat sales levels into domestic feed compounders.
- Old crop bean prices remain firm with merchant shorts continuing to prop up the market, as limited supplies are coming forward from farm. There is an inverse of £25-£30/t, so there is little incentive for growers to carry any unsold supplies to new crop.
- The new crop market has been quiet with very little farmer selling and few trades reported. Bean prices have weakened on the week in line with wheat futures, but despite the lower values, consumer interest remains limited, as buyers are relaxed due to optimistic production prospects.
- Marrowfat pea buybacks are available for harvest 2022. Please contact your farm trader for further information.
- ADM has a great autumn portfolio, with good seed availability of soft feed wheat RGT Saki which has great all-round disease resistance. It’s a great option in earlier drilling windows and performs well as both first and second wheat.
- Also highest yielding Group 4 hard SY Insitor – a perfect fit for lighter soil types, boasting good Septoria resistance.
- ADM Agriculture can offer high yielding hybrid OSR Duplo. The most powerful variety DSV has bred for the UK, layered with TuYV, pod shatter, RLM7, as well as N-efficiency. Duplo is also available in 1.8 million seed packs. This is larger than the average hybrid pack of 1.5 million seeds to allow flexibility on farm with drilling.
- For more information click here to view the ADM Agriculture seed variety guide.
- Offers of $440/t FOB Egypt for granular urea were rejected this week, with asking prices set at $450/t. This puts replacement values on UK farms in the region of £380-90/t.
- UK ammonium nitrate manufacturer CF has released a new set of terms that show an increase on its previous prices for nitrogen and nitrogen sulphur. Current urea levels are supportive of even higher AN prices.
- UAN liquid terms have also risen, following the AN and urea trends. UAN prices have been posted €30/t higher to €280/t FCA Rouen from the last official price posted 26 May.
- PK prices continue to rise, with MOP seeing significant upward movement on previous terms in the UK. Availability of alternative PK products, Fibrophos and P-Grow, is limited.
|Feed Barley £||Wheat £||Beans £||Oilseed Rape £|
|July21||140-145 (new crop a/a)||188-198||235||400-405 (new crop a/a)|
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.
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.