Market Report

Thursday 18 June 2020

SAMPLING HARVEST 2020

We sent a communication to all our farmer customers earlier this week regarding our plans for sample testing for the forthcoming harvest. If you have not received this important information, please speak to your ADM Agriculture farm trader to be fully informed and for us to be able to provide you with an efficient, smooth service in the coming weeks and months.

Wheat

  • Another week driven by weather, harvest progress and news regarding Russian exports.
  • US wheat prices are down $4/t on the week as an advancing US wheat harvest and generally favourable weather outlook weigh on prices.
  • NASS reported the US winter wheat harvest as 15% complete as of 14 June. Favourable conditions should allow rapid progress over the next two weeks.
  • Russia’s agriculture ministry says the country will not restrict grain exports during the first half of the 2020/21 marketing season. Quotas will be adopted for the Jan-Jun 2021 period to ensure domestic supply.
  • The ministry puts Russia’s 2020/21 grain exports at 45mln t and expects the country to produce 122.5mln t of grain, including 75mln t of wheat.
  • Ukraine’s agriculture ministry predicts the 2020 grain harvest will exceed 68mln t, compared with previous forecast of 65-68mln t and last year’s 75mln t.
  • China is predicting a bumper harvest of grains this summer thanks to a stable grain acreage and improved crop yields.
  • Indian farmers are set to speed up the planting of summer crops as the annual monsoon rains have covered more than half of the country and delivered more rainfall than normally received.
  • French farm office estimates 56% of this year’s soft wheat crop is in good/excellent condition, unchanged on the week as recent rains have help stabilise the crop.
  • EU’s crop monitoring unit has again cut its estimate of this year’s EU soft wheat crop yield to 5.6t/ha, down from 5.72t/ha last month.
  • EU (Paris) new crop futures are down around €2/t on the week. Recent rains have improved crop prospects and Russia’s announcement not to restrict export in 2020 has also weighed on values.
  • UK (London) new crop futures are down around £2/t following the weaker European trend and reacting to the recent rains that should help to reduce further crop reductions.
  • Favourable US harvest and crop development weather forecasts will maintain pressure on US markets, although talk of recent crop stress on corn and spring wheat crops may limit the downside.
  • UK, European and Black Sea weather has turned wetter over the past few weeks. Although there is still talk of dryness concerns in southern Russia, the recent rains would have been beneficial.
  • However, the main driver will expectations of increased Russian supplies, following confirmation that exports will not be subject to quotas during the first half of next season. This may entice importers to purchase more grain from what is normally the cheapest originator in the world, particularly as markets tend to weaken into the harvest period.

Malting Barley

  • The market is hoping that beer sales will start to pick up in July.
  • However, malt stocks are extremely high and demand for malting barley in 2020 is therefore reduced.
  • The wetter EU weather has eased malting industry concerns and prices have dropped back over the past few days.
  • France’s winter malting barley harvest should be well under way next week.
  • Early results look promising for quality.

Rapeseed

  • Reported spikes of coronavirus cases in the US and East Asia have left a sense of caution in markets over the last week. Crude oil in particular seems to be at a crossroads. Promising demand forecasts and the continued supply cut have been enough to keep Brent crude futures just above $40 per barrel.
  • Chinese purchases of US soybeans are keeping the market underpinned as continued weakness in the dollar is helping export competitiveness. The risk-off approach of outside markets and good crop conditions for most of the country is exerting downward pressure, leaving CBOT soybean futures just 2c higher than Friday’s close.
  • In Canada plantings are virtually completed with no issues to report. Farmer selling is quiet, and farmers hope for favourable weather for the next few weeks to get the crop established.
  • In Australia, most regions received rain recently. On the whole, crops now look in good condition.
  • Palm oil futures began the week firm on expectations of further export sales and the recovery in the value of rival oils. However, concerns over new Covid-19 infections have weighed heavily on sentiment.
  • On Monday the EU’s crop monitoring service MARS cuts EU 2020 rapeseed yield prospects from 2.95t/ha to 2.90t/ha. A small crop has long been expected so it is likely to have already been priced in.
  • This week the Matif has largely moved sideways, with August futures closing Wednesday at €375.75, as Monday.
  • In the UK, a slightly weaker pound has given some stability to rapeseed prices. As attention becomes more focused on new crop, rainfall has increased just in time to prevent some growers in the south spraying off their crops at the end of this week.

Pulses

  • Old crop bean prices have been flat and remain at a £10 premium to new crop, which is likely to erode over the weeks to come as shippers cover against the last old crop cargo to load in July.
  • New crop trade has been quiet, with little farmer selling, but also due to limited demand from the consumer. Old crop stocks in North Africa are reasonable and demand is subdued due to Covid-19. Buyers are relatively relaxed with only small quantities of new crop trading. Due to current price spreads they are only buying Australian origin, which looks the best value against the lower quality UK and Baltic offers.
  • The Egyptian government extended its export ban for faba beans and lentils for a further three months. This is to ensure supply of these basic commodities to its citizens as a precautionary measure during the current pandemic of Covid-19.

Seed

  • We have leading varieties of winter OSR supported by establishment schemes to help share the risk of establishment between the grower, merchant and breeder. Please call your farm trader for more info.
  • We have a good selection of winter wheat varieties available. We have limited availability on some key varieties so our advice to farmers is to place seed orders early as certified seed supplies look to be tight this year.

Fertiliser

  • Granular urea has firmed further on the global market. Reported trades have increased a further $11-16/t ($240-245/t) FOB Egypt week on week.
  • Liquidity in the market has been high, indicating the universal bullish sentiment being expressed on the global market. Supply and demand dynamics have changed as industrial demand for urea products has increased again.
  • High quality SKW products ALZON® neo-N (urease and nitrification inhibited urea), PiagranPro (urease inhibited urea) and Piamon (33N 30SO3 compound), exclusive to ADM, are available for delivery through until the end of the year. Availability on current terms are limited. New terms could be significantly higher than previous due to the firmer global urea market.
  • There is bullish sentiment in the UK ammonium nitrate market, with new UK AN terms expected to be released today.
  • These terms are likely to be impacted by the firming global market and as new season offers come to a close this week.
  • Higher energy pricing, which is affecting shipping and road haulage costs, and weaker currency levels are providing further support across all nitrogen fertiliser markets.
£/€ £/$ €/$
1.111 1.247 1.1225
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Jun20 124-136 155-165 215-220 323-328
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.

Latest Tweets

Follow Us

Get updates

Registered Office:
5 Hercules Way, Leavesden Park,
Watford WD25 7GS.

Company Number: 904957