Market Report

Thursday 19 August 2021

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Wheat

  • Another week where the ups and downs of the market have provided little directional movement.
  • The spike in prices following last week’s USDA report took the market into an overbought position, which in turn prompted some profit-taking, dragging prices back down from recent highs.
  • As a result, US markets are trading slightly weaker week on week, despite downward revisions of wheat harvest expectations by several key producers.
  • US spring wheat ratings have been pegged back, as has Argentina’s wheat crop. Russia’s wheat output has also been trimmed, while drought-hit Kazakhstan, another key grain producer, has cut its 2021 grain crop by 24% on last year to 15.3mln t.
  • France’s AgriMer reported 72% of the French soft wheat crop had been harvested as of 9 Aug, 11 days behind the average due to delays caused by heavy rain. Grain quality is being affected.
  • German co-op DVR now puts the German 2021 wheat crop at 22.4mln t, down from 22.8mln t previously, with yield below expectations following a cold spring and summer heatwave .
  • The UK harvest continues at a sluggish pace. Activity is slowly moving north and west, although ongoing shortness of supplies and increasing logistical issues mean growers in certain areas can still obtain small premiums, although these have weakened considerably compared with a few weeks ago.
  • Perhaps offering a pointer to future price direction, Egypt’s state buyer GASC purchased 180,000t of Romanian wheat for 5-15 October shipment, paying $35/t FOB more than its previous tender.

Malting Barley

  • Weather continues to interrupt the EU spring barley harvest.
  • Quality so far is good in the UK and Scandinavia with very few barleys not making the grade.
  • Prices have risen again over the last week.
  • However, prices are reaching levels that brewers are unable to pass on to the consumer.
  • The lack of available lorries is very concerning and haulage rates are much higher than normal.

Feed Barley

  • The feed barley market has come to a complete standstill due to lack of liquidity.
  • With the winter barley harvest complete and largely tidied up and spring barley delayed by weather and the wheat harvest, farmer selling is close to non existent.
  • In conjunction with volatile futures markets, this lack of liquidity has depleted confidence from sellers and values remain supported for another week.
  • Demand is also rather subdued, although we have seen some consumer activity over the winter as a few look to take some cover.
  • Export markets are quiet, and we see very little bid or offered at present. On paper the UK still needs to find some demand, particularly with promising spring yields so far.

Rapeseed

  • Another mixed week on the market prices, with US stocks and weather dictating the majority of the market direction over the past 7 days.
  • The oilseeds complex seems to have run out of steam following the initial rally after last Thursday’s USDA report.
  • US weather is forecast to turn cooler with rain for the second half of August, which will help crops conditions. Current crop condition ratings fell 3% on the week to 57% good/excellent compared with 60% a week ago and 72% last year.
  • Yesterday USDA announced the sales of 131,000t of US soybeans to China, which lent support to prices.
  • Malaysian palm oil fell back from recent highs today. Palm oil prices fell 2.65% due to the weaker veg-oil complex and a fall in palm oil shipments. Crude oil prices continue to fall due to continued fears over forward demand in China.
  • Canadian canola values have dropped back, closing lower again in Wednesday’s session. The market is digesting ongoing declines in production estimates, which many believe could fall further yet.
  • MATIF rapeseed has tried to make further gains, but eventually followed CBOT lower. Concerns over Russian’s sunflower crop may support prices, but after a big gain of circa £30/t in the past week Matif process are now trading just off the highs.
  • Sterling remains within the €1.1700/1.1800 range, removing any currency effect and leaving UK ex-farm values following US beans and oil markets. Seed was worth £480/t delivered Erith Thursday morning, still up £7-8 on the week, but the market remains volatile.

Oats

  • The market for UK oats remains one that looks undervalued. Feed oats at £50/t below feed wheat is attractive for feed compounders and the lack of good quality oats in Canada and Europe should set up good prices for milling specs. However, this milling demand is yet to be felt in our domestic market.
  • We still need more samples to draw strong conclusions about our quality. However currently, winters remain around 50kg/hl and springs around 52kg/hl. There is still plenty more to cut so weathering could be an issue if the wet weather persists.
  • Exports into Europe for feed oats remain ~£15 below domestic prices, with Fob values calculating around £130FOB Sept/Oct. However basis +52kg milling oats, we could see prices significantly higher.
  • Bottom line, get more cut/sampled and hope for good quality!

Pulses

  • Prices for spot beans have come under pressure this week as the first new crop supplies come to the market.
  • August still remains a small premium to September, but this will erode quickly as greater volumes of beans are harvested.
  • New crop bean prices continue to follow wheat futures, although the premium over wheat has eroded slightly on the week, as farmer selling increases and demand is lacking from either the domestic or the export market.
  • Production estimates in Australia continue move higher, but these are offset slightly by lower production estimates in the Baltics as the first crops are harvested.
  • Baltic and UK harvest yield and quality will be the next driver of price direction.
  • Pea yields are variable, but on the whole better than the five-year average to date. Quality is good with most samples being suitable for human consumption, although a few samples are showing high levels of bleaching.

Seed

  • Looking for a OSR variety with outstanding vigour that can be successfully drilled into September? With the N-Flex trait, LG Aviron offers not only great vigour, but also has TuYV resistance, pod shatter and RLM7.
  • Cereal availability is now beginning to look limited across most new varieties. We can still offer Merit, a Group 3 with preferred end use characteristics and consistent baking quality, with yields particularly excelling in the east.
  • With the wheat harvest delayed, many seed crops are still in the field – therefore we urge you to work with seed processors by setting realistic timescales allowing for processing and delivery before expecting deliveries on to farm.
  • Click here to view our seed varieties guide for 2021/22.

Fertiliser

  • FOB values for granular urea have softened, but freight rates and a weaker £/$ rate are supporting urea values here in the UK.
  • Dry bulk freight rates have reportedly increased 322% year-on-year (Hellenic Shipping News), whilst road haulage rates are rising also, adding costs to all delivered fertilisers at the farm gate.
  • Urea traders await the next Indian tender and price direction. Any weakness in the market is likely short-lived as buying patterns in North and South America, Europe and the UK are all behind on seasonal norms.
  • UK ammonium nitrate terms are being withdrawn today. Continental AN prices rose again last week. Although it is unclear what quantities are being sold at these levels, it is clear that availability is limited.
  • Potash and phosphate prices have stabilised (TSP, MOP, DAP) and alternative renewable PK fertilisers remain available from ADM Agriculture for those who have been restricted on spreading FYM.
£/€ £/$ €/$
1.17 1.3685 1.1695
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Aug21 156-164 183-193 225-230 465-475
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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