- US wheat prices are virtually unchanged on the week as fundamentals fail to ignite further buying support, despite firmer corn and soybean markets.
- Australian traders continue to offer wheat into Asian, Middle Eastern and African destinations as the country tries to find alternative outlets for its near-record harvest, which has coincided with the ongoing trade dispute with China.
- Elsewhere, the picture is more supportive. In Argentina, the Rosario grain exchange has recently lowered its projection of the country’s 2020/21 wheat crop to 16.7mln t due to continuing dry weather.
- The condition of Russia’s recently sown winter wheat crop remains a concern, despite some improvement seen in recent weeks following much-needed rainfall.
- Ukrainian maize prices have resumed their upward trend, supported by lower crop estimates and limited offers from growers.
- Agribusiness consultant APK-INFORM has lowered its forecast for Ukraine’s 2020/21 grain crop and exports after significantly reducing maize yield estimates.
- Ukrainian feed producers have asked the government to adopt an export quota for maize, fearing that rising domestic prices could push feed and food prices higher.
- Algeria’s state grain agency OAIC is believed to have purchased about 600,000t of optional-origin wheat in a recent international tender.
- Farm office FranceAgriMer has increased its forecast of French soft wheat exports outside the EU, pointing to brisk international demand for the projected smaller surplus this season.
- German export prices have been underpinned by hopes of new sales and a busy programme of vessels loading this month (Algeria/Pakistan), keeping values above French levels.
- UK futures are marginally higher on the week. Traders have become squeezed exiting their November position and plenty of demand remains for the first half of 2021.
- The UK still has a balance sheet problem this season, with imports needed to fill the gap. Given the reduced EU surplus (French/German wheat) it is uncertain where these increased imports will come from and what tariff terms will apply after 1 January.
Thursday 19 November 2020
- China continues to buy French malting barley, tightening EU supplies.
- EU malting barley prices continue to rise on the back of good demand and firm feed prices.
- The UK market remains very quiet, with all eyes on which way the UK/EU trade talks will go.
- Crop 2021 prices/premiums remain attractive, with various types of buybacks available.
- Demand through to the end of the calendar year is drying up as domestic and overseas consumers are largely covered.
- Demand for barley remains strong January onwards. However, once again trade deal uncertainty and doubts about UK access to EU markets on tariff-free terms is blocking the prospect of export trade in the new year.
- UK consumers are still happy to wait to cover 2021 requirements on the whole, hoping for lower prices to come.
- CBOT soybean prices reached new contract highs and it seems $12 is firmly in sight. Since the start of the week, prices have pushed through four-year highs.
- Dry weather in South America remains a concern, but there is a slight improvement with some rain expected in parts of Brazil.
- Brazilian agricultural consultant Datafro estimates that farmers have sold 53% of this season’s soybean crop, compared with some trade expectations above 60%. At the moment plantings are estimated at 54% complete vs the average of 52%.
- There have been no reports of sales to China this week, despite rumours of some cargoes trading. This offered some resistance to the price rise. However, China’s pig numbers grew 27% year-on-year, so meal demand will remain firm.
- World veg oil prices remain at contract highs, with soy oil hitting four-year highs and Malaysian palm oil prices touching eight-year highs. There are continued concerns over supplies, with Malaysian palm oil stocks reported at a three-year low of 1.57mln t while demand grows. Despite Covid-19 cases rising, it seems food security remains a primary concern and, with heavy storms threatening some palm plantations in Malaysia, the global supply and demand balance sheet remains tight.
- Canadian canola and Matif rapeseed hit new contract highs. February Matif traded over €416 in yesterday’s session, to close at €414.50.
- Prices remain volatile. UK prices are firm following CBOT and oil market highs. Sterling firmed slightly in recent days, but UK prices remain close to season highs.
February Matif (€)
- There are major congestion issues at UK ports, so shipping containers are delayed to all markets, due mainly to Covid-19 and UK/EU trade talks.
- There are also congestion issues at destination ports, such as Port Sudan. This is causing further delays to customers receiving goods.
- Australia’s harvest continues and reports are that yields and quality are both good.
- Demand for feed beans remains strong but the human consumption market is weak, so premiums are small.
- Buybacks for 2021 are still available, so book now to avoid disappointment later.
- Demand into the EU remains good as shipments out of Canada are delayed.
- Demand for canned and dried goods remains strong due to their long shelf life.
- Spring seed availability looks fairly good across the board, with the exception of spring wheat, which is very limited. The first batch of spring seed processing is now well under way. Please let your farm trader know if you require pre-Christmas delivery.
- Autumn cereal seed is limited, but we have some availability for any top-up orders. Please enquire for availability updates.
- Urea prices are rallying in North Africa following the realisation of limited supply globally, along with an absence of Chinese product available for the pending Indian tender.
- Prices have risen around $20/t FOB this week as European buyers step back into the market.
- Manufacturers are comfortable with sales and traders are aware of the increasing demand in what will be a relatively short delivery period.
- Increasing urea prices on the Continent and in the UK are likely to support firmer AN values. Here in the UK, we remain behind the curve on both AN and urea purchasing.
- Raw material costs continue to rise for NPK(S) compounds, as DAP pricing returns to levels not seen since August 2019. Reflecting this, blenders have increased values. There are fears of a potential logistical problem entering spring, with buying lagging behind normal.
- Freight rates continue to increase for new cargoes into the UK as global trade increases and fuel costs rise. We await further updates on UK/EU trade talks to know if tariffs will apply to fertiliser imports in 2021, something which is not priced into farmgate prices at present.
|Feed Barley £||Wheat £||Beans £||Oilseed Rape £|
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.