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Market Report

Thursday 2 December 2021

Wheat

  • Markets tumbled over the past week due to concerns over the spread of the Omicron Covid variant and its effect on demand for commodities. However, the risk-off sentiment has since abated and prices have recovered somewhat.
  • UK prices have reduced by the best part of £17/t over the same period as a result of the weaker global markets. Short-term price movement will continue to be driven by concerns over the new covid variant and its potential impact upon equity, financial and commodity markets.
  • However, the wheat supply and demand situation, especially for milling wheat, remains bullish, not least because exports for some key origins generally remain unsustainably high and will have to reduce at some point.
  • Russian wheat shipments for 2021/22 have amounted to 18mln t as of 25 November. Although down 17% on the year, exports face further restrictions in the new year as the country looks to preserve domestic stocks.
  • Ukraine has exported 24.8mln t of grain so far this season, up 18% on the year including 14.3mln t of wheat.
  • Meanwhile, Egypt’s state grain buyer GASC purchased 600,000t of wheat (40% Russian, 40% Romanian and 20% Ukrainian) for 9-20 January shipment in its latest international tender.
  • The EU Commission increased its forecast of EU wheat exports to 32mln t from 30mln t previously. As of 28 November shipments had reached 11.6mln t, up 11% on the year, and may exceed this once French data is accounted for.
  • There has been improvement in some southern hemisphere crops. Australia’s ABARES raised its forecast for the country’s current wheat crop to a record 34.4mln t, but added that heavy rains would probably lead to a fall in grain quality.
  • Buenos Aires Grain Exchange reported that Argentina’s 2021/22 wheat crop is expected to reach a record 20.3mln t, quoting reports of ‘better-than-expected yields’ during early harvest.

Malting Barley

  • Falling feed markets spooked the malting barley market this week.
  • Prices are at record highs and as we all know, malting markets have the habit of disappearing when prices turn.
  • UK farmers and traders sold crop 2021 and crop 2022.
  • UK buyers still have Jan/March 22 to buy, but they are well covered in the latter positions.
  • Various types of contract are still available for crop 2022 including our latest Null Lox varieties which have moved on from 1 & 2G to 3 & 4G.
  • We are currently marketing our environmentally friendly variety CB Score which is 4G.
  • Details are available on the latest recommended list or from your local ADM Agriculture farm trader.

Feed Barley

  • Despite the falling wheat market, feed barley prices in the UK are holding steady on continued slow farmer selling.
  • Elsewhere in the world, Black Sea FOB prices continue to firm as supply runs thin, which with the lower MATIF, is pushing Third Country demand into Northern Europe where the surplus is already small.
  • On a FOB basis UK feed barley is competitive for exporting into nearby EU importers.
  • Consumer activity is limited, but anecdotally UK buyers are fairly exposed to prices going into 2022.

Rapeseed

  • Another volatile week for all markets. US trading resumed after Thanksgiving and slipped sharply lower following initial reports of the new Omicron covid strain in South Africa. This also fell in line with month end and the trade took the opportunity to make some profit.
  • CBOT soybeans began the week by trading lower. Early South American crop availability, lack of Chinese buying and demand fears over the virus weighed on prices.
  • In South America, weather forecasts indicate rain disappearing at the end of the week and things looking warm and dry into the second half of December. Argentina’s soybean crop planting is on track with almost 40% now completed.
  • There were rumours of China buying small soybean parcels out of the US, as well as three cargoes from Brazil yesterday.
  • Oil markets traded sharply lower in reaction to the new Omicron variant. Crude oil fell €10 to $68 per barrel (WTI), a level not seen since September, amid concerns over the potential rolling out of new lockdowns and travel restrictions.
  • Canadian canola prices dropped back from the record highs. Stats Can will release its crop estimates on Friday; Reuters puts the crop at 12.8mln t, slightly up on its previous forecast of 12.78mln t.
  • In Australia heavy rain still hampers the wheat harvest, but ABARES estimate the canola crop at 5.73mln t compared with 4.52mln t last year.
  • Matif rapeseed traded sharply off the highs to levels not seen since October. The market has since taken back some of those losses, but sellers remain side-lined for now.

Oats

  • The oat market in the UK has been largely sheltered from the drop in wheat prices due to the tight oat global balance sheet. Australia’s wet weather has caused quality to deteriorate. The amount is yet to be quantified, but there is less milling quality than expected. Chile is also facing dry weather conditions, which may impact crop production and tighten global supplies further.
  • General trade has been slow over the last week, with the main UK oat millers continuing to be unaggressive buyers and waiting for their customers to come to the market. Feed demand remains strong. However, due to the lack of supplies being offered, some compound feed millers may have to pay more to stop them being fed on farm or exported.
  • Feed oats and milling continue to trade into Western Europe, with the UK being very competitive against other origins. However, offers of feed oats in particular are few and far between.
  • Bottom line, prices continue to be supported, but growers looking to sell for Dec/Jan may find it harder to get a market.

Pulses

  • The first human consumption bean vessel was loaded in the UK last week and will arrive in Egypt in the next two weeks.
  • Two further human consumption vessels are being loaded this week and prices continue to firm as shippers look to fill vessels, with prices in the UK on farm trading above what can be sold into Egypt basis the current market.
  • Demand for UK origin beans into Egypt remains strong. This looks set to continue in the short-term as new crop Australian bulk vessels will not arrive in Egypt until the end of February at the earliest.
  • The feed market has been stable on the week with limited buying interest seen on the Continent with the drop in value of most major commodities on the week.
  • New crop pea buybacks remain available. Please contact your farm trader for further information.

Fertiliser

  • Russian export restrictions are the most recent talking point on European and global AN markets. Supply remains tight from key manufacturing countries protecting their own domestic markets.
  • In the UK, clarity on CF’s operations beyond January 2022 remain unclear – the company announced in October that its Billingham site would operate until at least that time.
  • Granular urea trade, although muted, remains firm. Global demand is still evident with tenders for Pakistan (100,000t) and Ethiopia (800,000t), but nothing was offered. This highlights the continued lack of product availability and difficulties in the freight market.
  • Following concerns around ammonium nitrate availability in September and October, the focus has now switched to the supply of high nitrogen sulphur products in the UK, specifically for OSR/milling wheat usage.
  • ADM has Piamon 33N 30SO3 available for Jan/Feb delivery. This high quality compound product has good spreading qualities and a grade perfect for OSR applications.
  • Liquid terms for UAN products are available, but high sulphur grades are unavailable due to a lack of ATS availability in Europe, highlighting the limited sulphur supply once again.
  • Alternative renewable PK fertilisers, Fibrophos and P-Grow, are available for Dec-Apr delivery at sellers call for spring PK requirements. These products are a fraction of the cost of traditional bagged PK fertilisers with added secondary and trace elements for soil health.
£/€ £/$ €/$
1.1755 1.333 1.134
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Dec21 205-215 220-230 258-263 562-567
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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