Market Report

Thursday 2 September 2021

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Wheat

  • The UK harvest continues to progress with results showing major regional differences in yields, specific weight and quality.
  • It is very hard to get a true picture of crop size or quality at this stage. Spot demand continues to be evident for dry, available wheat of all grades and, to add to what has been a drawn-out frustrating harvest, a general lack of trucks is an ongoing issue for our sector as it is across the economy.
  • After trading near £200 earlier in the month, UK November new crop futures have been pressured by recent weakness in both the US and European markets.
  • Data for the UK 2020/21 marketing season is now complete, and even with wheat imports reported at just under 2.5mln t, the carry-out was projected at a historically low figure of just under 1.1mln t.
  • This was due to an upsurge in animal and industrial usage during the last quarter of the marketing year as travel and social restrictions were slowly lifted.
  • This coincided with tightness in the UK market during July and early August. However, spot premiums for ready-to-move wheat have steadily declined since.
  • Looking forward to 2021/22, Defra has pegged the provisional English wheat crop area at 1.624mln ha, lower than most trade views. This suggests a crop of slightly below 15mln t.
  • Given the expected increase in domestic demand, this would leave a more normal carry-out and an exportable surplus at best of just under 500,000t, which is certainly manageable.
  • Earlier indications suggested the UK could tap into some lower milling quality exports given the demise of this season’s French wheat harvest, but reports show UK quality is generally lower on the year, especially in the south.
  • Until final yields and production can be obtained, UK futures are expected to follow the French market. With prices at historically high levels, we would still promote a little-and-often selling strategy to growers.
  • Looking further afield, US markets have continued to weaken as tropical storm Ida is expected to slow grain exports from the Gulf region.
  • StatsCan reported Canadian all-wheat production for 2021 at 22.95mln t, down 35% on the year and the lowest for 14 years.
  • SovEcon has cut its forecast for Russian wheat exports to 33.9mln t, due to lower production.
  • The International Grains Council has trimmed 2021 global wheat production, while reducing global grain stocks to their lowest level in seven years.
  • France’s soft wheat harvest was 96% complete as of 23 August as traders start to address the quality issue of this season’s crop.
  • Most global markets will continue to be driven by events in the US, as slower exports and favourable rains weigh on prices. European markets will follow to an extent, but are more focused on quality issues for now

Malting Barley

  • There is still very little activity within the EU malting barley markets.
  • Trade sellers remain absent from the market and brewers are struggling to come to terms with new malt prices.
  • The market will be quiet until brewers start to buy again.
  • Farmers are concentrating on getting the last of the harvest in and the focus will then turn to autumn sowing.
  • Supply and demand is very tight and there is a lot of uncertainty about quality.
  • Prices remain well supported.
  • In the UK we have around 30% of the spring barley left to harvest.
  • We still expect to export 3-400,000t.

Feed Barley

  • Overall another steady week for feed barley, and the market is still struggling with a lack of any real supply or demand.
  • Export buyers are targeting levels some £8-10/t under seller’s ambitions, which is keeping activity to a minimum. The same is true of the domestic market, where barley has lost competitiveness in the feed ration vs wheat over recent weeks.
  • Although slow, origination is starting to pick up as the spring harvest draws closer to completion, and the quality of the later cuts appears to be deteriorating to an extent.

Rapeseed

  • We have seen another choppy week on prices with the whole of the complex moving lower.
  • The biggest news in the market at the moment is the damage to export facilities in New Orleans due to recent weather events. This has added a bearish tone to the market.
  • Weekly soybean crop progress ratings remain unchanged week on week, with good to excellent conditions ranging from 54-57% depending on area.
  • Malaysian palm oil exports during August were down 15.8% and energy markets were weaker.
  • Matif continues to trade in a range of €560.00 to €578.00.
  • The UK OSR harvest is now almost complete and plantings are well under way with expectations of an increased area going in the ground.

Oats

  • UK oats are currently the cheapest origin for 52kg/hl milling and 45kg/hl feed oats with cargoes of both grades trading over the past 10 days to Europe.
  • Offers from Scandinavia are few and far between as they continue to identify the quality of the exportable surplus. This is supporting UK prices.
  • Domestic feed oats still look very cheap given they are trading at £45-50/t discount to feed wheat.
  • Quality so far has been okay with winters averaging 50.3kg/hl with screenings of 4%, but the springs are disappointing. Currently our spring oat average is pegged at 47.8kg/hl, however we are yet to see the vast majority of samples so things could change.
  • Export buyers into Europe remain keen for offers of min 52kg/hl oats. If we can achieve this spec then we will see good demand in the coming months.
  • Bottom line, we need to get more samples in to establish the quality of the crop.

Pulses

  • The few winter bean samples seen to date are generally low quality with the majority suitable only for the feed market. Whilst levels of insect damage appear to be lower than the past few years, there are high levels of staining with the general appearance being poor.
  • The Baltic bean harvest is around 75% complete and yields and quality are disappointing. As a result, we expect greater demand for UK beans into Europe and Egypt this year and enquiries are starting to pick up. Shippers are currently reluctant to offer though, given that the majority of the beans harvested to date are very wet.
  • Yields and quality of this year’s pea harvest remain variable, but generally yields remain up on the five-year average. The quality is also surprisingly good given the wet weather conditions throughout harvest.
  • New crop pea buybacks are available for large blues, marrowfat peas, yellow peas and maple peas. Please contact your Farm Trader for further information.

Seed

  • Winter Wheat: With the delayed wheat harvest, we urge you to work with seed processors by setting realistic timescales before expecting deliveries on to farm. Some key varieties are beginning to look limited, however we have good availability of barn filler SY Insitor. Insitor is having another great year in trials with really good Septoria resistance and very impressive yields.
  • Winter Barley: Processing is well under way, with many varieties now making their way on to farm.
  • Rapeseed: As we move into September, we have two extremely vigorous varieties that will excel in the later-drilled spot. Duplo and LG Aviron are both in the top three for vigour in this year’s AHDB trials and are loaded with traits, including TuYV, Pod Shatter and RLM7.
  • Don’t forget ADM can cover all of your stewardship and cover crop needs. Get in touch with your Farm Trader with any enquiries.
  • Click here to view our seed varieties guide for 2021/22.

Fertiliser

  • Granular urea has traded up $13/t FOB Egypt this week following a dip due to seasonal weakness. French and Brazilian buyers stepped into the market, providing support.
  • India has about 5 mln t to buy before February. The next tender is likely to happen in the next few days.
  • In the US, hurricane Ida hit the port of New Orleans (NOLA), which will create serious distribution issues, as the location is the key US hub for urea imports.
  • Import statistics show reduced nitrogen imports into the UK, down a significant amount compared with last year, indicating supply into the UK remains tight.
  • UK-produced ammonium nitrate for Q4 could be the most reliable for reasonable delivery timings. Road haulage issues remain and are expected to cause some delays through Q4 and into Q1 2022 across many fertiliser commodities. Buying well in advance of application is encouraged to allow time for logistics planning.
  • ADM have Piamon 33N 30SO3 for Q1 delivery 2022, a high quality compound which is ideal for OSR applications.
  • Alternative PK products are still available for application on stubble, these are renewable PK grades at a fraction of the cost of traditional bagged PK prices.
£/€ £/$ €/$
1.1635 1.379 1.1855
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Sept 170-180 181-191 222-227 482-487
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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