Market Report

Thursday 20 August 2020

Sampling – Harvest 2020

As many of our farmer customers already know, ADM Agriculture will not be sending samplers out to farms for the forthcoming harvest. We need to be able to test the crops we buy, and it remains our intention to do this in as efficient manner as possible whilst reducing the risks associated with this service. If you have not already done so, please contact your farm trader to arrange for sample bags to be sent to you. Once you have samples ready, we will collect them and the results will be available via our online portal, ADM 365, or from your ADM farm trader.

Wheat

  • Markets this week have been driven higher by US maize. Concerns that the recent storm in Iowa will result in lower acreage and production was enough to encourage market shorts to trim their exposure, as it is widely believed that USDA will report lower figures in the September report.
  • US wheat has rallied as a result, also gaining support by talk of increased interest from China. However, larger crops and export supplies in Russia, Canada and Australia continue to provide resistance to higher prices.
  • SovEcon has raised its forecast for Russia’s 2020 wheat crop by 1.6mln t, to 80.9mln t, due to increased yields in several regions of the country.
  • Russia has harvested 82.8mln t of grain (before drying/cleaning) from just over 51% of the total planted area, at an average 3.36t/ha.
  • EU (French) prices are up €4/t on the week, supported by firmer global markets and talk of China buying French wheat.
  • UK (London) prices are up just over £3/t in the same period as the current supply squeeze and rising delivery premiums continue to underpin ex-farm prices.
  • The change in the UK weather has slowed harvest activity. With limited supplies becoming available in the north and west of the country, this has allowed spot delivery premium to edge higher, underpinning ex-farm values, especially given growers’ general reluctance to offer fresh supplies to the market.
  • Dryness in northern and western growing areas of Argentina has prompted the Rosario Grain Exchange to lower its wheat area forecast, although it left its crop estimate unchanged at 18-19mln t.
  • Ukraine’s grain exports continue to lag last season, reported at 5.1mln t as of 19 Aug, down from 6.4mln t. Exports include 3mln t wheat, 1.6mln t of barley and 502,000t of maize.
  • Egypt’s state buyer GASC continues to purchase wheat on the international markets, buying a further 415,000t of Russian wheat in its latest tender.

Malting Barley

  • The EU market is very quiet with prices falling over the past few days.
  • The Scandinavia spring barley harvest is coming to an end. Yields are above average, and quality is good.
  • The UK spring barley harvest has been stopped due to rains. The forecast is very mixed into next week.
  • Spring yields are mainly disappointing with high to very high nitrogen.
  • Unfortunately, we are not receiving as many farm samples as we would like, so it’s difficult to give any more information at the moment.
  • We would encourage growers to make samples available ASAP.

Feed Barley

  • Much of the UK’s spring barley crop is still in the field.
  • Spot feed barley remains supported as shorts are still struggling to cover nearby requirements. There is good demand for feed barley in the nearby positions, particularly in the north west and south west.
  • Consumers in the UK are still not coming to the market for their forward commitments, although anecdotally, good demand is expected going into the winter.
  • Export demand is currently not competing with domestic values.

Rapeseed

  • The phase one talks between the US and China remain difficult and the US Government’s criticism of how China has handled the Covid crisis in Hong Kong could undermine progress for any trade deal.
  • CBOT soybeans traded higher initially before trading lower into the close as worries about trade politics affected the market.
  • There are still concerns that a lack of rain across the Midwest and the storm that we saw last week will see USDA cut its crop estimates in the September report.
  • The US weekly crop condition reported showed soybean ratings down 2% on the week from 74% to 73% good/excellent with Iowa down 9% due to the storm.
  • Matif rapeseed recovered from the week’s lows with Nov20 hovering around €380. The EU harvest is now complete, crop estimates are higher than expected and nearby shorts seem covered with plenty more imports available if needed.

Pulses

  • There has been little harvest progress for either peas or beans over the last week.
  • The samples of large blues and marrowfat peas received recently have shown higher levels of bleaching as a result of recent rainfall. However, overall, the quality remains very good and the majority of the samples are suitable for human consumption. The winter beans continue to show high levels of insect damage with the majority only suitable for the feed market.
  • With very few spring beans harvested to date and harvest several weeks away for many, farmer selling remains very slow along with demand. It remains very difficult to sell human consumption quality beans with cheap offers from Australia continuing to quash demand for UK/EU origin beans. The few bids that we have seen represent a very small premium over feed for growers of between £5-£10.

Seed

OSR

  • Following the recent rainfall, it’s not too late to order OSR seed. We have many leading varieties ready for immediate dispatch. Please contact your farm trader now for more information.

Winter Barley

  • Seed processing is now well under way. We still have some conventional and hybrid barley seed available, but stocks are limited!

Winter Wheat

  • For anyone looking for an early drilled wheat, we can offer KWS Parkin. This short, stiff variety has earlier maturity than any other on the Recommended List – ‘first in, first out’. In the true early drilled spot this will out yield any other variety.

Fertiliser

  • Granular urea has held firm in North Africa at $280-2/t FOB Egypt over the past week as Indian tenders keep supporting global prices.
  • PiagranPro, urea with an incorporated inhibiter, is available as a preferred option. Produced by world renowned urea producer, SKW Piesteritz, certifying its effectiveness and using this product will remove any risk of volatilisation.
  • UK AN producer, CF, has increased both spot and October terms across ammonium nitrate, Nitrogen-Sulphur and NPKS products, reflecting the firmness in the global market.
  • Liquid UAN terms are anticipated to rise when we receive them, as with AN and urea markets move on from new season lows.
  • Phosphates have risen marginally on the week whilst potash markets remain relatively unchanged. UK markets remain relatively quiet whilst harvest progress is haphazard.
  • ADM can offer a carbon-neutral, renewable alternative to traditional bagged PK fertilisers with no compromise on crop nutrition called Fibrophos and P-Grow which can save valuable time and money.
£/€ £/$ €/$
1.1085 1.3125 1.1835
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Aug20 123-133 158-172 198-203 328-333
Nov20 127-136 162-172 201-206 338-343
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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