- US prices are up around $5/t on the week on news that China will grant exemptions on retaliatory duties imposed against numerous US goods. This gave US traders hope that China may soon start purchasing US agricultural products.
- USDA’s Outlook Forum starts today in Arlington, Virginia, with the department expected to project a sharp increase in 2020 US corn and soybean planting intentions, following this season’s weather-related planting problems.
- ABARES’ latest update has reduced Australia’s 2019/20 wheat output estimates to 15.17mln t, which would be a 12-year production low.
- Chinese buyers have made purchases of Ukrainian-origin maize in the past week, following deals for French wheat reported last week. It was reported that at least 200,000t of maize was bought, with some estimates going up to 500,000t.
- Russian wheat export prices registered a third consecutive weekly decline last week, hit by strong competition with other major exporters, and a decline in the global benchmark.
- UkrAgroConsult forecast Russia’s 2020/21 wheat exports at 38mln t, which compares with their 2019/20 estimate of 32.5mln t.
- Ukraine’s grain exports are up 25% year on year, at 38.4mln t so far in the marketing season. This includes 16.2mln t of wheat, 17.7mln t of maize, and about 4mln t of barley.
- Ukraine’s 2020 grain harvest is likely to fall 3.2% to 72.67mln t, from a record 75.1mln t this season, according to consultancy ProAgro. It sees wheat production falling 7.3% to 26.2mln t, from 28.3mln t in 2019, and maize likely to remain near this year’s level of 35.85mln t.
- EU (Paris) futures are up €1.75/t on the week, supported by a weaker euro, with prices in US$ terms virtually unchanged.
- UK prices are up about £1/t on the week.
- AHDB reported its updated intended planting figures this week, showing the wheat area at 1.504mln ha, a fall of 17% from the June 2019 survey. However, within this figure, UK growers still intended to plant 287,000ha of both winter and spring varieties as of February 14th.
- With the recent storms over the past two weekends, the intention of growers and final planting area will still be influenced by the weather and soil conditions and we feel that given the current weather pattern, the projected AHBD figure looks optimistic.
- It is important to realise that the survey refers to ‘intended’ plantings. The figures may well be significantly different in reality – only time will tell. The large intended spring area, for all crops, still of course remains to be planted.
Thursday 20 February 2020
- Wet weather is holding back spring barley sowing in Europe, particularly in France.
- However, there are no real concerns at present.
- The latest AHDB early bird survey is indicating a spring barley area of 1,042 hectares.
- If the spring area gets planted in reasonable time, it has the potential to produce a very large malting barley surplus.
- Buyers remain absent from the crop 2020 market.
- There was a slow start to the week, with markets closed for Presidents Day. Despite China waiving tariffs on 700 US products as part of the phase-one agreement, CBOT soybeans struggled to make gains on a lack of nearby demand.
- This week also saw the start of the USDA Outlook Forum, which should highlight the planting estimates for this coming season. Current estimates are at 84.6mln acres (range 80-87.5mln acres).
- Chinese markets remain quiet. There are now over 75,000 cases of coronavirus worldwide, 74,000 of which are in mainland China. However, reports now suggest the numbers of new cases have been slowing for the past 15 days.
- Markets remain pressured on the fear of what effect coronavirus will have on demand. China’s Central Bank cut interest rates on one-year loans on Monday in a bid to rally demand in its economy.
- In South America the weather still looks favourable. Argentinian soybean crop conditions were quoted as “exceptional”. Harvest in Brazil is starting to gather momentum. Analysts raised crop expectations to 125.6mln t (123mln t previously).
- Palm oil traded higher for two sessions after losing 5.4% of its values last week.
- In Canada farmer selling has been slow. Canadian rail blockades continue to hinder logistics. For the last few weeks rail networks have been battling with protesters who are blocking major rail networks in protest over a new costal pipeline.
- European rapeseed prices have recovered from recent lows. May futures traded over €400 to touch €403.50 this week, however weaker outside markets pressure prices in the last few sessions. Whilst the balance sheet is still tight at the end of the season, recent imports mean nearby coverage is good.
- Here in the UK, prices have tried to follow the EU market higher, though capped by the firmer sterling, which spent most of the week trading over 1.200.
- Yesterday the AHDB released an updated 2020 crop estimates report, which put the UK rapeseed area at 361Kha (-32% from June’s survey). This could potentially mean a UK harvest around 1.1mln t, which would be the lowest since 2000/2001.
- The AHDB updated planting figures pegs the oat area at 229,000ha, up 26% from the previous year. This increase (if realised) will be seen in spring oats, which on average is lower yielding and poorer quality than their winter counterparts. Spring oats also yield less in the milling process. That said an area of this size paints a very healthy production figure, however it is still all to play for as the spring drilling and growing period will be key to understanding the real outlook for 2020/21.
- Millers still have oats to buy for this season, and there remains a healthy export market. One would have thought that with low farmer selling this would drive values higher, but supply and demand points towards a healthy supply of oats so consumers are reticent to pay up.
- The difficult weather conditions are causing several headaches in terms of spring cropping options.
- Spring barley remains a popular choice with a large area expected to be sown. RGT Planet is extremely tight, with Laureate still available in limited quantities.
- One variety worth considering is LG Diablo, particularly for growers who are looking to maximise yield potential, with extremely high potential in the eastern region, and with the potential premium options post-harvest for malting purposes.
- Spring oats are available in limited quantities and spring wheat is extremely short, with supplies coming in from the continent all the time. Supplies are constantly changing so please speak to your ADM farm trader for up to date information.
- Spring pulses have also been very popular since the new year, with contract space becoming limited by the day as growers look to add peas into the rotation. Large blue and marrowfat contracts are still available with industry leading terms.
- Finally, spring oilseeds are seeing demand. Both linseed and spring oilseed rape, although spring linseed varieties are getting extremely short in supply, with the major variety Bingo now sold out. On the spring OSR front, we expect to see a sharp rise in the area from the <10,000ha we have seen over the past number of years, but seed availability will be the limiting factor.
- The leading varieties are Lagonda, Performer and Lumen. The Clearfield variety Click CL is also available.
- Granular urea has traded up $4/t from last week to $250/t FOB Algeria. Manufacturers are confident they can continue to achieve these higher prices knowing global supply is limited whilst spot demand is high from the US. India are expected to tender for 1 mln tonnes in the second half of March, which could support current levels if anticipated demand materialises.
- UK urea levels have firmed, as replacement values increase from the higher FOB market. Despite firmer prices, granular urea remains the cheapest form of nitrogen in the UK market and will reduce production costs and increase net margins in comparison to using other forms of nitrogen. Speak to your farm trader today about ADM Agriculture’s granular urea offers.
- CF released new terms at the beginning of the week. More commitment has been seen from this, and it is clear that although buying may be hand-to-mouth at present, there is still a spring fertiliser market to service. Early orders can be prioritised for delivery, ensuring product is on farm for what could be sporadic windows for application.
- ALZON® neo-N is available from ADM Agriculture. A stabilised dual inhibited urea that allows you to reduce a pass and protects crops nitrogen supply from extreme weather. This could be beneficial for those wanting to reduce soil compaction on already damaged soils, as well as those wary of further unpredictable bouts of weather. Speak to your farm trader for more details.
|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.