- US prices have eased on the week as fund traders are now reported as being square in Chicago wheat. US wheat harvest has commenced, although at a slow pace, with concerns regarding quality intensifying after excessive moisture.
- Improved weather conditions in the US northern plains and Canadian spring wheat areas is seen exerting pressure upon US spring wheat prices.
- Australian officials cut their 2019-20 wheat production estimate to 21.2 mln t, citing continued dryness concerns as the reason for the reduction.
- Egypt has purchased Russian and Romanian wheat for middle/late July shipment, with prices considerably cheaper than French and US supplies.
- EU wheat prospects remain favourable, although concerns are now switching to the forecast of higher temperatures across much of the western EU (France and Germany) and its potential impact upon the crop.
- UK prices are weaker on the week, although sterling is slightly higher, especially against a weaker US$.
Thursday 20 June 2019
- The EU and UK malting markets remain very quiet.
- The market seems to have stabilised as first sellers are absent from the market.
- Prices throughout Europe have dropped by around £50/t from the highs seen last year.
- Growers will now wait until they see what harvest brings before they make any more selling decisions.
- US weather continues to be the main driver for price direction. Weather forecasts in the US Plains remain wet for the next few days, with the next 5-7 day forecast looking mixed. This not only slows planting progress with farmers unable to get on to the land, but due to poor river logistics, some inland crushers are unable to get the supply of beans they need and are forced to take longer shutdowns for maintenance.
- US soybean planting progress is currently estimated at 77% vs. 96% last year (5-year average at 93%). Bean emergence estimated at 55% vs 84% 5-year average. Planting in the western corn belt and North Plains are mostly complete. Farmers in the eastern corn belt are running out of time before insurance cut off dates.
- A recent tweet from President Trump outlined plans for US and Chinese delegates to meet in Japan next week. Though an agreement will not be finalised, it does show signs of relationships improving. Both leaders confirm that they will attend an “extended” meeting at the G20 next week.
- Last week China tried to roll old crop soybean purchases into new crop. US export line-ups are already slow. China still have 100 ships to call before the end of the season, which is only a few months away. 2018 trade data suggests China are now ranked fourth in the top US exports list (agricultural products), previously ranked first/second.
- No new confirmed cases of African swine fever in China, but this week Vietnam reported that 58 of the 63 provinces have confirmed ASF cases. So far, they have culled 9% of their total pig herd population, which equates to over 2.5 mln pigs.
- Canadian canola plantings are complete, apart from a few areas in need of re-seeding. Recent showers have helped crop conditions, but soil moisture levels still below average. At the start of the month, canola crops in Saskatchewan were reported to be 34% poor/very poor condition (11% LY), 23% is rated to be in good/excellent condition (63% LY). Oilworld revised its Canadian canola production estimates down 0.5 mln t to a four-year low of 19.0 mln t for 19/20.
- Areas of Australia have also received rain recently, though parts of Western Australia are still abnormally dry. Canola crop estimates for 19/20 vary. ABARES estimates a small increase of 0.4 mln t from last year’s nine-year low of 2.18 mln t to 2.58 mln t this season. Other estimates from 2.5-3 mln t.
- Closer to home, European rapeseed prices follow CBOT markets lower. Harvest 2019 is fast approaching, with a large carryout there is less demand for old crop as the trade concentrate on the new crop market. Despite recent rains, crop conditions remain unchanged. EU rapeseed production is still estimated to be at a 13-year low and below 18 mln t.
- Forecast rains in Australia and Canada are much welcome after recent lower precipitation levels were causing yield concern. Conversely, in the US Midwest, the oat crop is suffering from too much moisture.
- In the UK, oat crop reports remain favourable. In order to analyse potential price direction for the coming harvest, more clarity is needed from Brexit with regards to export tariffs past October 2019 (do we have them or don’t we?). The ability to trade any exportable surplus tariff free will underpin our domestic values.
- Old crop remains mostly complete and there is little buying interest.
- Dry weather in eastern EU has seen crop estimates for beans reduced for new crop. Coupled with weaker sterling, we have seen new crop prices for feed beans firm.
- New crop human consumption remains limited of both sellers (due to the above) and buyers as they continue to work through their old crop stocks.
- Feed peas are also somewhat supported due to the dry conditions mentioned, but they do not work into the compound feed market due to their relatively lower protein than beans.
- Continued rain this week has not severely adversely affected the crop so far, but further rains could start to damage it.
- KWS Firefly is in high demand with limited seed available, so orders should be placed now.
- HOLL OSR contracts are still available for autumn 2019 sowing – circa an extra £100/ha gross output for just changing which variety you drill.
- Winter bean seed is expected to be in high demand. Seed requirements should be covered as soon as possible.
- Tight supply for July due to plant turnarounds and sustained demand have supported firm prices. Granular urea was sold at $294/t FOB Egypt, up $4/t since previous reported trades.
- Globally, urea demand remains supported with the next Indian tender to be announced soon and demand from Brazil continuing. US corn plantings are at 93%, suggesting nitrogen requirements in the US will not be as heavily affected as previous indications of the corn cropping area had implied.
- Working on replacement values out of Egypt this week, the on-farm price is now £295-300/t in the UK. Product is in short supply in the UK and firmer prices will be seen across the country, although to date many have focused on securing their AN for next season and continue to sit tight on urea.
- UK ammonium nitrate tonnage for September has now been fulfilled. New CF terms will be released on Monday 24 June.
- Traders are having difficulty offering imported products due to a lack of availability and the weak currency continues to dominate and direct UK market prices.
|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.”
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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.