- US wheat prices are up $2/t on the week, supported by talk of declining Southern Hemisphere production, continued US export demand and a reported deterioration in US winter crop ratings.
- Argentina’s wheat production continues to slide lower, with BAGE lowering its estimate to 18.5mln t from 18.8mln t last week, with just over 13% of the crop harvested.
- Russia will boost its exports of grain in the second half of the current marketing season despite the intensification of competition, according to the president of the Russian Grain Union.
- EU (Paris) futures are up €2.50t/t on the week, supported by a firmer US market, strong EU shipment programme and a further tranche of international buying that makes French wheat supplies competitively priced.
- Winter cereal sowing in France remains well behind the usual pace, according to farm office AgriMer. Soft wheat sowings are put at 72% complete, down from 92% a year earlier. This reflects, to an extent, the situation in the UK.
- Strategie Grains has lowered its soft wheat area estimate for next year’s EU harvest after heavy rains continue to disrupt fieldworks in western EU countries.
- UK (London) futures are down £1.40/t (May 20 position) on the week, as growers continue to struggle to get crops sown due to ongoing waterlogged fields. Current estimates are that about 50% of the UK’s intended winter wheat area has been sown, ranging from 0% in some regions to 100% in the least rain affected areas.
- Some progress has been made with regard to UK winter wheat drilling over the past drier week. This has been almost entirely on light and higher ground with some heavy land farmers ‘closing the gate’ until spring.
- Most traders and analysts are now spending a huge amount of time looking at the potential UK area that will get planted and potential subsequent yields. The range in estimates for the 2020 UK wheat crop is probably 4mln t at present. The only thing we can say for certain is that the 2020 crop will be much lower than in 2019.
Thursday 21 November 2019
- EU malting barley markets are well covered until next spring, with prices drifting slightly lower.
- There is currently no buying interest for UK FOB cargoes, crop 2019 or crop 2020.
- UK maltsters have nearly covered their buying requirements for crop 2019.
- UK merchants are continuing to struggle to find enough lorries to cover what the maltsters are asking them to deliver. This is having a serious impact on some maltsters and slowing down collections from farm.
- Malting growers are aware that we are going to see a much bigger spring barley area for crop 2020 and are well ahead in marketing next year’s crop.
- US soybean harvest nears completion with an estimated 91% done. Some rainfall in the forecast going forward may delay progress.
- Last week CBOT soybeans found support from better than expected export sales, although after a constructive trade conference call between China and the US on Saturday, renewed pessimism that a “Phase 1” deal will not be completed by the end of 2019 and pushed soybeans down to an eight-week low.
- China insists the US roll back existing tariffs, something the US is reluctant to do. There could be up to 3mln t of US soybeans waiting to be unloaded in China as of midweek and, with no deal, it’s unlikely the problem will go away.
- Weather in Argentina remains wet for the next 5-10 days. Planting was still estimated to be 20% complete at the end of last week.
- The Canadian canola harvest is almost complete, though some areas have struggled to get the last 5% in the shed. Areas such as Alberta have had a decent amount of snow and it’s likely that the small percentage that’s left in the ground will be harvested in the spring. Farmer selling remains slow, with farmers optimistic that China will eventually come back into the market.
- Matif rapeseed continued an upwards trend this week, making fresh highs on the nearby positions before closing lower. Markets are still supported by firmer world veg oil prices and rumours of a biodiesel tax credit in Europe.
- Although new cases of African Swine Flu in China have fallen, the disease has now been detected in Poland. One case quickly turned into seventeen reported cases, all in wild boar. Measures are in place to stop it from spreading into neighbouring countries.
- As mentioned in previous reports, the recent strength in sterling has continued to cap UK farm gate prices.
- The old crop oat market has seen little change on the week. Higher than average premiums continue to be paid for Mascani over all other varieties, as buyers look to hedge against any potential losses on the winter drilling acreage. Farmer selling has eased, and the trade looks to focus on execution up to Christmas.
- The UK remains export competitive. However, demand is focused on the new year, and many sellers are keen to see the result of the general election and Brexit direction before committing more tonnes.
- The old crop bean market is unchanged and has been trading at the same level for the last few months. The UK remains the cheapest origin in Europe for feed beans and is therefore well placed to capture export demand as and when it arises. However, fresh demand has been thin recently, with most buyers covered until the end of Q1 2020 and unwilling to pay a carry to cover their later requirements.
- Premiums for human consumption quality beans are unchanged, with continued demand for winters from Egypt (spring beans are too expensive) and spring beans to Sudan. Australian bean prices have firmed slightly recently, with harvest being delayed and a lack of liquidity. However, as harvest progresses, we expect these to soften as grower selling of Australian beans increases.
- Over the past week we have seen increased interest in the pea buybacks for both marrowfats and large blues. These buybacks remain available, but we expect all our available contracts to be taken up, given current planting conditions and the big demand for spring contracts across a range of crops.
- A surprising amount of autumn sowing progress has been made in some areas of the country this week. We have stock available for immediate delivery, let your farm trader know of any requirements.
- There is still a limited amount of imported spring wheat available.
- Spring barley remains unchanged on the week with RGT Planet and Laureate very tight.
- Pea contracts have been booking up fast for spring 2020. Daytona is available for large blue growers and Kabuki for our marrowfat buybacks, we are now sold out of LG Kingfisher and LG Stallion.
- We have preferential terms on maize orders received before Christmas – please speak to your farm trader for more information.
- India has purchased -1.79mln t in its most recent tender, making it one of the largest on record. This has tightened the supply situation.
- Ethiopia has also closed a tender for 450,000t of urea this week, trading at $260-263/t FOB Egypt, putting UK replacement values at around £265-70/t on farm.
- These volumes, to be shipped during Nov/Dec, are now likely to support values, with significant European and North American demand in Q1 2020 to surface providing further stability.
- In the UK, the market has remained flat for the past week following price corrections in at best a lacklustre autumn market.
- Prices have weakened since harvest due to uncertainty around the winter cropping area being reduced or just delayed. News of further winter crop drilling and crop establishment successes are likely to cause the market to rally at some stage.
- Buying opportunities remain for those who can take delivery pre-Christmas for all nitrogen products.
|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.
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