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Market Report

Thursday 21 October 2021

Wheat

  • US wheat markets have regained last week’s losses as talk of declining export availability in the new year continues to provide long-term support to the global outlook.
  • The Paris wheat market has hit new contracts highs as rumours of further sales to China underpinned the effects of strong demand and tightening availability in Europe.
  • UK prices, on both old and new crops, posted small gains on the week, supported by the firmer trend from the European and US markets.
  • The current pace of exports out of the EU, Russia and the Ukraine is unsustainable, meaning prices should remain firm well into 2022. As export availabilities decline, this will support the stock rebuild that is required in several major exporting regions.
  • EU soft wheat exports outside the bloc had reached 8.67mln t as of October 17, compared with 6.38mln a year ago.
  • France will have a chance to boost soft wheat exports to Egypt later in the season if Russia sets export quotas and maintains its current tax system.
  • Russian wheat exports totalled 11.1mln t as of 14 October, down 18% on the year. Prices have risen to a nine-year high, supported by limited supplies in the domestic market and the strengthening of the ruble.
  • Ukraine’s wheat exports had reached 10.7mln t as of 18 October, up 7% year on year. The Ukrainian government has agreed with traders to set a maximum wheat export target at 25.3mln t for the current season, compared with 17.5mln t last season.
  • China’s autumn grain harvest is seen at 80% complete. The impact of recent continuous rain on output was ‘generally limited’ according to the Ag Ministry.
  • The country is set to start fresh rounds of wheat auctions from state reserves, starting this week with 1mln t being offered following a rise in domestic prices. The minimum purchase price for wheat in 2022 has been raised to help enhance grain security in the country.

Malting Barley

  • Malting prices dropped this week on talk that Australian and Argentinian malting barley had traded into the EU.
  • UK domestic buyers also dropped their buying ideas.
  • Crop 2022 buyers also withdrew from the FOB market.
  • We do have domestic crop 2022 contracts available. Please speak to your local ADM Agriculture farm trader for details.

Feed Barley

  • Another week of gains for the barley market, despite there being no real activity to report.
  • Logistical difficulties with French barge execution into the Netherlands is causing problems, and we are seeing a squeeze in spot prices as a result and UK is looking more competitive here over the next few months.
  • ongoing difficulties in the freight market are prohibiting any export business from being concluded.
  • Domestic prices are climbing higher in line with firming wheat markets. Meanwhile farmer selling remains slow, mainly due to the high malting pass rates and continued strength in premium markets.

Rapeseed

  • CBOT soybeans recovered from the lows that followed last week’s USDA supply and demand report to trade back at recent highs.
  • Weather in the US looks dry everywhere. Rain is forecast in the next week, which will slow harvest progress in the Eastern Corn Belt.
  • The US soybean harvest is estimated at 60% complete, just below average trade estimates. This is up from the 49% reported last week.
  • In China recent GDP figures were viewed as disappointing, up 4.9% year on year between July and September compared with the expected 5.2%. However, China’s pork production is reported up 43% in the third quarter and up 38% for the first nine months of 2021.
  • Soybean crush margins have improved, but crush figures are still reported to be up to 13% lower, with no sales reported in yesterday’s session.
  • Soybean plantings in Brazil are advancing quickly. Weather remains favourable, with showers helping soil conditions. Mato Grosso is reported to be 45% complete compared with the 26% five-year average, The national figure is 25%. Argentina remains dry for the next couple of weeks.
  • Crude oil rallied again this week, led by another rise in EU natural gas. These firmer markets and an increasing competitiveness into biofuel pushed up Malaysian palm oil prices to record highs. Continuing talk of higher soy oil usage in the US biofuel plan gave the funds something to trade on.
  • Canadian canola rallied again later in the session to close just below $950, tracking the complex higher. Despite a much smaller than anticipated crop, farmer selling seems to be picking up at these higher numbers and, even though margins are pressured, buyers still want to take ownership given how tight the balance sheet is.
  • Matif rapeseed soared to new highs. November Matif made €700 yesterday as it heads into expiry at the end of the month. February futures tried to catch up and closed the gap by €2 or so, but there remains a €15.5 inverse caused by tight nearby logistics and the need for seed coverage.

Oats

  • The UK oat market continues to follow an upward trajectory of following the rise in the global grains markets. Over the course of the last week, London ICE wheat futures rallied £7/t and the Matif wheat market has rallied €9.25. Consequentially, export prices into western Europe for both milling oats and feed oats have appreciated. There are still Nov/Dec buyers looking for cargoes of both milling and feed. However, the lack of storage to pre-assemble required following a lack of trucks in the UK, is making sellers nervous about selling. As ever, price will dictate what trades. Domestic millers remain buyers for Q4, but space is getting limited and soon sellers will need to focus on Q1 of 2022 to make fresh sales.
  • The variable UK crop is being utilised by consumers with millers offering fallbacks to 45kg/hl with claims. Feed oats remain valued at £40 discount to feed barley. This could see a higher on-farm usage figure than last year, along with strong demand from compounders looking to mitigate the high feed grain alternatives.
  • Scandinavian milling oat sellers remain largely absent from the market, which is leaving the door open for UK exports into western Europe.
  • Bottom line, good demand remains into Europe, but Oct/Dec sellers may be disappointed if they expect movement as demand may not be there.

Seed

  • Winter seed – ADM Agriculture has limited winter cereal seed available and floor stocks are constantly changing.
  • Spring seed – As we look ahead to the spring we have a great seed portfolio. With high nitrogen prices, growing a pulse crop for harvest 2022 is a great option. Get in touch with your farm trader now to discuss bean seed and our market-leading pea buybacks.
  • Catch up on our latest seed YouTube video, as head of seed, James Barlow, discusses autumn establishment and using pulses in rotation.

Fertiliser

  • Granular urea continues to trade higher. Jumps of $5-15/t FOB Egypt have been seen despite a reduction in the amount of business concluded.
  • Market fundamentals remain in place – tight global supply in a period of growing demand.
  • European buying continues to increase, despite significantly higher prices. Manufacturers are looking at executing sales in domestic/local markets, unless premiums are paid to import into the UK.
  • Despite energy markets easing, prices remain higher than seasonal norms and above levels seen in September, causing capacity reductions and plant closures across Europe as we head towards the colder months.
  • ADM Agriculture continues to be able to supply granular urea for Q1 2022 delivery at a competitive £/kg N rate in comparison to other nitrogen source options.
  • We are also offering granular lime for Q4 2021 delivery. There has been little impact on lime prices in a year of high fertiliser prices; ensuring soil pH is at an optimum for fertiliser use efficiency is key.

 

£/€ £/$ €/$
1.1865 1.381 1.164
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Nov21 195-205 202-212 250-255 565-570
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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