Market Report

Thursday 22 July 2021

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In today’s video, fertiliser trader, Amy Vickers, talks about the negative implications of a P&K holiday.

Wheat

  • Markets continue to firm but remain volatile as adverse global weather continues to offer support.
  • The focus is now on how low Canadian and US spring wheat production will fall and the resulting impact on the global balance sheet.
  • In Europe, much-needed drier, warmer weather is expected over the next few weeks. Hopefully, as harvest activity increases, yield prospects in Russia and the quality of the French crop can be obtained.
  • The US winter harvest is now reported as being 73%, complete, although the spring wheat crop continues to decline as drought intensifies across the northern plains. The US corn crop is also suffering in areas experiencing moderate to intense drought.
  • Canadian prospects are also declining as drought conditions across most provinces threaten grain and oilseed output.
  • Latest data shows wheat yields in Russia running slightly behind last year. Whether this trend continues in the more critical black earth region, where harvest is just starting, remains to be seen.
  • Ukrainian farmers have harvested 5.5mln t of grain, from 9% of the sown area, with average yields of 4.16t/ha, according to the agriculture ministry. This included 2.5 mln t of wheat averaging 4.11t/ha.
  • According to official sources, favourable weather could push total grain production in the country, to 76mln t, compared with last year’s 65 mln tonnes, although agency APK Inform has said this month that adverse weather could significantly affect yields.
  • Kazakhstan plans to restrict or even stop shipment of grain and feedstuffs for six months from 15 August as concerns over crop production increase fears over food security.
  • Strategie Grains report that the EU’s wheat harvest will be later than usual, but yields are expected to be good, except for a few central parts of the bloc. Total output was raised to 133mln t.
  • France’s wheat harvest has started. Yields are variable and there are some concerns regarding quality due to recent wet weather.
  • Exports across the Channel have been delayed, causing UK spot prices to surge over the past few days due to increasing demand on diminishing domestic supplies.
  • UK old crop long-holders should seriously consider offloading supplies. The eventual arrival of vessels may coincide with early harvest activity in parts of the south and east of the UK, meaning the large spot premiums will quickly disappear.

Malting Barley

  • EU weather has improved and the harvest has resumed.
  • The French winter crop has not been affected by the wet weather and quality and yield is good.
  • The first French springs are showing above average yields and good quality.
  • The UK winter malting barley quality is very mixed.
  • Currently yields are above average. Nitrogens are low, but specific weights and screenings are not as good as expected.
  • The UK and EU markets are very quiet and prices are similar to last week.

Feed Barley

  • Feed barley prices are up on the week following a weaker pound and firmer grain markets in general.
  • German execution into the Netherlands has been hampered by wet weather, which is pushing Dutch buyers into the UK market. Spanish and Irish bids have fallen behind, exacerbated by continued tightness in the freight market. Demand overall however still remains lacklustre.
  • Origination is still rather slow despite harvest getting underway nationally. So far, yields are being reported as average to good and grain is being cut dry, although specific weights appear to be suffering.

Rapeseed

  • Outside markets (shares and mineral oil) were sharply lower at the beginning of the week, which caused the oilseeds complex to sell off, but have recovered since.
  • Weather reports are unchanged. Hot and dry weather remains for the next few weeks in the US, but this isn’t bullish enough to push the complex higher, as there are a few weeks to go until crops really need rain. Developments will be closely watched.
  • Canola prices hit highs at the end of last week on the persistent hot weather that is causing crops to deteriorate. Showers this week have caused the complex to fall by nearly 3% midweek, taking back the weather premium.
  • Drought and low water levels in Argentina are hindering meal logistics, which is supporting nearby prices. According to the agriculture ministry, farmers have sold 58% of their soybean crop this season compared with 56% last year.
  • China remains quiet, despite the few cargoes traded this week out of Brazil. The lack of recent reports has weighed on prices as China has not purchased from the US since 24 June 2. Floods are causing problems in central China, a large livestock area.
  • Crude oil fell to its lowest level since March on Monday, but has rallied back. Opec’s decision to increase production pressured the market along with fears of rising covid cases.
  • However veg oils are now under pressure, with the market digesting the changes in Argentina’s biofuel mandates, which will push more soy-oil back onto the market. The decision by the US Government to delay biofuel blending rates for 2021 and 2022 also pressured prices.
  • All Asian markets followed US markets lower yesterday. US overnights are sharply lower again. Malaysian palm oil prices weakened slightly yesterday and are down slightly this morning on reports that exports are 883,000t so far in July, down 7% compared with this time last month.
  • Matif rapeseed prices are sharply lower on the week, reflecting the wider sentiment as well as some EU harvest pressure.
  • Sterling firmed from midweek lows, which will pressure prices slightly.

Pulses

  • The UK bean crop continues to develop well and the start of the growing season in Australia has been ideal.
  • There are some yield concerns being raised in the Baltics due to the recent hot weather, with some estimates suggesting the yield may be at least 10% down year on year. However, any reduction in yield in the Baltics will be offset by the larger planted area (up 33% year on year), so it’s likely overall production will be higher.
  • New crop bean prices continue to follow wheat futures and have therefore been on a rollercoaster ride, trading in a £10 range and up £4 on the week.
  • We continue to see no human consumption interest for UK beans from either Sudan or Egypt. Supplies of old crop Australia beans are plentiful and importers remain focused on securing these remaining supplies before looking to new crop UK and Baltic.
  • From a feed perspective, demand domestically remains subdued. At current premiums over wheat most compounders view beans as unattractive against other protein sources.
  • The vining pea harvest is currently producing good yields in some regions, though not all. This is a reasonable barometer for the forthcoming UK pea harvest, which is likely to commence in the next fortnight.
  • New crop marrowfat pea buybacks are available. Please contact your farm trader for further information.

Seed

  • There has been strong demand for OSR seed in the past couple of weeks as growers look to capitalise on barley due to be cut shortly. DK Excited is available for early delivery and supported by an establishment scheme for extra peace of mind.
  • Base price increases have been pushing growers to make decisions on cereal seeds. Availability is OK across most varieties at present. Please call your farm trader for advice on varieties in your area.
  • Click here for our latest YouTube video with Keith Costello talking through agronomy for the perfect pea crop.

Fertiliser

  • The latest Indian tender has closed, but there is expectation that the country will need to tender again in August.
  • Chinese supply constraints combined with higher seasonal demand from the US have caused urea markets to rise significantly over the past month.
  • UK-produced ammonium nitrate is well priced today against both urea and all other imported AN products. This suggests there could yet be further increases in UK AN prices.
  • Raw material costs remain high for manufacturers of nitrogen products and demand globally remains evident through Q3.
  • Straight values continue to rise as UK stocks continue to reach replacement values which are significantly higher today. Alternative PK products are available.
£/€ £/$ €/$
1.1675 1.377 1.1795
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Jul21 145-155 new crop a/a 190-215 230-235 424-429 new crop a/a
Aug21 168-178 new crop a/a
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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