Market Report

Thursday 23 July 2020

Sampling – Harvest 2020

As many of our farmer customers already know, ADM Agriculture will not be sending samplers out to farms for the forthcoming harvest. We need to be able to test the crops we buy, and it remains our intention to do this in as efficient manner as possible whilst reducing the risks associated with this service. If you have not already done so, please contact your farm trader to arrange for sample bags to be sent to you. Once you have samples ready, we will collect them and the results will be available via our online portal, ADM 365, or from your ADM farm trader.

Wheat

  • US wheat prices have eased back $5/t on the week, pressured by the ongoing US winter wheat harvest, now reported as 74% complete.
  • US maize prices have remained stable on the week, supported by trade talk of increased demand from by China due to lower domestic production.
  • US weather remains favourable for spring crops. Both maize and soybeans will enter key development stages over the next few weeks.
  • There are reports that China has bought seven cargoes of Australian wheat. Traders believe China is ensuring it fills its WTO import tariff quota.
  • Recent unfavourable weather in Russia has affected grain yields. Further downward crop revisions are possible.
  • Egypt’s state buyer GASC purchased 115,000t of Ukrainian wheat at its latest international tender. The economy minister has stated wheat reserves are sufficient for five to six months.
  • Strategie Grains further reduced its forecast for this year’s EU soft wheat crop to 130.3mln t, down from 130.9mln t previously and 147.2mln t last season.
  • French farmers had harvested 47% of this year’s wheat crop as of 13 July, up from 11% a week earlier and well above the 26% seen at the same time last year.
  • The UK wheat harvest has started in southern counties. Early results show decent quality, but very variable yields.
  • In summary, as harvests progress in the northern hemisphere, prices have eased, although in general producers remain slow sellers.
  • In the UK, official May usage data came in as expected and, although exports were slightly higher than expected, end-of-season stocks are still projected at a historically high figure.
  • Farmers are more concerned with getting crops harvested rather than marketing, allowing spot delivery premiums to rise as merchants look to cover outstanding July and early August requirements. However, the scale of the rise will be short lived as harvest activity increases and additional supplies become available.

Malting Barley

  • France’s winter malting barley harvest is complete with good quality but below-average yields.
  • The country’s spring harvest is underway. Quality looks good so far although yields are slightly down.
  • Germany’s harvest can be described as mixed quality and yield.
  • The early UK winter malting barley harvest is also very mixed. Nitrogen levels are around 0.1% higher than normal and yields down by up to 20%.
  • Spring crops in Scandinavia and the UK look promising given the growing season we have had.
  • The market is extremely quiet and unlikely to change until harvest is complete and all results are in.
  • The 2021 UK and EU crop area looks likely to drop, which is helping prices and premiums.

Feed Barley

  • We have seen a much better week of winter barley harvest. The yields are reported as average, and this is not inspiring much farmer engagement.
  • As a result, volumes coming onto the market are thin and liquidity is still very low. We may see this change in the coming weeks as harvest progresses, and we get into the much larger spring barley crop.
  • There is still next to no buying interest to report from UK consumers, despite barley looking cheap vs other products.
  • The Saudi Grains Organisation (SAGO) purchased 720,000mt feed barley at tender for Oct-first half Nov arrival, most of which was priced basis Black Sea origin.
  • We have made a successful start to our feed barley export campaign, with our first vessel under load in Great Yarmouth bound for Lisbon.

Rapeseed

  • Recent Chinese purchases of US soybeans have offered the market some support, at a time when CBOT soybeans are pressured over concerns that the US and Chinese relationship may take a turn for the worse.
  • China purchased 715,000t of US beans (66,000t of old crop and the balance for 20/21) on Wednesday. A further 211,300t was sold to an unknown destination.
  • Weather in the US is becoming more favourable for the next seven to 10 days. US soybean crop ratings improved 1% this week to 69% good/excellent, falling in line with trade expectations. Yield potential of 49.8 bu/acre looks on track for now.
  • Crude oil prices hit a four-month high this week, achieving levels not seen since the Saudi-Russia break up back in March. The promising news of a new vaccine and the EU stimulus package gave the market hope that demand may return to “normal”.
  • Veg oil prices remain firm. Palm oil is trading close to contract highs, now in the “overbought” territory. Malaysian palm futures have risen 12% on nearby positions since 10 July. Demand is returning from some key importing countries and there are concerns over supply issues, especially with reduced labour forces in some Malaysian plantations.
  • In Canada, crop conditions across the prairies remain favourable, with Manitoba receiving rain in recent days. Crop estimates are starting to rise for this season, some pegging production at 20mln t vs. the current government estimate of 18.87mln t.
  • Matif rapeseed remains rangebound, trading within a €5 range. Harvest in Europe is progressing, but is still behind normal. Yields remain variable.
  • Sterling remains volatile on the back of the EU recovery deal and budget report. UK farm prices are still trading at season highs, supported by the weaker pound in the last few days.

Pulses

  • Australian faba bean production estimates continue to be revised higher, with many in the trade now forecasting a crop of over 500,000t and some analysts going as high as 600,000t. There is a lot of weather to get through between now and harvest before production can be assured and a dry September could change things.
  • Australian beans continue to be offered aggressively into North Africa, quashing demand for EU origin beans.
  • Harvest is underway in the UK with some winter beans and peas being cut on the south coast. However, this appears to be the exception, with most crops many weeks away from being fit.
  • UK prices are unchanged on the week. Farmer selling is almost non-existent, and this is expected to continue until harvest gets underway.
  • Pea and bean buybacks are available for harvest 2021. Please contact your farm trader for further information.

Seed

  • We have a great portfolio of OSR varieties, including Clearfield and HOLL varieties. If you are still deciding what to do about OSR this autumn, ask your farm trader about the establishment schemes we have to offer.
  • We now have some OSR seed on the floor ready for immediate dispatch including DK Excited, Windozz and Campus. Make the most of the soil moisture and drill early! Other varieties should be ready imminently or within the next couple of weeks.
  • Cereal seed is in high demand with stocks changing daily. Some key winter wheat and winter barley varieties are starting to become very limited. Please contact your farm trader now to avoid disappointment.

Fertiliser

  • Ammonium nitrate prices are rising, with European 33.5% product increasing €2/t on July for August movement. Brazilian markets are active, and manufacturers are seeking to achieve higher FOB values to all destinations. CF Fertilisers terms will be withdrawn on Friday and new terms for August are expected to reflect global sentiment. Increases are likely across all grades.
  • UK PK markets are active and rising demand has rallied prices on certain products as old stock is depleted. This trend is expected to continue as land is cleared. Importers are now entering new PK stocks bought at higher global prices. Indian demand is adding support – growing conditions have been exceptional this year and subsidised farmer buying is increasing demand. ADM has alternative PK products offering good value and more stable pricing, as well as comprehensive secondary and trace nutrients. These products are available for nationwide delivery.
  • Liquid UAN markets are currently stable, but rising urea and AN markets could affect autumn and spring prices in the UK. Potential tariffs for 2021 could result in significant increases in spring fill values as application time approaches.
£/€ £/$ €/$
1.096 1.2705 1.1585
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Jul20 123-130 160-170 208-213 332-337
Nov20 131-138 164-174 203-208 342-347
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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