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Thursday 23 September 2021
- After early monthly pressure, fresh impetus has returned to grain markets as talk of declining crop prospects supports prices.
- Rumours of Russian export restrictions are further tightening the outlook for global milling quality wheat and importing countries have a lot to buy.
- In addition, severe frosts and lower rainfall across Western Australia’s grain belt will hurt final wheat production this season. However, Australian grain exports could hit a record level as strong international demand and ailing American/EU crops support the export outlook.
- The much-depleted Canadian harvest progresses amid favourable weather conditions. Some frosts have been reported, but no widespread damage has occurred.
- Russia’s wheat harvest is now seen at 74-75mln t, at least 10mln to lower than last year, with the country’s total grain output expected to total 117-120mln t.
- Kazakhstan has upgraded its 2021 grain harvest to 16mln t, although this remains 25% below last year’s level. The country has trimmed its export forecast to 6-6.5mln t.
- Strategie Grains now puts the EU soft wheat harvest at 129.1mln t, down 2.4mln t on the month, due to the effect of heavy rains in western regions. China has agreed to relax minimum test-weight requirements for French wheat cargoes to 75kg/hl from 77kg.
- Hot, dry weather in southern Europe is also paring yields for summer crops. The EU’s crop monitoring unit MARS has trimmed both corn and spring barley yield forecasts.
- The Argentine government is seeking executive powers over grain exports taxes until 2024. The arrangement currently runs until end-2021, and if successful this could reduce farmer selling and therefore the pace of exports from the country, which is expecting a record 21 mln t wheat crop this season.
- Ukraine has also broken records, where growers have threshed 33mln t of wheat this season, up a third on the year thanks to average yields at 4.65t/ha.
- London ICE futures have moved up, but relatively less than CBOT and MATIF with currency slipping a bit. This means the UK has become competitive for export with some recent trades taking place, although ongoing issues with high moisture and lower test weights has slowed movement off farm.
- The UK surplus is small this year on paper, and may be zero if the carryout at the end of the season is increased, so there is no room to export any big volume.
- The world and EU malting barley market remains well supported due to the global lack of supply.
- There are buyers for EU malting barley but few sellers.
- UK malting barley is also in demand, but again there are few sellers as growers concentrate on autumn sowing.
- Prices are up slightly over the last few days.
- There is also renewed interest in crop 2022 with a variety of contract options available.
- Outside markets were pressured at the start of the week following the potential collapse of one of China’s largest real estate companies. Markets have since recovered with the Evengrande default now likely to be resolved.
- The US has seen some rain in the eastern corn belt, but heading west it looks warm and dry for the next seven days. This will increase harvest pace, but there are showers in the longer term forecasts.
- Soybean futures bounced off long term support levels at $12.50. The US harvest has started with reports pegging progress at 6% completed. Yields are said to be mixed, 2-6 bushels/acre below expectations, but it is early days. Soybean crop conditions improved 1% from 57% good/excellent to 58%.
- In South America it looks like Brazil will finally receive rain next week, which will help planting conditions considerably.
- Soy oil has traded higher following a Reuters announcement last night of potential cuts the US Environmental Protection Agency may make on 2020/21 biofuel blending. This could see more soy-oil being used in the ration once again, meaning more soybeans acres are needed.
- Energy markets continue to rally, with crude oil (West Texas Intermediate) back to $72/barrel as demand outweighs supply and a cold winter forecast.
- After a slow start to the week Malaysian palm oil rallied 3% yesterday following the support seen in soy-oil and firming energy markets. Prices are still trading off season highs for the time being. Palm exports were reported slightly higher than estimated and production is still lagging due to the lack of available labour.
- It was announced that India’s edible oil imports may fall by 3% this coming season, which may pressure palm prices. Closer to home, Germany also reported that it will look to stop using palm oil in biofuel from 2023.
- Canadian canola prices found support on firmer oil markets, but with harvest in full swing, markets are seeing some slight hedge pressure.
- Matif rapeseed made new highs this week. November futures rallied through €600/to trade over €610 by the middle of the week.
- Sterling is rangebound 1.1600 – 1.17000. UK prices remain at contract highs.
- The UK oat market has seen a rise in prices over the last week of £5-10/t, supported by a lack of milling oat offers coming forward and high demand by feed oat buyers into Europe.
- The slow assessment of the UK crop following a delayed harvest has resulted in a lack of sellers and this has made millers pay higher prices in order to cover demands. Quality has been variable with many samples in the 45-48kg/hl bracket and millers are using these tonnages on fallbacks in order to limit the amount being downgraded to feed.
- Our winter oat sampling averages have fallen since last week however the springs are unchanged with specific weight.
- Export buyers into Europe remain keen for 45kg feed oats. Milling oat values are still too far apart to give a clear value, but certainly higher than previous trades.
- Bottom line, oat market remains well supported, but we need more confirmation of quality.
- Winter Wheat: ADM still hase good availability of Group 4 hard wheat SY Insitor. It has had a great year in trials with really good septoria resistance and very impressive yields.
- Haulage issues continue to hold up getting deliveries on to farm. We urge you to place any outstanding seed orders in good time to avoid disappointment.
- Winter Barley: We are beginning our final run of production of winter barleys. Please get in touch with your farm trader now for an update on our seed availability, as it is becomming limited across the board.
- Don’t forget ADM Agriculture can cover all of your grass seed, stewardship and cover crop needs. Get in touch with your farm trader with any enquiries.
- Please click here for our 2021/22 seed varieties guide.
- India returned to the market seeking 1mln t to be shipped by November. Prices rose on Tuesday immediately $10/t FOB Egypt.
- Brazil has significant quantities of urea to buy for its Safina (second corn) crop. Supply remains tight as values break historic levels.
- UK markets are following world urea replacement values, although true replacement values today equate higher than where sales are being made.
- CF’s ammonium nitrate plant in Billingham has reportedly restarted production after striking a deal with the UK government.
- No UK AN terms are available and supply concerns remain with the potential for a repeat situation in three weeks when government funding stops.
- AN importers have been forced to source AN from alternative sources beyond Europe due to tightness in supply, taking on 6.5% import tariffs.
|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.”
ADM Agriculture cannot accept liability arising from errors or omissions in this publication.
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.