Market Report

Thursday 24 September 2020

Sampling – Harvest 2020

Knowing the quality of crops is especially important this year so 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

  • Global wheat prices have made further gains due to increasing concerns over dryness in Argentina as well as in Russia and Ukraine, helping to support European and UK markets.
  • Increasing numbers of fields in the north of Argentina will not be harvested as drought increases its grip, while dry conditions in south Russia and Ukraine have an adverse effect on establishment of winter crops. Night frosts in Ukraine this week could make the problem worse.
  • Other events are adding to the positive market tone. Ukraine’s 2020 wheat harvest has declined to 25.1mln t from 28.3mln t in 2019, according to official ministry data. Grain exports are running 15% lower on the year, mainly due to lower maize exports.
  • Russian wheat export prices rose for the fourth week in a row on strong export demand from Turkey, Egypt and other major importers, amidst a general lack of farmer selling despite record ex-farm values in local currency terms.
  • Talk that Romania may stop wheat exports due to lower yearly supplies has helped to push European/Black Sea prices higher.
  • Egypt has purchased almost 650,000t of wheat during the week, mainly of Russian origin. Strategic reserves now put at seven months, above the governments’ stipulated minimum six-month target.
  • Algeria is planning to open its market to imports of Black Sea wheat, a long-anticipated move that could shake up competition.
  • The Indian government has raised the price it will pay local producers for new-season wheat by 2.6% ,hoping to encourage them to increase plantings that will begin next month.
  • Looking at potential downsides, Strategie Grains has raised its EU (including the UK) soft wheat crop forecast to 129.3mln t, up from 128mln t last month.
  • The consultancy kept exports unchanged at 23mln t due to increased shipments from other countries. FranceAgriMer lowered its forecast of French exports outside the EU to 6.6mln t., down from an initial projection of 7.75mln t.
  • However, European and UK markets rose this week, gaining from the global trend and limited ex-farm sales. UK values touched contract highs, aided by a weaker pound, the much-reduced harvest and increased import requirements.
  • The Bank of England has warned that the Covid resurgence and the lack of clarity over the UK’s future trading relationship with the EU could continue to pressure sterling.

Malting Barley

  • The EU has had another quiet trading week. Prices are unchanged.
  • The UK market has also been very quiet with little fresh demand.
  • Brewers are concerned about the latest virus restrictions and remain absent from the market.
  • Scottish distilling barley continues to come down into Yorkshire and East Anglia.
  • Crop 2021 buyback contracts remain attractive. Please contact your local farm trader for details.

Feed Barley

  • Feed barley markets are firmer again on the week, as the UK now calculates for handy-size cargoes into third country destinations, aided by continued weakness in sterling and firmer competing origins.
  • This demand has reduced the pressure to sell to domestic mills, and the discount to wheat has started to narrow. We have seen an increase in consumer activity as cover is sought with prices firming.
  • We have seen regional pressure to spot prices in the north of the country, as the more recently combined spring barley comes onto the market, much of which is in poor condition with high moistures and low specific weights widespread.

Rapeseed

  • Tensions have risen between US and China following a statement by President Trump to the United Nations General Assembly, stating that China must be held accountable for the Covid-19 outbreak. This hasn’t affected recent Chinese buying interest – the country has been in the market every day purchasing US soybeans to try to bolster stocks.
  • The market has rallied for several weeks on rising demand. Soybean prices reached levels not seen since 2018. The market looked over-bought, with managed funds still record long. However, outside markets weakened on Covid-19 fears and markets saw this as an opportunity for a sell off.
  • Weather in the US remains favourable, which will help harvest progress. US crop ratings remain unchanged at 63% good/excellent.
  • Soybean harvest is estimated to be 6% complete at the start of the week. Early yields have been reported to be better than expected in some states.
  • Crude oil is still trading below $40. Veg oil had traded higher at the start of the week, reaching eight-month highs. However, gains couldn’t be sustained. With most markets trading lower this week, buying interest backed off, pressured by weaker outside markets and developing restrictions in Europe due to coronavirus.
  • In Canada, it’s estimated the national harvest is 35% complete as of 15 September. Yields are currently in line with the three-year average.
  • In Australia, crops in the south are reported to be in good condition with recent rains of 10-20mm in the last week. Western Australia has missed the rain. Topsoil moistures are falling, which may have affected yield potential.
  • Matif rapeseed firmed to new highs to €395 on the November position, helped by firmer oil markets at the start of the week, along with continued concerns over the lack of rain in northern Europe, Baltics and Ukraine. However, forecast of rain, weaker outside markets and falling agricultural commodity and oil prices saw Matif values fall back close to nearby support levels.
  • UK prices fell back from season highs, but a combination of Brexit and coronavirus developments will make sterling volatile in the short-term.

Oats

  • Milling oat values vs last week have firmed slightly as buyers look to cover near requirements.
  • Farmers attentions are focused on drilling and sellers needing harvest movement have all but dried up.
  • Expectations for 2021 harvest are for an increase in oat acreage, especially in winter oats as growers look for OSR alternatives.

Pulses

Beans

  • Beans have seen a rally due to lower yields in the south and aggressive on farm pricing from merchants due to trade shorts in the nearby.
  • Quality and yield in the north of the country are better than the south. Things will develop as harvest continues / completes.
  • Demand for the Middle East remains very limited.

Peas

  • With harvest complete, we are collecting the final few samples from farm.
  • Quality remains good with a high proportion of samples being less than 10% bleached.
  • If you have peas to sell or offer, please let us know.

Seed

  • Winter wheat – stocks are changing quickly with limited availability across key varieties. Quality wheats are well sold, but there is still availability of a range of feed varieties, including KWS Parkin, Gleam and Graham.
  • Winter barley – hybrid barley remains tight, with a small amount of SY Baracooda Conventional barleys are in a similar position, with the exception of some KWS Gimlet.
  • Contact your farm trader for our full cereal seed availability.

Fertiliser

  • Granular urea has slipped further on the global market, although currency exchange rates are slowing the fall in UK prices.
  • India will tender again, needing to buy a further 1mln t a month through October to January. This is likely to stabilise pricing, so a buying opportunity may not be far away.
  • PiagranPro, the only integrated inhibited urea, remains a very favourable option and is available for Q4 delivery.
  • CF October terms on nitrogen and nitrogen sulphur products are available, although with the focus on autumn drillings all markets remain relatively quiet week on week.
  • Spot PKs are available from ADM. Prices for straight and blended products are at season lows at present.
£/€ £/$ €/$
1.0955 1.276 1.1645
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Nov20 138-143 175-185 204-209 344-349
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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