Market Report

Thursday 25 July 2019

Deferred Payment Scheme for OSR Seed

ADM Agriculture have launched a new scheme to enable growers to order and sow their OSR seed for drilling in 2019, with the ability to pay for it from the 2020 harvested crop.

Available on a range of market leading varieties of OSR, aiding cash flow on farm and removing some of the upfront costs of growing an important break crop. Please contact your ADM Agriculture farm trader for more details.

ADM Field to Flour Growers Club

ADM have launched a new wheat contract with the intention of encouraging farmers to produce food in a more environmentally friendly way and deliver improvements in food quality and safety. ADM want to work with local growers, sourcing wheat that is grown in the locality of its flour mills, but given the national coverage of our mills, we can support growers throughout the country.

In return for pledging to produce wheat that conforms with the sustainability criteria, growers will have access to exclusive contract terms to produce Group1 milling and Group3 soft wheat, and the opportunity to have a direct relationship with the end user. Please contact your ADM Agriculture farm trader for more detail.

Wheat

  • US prices are down $4/t on the week, as the potential of US spring wheat crop is seen as improving following the reports from the ongoing wheat tour.
  • Russia’s 2019 wheat crop estimates continue to drift lower as a result of the adverse weather prior to harvest, with the range of estimates now seen between 73-76mln t.
  • The EU is set for a larger wheat harvest this summer. The heatwave in late June had a less severe impact than initially feared, with bigger than expected crops in France, Germany, the UK and Poland.
  • The EU’s crop monitoring unit cuts its forecast of the EU’s soft wheat yield this year to 6.04t/ha, down from 6.1t/ha last month. The forecast is still 7.3% above last year’s level and 1.6% higher than the 5-yr average.
  • Egypt’s GASC purchased 300,000t of wheat at an international tender this week, originating 120,000t from Romania, 120,000t from the Ukraine, and only 60,000t from Russia.
  • Iraq’s wheat production is expected to reach 4.4mln t, almost double last year’s 2.3mln t. The acting director of the Iraqi Grain Board said they see no need to import wheat for the balance of the year.
  • Indian farmers planted an array of summer-sown crops on 56.7mln ha, down 7% y/y, mainly due to a delayed and relatively weak 2019 monsoon that affected plantings of most grains.
  • UK prices are down £1.50/t on the week, as sterling consolidates after the election of Boris Johnson as Conservative leader and Prime Minister. This followed an initial weakening due to the increased possibility of a ‘no-deal’ Brexit under Johnson.
  • In summary, northern hemisphere harvests are ‘ramping-up’ and with demand conspicuous by its absence, prices are likely to continue to drift lower.

Malting Barley

  • The winter barley harvest is well under way. We are seeing good quality Craft with low nitrogen, good retention and above average yields.
  • First samples of Venture are lower in quality than Craft with higher screenings making some unusable as malting.
  • We continue to see buying interest on the winters and markets remain active.
  • We have a selection of winter 2020 contracts available, please speak to your farm trader for details.

Rapeseed

  • US weather remains non-threatening. Temperatures are cooling and rain is making its way across the Western Corn Belt.
  • This week soybean crop ratings began to stabilise and remain unchanged from last week – 54% good/excellent, 34% fair, and 12% poor/very poor. This is the lowest crop rating for this week since 2012!
  • Next Monday, US delegates will travel to China to continue trade talks, although an agreement is not expected to be signed. There have been no additional purchases of US soybeans since the last round of talks, but it was confirmed yesterday that five privately owned Chinese crushers have been approved to temporarily buy 3mm t of tax-exempt US beans.
  • In Canada, rain across Saskatchewan has helped some of the poorer looking crops. As a result, funds increased their net short in Winnipeg Canola futures.
  • According to the Agricultural Ministry in the Ukraine, harvest is 87% complete. Yields have improved slightly from last week but remain lower year on year.
  • In Romania, harvest is virtually complete. Yields and oil results are lower compared to last year.
  • As a result, European rapeseed prices remain firm. UK prices have tracked EU prices higher over the last few weeks but have not been helped by the firming sterling vs euro.

Oats

  • Oat prices across the major global oat markets continue to trend lower. This has been mirrored in the UK, where harvest values have traded at around the £120.00 £125.00 ex-farm level for milling oats.
  • The UK oat crop quality and expected yield reports remain positive.

Pulses

  • New crop beans are slightly weaker on the week, as a result of firmer sterling. Demand for feed beans is limited to the port’s – beans continuing to price themselves out of the domestic feed ration.
  • There are few fresh enquiries on the export market for feed, with buyers in the EU reticent to put business on the books post October, due to the potential import tariff. It’s therefore exported that the feed base price will come under pressure once harvest commences and we see some farmer selling.
  • Australia has a relatively dry forecast for the next few weeks. The long-term forecast is showing a dry spring, so there is potential for Australian production to be revised lower. This could tighten the food quality supply and demand balance sheet. All eyes will be on UK and Baltic quality once harvest commences, which will be the next driver of human consumption premiums.

Seed

  • The first AHDB winter barley trial results are in from three sites, with SY Baracooda leading the hybrid pack on 108% of control. SY Baracooda is exclusive to ADM – contact your farm trader for to secure your order.
  • The 6-row varieties continue to impress. KWS Funky is top of the conventional list, with 109% of control. Top of the 2-row varieties is currently KWS Gimlet at 105% of control, some 3% ahead of KWS Orwell.
  • OSR seed is due in for processing shortly, with delivery starting over the next couple of weeks. ADM Agriculture have a comprehensive portfolio of varieties to cover all requirements and sowing conditions are currently excellent, with plenty of barley crops cleared and more than adequate moisture and warmth to get seeds growing fast and evenly away from flea beetle.

Fertiliser

  • Globally, granular urea has stabilised following the Chinese export situation last week, whilst markets in the UK remain relatively flat as harvest gets underway.
  • Currency is still a large part of future price direction. Sterling has been supported by weakness in the euro. Any further political/economic uncertainty in the UK could weaken sterling further and keep imported fertiliser products firm-stable.
  • UK ammonium nitrate and nitrogen sulphur compounds prices are unchanged. October terms will be withdrawn when volumes have been met.
  • Liquid terms have been well received, with many mitigating their risks regarding the uncertainties around UAN tariffs. New terms are expected to be pulled due to large uptake. Contact your ADM Agriculture farm trader today to secure tonnage.
  • Many are looking towards Fibrophos and P-Grow to reduce their fertiliser input costs, with a fixed price that is not directly impacted by currency. Speak to your farm trader today on how you could benefit from utilising the renewable compound fertiliser.
£/€ £/$ €/$
1.1215 1.2495 1.114
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Jul19 115-120 133-143 - 319-324
Nov19 120-130 137-147 200-210 329-334
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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