Market Report

Thursday 25 June 2020

SAMPLING HARVEST 2020

We have sent a communication to all our farmer customers regarding our plans for sample testing for the forthcoming harvest. If you have not received this important information, please speak to your ADM farm trader to be fully informed and for us to be able to provide you with an efficient, smooth service in the coming weeks and months.

Wheat

  • US wheat prices continue to drift lower pressured by harvest progress and favourable weather, as well as talk of record yield and output from this year’s US corn crop.
  • NASS reported US winter wheat harvest 29% complete as of 21 June, slightly above the five-year average of 26%.
  • Russia’s agriculture ministry says that the country will not replenish its stockpile of grain in the new season.
  • Favourable weather in the central federal district is seen elevating Russian wheat yields and final production.
  • Ukraine’s wheat production is expected to be lower following recent warm and dry weather in the central and northern areas.
  • Egypt’s state buyer GASC continues to import grain during its domestic harvest, purchasing a further 240,000t from Russia, Romania and the Ukraine.
  • India has authorised imports of 500,000 tonnes of maize with a 15% import tax as the country tries to augment domestic supplies due to recent declines in production and rising feed demand.
  • Germany’s 2020 wheat crop will fall 4% year on year to 22.2mln t, according to the country’s association of farmers co-ops, down from a previous forecast of 22.4mln t.
  • Condition of this year French soft wheat crop remained stable in the week ending 15 June, with 56% of the crop rated good/excellent.
  • EU Commission cut the import duty on maize to €4.65/t from Tuesday this week, following a slight rise in global import prices.
  • EU (Paris) futures fell to a new three-month low as a sharp rise in the euro and improving prospects for cereals harvests pushed prices through a key support level.
  • London futures are down circa £1.50/t on the week, although slow ex-farm sales continue to underpin physical price values.
  • With the wheat harvest steadily advancing northwards in the US and just commencing in Europe, the trade will continue its weather watch to obtain early indications of yields, and more importantly, quality.
  • Early harvested crops in southern France have resulted in some disappointing yields but decent quality, although both normally improve as the harvest moves up into the Paris basin.
  • Talk of improving wheat yields and production from within Russia should continue to provide major resistance to any substantial gain in European prices, as increased availability onto the export markets may entice key importers to ramp up purchases of Russian wheat, while the country operates under a non-quota export campaign.
  • In the UK, the return to much hotter conditions may rekindle talk of more potential crop issues, although cooler conditions with some rain is forecast for the weekend and into next week.

Malting Barley

  • UK pubs are set to reopen, which should support malting demand into 2021. However, maltsters still have a huge backlog of crop 19 malting barley waiting to be moved.
  • Harvest intake will undoubtedly be restricted.
  • The French winter malting barley harvest has started with early reports pointing to good quality but slightly reduced yields.
  • The recent rains have been beneficial for UK and EU crops and prices have fallen over the last few days.

Feed Barley

  • Domestic feed barley markets are currently very difficult to pin down. Buyers are taking a risk-off approach and the weaker wheat market is not helping to stimulate demand.
  • Export demand is also tricky to come across, with buyers in Holland seemingly waiting for harvest, whilst any interest from Spain has completely disappeared following optimistic crop forecasts in the region.
  • Harvest has been delayed in the Black Sea region due to continued wet weather, causing some tightness as shorts try to cover in positions.
  • The French winter barley harvest has started with mixed yield reports.
  • A warmer week in the UK is helping crops progress, with reports that the earliest winter barley may start to be combined over the next week.

Rapeseed

  • Outside markets led the way this week as a rally in crude oil in the first half of the week was offset by a sell-off on Wednesday.
  • Comments by the White House that the phase one trade agreement with China was in tatters were quickly rescinded, but briefly caused the market to wobble. Early optimism of potential sales by the US to China was not backed up by actual agreements, to pressure CBOT soybeans downwards latterly. August futures closed Wednesday 3c/bushel lower week on week. Favourable weather forecasts in the US Midwest will continue to exert pressure on forward markets.
  • Malaysian palm oil, which often leads the veg oil complex, has followed crude closely, mirroring the general uptrend in the last two months, but also the decline on Wednesday.
  • Matif rapeseed, which drives the UK price, has followed the same pattern too. Wednesday’s fall offset gains in Thursday-Tuesday’s trading sessions, to leave values largely unchanged on the week.
  • Harvest in Ukraine and the Black Sea region, which would usually be underway by now, has been delayed by rain. Early cuts in southern France have reported lower than expected yields.
  • In the UK, a combination of firmer Matif values and weaker sterling saw new crop prices touch season highs briefly. With hot weather continuing for most of the country, it won’t be long before harvest begins.

Oats

  • The wet winter and dry spring remains fresh in the mind. Recent rains followed by sun has (anecdotally) improved the oat crop condition, although yields will have been affected by the poor drilling conditions.
  • Fresh trade remains very quiet. Certainly, offered levels of Scandinavian oats for Q4 2020 shows considerable upside to the current UK market. However, if the crop is of decent quality, even with reduced yields we would expect to see domestic values fall.

Pulses

  • The old crop bean campaign is drawing to an end. There is no human consumption demand and only a few shorts remain for feed beans against export sales due to be shipped in July.
  • The new crop market remains quiet. Farmer selling is limited, but at the same time, there is little buying interest at these relatively high levels. Prices remain above £200/t ex-farm for most, which are near the highs of the season to date.
  • Reports regarding the condition of the crop are mixed, ranging from excellent to poor. Pea crops on the whole are looking well. New crop pea buybacks are available for harvest 2021. Please contact your farm trader for further information.

Seed

  • Due to the wet autumn, supply pressure remains on winter barley and winter oats.
  • We have a wide range of market-leading winter wheat varieties to offer, with limited availability on some key varieties.
  • We advise those requiring seed to get orders covered as soon as possible to avoid having to make alternative cropping plans.
  • We have a great portfolio of OSR varieties with a selection of different traits to suit your needs, including some with very appealing establishment schemes. Get in touch with your farm trader for more information.

Fertiliser

  • News from the Indian tender has seen China offer some export tonnage, despite the rising tensions between the two countries after a border dispute and calls for India to boycott trade with China.
  • Egyptian urea, with current limited product availability, has held prices around $240-5/t FOB. UK urea levels appear to have settled with weaker currency also helping to support prices.
  • Exclusive to ADM Agriculture, our SKW Piesteritz products, ALZON® neo-N and PiagranPro, have been in high demand for forward buying. This is arguably due to the unpredictable extreme weather that has been experienced over the past nine months and better active agent efficiency at usage time after longer periods of storage.
  • UK ammonium nitrate prices have been issued seeing a £7/t increase on the 34.5% product for spot delivery from new-season terms.
  • The liquid UAN market has been active over the past two weeks, with attractive summer, autumn and spring fill terms available.
  • Considering the current overall state of UK soils, investment in autumn PK applications is encouraged due to adverse weather impacts and crop take off. Alternative PK products offer excellent value with comprehensive secondary and trace elements incorporated.
£/€ £/$ €/$
1.1095 1.2425 1.12
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Jul20 120-135 155-165 205-210 321-326
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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