Market Report

Thursday 25 March 2021

Please click *here* for this week’s grain market update on the ADM Agriculture YouTube channel.

Wheat

  • US wheat prices have traded down a further $5/t over the week as continued improvement for new crop prospects weighed on values.
  • The latest weather outlook for the US spring remains favourable for farmers to plant what could be record corn and soybean crops. However, soils are much drier than the past two years and this could come into play later on.
  • Other areas have also reported good new crop propects. Consultant SovEcon raised its forecast for Russia’s 2021 wheat crop to 79.3mln t, saying crop conditions had improved dramatically due to a mild winter and ample precipitation in recent weeks.
  • Ukraine’s government said favourable weather could help farmers increase the grain crop to 75mln t this year, with exports reaching 53mln t (65.5mln t and 45.4mln t respectively in 2019/20).
  • FranceAgriMer reports the condition of the French soft wheat crop declining slightly last week, with 87% of the crop rated good/excellent (88% a week earlier), but still much improved from last season’s 63%.
  • Strategie Grains left its estimate of the 2021/22 soft wheat crop unchanged month on month at 129.6mln t.
  • EU/UK prices have also eased during the week following the weaker global trend, although some support has come from a firmer US dollar.
  • Market participants will now wait until the release of key USDA planting/stocks data, due out next Wednesday, with the focus heavily on the corn and soybean numbers.
  • Turning to old crop, Ukraine’s grain exports have fallen 23.4% on the year to 34.01 mln t, with traders selling 14.01mln t of wheat (80% of quota), 15.43mln t of corn and 4.05mln t of barley.
  • Harvesting of Brazil’s summer corn crop had reached 58% of the planned area, although the delayed bean harvest, seen at 59% complete, is still slowing sowing of Brazil’s second corn crop.
  • Strategie Grains trimmed its forecast of 2020/21 EU/UK soft wheat exports to 25.2mln t.
  • Soft wheat exports from the EU had reached 19.34mln t as of 21 March, down from 24.65mln t cleared by the same week last year.
  • China continues to sell wheat from state reserves, with a further 1.63mln t traded last week, although prices paid were lower due to declining domestic corn prices.

Malting Barley

  • The EU and UK malting barley markets are drifting lower, along with the feed market.
  • EU and UK spring barley plantings are going well, which is also putting the market under pressure.
  • Ongoing Covid problems are causing uncertainty for brewers, but more so in the EU.
  • The UK new crop market is still well supported with attractive prices and premiums.

Feed Barley

  • Overall another quiet week for the feed barley market, although old crop prices have found support after the sell-off seen in recent weeks as buyers step back into the market and origination on farm remains tricky.
  • Export business is still noticeably absent from the market, but today’s prices certainly seem to be peaking more interest than in recent weeks.
  • Drifting values on new crop positions are also starting to draw the attention of buyers, both domestically and on the Continent.
  • UK prices look good value to consumers as the spread vs wheat continues to widen and the spring planting campaign draws closer to completion.

Rapeseed

  • Outside markets were lower again on continued fears about economy recovery, with the US treasury confident of a rebound, but admitting there was a long way to go before things were back to normal.
  • CBOT soybeans have been mixed this week, trading sharply lower on weaker outside markets, but recovering on better veg oil prices.
  • Predictions of a bigger US corn area in 2021 is offering resistance to new crop. However, some in the trade believe current corn usage is higher than reported, or the crop size is wrong, particularly as farmers aren’t selling. They expect the 2020/21 carry-out will be reduced, tightening supply.
  • Weather is looking favourable in Argentina, with most of the country receiving rain yesterday, which should help late soya development. Brazil still looks warm and dry.
  • China/US trade talks resumed last week with both sides complaining about each other’s policies which pressured markets. There are still a lot of unknowns surrounding African swine fever in China, which will be followed closely as we go forward. China did come into the market to buy corn, but no soybeans, with crush margins continuing to be pressured on lower meal demand.
  • Crude oil is affected by the blockage in the Suez canal with Brent crude rallying 5% on Wednesday, but there is no fundamental shortage and oil stocks remain high.
  • Veg oil markets were firm again. Asian markets all rose sharply this week. Palm oil played catch up from soy oil’s recent rally on the back of continued talks of cleaner energy and higher usage in airplane fuel.
  • Matif rapeseed traded lower to start the week, but has made some gains since then. Old crop coverage is getting better and demand for oil is starting to pressure prices.
  • Sterling has fallen (GBP/EUR: 1.1582, GBP/USD 1.3686) due to fears the EU will ban vaccine exports to the UK. We will have to wait for the final decision later today.

Oats

  • The old crop market remains largely unchanged. Millers are comfortable with their cover and are not chasing sellers. On the other side, sellers are more focused on spring land work, and as a result, fresh trade is very light.
  • The AHDB early bird survey suggested an oat area of 214,000ha, up 2.1% on the year. It will be interesting to see if this area is realised, or whether the drilled area is lower than this initial estimate if farmers have moved to alternative crops due to the significant discount that oats have been compared with other commodities in this last harvest year.

Pulses

  • Old crop bean markets have traded lower again on the week, driven by limited demand both at home and abroad. With bean markets now trading lower and sterling weaker, UK beans are now competitive on the export market, if any buying interest arises.
  • New crop beans continue to track wheat futures and have traded lower on the week as a result. Early indications are that the Australian crop size will be significantly smaller next year and therefore the UK might capture a greater share of the human consumption market.
  • Marrowfat and yellow pea buybacks for harvest 2021 remain available. These can be drilled comfortably in April and early May, so are a good alternative to look at for anyone who is concerned about drilling spring barley or beans at this later stage.

Seed

Spring seed:

  • ADM has Laureate spring barley on the floor for immediate dispatch.
  • We have marrowfat pea variety Kabuki available on our market-leading buybacks.
  • Maize seed demand is increasing. Contact your farm trader for more information on the varieties we can offer.

Autumn seed:

  • As we look ahead to the autumn we have a great portfolio of OSR to offer, including some varieties supported by very appealing establishment schemes. Click *here* to see this week’s seed market update on YouTube.

Fertiliser

  • Last week’s Indian urea tender received offers of 1.9mln t. Traders await to see if Chinese exports will cover most of the requirements. US and South American pricing is firm.
  • European prices remain firm also as North African pricing is unchanged on the week.
  • Demand in the UK is increasing due to better weather conditions, which is supporting current prices, but it is not sufficient at the moment to prompt price increases.
  • UK ammonium nitrate prices remain stable. If global or domestic urea values increase, AN prices could move upwards again.
  • NPK compound product availability is good at present and business is increasing for grassland markets and spring cropping.
  • Phosphate values continue to rise. ADM Agriculture has alternative renewable 0-P-K products available for spring delivery.
£/€ £/$ €/$
1.162 1.3725 1.181
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
May21 162-172 196-206 220-225 439-449
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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