- US wheat prices are down just over $3/t, following a roller-coaster week of trading.
- US crop planting could increase to a record next year if prices and weather hold, USDA officials reported, citing ‘there is no indication that demand is going to soften any time soon’.
- Talk of continued dryness in South America, linked to the La Nina weather pattern, has traders talking down soybean and corn production estimates.
- BAGE sees corn plantings 31% complete against the expected area of 6.3mln ha. Wheat harvest is 20% complete, with production estimate unchanged at 16.8mln t.
- Ukraine’s export prices fell last week following a decrease in demand from shippers and importers due to higher prices.
- SovEcon has raised its forecast for Russia’s 2020/21 wheat export by 1mln t to 40.8mln t, due to higher crop estimate and the current pace of exports.
- French farmers had sown 95% of the expected soft wheat area for next year’s harvest as of 16 Nov.
- An up and down week for US wheat as support from declining crop ratings was negated by a commodity sell-off prior to the Thanksgiving holiday. US wheat, although more competitively priced against other origins, is still not translating into additional export demand. Black Sea prices have edged lower. Australia’s crop is expected to be reported in excess on 30mln t next week, and with ample global inventories, these are deemed bearish to US wheat prices.
- EU prices hit contract highs this week, as the US market firmed. Continued interest form China, and the fact German wheat is now competitive into North Africa, keeps the balance sheet uneasily tight. While EU exports are running lower year on year, domestic and international demand will need to reduce over the remainder of this marketing season.
- UK prices have remained steady, with futures edging up a fraction on the week. With seasonal logistics starting to kick in and the need for the UK to start pricing in additional imports, ex-farm prices should remain supported. Sterling has continued its firmer trend, helped by reports that a post Brexit trade deal can be reached prior to the 31 December deadline, which hopefully will result in more transparency on how the UK will trade, internally and externally pre January 1st
Thursday 26 November 2020
- Demand is strong in the run up to Christmas, but EU buyers are finding it difficult to purchase what they require.
- EU malting barley prices have risen again this week, but premiums remain unaltered.
- UK markets are very quiet and prices unchanged from last week.
- EU and UK new crop values are also slightly firmer.
- Please contact your local ADM farm trader for 2021 crop contract details.
- Feed barley markets are quiet, as all nearby demand seems to have disappeared and the focus switches to execution in the run up to Christmas.
- Domestic buyers are still fairly relaxed about their cover going into the New Year.
- Tunisia bought 75,000t of feed barley for Dec’20-Jan’21 shipment, ex Black Sea, at below UK replacement levels.
- We are still waiting to hear the outcome of UK/EU trade deal negotiations before the barley market can continue to function properly.
- US stocks trade at highs before consolidating prior to the long weekend for Thanksgiving. Everything has retracted from the highs of the week. The US federal reserve met yesterday to discuss a new economic aid package, but little became of the talks.
- CBOT soybeans hit $12, but struggled to make any additional gains. Markets sold off before the long weekend, apart from soy oil, which closed slightly in the green.
- In South America, rain is now falling in parts of Argentina, with the showers expected to hit southern parts of Brazil in the next few days.
- In Brazil, plantings were updated, but vary as to whom you speak. They are estimated to be between 75%- 81% done nationally, vs 79% last year, but as said previously, some of this area will have to be re-drilled.
- There are rumours that China sold back 2-5 cargoes of soybeans from the US, switching supplies to Brazil. However nothing has been confirmed. This pressured prices, whilst South American weather remained supportive.
- Chinese crush margins weaken and buying interest has dropped off. It’s still thought that China will return to the US market at some point in the season.
- Managed funds reduced their overall net long before the holiday to 222,000 contracts.
- Veg oil prices traded close to highs at the start of the week. Malaysian palm oil is at eight-year highs on weather concerns. Prices were pressured later in the week with Malaysian palm priced trading 2.4% down, 5% off the highs we saw back on 19 November. November exports being reported lower than expected added to the decision that Indonesia will not increase its biofuel mandate from B-30 to B-40.
- At the start of the week Canadian canola hit seven-year highs. Matif rapeseed also rallied to new contract highs. Prices saw pressure later in the week, with weakening CBOT soybeans priced and lower oil markets. Matif values fell back, sharply trading €6 down in some sessions.
- UK prices remain close to contract highs. Sterling remains rangebound, reacting to the latest UK GDP data being reported to be the worst for 300 years, down 11.3%, and the ongoing trade talks.
- UK feed bean prices have firmed slightly this week, as some UK consumers have had to increase their bids to ensure cover for Quarter 1 of 2021.
- At current parities, the UK remains competitive on the export market against the Baltics into Europe.
- The Australian harvest continues to progress with good yields and quality reported, and some estimates suggest a crop size double that of last year. As a result, prices in Australia have fallen $20/t this week and Australian origin beans are now a significant discount to UK beans into Egypt, quashing any demand for UK beans. With the feed bean price rallying, human consumption premiums are less than £5/t, if demand can be found.
- Old crop green pea prices remain well supported.
- We have spring barley processed on the floor ready to go. Please get in touch with your farm trader if you require pre-Christmas delivery. Don’t forget the added bonus of using Tiros seed treatment with 0.7t/ha yield increase, giving an 8:1 return on investment.
- Spring bean and spring wheat availability is beginning to look very limited.
- ADM has market-leading buybacks available on large blues and marrowfat peas, call your farm trader for more information.
- Although winter seed is in short supply, we do have a couple of key late-drilled winter wheat varieties available for immediate dispatch.
- Granular urea demand has increased on the world market. France, India and the US have been buying. Prices have edged up in the UK also, with gains significantly outpacing GBP strength.
- Replacement values in the UK are now approaching £270/t. With plenty of buying left to be done in the UK urea market, and the window for delivery shortening, it would not be surprising to see these levels achieved in the near future.
- CF has withdrawn all AN term this week. New levels are anticipated to be higher, reflecting other nitrogen sources price increases across Europe.
- DAP continues its price rally, whilst TSP and MOP levels continue to slowly increase. Further gains could been seen on TSP in particular.
Global urea spot price comparison. $/t FOB unless otherwise stated.
|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.