- All markets are stuck in a narrow range as northern hemisphere farmers are more concerned with plantings than crop marketing. This doesn’t mean that the fundamentals of more supply than demand have changed much but has created in some regions some good spot-marketing opportunities for farmers.
- In the UK, all ports are almost fully committed for September and October as shippers have put business on the books for the period up to the supposed Brexit day of 31 October. Because of tariff concerns, almost no export business is possible beyond that date, and it does not look like any clarity with regard to trading rules will be apparent much before the EU summit of 17-18 October.
- A scenario where ‘normal’ export business is possible from November onward gives the UK every chance of exporting its surplus during the remaining eight months of this marketing season. The alternative situation would see UK exports to the EU attracting a €12 import tariff. That would leave the UK with well over 1mln t to export, either at a reduced price into the EU (because of the tariff) or seeking other export outlets further afield. The latter is possible, but probably at levels below where ‘normal’ EU business could be transacted. The fact remains that until the political landscape becomes clearer, the UK wheat market is watching and waiting, but that probably also applies to all sectors of UK industry.
Thursday 26 September 2019
- Another extremely quiet week for EU and UK malting barley.
- Prices have weakened slightly over the past seven days.
- Some EU traders believe that they have enough malting barley to satisfy demand with or without the UK after 31 October.
- UK ports remain extremely busy shipping as much as they can, with only a few weeks remaining. Wet weather is not helping.
- A lot of malting barley that was not on a pre-harvest contract continues to be moved as feed.
- Buyers should come back to the market for Jan/June 2020 purchases once the Brexit outcome is known.
- Little change on US soybeans this week. Reports of fresh Chinese purchases buoyed prices early on. Total Chinese purchases of US beans this month have now reached 1.3mln t.
- BAGE projected that Argentina’s 2019/20 soybean crop will drop to 51mln t, forecasting that planting decisions will be influenced by concerns over the economy surrounding the upcoming election.
- Ongoing rains continue to delay the Canadian canola harvest, with Manitoba 58% complete (40% last week) and Saskatchewan 15-20% (6% last week).
- Ukrainian imports keep EU crushers supplied nearby, as shippers push to export seed ahead of the 1 January VAT changes.
- South Australia received some much-needed rain. However, many forecasters have reduced their production estimates. Oilworld forecasts the Australian crop to fall to 2.25mln t (2.18mln t last year, a nine-year low).
- EU prices are consolidating after their recent rally, as Black Sea imports solve the tight supply situation nearby.
- Domestic prices have also moved sideways this week, with all eyes on sterling, which will be the more important driver of prices in the short-term.
- The UK oat market remains largely unchanged on the week. With no fresh news on Brexit and the UK Tariff Rate Quota situation, millers are keeping values unchanged, as well as being selective on quality. Without any more clarity on our export situation past 31 October, this trend will probably continue.
- The market is struggling to find enough homes for +40kg oats, of which there is substantial supply, especially in spring varieties. Where homes can be found, quality values ex farm have traded at circa £90/t.
- Premiums for winter beans suitable for human consumption continue to fall, as buyers show a reluctance to buy, with most north African importers looking for spring varieties. Values for spring bean varieties are unchanged on the week.
- Feed bean prices have remained stable, as shippers continue to cover short positions. There has been a reasonable volume of feed leaving UK shores this month and, with a larger programme for October, we expect feed prices to remain stable in the short term.
- We have seen some further demand this week for feed beans for October loading, but there are very few berths available around the country, with ports flat out pre-Brexit, so it is difficult to make further sales for execution in October. Buyers looking to import the beans into EU destinations remain reluctant to cover their requirements due to the potential import duty.
- In the long term, we need to either find some additional export demand, or bean prices need to drift lower, to force their way into the compound feed diets.
- Varietal availability of winter wheat remains unchanged on the week.
- We are down to our last batch of SY Gleam. The variety has been in extremely high demand this season, off the back of a great year on farm.
- Any overage of KWS Extase has now been sold.
- Limited stocks of KWS Firefly remain available.
- Winter beans are sold out.
- We would urge growers to reserve their spring bean requirements now.
- KWS Orwell is sold out, however from the conventionals, KWS Gimlet, is still available, and there is a limited amount of the hybrid SY Baracooda.
- Granular urea sales remain limited on the global market. Offers for North African urea have been rejected at $260/t FOB Egypt last week, targeting $270/t FOB, but an individual sale of 5-6,000/t has been accepted at $260/t this week due to limited European buying.
- With higher freight rates and both the euro and sterling down against the dollar this week, the $4-5/t correction from the early-mid September FOB levels may not translate at the farm gate across the Continent if these levels continue.
- UK domestic granular urea market is trading below replacement values. Current on-farm prices would be similar to those if the dollar/pound rate was around 1.30 and FOB values remained at $260/t.
- UK ammonium nitrate has remained flat since the new season. November premiums are beginning to look likely as interest returns to the market and supply is capped by UK AN production capacity and importers remaining risk adverse by importing AN when required.
- ADM offers tank deals as well as competitive terms on liquid fertiliser. Growers interested in finding out more about how liquid fertiliser could benefit their farming system should speak to their ADM farm trader or the fertiliser desk.
- With GBP currency volatility high and tariffs still very much a possibility, taking some cover is recommended. Speak to your ADM farm trader today on how to mitigate your risks.
|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.
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