Market Report

Thursday 27 August 2020

Sampling – Harvest 2020

As many of our farmer customers already know, ADM Agriculture will not be sending samplers out to farms for the forthcoming harvest. We need to be able to test the crops we buy, and it remains our intention to do this in as efficient manner as possible whilst reducing the risks associated with this service. Knowing the quality of crops is especially important this year, so if you have not already done so, please contact your farm trader to arrange for sample bags to be sent to you. Once you have samples ready, we will collect them and the results will be available via our online portal, ADM 365, or from your ADM farm trader.

Wheat

  • Another week in which markets have been driven by US spring crop concerns.
  • Much of the corn belt is still suffering from an unseasonable spell of hot, dry weather and yield expectations for US corn and soybeans declined after another week with very little rain.
  • US prices continue to firm as a result, up $7/t on the week.
  • EU prices also rose, by just over €2/t, supported by firmer global markets and continued talk of Russian interest in French wheat.
  • EU’s crop monitoring unit (MARS) has slightly raised its EU wheat yield estimate to 5.55t/ha. However, it has sharply reduced its maize estimate to 8.01t/ha, down from 8.21t.
  • UK (London) prices are up just under £2/t as harvest delays continue to provide a supply squeeze, underpinning delivery premiums and farm gate prices.
  • With most northern wheat either still in the field, or in need of being dried, the shortness of supplies has continued to support spot prices. Given the unpromising forecast, it remains likely that this squeeze will continue for a few weeks. However, at some stage, the backlog of will eventually be made available.
  • Harvest prospects are improving further east. SovEcon has again raised its forecast for Russia’s 2020 wheat crop, this time by 300,000t to 81.2mln t.
  • Ukraine’s wheat and barley harvests are virtually complete, with farmers reaping 26.2mln t and 8.7mln t respectively before drying and cleaning.
  • Kazakhstan will have 7.5-8mln t of grain available for export during the 2020/21 season, based on an improved harvest outlook of 18mln t.
  • Egypt’s state buyer continues its buying strategy, purchasing a further 530,000t of Russian wheat in its latest tender.
  • Looking at more distant prospects, harsh frosts over recent days have added to severe dryness in punishing Argentina’s recently sown wheat crop.
  • Meanwhile, Argentina’s 2020/21 corn planting area is seen at 6.2mln ha, down from 6.3mln previously due to dry weather in key producing areas.

Malting Barley

  • The European market remains extremely quiet with buyers absent.
  • Demand is down around 10% and there is a surplus of good quality malting barley.
  • The spring barley harvest in the UK continues to be hampered by the bad weather.
  • England has cut around 60% of spring barley so far., Scotland around 15%.
  • Yields are below average. Nitrogen is around 0.15 to 0.20% higher than normal. The grain is 96 retained over a 2.5mm sieve.
  • Unfortunately, there are germination and pre-germination problems in some of the later cut barleys.
  • For those growers who have half their barley in the barn and half in the field, please try to keep them separate.
  • We have various crop 2021 contracts available. Please contact your local farm trader for details.

Feed Barley

  • Adverse weather conditions across much of the UK over the last week have put a stop to harvest, with plenty of spring barley still in the field nationwide.
  • The squeeze in prices continues, as we see continued demand from consumers/shorts for the nearby positions, combined with a very slow pace of origination. A firming ICE wheat market is helping to support values in the deferred positions.
  • Talk of quality derogations from the malting industry is keeping out of spec malting barley from the feed market.
  • Tunisia tendered for 75,000t of feed barley for October’20 shipment, which traded basis Black Sea values some $10 cheaper than current UK levels.

Rapeseed

  • Harvest in Europe is now just about finished, with disappointing yields in the UK and France being offset to some extent by better crops in Scandinavia and the Baltics. The latter prompted a raft of selling in mid-August, which has now come to an end as growers focus on wheat harvest and drilling next year’s crop.
  • Crushers in Europe appear to be well covered into Q4 2020, but with European farmers now disengaged from the market, any short could find it difficult to originate seed. The market will be reliant on third country imports as we go through the season.
  • Current weather conditions in Australia will need to be watched closely. Prospects look great and, with timely rains boosting the crop, output could now exceed 3.5mln t.
  • It’s a similar picture in Canada. With harvest just getting started yields are looking good, but with strong demand from both Europe and China, we should expect to prices to remain generally supported.

 

Pulses

  • There has been little activity over the past week with little harvest progress. Most winters are cut, and many spring bean crops are still several weeks away from harvest.
  • UK values are unchanged on the week, with the feed price holding as short holders try to cover their nearby requirements with harvest slightly delayed.
  • Harvest in the Baltics is approximately 15% complete with the early yield and quality reports very good. Current estimates forecast a crop at least 10% larger than last year. Baltic offers for human consumption quality beans have drifted lower as a result and are offered aggressively into little demand.
  • It remains very difficult to sell UK beans as human consumption vs competing offers from Baltic and Australia. If sales are made, they are done so at a relatively small premium over feed of £5-£10.

Seed

OSR

  • We have OSR stock ready for immediate delivery! Ask your farm trader for our next day availability of market leading OSR varieties including LG Aviron, the vigorous OSR variety topping the AHDB yield trials.

Winter Wheat

  • We still have availability of all mainstream winter wheat varieties, including RGT Saki, one of the highest yielding group 4s with an outstanding all-round disease package which is performing right at the top of the current years AHDB trials.

Winter Barley

  • Although stocks are looking very limited for conventional barleys, we have limited availability of high yielding hybrids SY Baracooda and Bazooka.

Fertiliser

  • Inhibited urea’s for use in the UK should be considered as we approach changes in regulations regarding ammonia emissions.
  • CF Ammonium Nitrate prices are unchanged since the last increase. Stability in AN pricing remains, despite little activity in the UK market. AN prices on the continent have seen an increase of €7/t from the original July offer for September delivery.
  • Liquid UAN prices have seen increases from original autumn and spring pricing also, as AN and urea levels support UAN levels.
  • Phosphate and potash sales are reliant on harvest progress at present. Full load delivery is available quickly. Alternative PK products are also available that offer good value, amongst other benefits, for those considering a PK holiday from traditional bagged fertilisers.
£/€ £/$ €/$
1.117 1.3205 1.1825
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Aug20 124-135 162-175 198-203 334-339
Nov20 127-135 165-175 201-206 339-344
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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