Market Report

Thursday 28 May 2020

COVID-19 – Safe transfer of grain passports and self-isolating

It is important that all farmers follow UK government advice with regard to sanitising and best practice. We strongly recommend all participants in the grain supply chain read this advice from AHDB https://ahdb.org.uk/knowledge-library/coronavirus-guidance-for-combinable-crop-deliveries-and-collections

If farmers are quarantined or self-isolated for a period of time and therefore unable to load combinable crop sales or accept deliveries of seed or fertiliser, please advise your ADM farm trader as soon as possible and we can then delay the collection/delivery until the period of self-isolation is complete.

To date, the grain supply chain is working close to normality. All parts of the industry are working well together, and the situation is obviously under constant review and of the utmost importance in keeping the nation supplied. ADM Agriculture would like to thank all our customers for their ongoing support.

Wheat

  • Global prices have remained range-bound this week, caught between favourable sowing and crop development weather in the US and ongoing concerns over dryness across much of the northern EU and southern Russian growing areas.
  • US wheat prices are down $2/t on the week as spring plantings advance under favourable conditions, supporting talk of bumper US crops.
  • Recent rains have improved the condition of this year’s US winter wheat crop, although it is still seen lagging the conditions of a year ago.
  • Favourable weather has allowed Canadian sowings to advance last week closer to the five-year average pace.
  • Russia will harvest around 120mln t of grain in 2020, slightly lower than last year due to lower yields in several southern regions.
  • Ukrainian farmers have sown 96% of the intended spring area. Recent rains are believed to have improved winter crop prospects.
  • French soft wheat crop conditions improved in the week ending 18th May, up two points to 57% good/excellent.
  • UK (London) new crop futures are up £2.50/t on the week, supported by ongoing dryness threatening crop prospects and currency movements.
  • The current weather conditions here are also affecting grass growth, which may increase compound feed usage over the next few months.
  • However, the higher-than-expected March import figure of just over 160,000t, a seasonal high, coupled with a seasonal low for exports of just over 40,000t, due to high prices, should ensure carry-out stocks remain on track for a historical high.

Malting Barley

  • The EU malting barley market was firmer this week due to sales of French barley to China.
  • EU malting barley crop prospects continue to look good with Scandinavia expecting a big crop.
  • Rain is needed urgently in some parts of the UK, especially for spring crops.
  • The winter malting barley variety Electrum has been given full recommendation for brewing.

Rapeseed

  • It was a slow start to the week with EU members away last week and US and UK national holidays on Monday.
  • CBOT soybeans prices struggled to break nearby resistance levels. Yesterday rumours circulated that China may have purchased a further 10-12 cargos of Brazilian soybeans (Sept-Oct), which capped US price gains.
  • The trade remained hopeful that China would return to the US market for new crop soybeans. However, as trade tensions between the two sides increase, this is now in doubt.
  • US soybean plantings continue at a record pace, with the forecast in Midwest showing normal rain fall and high temperatures for the next few weeks. Soybean plantings were reported at 65% complete vs 69% expected and a five-year average of 55%.
  • Crude oil prices have stalled recently with West Texas Intermediate closing below $35. Oil prices fell back off recent highs as reports circulated, suggesting larger than expected stocks and rumours of further price wars between Russia and Saudi Arabia.
  • Veg oil prices followed crude oil levels higher earlier this week, with demand still a big question mark. Values then followed energy markets lower in the last few sessions.
  • There are interesting developments in Canada, where canola plantings at the end of last week are estimated to have reached 38% in Saskatchewan and 50% in Alberta. Most major growing areas saw decent rains last week with temperatures below average. Chinese/Canadian trade relations may once again hang in the balance as Canadian courts proceed with criminal proceedings against the CFO of Huawei.
  • In Australia farmers braced themselves for one of the worst storms in decades, bringing with it severe rain. Winds swept across the parts of major growing regions, covering some emerging plants with windblown soil. Thankfully the storm was not as bad as expected, but it will take a few weeks to see what damage has been done to newly planted crops.
  • Matif rapeseed continues to trade within its recent €10 range. The market continues to see a trade-off between a well-covered old crop market and continued fallout through Covid-19 vs a new crop weather market.
  • Here in the UK, as the season draws to a close, prices are trading at recent highs. Sterling fell against the euro since last week’s report, nearing 1.1100 on the back of the EU €500-700bn bail out and ongoing Brexit negotiations.

Pulses

  • Bean trading has come to a standstill. Bids for old crop have completely dried up, as all shorts are now covered to domestic homes and ports, and there is little interest on the export market. With Ramadan and Eid celebrations now complete, we may see some interest pick up over the next few weeks.
  • There has been no farmer selling of new crop as concerns remain about the effect of the dry weather. Despite this and weaker sterling, new crop bean prices have been stable. Conditions in the Baltic states are OK and plantings in Australia are now complete, having gone into the best conditions seen for many years.

Seed

  • We have a great portfolio of OSR varieties to offer, with a selection of different traits to suit your needs, including:
  • DK Excited – with market-leading traits, including TuYV resistance, pod shatter resistance and excellent autumn vigour.
  • RGT Nizza CL – a high-yielding Clearfield variety.
  • HOLL – varieties on our buyback contracts, including V3670L, with very high gross output potential.
  • All the above varieties are supported by very appealing establishment schemes. Get in touch with your farm trader for more information.
  • We have a range of over-yeared wheat and barley seed available for July delivery.
  • There is still time to order your cover crops to put some goodness back into the soil this summer. We have a variety of mixes available to choose from and we can also cater to your bespoke needs. Click here to view our small seeds brochure.

Fertiliser

  • Granular urea is being bid $212-220/t FOB Egypt, but no significant sales have been reported at these levels.
  • Another Indian tender is anticipated for the second half of June which could define new direction for urea prices.
  • Nola (New Orleans/Louisiana) prices have plummeted as the US enters the summer low season.
  • CF new season terms have been released.
  • The price of ammonium nitrate on the continent increased €2/t last week. A weak £/€ rate has kept UK AN prices highly competitive against imported products.
  • New Season ALZON® neo-N, Piamon and PiagranPro are also available.
£/€ £/$ €/$
1.1135 1.2255 1.1005
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Jun20 122-134 155-165 235-240 316-321
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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Watford WD25 7GS.

Company Number: 904957