- US wheat prices are up $4.75/t on the week, as underlying support from talk of lower Southern Hemisphere production. Increased Chinese purchases of US wheat keeps the market underpinned amidst continued buying interest.
- NASS reported the US winter wheat crop as 52% good/excellent unchanged on the week, but below the 55% reported a year earlier. Official national rating will now cease until early April as the crop enters dormancy.
- Russian grain exports are expected to fall to 3mln t in November, down from 4.1mln t in October, with YTD exports a/o Nov 21st reported at 19.4mln t (including 17mln t of wheat) which is down 16% y/y.
- EU (Paris) futures are up €2/t on the week, supported by firmer global markets, continued EU export demand, and a stronger US$.
- The EU’s crop monitoring unit (MARS) sees this season’s heavy rains have caused France’s soft wheat area to be smaller than last year, with a quarter of the crop left to plant a/o Nov 18th when planting is generally ending. However, as in the UK, winter wheat planting is expected to continue, where possible, for some time yet.
- AHDB’s ‘early bird survey’ showed a/o mid-November that farmers across the UK intended to plant nearly 10% less wheat for harvest 2020 than in 2018. Most traders expect a larger fall in the wheat area and a large increase in the spring barley area. If the current weather pattern continues through December and into January, the reality of what does get planted could be vastly different to what is currently intended.
- In summary, EU wheat seems well supported by the export trade, and with the UK about to enter its ‘festive season logistical market’, there is little reason why the markets should fall dramatically as growers’ selling activity slows and uncertainty reigns with regard to the UK’s 2020 wheat crop size.
Thursday 28 November 2019
- The Australian barley harvest is under way and early results are better than was expected a few weeks ago.
- As harvest approaches, Argentina are reporting crops looking promising.
- The EU and UK malting market is unchanged on the week.
- UK buyers are looking for small volumes for February to June delivery.
- Crop 2020 markets are very quiet with the trade expecting up to 50% more spring barley than this year.
- Fresh news was hard to find ahead of Thanksgiving and CBOT soybeans struggle to find any friends, falling for the 8th session in a row.
- Heavy storms make their way across the US which is likely to put halt to any land work. At the start of the week US soybean harvest was estimated at 91% vs. 85% last week (95% 5-yr average).
- We would expect the US markets to remain quiet until next week, with many taking a long weekend for Thanksgiving.
- Despite President Trump’s comments that a “phase 1” deal with China was in the “final throes”, negotiations may have taken a backwards step days later, after the US signed a bill backing Hong Kong protesters and imposing possible sanctions on China.
- Chinese rapeseed stocks continue to deplete, crush margins trade above $70 and new business is slow to come forward. It is still reported that a number of November vessels are still to be discharged, which could take up to 30 days.
- Canadian canola prices bounced from recent lows as the trade covered in shorts ahead of the US holiday. The recent national rail strike is said to now be resolved, although it may take some time for services to return to normal. Farmer selling is still slow with optimism that an agreement with China could reopen trade flows.
- In Australia the Canola harvest is progressing – western Australia being 91% complete this week. Weather going forward still looks warm, but growers should be complete in the next week or so.
- Closer to home, African Swine Fever continues to spread across Poland, with more confirmed cases over the last week. Affected zones are now getting worryingly close to the German border. Increased measures are in place to try to contain the affected wild boar and prevent further spread.
- Global veg oil prices fell from recent highs this week. Palm oil trading 3% lower from Mondays high before finding support.
- Matif rapeseed futures struggled to break recent highs, and prices saw a sharp fall at the end of Mondays session, before finding renewed support.
- Here in the UK, farm gate prices continue to be heavily influenced by the direction of sterling.
- In the last week, the AHDB released the early bird survey for 2019 drilling and pegged the oats at 200kha (for winters and springs), an increase of 10% YoY. This could be attributed to an increase in spring hectarage following the issues surrounding winter drilling.
- The old crop market remains largely unchanged on the week. The UK is still export competitive on feed oats, however it remains hard to nail down firm bids at present.
- Pulse Australia has estimated Australian faba bean production at nearly 340kmt. If this is realised, then globally there should be no shortage of quality beans for the North African market. There remains strong interest to Sudan for spring beans. However, the window to shift these products to get the goods landed in Sudan by the end of February ’19 before their import restriction is slowly closing.
- Old crop feed bean prices remain well supported on the back of a slowdown in farmer selling and shippers short for their December requirements.
- There has been strong interest in the new crop pea buybacks over the last week, with growers looking at alternative spring options. We have contracts available still for Large Blues and Marrowfat peas.
- We still have a limited volume of Tybalt to offer. Please speak to your farm trader for the latest stock position.
- The AHDB planting intentions report forecast a significant rise in the spring barley area. RGT Planet and Laureate remain in tight supply and we still have decent stocks of LG Diablo as a high yielding option.
- Combinable pea buybacks are being contracted daily with growers looking for alternative spring breaks. ADM Agriculture still have Daytona for large blue contracts and Kabuki to go against the marrowfat buyback.
- Don’t rule out spring OSR for 2020. It’s a true break crop, with ability to be later drilled than many other spring options. Contracts and seed are available, and you have assurance there is a guaranteed market for OSR versus other minor spring crops.
- Urea traded $5/t above last week’s lows on the global market. A bullish sentiment has appeared from estimates of traders holding short positions of around 250,000t for the Indian tender, shipment by 19th
- Some Chinese urea plants have been shut down also, reducing the supply in what appears to be a tight market. European and North American buying is expected to increase in Q1 2020 also, possibly offering continued support into the spring.
- Weather and 19/20 cropping plans are arguably the biggest drivers for the UK market at present. Potential for firmer prices is high for 2020, due to uncertainty of winter cropping areas and the potential for the diminished autumn demand to be added to the spring market.
- For those that are in a position to do so, buying opportunities continue to exist pre-Christmas.
|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.