Market Report

Thursday 29 April 2021

Please click *here* for this week’s market updates on the ADM Agriculture YouTube channel.

Wheat

  • Grain markets around the world have continued to trade higher as the weather-related rally intensifies speculative buying, driving markets to new contracts highs.
  • Continued dryness in Brazil is threatening the country’s second corn crop, with the potential impact of increasing export demand for US corn, which is something the US can ill-afford at a time when its weather remains far from ideal.
  • These weather issues in the US are already being highlighted in winter wheat crops, where drought-like conditions remain an issue across the Southern and Northern Plains. We have seen the weekly USDA crop rating fall sharply week on week.
  • In Europe, the cooler and drier weather continues to affect crop development and is delaying spring sowings. In contrast, areas in Russia have received too much rain. Analyst IKAR has downgraded its forecast for Russia’s 2021 wheat crop to 79.5mln t from 81mln t, as farmers will need to re-sow wheat across a large area of the country’s central region.
  • The upward market march has seen UK new-crop futures put on £10/t over the past week, and the scale of the global rally has been impressive. However, markets will be vulnerable to bouts of profit taking and will take a breather at some point. We are, and will probably remain, in a weather market for some time, with any forecast of rain in the US and EU growing areas seen as negative to pricing, and less than expected or no rain seen as positive.
  • We may not yet have seen the top of the new-crop market, although prices are at historically high levels for the time of year. A little and often marketing strategy remains a sensible option for UK growers.

Malting Barley

  • Although we have seen wild swings in the feed markets, the malting barley market has remained reasonably stable.
  • EU and UK malting prices have climbed steadily over the last week.
  • The demand outlook for crop 2021 is looking much more positive, with beer sales increasing as the pubs open up.
  • Malting demand is also likely to increase due to new capacity opening up in Scotland.
  • The dry weather in the UK remains a concern for the spring crop.
  • Please contact your local ADM Agriculture farm trader for crop 2021 and crop 2022 contract details.

Feed Barley

  • Another week of very thin supply on old crop feed barley. We still see good demand from consumption and shorts in both domestic and export markets, but all the while origination is extremely difficult. We expect to see prices supported on old crop.
  • New crop has been moving with wheat markets, and we see optimism returning to the market as rains appear in the forecast for the next week. Sellers as a result are a little less cautious and the discount to wheat is starting to widen in domestic markets.
  • We still remain circa €12/t from competing into the closest export market on new crop positions.

Rapeseed

  • It was another week for the bulls on the CBOT, but that doesn’t mean it wasn’t a rollercoaster. July soybeans spent the first half of the week heading to new highs before a little pull back, although they have since resumed an upward trend. Oils have had a very strong week, hitting seven straight day on day highs.
  • China continues to be unpredictable. Last week its agriculture ministry released guidelines on how to reduce corn and soymeal intake within the hog population. However, crush rates and margins continue to improve, which continues to disprove the rumours of increasing African swine fever.
  • The weather in the US remains very hard to forecast. The most recent reports have added rain to the Midwest, Delta, South East and the lake states, but the Plains and Dakotas still look to be warm and dry. Canada’s forecast is still not looking good. It remains dry and cold with soil moisture levels decreasing each day.
  • US bean plantings are at 8% compared with 7% last year. Good weather is becoming even more important to maintain the pipeline stocks. Corn is 17% planted vs the 20% five -year average. Corn emergence is also on par with previous years. According to ADM’s CEO Juan Luciano, we could expect corn and soybeans to gain an extra 5mln acres in the US from the March estimates. This would add 125mln bushels to each crop.
  • Canadian canola touched $900 on Monday with fresh news of two new crush facilities. The Canadian agriculture ministry also estimated the country’s crop to be 21.5mln acres, well below the trade estimate of 22.6mln acres.
  • Matif rapeseed sharply fell on Tuesday to recent lows after profit taking/technical correction. From there it has slowly recovered but remains very volatile. May Matif expires tomorrow and is currently trading at record high levels. Matif lags behind, but is trading approximately €10 off recent highs.
  • Sterling has struggled to find support this week. Fears of a pro-Scottish independence manifesto has not helped. As the UK continues to roll out its vaccine, but also buy in booster jabs for the autumn, the underlying tone is good in the long run, although the gains are going to be slow to come by.

Oats

  • Weather remains the talk of the town and dryness is becoming a significant concern. Initial expectations were that spring area would make up the higher percentage of overall oat area, but spring conditions have not been favourable and there appears to be no let-up in the near forecast. One to watch.

Seed

  • We have consistently high yielding and stiff-strawed SY Baracooda hybrid barley, with over-yeared stocks available for early delivery onto farm.
  • ADM has a perfect all-rounder in DK Excited, known to perform well in most situations – also supported by an establishment scheme, allowing the risk of establishing OSR to be spread between the merchant and the grower.
  • If you’re looking for cover crops, ADM Agriculture has a range of ready-made mixes and can cater for bespoke needs. Contact your farm trader for more information.

Fertiliser

  • Granular urea prices in North America increased at the beginning of the week on higher corn prices. Demand has now eased, but prices remain stable.
  • North African urea increased $8-10/t week-on-week on the back of the North American gain as well as a new Indian tender for June shipment.
  • Urea prices in the UK are currently stable, with little room for significant corrections manoeuvre at present.
  • Phosphate prices remain high and prices have been accepted at these levels. Alternative phosphate and potash fertilisers are available for spring and summer movement at comparatively good levels.
  • Delivery timescales on most products remain relatively short. Speak to your ADM Agriculture farm trader for any spot/top-up requirements today.
£/€ £/$ €/$
1.1505 1.396 1.2135
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
May21 165-180 202-212 215-220 442-447
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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