Market Report

Thursday 29 August 2019

Wheat

  • US prices are up about $2/t on the week, as support came in from a lower Canadian production figure, and short-covering prior to the long Labour Day holiday weekend in the US.
  • US winter wheat harvest declared as virtually complete, although wet weather is seen delaying the spring wheat harvest, reported as only 38% complete vs 75% last year, and 65% as the 5-year average.
  • Canadian all-wheat production for 2019/20 was projected at 31.25mln t vs trade estimates of 32.4mln t and last season’s 32.2mln t, as weather conditions are seen impacting upon final harvested acreage and yields.
  • Paris wheat futures have held steady this week, but still within €1/t of the recently set contract low, as reported non-EU exports reported as 2.8mln t for the season-to-date, a rise of 6% y/y.
  • Export quotations continue to decline in Russia, as prices react to stiff competition from other producers.
  • Egypt purchased 350,000t of wheat for October 1-10 shipment, including its first French purchase of the season. Purchases for the year amount to 2.13mln t (Russia 935,000t, Romania 660,000t, Ukraine 475,000t and France 60,000t).
  • London wheat futures are down £4/t on the week, as high yields continue to be reported, the time window for exporting tariff free to the EU looms large, and ports approach loading capacity.
  • In summary, it appears that global markets are taking a breather this week, as harvest in the northern hemisphere concludes. Traditionally, the seasonal lows are set in late August, but given this season’s apparent over-supply, and the fact that EU and Black Sea prices are already trading at or near multi-year lows, we may not yet have seen the absolute bottom of the global wheat market, unless we foresee real production issues relating to southern hemisphere wheat or the US corn crop in the coming months.

Malting Barley

  • The spring barley harvest is nearly complete in England.
  • The trade is reporting that some of the post rain spring barley is extremely weathered and being downgraded to feed.
  • Scotland is about 50% through their spring crop.
  • So far, Scottish yields and quality are excellent, and just like in England/Wales, a big surplus is forecast.
  • There are no buyers in the market and a lot of barley that is not on contract is moving as feed.

Rapeseed

  • US soybeans continue to trade on the weather market, with temperatures starting to turn cooler into September. Recent rains have helped crop development, but with the later planted crops, maturity is 2-4 weeks behind normal. Some warmer weather would be beneficial.
  • Soybean crop ratings improve week on week, up 2% from last week. Good/excellent is reported at 55%, 32% reported as fair, and 13% reported as poor/very poor.
  • Whilst US weather will remain important, the trade will also be keeping a watchful eye on South American weather. Plantings are due to start in Brazil next month with some farmers already concerned over lack of moisture and excessive heat.
  • The US/China trade war continues with new levies coming into effect this coming weekend. President Trump commented at the G7 summit that negotiations are showing signs of improvement, with a Japanese trade agreement outlined in principle, and further face-to-face meetings with China are likely to coincide with the United Nations General Assembly in September.
  • In Canada, the Canola harvest is around the corner and some farmers are likely to carry old crop stocks into next season. Yesterday, Statistics Canada released their first attempt at estimating the 2019/2020 canola production at 18.45mmt, down 1.89mmt from last year’s 20.34mmt.
  • In Australia, some areas are getting decent rainfall, but others remain very dry. They could still do with another few showers to get crops looking average.
  • The EU rapeseed harvest is virtually complete, and attention turns to this season’s plantings. EU weather is mixed with some areas receiving rain and sun. Parts of Germany would still benefit from more rain to help emergence.
  • Overall, Matif rapeseed prices remain firm. Although vegetable oil prices fell last week, demand remains strong, and prices have since recovered.
  • Here in the UK, prices remain largely influenced by the direction of sterling. Yesterday we saw recent gains eroded as the Queen approved the early proroguing of parliament.

Pulses

  • The pea harvest is all but complete. Overall, the quality of the crop has been excellent, with most samples suitable for human consumption.
  • Canadian origin green pea prices are under pressure and this will continue to keep a lid on UK values which have remained stable throughout harvest.
  • The faba bean harvest continues to produce variable quality and yields. Prices continue to come under pressure, particularly for feed quality material on the back of greater supplies coming to market and very little buying interest. Prices are expected to remain depressed in the coming weeks.

Seed

OSR Drilling

  • Conditions are currently perfect for establishing OSR with ample moisture and soil temperatures still high enough to get plants up and away. ADM Agriculture have stock of leading hybrids available for dispatch immediately as we get into early September. We would advocate drilling hybrids only now, as their vigour will allow them to get away much faster than their conventional counterparts.

Wheat AHDB Results

  • Five trials sites in the AHDB series have been reported, with LG Skyscraper leading the pack, both on single year and 5-year mean yield scores. LG Skyscraper has looked well all season, providing a lot of grain and straw, while standing up to the strong winds and rains very well. Anyone looking for a high yielding feed wheat with some premium potential should look no further than LG Skyscraper. Call your ADM Agriculture farm trader for a quote.

Fertiliser

  • The global granular urea market woke up last week with European buyers returning to the market after the summer break. FOB Egypt values firmed $10-15/t during this week, as manufacturers sold the majority of available urea for September shipment.
  • India are expected to tender soon, along with fresh demand from South and North America, which should now support the market into Q4. Current offers for October shipment are $10/t over the highest trades for September at ~$267/t FOB Egypt.
  • There is significant potential for high demand in the urea market for Q4 and Q1 2020, as the current UK urea market is estimated to be below 40% covered so far. This is now starting to encourage further covering by some.
  • UK ammonium nitrate still has tonnage available for October. Tariffs continue to look likely post October 31st, and with Yara November pricing up £16/t, shows a potential upward correction. ADM Agriculture continue to suggest farmers consider these terms closely.
  • Fibrophos and P-Grow are still available to be applied to stubble for PK requirements. A UK produced renewable fertiliser, it is a way to reduce input costs in a firm nitrogen market. Enquire on our products through your ADM Agriculture farm trader today or our website.
£/€ £/$ €/$
1.1025 1.221 1.107
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Sept19 111-113 119-127 332-337
Nov19 113-115 124-132 337-342
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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