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Thursday 3 June 2021
- A warmer and drier two-week forecast for North America and Brazil built renewed weather concerns into the market last weekend. This enabled northern hemisphere wheat markets to recover some of last month’s losses, which had been triggered by much-needed rain in key production areas.
- US markets have pulled back about one-third of the price decline seen throughout May, as the market bounced off key long-term support of $6.70/bushel for CBOT wheat (front month), gaining around $15/t over the past week.
- EU and UK prices have continued to follow the volatile global market, with new crop Paris and London wheat prices up €4/t and unchanged respectively over the week, albeit well off yesterday’s intra-day highs.
- The continued rapid pace of US spring plantings has calmed market nerves a little, with the corn area put at 95% planted versus the five-year average of 87% and spring wheat 97% versus 93%. Good weather continues to be pivotal to the US coarse grains market. Talk continues to suggest that the total US corn acreage could exceed USDA’s 91mln-acre figure by up to 5mln acres, but this remains uncertain and yield will be as important as acres when it comes to harvest.
- The latest US winter wheat crop ratings are mixed. Despite the arrival of much-needed rainfall last week, National Agricultural Statistics Survey (NASS) reported that winter wheat crop ratings had only gained 1% to 48% good/excellent, compared with 51% this time last year.
- NASS also said that its initial rating for US spring wheat came down 2% week on week to 43% good/excellent, compared with 80% a year ago.
- UK prospects continue to look positive with beneficial warmth and sunshine in the forecast, with estimates for the 2021 wheat crop back up to around 15mln t, a figure that looks to balance the 2021/22 S&D, with a significantly lower dependence on imports.
- Australian farmers continue to be optimistic for a strong second consecutive cropping season as planting conditions have been exceptional over the drilling window and look favourable in the medium term forecast.
- Having seen a significant sell off throughout May21, wheat markets are still very sensitive to adverse weather conditions to wheat and corn across the world. While a good wheat crop is expected globally, the drop in forecast corn production due mainly to the fall in the Brazilian second crop means that wheat needs to fill the gap.
- The emphasis on 2021 wheat harvest having to deliver around the world remains the name of the game. The fundamentals remain tight, so any weather fluctuations will result in volatility in global markets, with any major setback a potential catalyst to higher market moves.
- There is little change in the world’s malting barley market.
- Malting barley crops in the UK and EU generally look good to very good.
- Prices are unaltered during the last week and premiums remain attractive.
- Old crop feed barley is drifting lower as consumer coverage increases and sellers start to come out of the woodwork. Overall, it feels as though the market is finished and the emphasis is on new crop.
- Crops are looking good and we have started to increase our production forecast for next year. Despite this we are still seeing a noticeable absence of farmer selling.
- The UK remains too expensive to sell into nearby coaster destinations such as The Netherlands and Spain. However, we are starting to see interest for larger sizes from North African destinations which is helping to support new crop values.
- Domestic demand on new crop remains quiet, with many encouraged by recent weather and crop progress, hoping for better prices to come.
- It has been a short week for the US markets following the long weekend, but recent price movements have more than made up for it over the past few sessions.
- CBOT soybeans haver closed higher every session this week following a change in US weather. The recent ideal planting conditions of wet and cool weather has turned hot and dry for the next 10-14 days. There has also been chatter about lower Brazilian crop and an increase in Chinese demand.
- US soybean plantings were reported at 84% complete with average estimates ranging from 85% to 89%. Emergence was 62% versus 50% last year and the 42% five-year average.
- Funds stepped back into the market at the start of the week and bought into soybeans and soy-oil once again.
- Crude oil hits two-year highs, with an increase in spot demand. Soy-oil traded back at contract highs following an increase in Asian oil demand. It’s also reported that India was considering cutting the import tax on edible oils. After initial demand fears and renewed lockdowns, palm oil broke its recent downtrend and rallied more than 5% in the past few sessions.
- Canadian canola and Matif rapeseed prices saw a setback at the start of the week, but have both rallied since following veg oils higher.
- Rapeseed crop prospects are looking better with bigger Canadian and Australian crops forecast. EU crop prospects have also improved from where they were last month. UK prices are now getting back close to highs once again.
- There is little demand for old crop peas for either feed, micronizing or human consumption, with most consumers now covered until new crop. Any remaining supplies left on farm will therefore likely have to be carried over to next season.
- There remains markets for old crop beans with merchants short against existing domestic sales, but there is little appetite from the consumer, either domestically or abroad, as consumer coverage is high. The old/new crop market remains in an inverse, so there is little incentive to carry any remaining supplies left on farm to new crop.
- The current weather conditions are perfect for the growing pulse crops, with the crop potential in terms of yield looking better than last year. It is still too early to determine the quality, and whilst we had a cooler than usual April and May, the recent hot weather is likely to encourage bruchid activity.
- First crop inspections on all pea and bean seed crops have now taken place. All crops are looking very well as the weather has been perfect to date. We have very attractive buyback contracts available on marrowfat peas, please contact your farm trader for further details.
- Last week saw us launch our new seed catalogue which offers growers a comprehensive guide to our recommended varieties for this autumn. Buybacks contracts are available on most. Please book early to ensure your preferred varieties are secured.
- Granular urea has traded up another $8/t FOB Egypt this week, a rise of circa $60/t from the beginning of May. US prices are increasing due to spot demand and concern over global supply at present.
- ADM has both spot and forward pricing on urea available, offering alternative delivery options for the early buyer.
- Ammonium nitrate terms in the UK have risen £10/t following initial new-season reset terms. Tightness in supply and higher prices being achieved on the Continent are making the UK a less desirable destination for European producers at present.
- Liquid UAN terms are likely to be issued shortly.
- ENhancePro ATS is available for quick delivery for those looking to improve milling wheat proteins. Prices offer good value against alternative foliar products available today.
- Alternative PK products are readily available and able to be booked for pre/post-harvest delivery ready for spreading. These products offer comprehensive nutrients at unbeatable value.
|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.