Market Report

Thursday 3 October 2019

Wheat

  • US wheat prices are up about $4/t on the week, supported by harvest delays of spring wheat crops in Canada and the US, and ongoing concerns over dryness in Australia.
  • US winter wheat sowings are 39% planted, in line with last year’s 41% and the 5-year average of 38%, amidst improving soil moisture and generally favourable conditions.
  • Dryness in Argentina is hitting the outlook for wheat and corn crops, local climate experts say, although the BAGE have recently raised their wheat production forecast to a record 21mln t.
  • Russia has harvested 108mln t of grain from 85% of the planted area. With an average yield of 2.71t/ha, data from the ministry showed, compared with 97mln t, with an average yield of 2.61t/ha a year earlier.
  • Egypt purchased 60,000t of French wheat for 5-15 November shipment, although another three cargoes (one Ukrainian and two Russian) were offered within $1 of the price. Price paid reflected a $6/t increase from the last tender on Sept 25th.
  • Soft wheat exports from the EU in the 2019/20 marketing season that started on July 1st had reached 6.25mln t by September 29th, up 37% y/y.
  • UK spot prices remained underpinned as shippers look to cover requirements for their October shipping programme, although domestic consumption interest remains thin.
  • US wheat prices received some more support from bullish US corn and soybean stocks numbers this week, although wheat numbers came in line with trade expectations.
  • Export pace, whether in the US, EU or Black Sea region, is seen underpinning cash levels after a flurry of international tenders, although at yesterday’s Egyptian tender, the volume of Russian offer was greatly reduced.
  • Wheat on its own is still difficult to get bullish, as too much supply is seen chasing what little demand appears.
  • For wheat to sustain a rally, either a supply issue (southern hemisphere) or ‘spill-over’ support from external markets will need to occur.

Malting Barley

  • EU malting barley prices have risen this week on the back of firmer feed markets.
  • UK prices remain unchanged due to the lack of export markets.
  • UK maltsters have covered some of their January/June requirement.
  • Crop 2020 is being discussed, but buyers are taking a wait and see approach until the Brexit situation is sorted out.

Rapeseed

  • CBOT soybeans have rallied 20cts since the beginning of the week on the back of Monday’s USDA report, showing US soybean stocks at 913mbu vs average trade estimates of 982mbu.
  • However, concerns over global growth and the macro-economic slowdown following US tariffs on the EU, have helped to keep a lid on rising commodity prices.
  • Black Sea rapeseed exports are expected to have exceeded 2mln t by the beginning of October, but are expected to slow down as exporters try to make space for upcoming corn harvest.
  • Canadian canola is facing ongoing yield and quality uncertainties as rain and snowfall over the past week delays harvest even further.
    • Current harvest progress estimated at 20% vs over 50% last year.
  • Australian weather remains hot and dry, but scattered showers are showing in next week’s forecasts.
    • With Chinese crush margins currently above $100/mt, the EU will continue to face fierce competition for an already reduced Australian canola crop.
  • GBP/EUR under pressure over the past week, trading below 1.12 on Tuesday, as Prime Minister Boris Johnson’s latest Brexit proposals reportedly criticised in Brussels.

Oats

  • Domestic UK values have come under further pressure, especially on spring oats, where buyers are specifically targeting parcels +50kg/hl. Parcels below this quality are struggling to find comparable markets.
  • Feed demand remains sporadic, especially on quality around 40kg/hl, where buyers are few and far between, as barley continues to be a better buy for users.

Seed

Winter Wheat

  • Group 1 varieties are now getting well sold, with a small balance of KWS Zyatt available and all others sold out.
  • Feed varieties remain available.

Winter Barley

  • KWS Gimlet and SY Baracooda remain available, but in limited quantity.

Winter Oats

  • Mascani is sold out, however there are other varieties available. Remember to ask your farm trader before purchasing seed, as the oat millers may not accept them.

Pulses

  • We would urge growers to cover spring bean requirements promptly, as winter beans have sold out. Peas on buyback are available for drilling spring 2020 where growers are looking for another pulse option. Please speak to your farm trader for more information.

Fertiliser

  • Granular urea global levels remain flat from last week. The last reported trade was at $260/t FOB Egypt. New price direction is anticipated from the next Indian tender of 1-1.5mln t that will be announced mid-October.
  • UK urea prices may begin to be impacted more by limited supply and the significant demand that is anticipated. There is an estimated 50-60% of the urea market still to be covered in the UK. Prices are vulnerable to currency swings as portside stocks are being replenished when required.
  • UK ammonium nitrate October volumes are almost achieved, and terms are likely to be withdrawn soon. New November and December terms are likely to be at a premium to October.
  • ADM Agriculture liquid fertiliser terms are available for both Autumn and Spring fills. Speak to your farm trader today to discuss how switching to ADM Agriculture liquid fertiliser and ADM Agriculture tank deals could save you time and money, and fit in well with your farming system.
  • Any growers who have not taken some cover on their nitrogenous fertiliser requirements are still recommended to do so, as upside risks still remain from currency volatility and tariffs.
£/€ £/$ €/$
1.1225 1.2315 1.097
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Nov19 115-119 129-137 175-185 335-340
May20 121-125 135-143 181-199 341-345
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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