Market Report

Thursday 3 September 2020

Sampling – Harvest 2020

As many of our farmer customers know, ADM Agriculture are not sending samplers out to farms for this harvest. We need to be able to test the crops we buy, and it remains our intention to do this in as efficient manner as possible whilst reducing the risks associated with this service. Knowing the quality of crops is especially important this year so if you have not already done so, please contact your farm trader to arrange for sample bags to be sent to you. Once you have samples ready, we will collect them and the results will be available via our online portal, ADM 365, or from your ADM farm trader.

Wheat

  • Global markets this week remain driven by the effect of poor weather on US spring crop production.
  • Confirmation of a larger-than-expected crop in Canada did little to calm the market, even though this was backed by bigger crop forecasts for Russia and Australia. Global supplies appear more than adequate, especially with demand remaining uncertain.
  • In more detail, US corn and soybean crop ratings declined further last week. A cold front set to enter the western corn belt could also cause some frost damage.
  • Canadian 2020/21 all-wheat production is expected to increase by 10% compared with last year to 35.7mln t, mainly due to increases in winter and durum wheat output.
  • The IGC raised its forecast for global 2020/21 wheat production to a record high of 763mln t, with increases for Russia and Australia largely responsible for the increase.
  • US wheat prices took their lead from the spring crop ratings, increasing a further $7/t on the week, aided by support from other markets and talk of Chinese buying interest.
  • Russian wheat export prices have firmed. Exporters are looking to secure supplies to cover a heavy early-season export program, but farmers remain reluctant sellers.
  • Ukraine’s agriculture ministry has reduced its forecast for the country’s 2020 grain crop to 68mln t from 70mln t previously, mainly due to a reduction in its maize crop forecast.
  • The ministry also expects Ukraine’s grain exports to fall 16% on the year to 47.4mln t, due to a smaller crop, including 17.5mln t of wheat, 26mln t of maize, and 3.3mln t of barley.
  • EU (Paris) futures followed the US trend, up €4/t on the week, with gains capped by a firmer €/US$ exchange rate.
  • UK (London) futures also increased, up £2.50/t.
  • UK physical prices remain driven by harvest delays in the north and west, where ex-farm and delivered prices continue to firm.
  • With the forecast expected to improve into next week, additional supplies may enter the pipeline and reduce spot premiums. Feed wheat imports are also now arriving, satisfying nearby demand.
  • Looking further ahead and further afield, Argentina’s wheat yields could fall as much as 50% on the year in northern/central parts of the country’s farm belt, due to dryness exacerbated by unusually strong frosts.
  • US winter wheat sowings have commenced in the far south, although soil conditions remain dry and additional rains are required.

Malting Barley

  • The EU spring barley harvest is nearly complete and there looks to be a big exportable surplus.
  • The UK spring barley harvest continues to be hampered by the wet weather.
  • The south and East Anglia have all but finished. The Midlands is 60% complete and Yorkshire and Scotland around 40%.
  • The market remains very quiet. Most buyers are relaxing their specifications from 1.85 to 1.90% N.
  • There should be enough barley for the reduced supply, given that buyers have relaxed their specs.
  • A lot of barley has been combined wet and growers are advised to dry the barley sooner rather than later.

Feed Barley

  • Yet again wet weather across the UK has hampered harvest progress.
  • Most of the spring barley in the south of the country has been cut, however a large amount of barley still stands in the north.
  • Demand is still stronger than supply in the nearby positions, with plenty of shorts still looking to cover Sep’20 execution. However, in general, both domestic and export markets remain ill-defined.
  • Algeria tendered for 50,000t (two cargoes) Oct’20 shipment. However, this traded below current UK values and will likely be of Baltic origin.

Rapeseed

  • US stock markets have reacted to the upcoming US election. The Dow-Jones traded just short of highs as investors clung on to hopes of a Covid-19 vaccine.
  • US weather forecasts are mixed with rain due this week and over the weekend, but it could miss some of the key areas. Temperatures are falling below normal.
  • Reuters reported further Chinese purchases of US soybeans in yesterday’s session by state owned firms, totalling 480,000t Dec-Jan (8 cargoes), supporting nearby soybean prices.
  • Statistics Canada estimated the country’s canola production at 19.4mln t vs. 19.5mln t earlier this year, against trade expectations of 19.2 – 21mln t.
  • EU weather remains largely dry with some rain expected across the north-east and temperatures close to normal. In the Baltics/Black Sea, temperatures are above normal with little rain in the forecast for the next few weeks.
  • Matif rapeseed has firmed but struggled to break the nearby resistance level of €385. Veg oil prices remain firm and plantings are now largely complete, but concerns remain over how dry areas are across Europe and Black Seas regions, which may affect germination of new crop rapeseed.
  • In the UK, sterling rallied to a 12-week high against the euro ahead of next week’s ECB policy meeting.

Matif Rapeseed November (€)

Pulses

  • International faba bean markets continue to trade lower, with Australian origin beans trading $10 lower into Egypt week on week as conditions remain favourable. September is a crucial month in Australia’s growing season and most market participants are confident that above-average yields can be achieved if there is one more rainfall event in the month. The Australian Bureau of Meteorology is currently forecasting a 75% chance of above-average rainfall in the next three months.
  • Harvest continues to progress in the Baltics and yield and quality appear reasonable. Baltic origin beans continue to be offered aggressively into Egypt, and as a result of the UK’s high feed price, very little human consumption premium is available to growers in the UK.
  • The delayed harvest and wet weather is keeping the feed price firm as merchants look to cover September shorts basis the limited quantities available. However, once the shorts get filled it is likely that prices will drift lower as UK beans remain outpriced for export currently, for both feed and human consumption quality.

Seed

Winter Wheat

  • We still have availability of all mainstream winter wheat varieties. However, KWS Extase is beginning to look very limited so do get in touch with your farm trader now to avoid disappointment.

Winter Barley

  • Conventional winter barley seed is looking very limited. We do have limited availability of high yielding hybrids SY Baracooda and Bazooka.

OSR

  • We have OSR stock ready for immediate delivery! Ask your farm trader for next day availability of our most vigorous OSR varieties LG Aviron, DK Excited and Aurelia.

Fertiliser

  • UK-produced ammonium nitrate prices have continued as last week. Harvest and drilling remains a focus for most parts of the country, so we have seen little to no new buying commitment this week.
  • The short-term market outlook is flat, but once winter drillings progress, the forecast is for a steady price rise heading into the winter months through to usage time.
  • Both traditional straights and blended PKs, as well as alternative PK products, are available from ADM Agriculture for spot delivery.
£/€ £/$ €/$
1.1225 1.327 1.182
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Sept20 125-135 165-177 199-204 332-337
Nov20 127-135 167-177 201-206 336-341
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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