- US prices have firmed as ongoing delays in corn and soybean plantings and a decline in winter wheat crop ratings lead to further bouts of fund short-covering.
- Weather conditions globally remain far from ideal for crop development. There are concerns over dry conditions in Australia, Canada and Russia, while wet weather in Eastern Europe and the Ukraine remains a threat to final quantity and quality.
- Russia’s agriculture ministry cuts its forecast for 2019/20 wheat production to 75mln t from 78mln t. This follows crop damage due to cold weather in the Volga Valley. Grain exports are forecast to reach 45mln t, including 36mln t of wheat.
- EU Commission raised its forecast of 2019/20 common wheat production to 143.8mln t from 141.3mln t last month, whilst leaving its projection for common wheat exports to non-EU countries unchanged at 25.5mln t.
- UK growers have taken advantage of the £20/t rally in new crop wheat prices from the low set on 13th May, increasing their selling activity.
- The resignation announcement from Theresa May and the ongoing Brexit saga is keeping sterling in a choppy range. Although unchanged on the week, it has provided some support to ex-farm prices.
Thursday 30 May 2019
- Recent timely rains have counteracted dryness concerns on spring barley, but more precipitation is needed in the coming weeks to maintain crop development and quality.
- The malting barley market remains quiet. Prices remain unchanged with UK buyers reasonably relaxed. There is now some focus on the availability of export outlets for malting barley after October due to the ongoing Conservative party leadership debate and the prospect of a potential ‘no-deal’ Brexit.
- Another volatile week for CBOT soybeans as funds unwind short positions.
- The market is still reacting to the US weather forecasts, which show rain until the first week June before dryer conditions prevail.
- US soybean planting progress looks to be limited in the short term. Areas of the Mississippi are still at or above flood levels for the longest period since 1927. US soybean plantings are estimated 29% complete vs 19% last week, compared with 74% last year.
- There is no sign of an agreement between China and the US, with both sides arguing one needs the trade deal more than the other.
- Canadian canola hit six-week highs in recent days before following other markets lower, which enticed some farmer selling. Canadian export sales volumes seem to be stable, although with China still absent from the market, seed is left searching for an outlet.
- Closer to home, European rapeseed prices struggled to sustain recent highs, following soybeans lower.
- Despite recent rain there are still concerns over the size of next season’s EU rapeseed crop. As mentioned last week, production estimates are still being reduced, to below 18 mln t.
- UK rapeseed prices followed the European trend. The UK old crop carry continues to grow, and prices are quickly reaching new crop levels.
- Sterling is still trading at the lower end of its recent range and remains choppy on the prospect of a second Brexit referendum, rather than fears of a ‘no-deal’ Brexit on October 31st.
- The old crop oat market remains void of any fresh impetus and appears all but finished for the harvest year, barring odd clear-up loads coming to market.
- The EU commission has forecast oat production up circa 6% for harvest 2019. With a significant time to go before crops start being combined, this projection could of course be subject to change. However, if realised then we can expect prices to continue to drift lower and back to historical averages.
- A rising tide lifts all boats, but only to a limited extent with pulses! New crop feed beans are only slightly firmer on the week despite the rally in wheat, corn and protein markets. Beans did not fall dramatically in line with the recent downtrend we have seen in other markets, so it is therefore unsurprising that they have not rallied with other markets.
- Whilst feed beans are now more competitive against other mid-range proteins than they were this time last week, there is still some way to go before they compete in the compound feed ration. With crops in the UK looking well and all demand on the export market, the main driver of prices recently has been weakness of sterling and this remains the case in the short term.
- The season of trials and open day visits has now commenced.
- A lot of disease is showing in untreated trials – worthwhile seeing a trial site relevant to your location.
- Expect increased demand for autumn cereal seed over the coming month.
- Septoria tritici is the major driver of varietal selection in wheat – KWS Extase/KWS Firefly are proving very popular. Graham/KWS Siskin are likely to be in demand once again. Look out for candidates RGT Saki and Theodore.
- SY Baracooda – an exciting new hybrid barley available for autumn 2019 planting. Very high yield potential with solid all-round disease resistance.
- Wide range of OSR varieties available, including HOLL varieties, on an attractive buyback contract.
- Growers looking at winter beans/oats to replace some OSR should cover their seed requirement sooner rather than later.
- Vibrance Duo and other growth-stimulating seed treatments worth exploring in many situations this autumn.
- Granular urea has continued to trade globally above $270/t, with 10,000t sold at $270-272/t fob Egypt. Manufacturers are relaxed about June, with expected demand from Brazil indicating price support into July. Various scheduled Egyptian plant closures for maintenance in June could also limit supply for Europe, meaning the outlook remains flat to firm with potential for only minimal change into July.
- Sterling’s weakness against the US dollar is exacerbating these firmer prices for the UK market. Replacement values on farm today are around £275/t, but any further falls in the pound will firm prices further. However, with some stock still available, values below replacement are still possible in some areas so contact your ADM Agriculture farm trader or the fertiliser desk with any enquiries.
- The ammonium nitrate market remains relatively unchanged, with an active spot market. The generally firmer nitrogen market and the weakness of the pound indicate a firmer new season price than last year for both imported AN and UK AN. CF is giving no indication of a release date for new terms as the grassland market remains busy.
- ENhance Pro is a nitrogenous foliar fertiliser developed to improve milling wheat proteins. Those looking to maximise on their milling wheat premiums should enquire about our foliar product, which delivers 17kg/ha of nitrogen and 20.25kg/ha of bio-available sulphur at an application rate of 50 litres/ha.
|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.
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.