Market Report

Thursday 31 October 2019

Wheat

  • US wheat prices are down $4/t on the week as the market currently seems starved of bullish input.
  • NASS reported US winter wheat sowings 85% complete, ahead of last season and the five-year average, with initial crop ratings showing a slight improvement year on year y at 56% good/excellent.
  • US wheat exports continue to attract good demand, with shipments running 23% ahead on the year, although running slightly behind the five-year average.
  • Prices for Russian wheat rose further last week due to continued demand from exporters and hopes of supplying Saudi following a recent tender.
  • Egypt’s state buyer GASC purchased 235,000t of wheat (60,000t French, 60,000t Romanian and 115,000t Ukrainian) for 5-15 December shipment. It was only the second time this season that Russian supplies were not included in the purchase.
  • EU (Matif) prices are down €2/t on the week, although export demand and inclusion in the Egyptian tender keeps cash values underpinned.
  • Official data showed soft wheat exports from the EU in the 2019/20 season had reached 8.55mln t as of 27 Oct, 50% above the volume cleared by 21 Oct last year.
  • The EU’s crop monitoring unit MARS cuts its forecast for the already harvested soft wheat crop yield to 6.01t/ha, slightly down from its September estimate of 6.03t/ha, but still 1.1% above the five-year average.
  • UK prices are up £2.65/t (May 2020 futures) on the week, as a decline in producer selling and new crop planting concerns supported the market, with Nov 2020 futures also higher, up £4.65/t on the week.
  • We thought it was all over, but Brexit has been extended as far as 31 January after approval from the EU. The PM has called for a general election on 12 December, which, depending on the result, could have an array of Brexit consequences.
  • In summary, the US market has run out of bullish support, although global weather may still have its say. EU prices have followed the US lower, but remain cash supported, and the UK is trading Brexit, planting delays, and lower 2020 acreage.
  • Global grain supplies remain abundant, and the market, especially within the US, needs a spark to ignite and fuel a reversal to the current down-trend, but what that spark is remains unclear.

Malting Barley

  • UK maltsters are buyers for the January to June period.
  • There are very few sellers, with everyone’s attention firmly focused on the autumn sowing problems.
  • The export window has again been extended but there is uncertainly beyond 12 December.
  • EU buyers are now trying to work out what the unexpected UK surplus means to the market supply and demand.
  • We estimate that approximately 70% of the intended crop 2020 winter malting barley will be sown.
  • Other companies are predicting a much lower figure.
  • It looks certain that we will have a much-increased spring malting barley area for crop 2020.
  • The main spring malting barley varieties will soon be sold out.

Rapeseed

  • The US soybean harvest is reported behind normal at 62%, vs an average of 78%. Continued wet snowy weather in the forecast is likely to delay harvest further.
  • The soybean market struggles to recover from last week’s sell-off. News of a phase 1 deal between China and the US was quickly dismissed with the announcement that the upcoming APEC meeting has been cancelled.
  • The Canadian canola harvest in most regions should be nearing completion in the next week with less than 20% left to go. Weather on whole is cold, but dry. Saskatchewan and Alberta harvest is almost done, but Manitoba continues to struggle with wet weather.
  • Chinese officials met with Canadian counterparts at the WTO in Geneva this week to discuss Chinas ban against Canadian canola seed. The outcome of the meeting was not confirmed though was said to be positive.
  • Harvest in Australia is just starting to gather pace but is still less than 10% complete. Temperatures average the mid-30s, which meant some farmers around the lakes of Albany/Esperance in Western Australia were banned from cutting because of a risk of fires. Whilst those who are able to harvest are said to be switching between rapeseed and barley depending on which is fitter. Official reports at the end of this week should confirm early yields/oil results. If found to be lower than last year, it may lead to a sub 2mln t crop.
  • Matif rapeseed values have recovered from the lows we saw a few weeks ago. With November futures expiring today, February futures managed to regain significant losses in the last few weeks to trade close short-term resistance levels.
  • Crush margins have come off a few more euros over the last week. Pre-Christmas crush coverage is good, with gaps to fill in 2020. It’s hard to see a major rally in the short term.
  • Here in the UK, with ongoing political influences, it goes without saying that sterling will still have a big impact on prices going forward.

Oats

  • Another lacklustre week with regards to fresh domestic news on old crop oats. Values remain largely unchanged, as buyers feel relaxed about cover. The Brexit “flextension” has seen some continental buyers put some values in the market for pre-Christmas feed oats (48kg). However, these values are not providing any upward pressure on domestic levels.
  • The current focus is winter drilling for harvest 2020. Wet weather across the UK has massively hampered progress, with some areas reporting only 15% of winter oat acreage drilled. The question also stands as to whether we could see an increase in spring acreage, as farmers look for potential alternatives to winter cropping, should the poor weather persist.

Seed

Spring Wheat

  • Following a surge in demand following the rains over the past 10 days all spring wheat is now sold out.

Spring Barley

  • RGT Planet and Laureate remain in very tight supply – growers should cover requirements on these ASAP.
  • LG Diablo is a very high yielding spring barley with premium potential which is would suit any ground too wet to go in with winter wheat and barley.

Peas

  • We have seen an increased interest in peas for sowing spring 2020. Peas represent a fantastic gross margin break crop with an excellent entry into winter wheat afterwards. Our buyback contracts offer market leading varieties and an opportunity to be part of a lucrative closed loop supply chain directly into the human consumption market. Talk to your farm trader for more information.

Autumn Cereals

  • Demand has been higher than expected this week for winter wheat seed, as a slight break in the weather has meant growers on the lighter ground have been able to make some sowing progress.
  • We have stock ready for immediate dispatch as required of all the main winter wheat varieties.

Fertiliser

  • Offers for granular urea FOB Egypt were at $250/t this week, although offers at this level are not being accepted by manufacturers who last sold at $260/t.
  • While the global market trades sideways, the UK domestic market has been stable-weak. Strength in sterling and a lacklustre market, due to uncertainty surrounding the current drilling conditions, have put pressure on prices.
  • There is a good opportunity for spot business now for those adamant they will have winter crop in the ground, require more fertiliser for spring, and want it to arrive on farm in a timely manner.
  • CF is yet to announce new terms. Please contact your farm trader for any fertiliser enquiries.
£/€ £/$ €/$
1.1605 1.2955 1.116
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Nov19 118-123 131-139 175-185 319-324
May20 124-129 139-147 181-191 325-330
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.

Latest Tweets

Follow Us

Get updates

Registered Office:
5 Hercules Way, Leavesden Park,
Watford WD25 7GS.

Company Number: 904957