- After another week of wild swings wheat markets have eased back, although losses were limited by strength in the US corn market.
- With little additional bullish news, US wheat slipped $2-3/t, although corn is $5-6/t higher.
- The UK market followed the weaker global trend, trading about £6/t lower as signs of diminishing domestic demand provided a negative tone.
- SovEcon has raised its projection of Russian wheat exports for the 2020/21 season from 36.3mln t to 37.9mln t, due to increased farmer selling ahead of the export tax being imposed on 15 February.
- Russia’s economy minister says the country is preparing a permanent grain export mechanism, which will start on 1 April. It is expected to be a formula-based export tax rather than the imminent fixed tariff.
- In the Ukraine, ministry officials and market participants have agreed to set the maximum volume of corn exports from the country at 24mln t for the 2020/21 season.
- Ukraine’s grain exports have fallen almost 20% on the year to 28.7mln t, including 13mln t of wheat, 10.4mln t of corn and 3.9mln t of barley.
- Egypt’s state buyer (GASC) purchased 480,000t of wheat for March 15-30 shipment, including 120,000t from Russia, 240,000t from France and 60,000t each from Ukraine and Romania.
- Soft wheat exports from the EU had reached 15mln t as of 31 January, down 20% from the same point last year.
- Argentina is looking for ways to ensure ample domestic wheat supplies without resorting at shutting down exports as farmers fret about possible state intervention in the market.
- US farmers are expected to increase acreage of both soybean and corn this year in response to high prices and the return to cultivation of a high level of prevented planted area in 2020.
- Recent and expected favourable weather continues to boost Indian wheat production outlook, with the crop now estimated at 109mln t.
Thursday 4 February 2021
- Malting barley demand for the February to June period remains weak.
- Prices for this period have dropped over the last week.
- Demand for crop 2021 remains strong and premiums are significantly higher than last year.
- The wet weather continues throughout the EU, but there are no concerns regarding spring plantings at the moment.
- UK export prices have dropped due to the rise in the pound versus the euro.
- Barley vales have traded lower this week, although it is worth noting that this is only on thin volume and in general the bid/offer spread in both the domestic and export market remains wide.
- Barley has traded into the Netherlands this week, as German values have firmed and the UK once again seems more competitive.
- On the whole sellers are still cautious with good underlying demand over the coming months, and at recent levels farmer selling has ground to a halt.
- CBOT soybeans are rangebound ahead of next Tuesday’s USDA report.
- Soybeans have been very volatile this week in the lead up to the USDA’s update. South American weather remains a focus, with wet weather hindering harvest progress in Brazil and dry weather in Argentina for the next 7-10 days.
- Crop consultancy AgRural estimates the Brazilian soybean harvest at 1.9% complete, the slowest in 10 years. Buenos Aires Grain Exchange reduced its Argentinian crop estimate to 46mln t from 46.5mln t last month. Crop ratings fell 3% to 18% good/excellent. Talks of strikes in Argentinian ports supported prices.
- US soymeal is still in demand with Chinese interest remaining in place for the summer months. However there are increased cases of African Swine Fever in China, although the new strain isn’t as strong as last year, but is spreading fast and will be closely watched.
- There were reports of China selling back Brazilian cargoes and no new business has been reported.
- Veg oils traded lower, with Malaysian palm oil falling 3% after re-opening from the national holiday on Monday. It seems the Indian import tax wasn’t fully factored in, plus lower than expected exports for Jan which were 35% lower.
- Canadian canola rallied to close back near to contract highs again, trading over $717 on the front month position before dropping back this week.
- Matif rapeseed is back trading in a €10 range after making new contract highs last week. We wouldn’t expect to see any major changes before next week’s USDA report.
- UK prices remain supported but pressured slightly by firmer sterling, which is trading between 1.1300/1.13500.
- Old crop feed bean markets have continued to firm, up £3 on the week.
- The rally in UK values combined with stronger sterling has now made UK beans uncompetitive for export to Northern Europe, with the Baltics now slightly cheaper. Whilst the UK is on paper competitive to southern Europe, we are too expensive versus the buying intentions which are €10/t away.
- Demand for human consumption beans remains subdued. We have seen some very limited demand this week from the UK snack food manufacturers, but enquires into North Africa are non-existent, as the UK remains too expensive against Australia.
- New crop bean prices continue to track wheat futures with attractive premiums over wheat available. Prices of over £200/t ex farm are available for most at harvest.
- Pulse buybacks and ADM’s marketing pools for harvest 2021 remain available.
- ADM Agriculture have the following pea seed availability on our market leading buybacks; Bluetime, Blueman and Daytona (large blues), Kabuki (marrowfats) and Manager (yellows/white). Contact your farm trader for more information.
- Spring barley availability is good. ADM Agriculture has agronomically strong RGT Planet – the most widely grown cereal variety in the world, as well as dual purpose varieties Laureate and LG Diablo to offer.
- Spring bean seed position is beginning to look very tight. We do however have a small amount of Lynx, ready for immediate dispatch.
- Granular urea continues to trade higher with European and North American demand driving prices to $380/t FOB Egypt for April shipment.
- UK values are closely chasing replacement costs as product remains short in the UK. ADM has urea for February and March delivery.
- Rumours of the next Indian tender, expected soon, is further fueling the urea market.
- Ammonium nitrate values have stabilised for the time being, although further upside risk remains very clear here in the UK.
- Phosphates have continued their rally and TSP values have risen significantly on the back of DAP prices.
|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.