Market Report

Thursday 4 March 2021

Please click ***here*** for this week’s grain and fertiliser market updates on the ADM Agriculture YouTube channel!

Wheat

  • US wheat prices have eased on lagging demand and an absence of bullish news, but European and UK market dynamics continue to look well supported.
  • The market has traded down $10-11/t on the week. US crop insurance policies that guarantee prices for the 2021 growing season are at their highest level for seven years, at $4.58/bushel for maize and $11.87/bushel for soybeans, bolstering expectations for a record combined acreage.
  • Russia’s agriculture ministry has proposed minimum and maximum prices for grain between 1 July 2021 and 30 June 2022 for purchasing and commodity intervention. This should provide a floor to Russian prices, so the country may be less aggressive on exports.
  • France’s agriculture ministry reported that 87% of the country’s soft wheat crop was in good/excellent condition, up from 86% a week earlier and 64% last year.
  • Australia’s state researcher ABARES predicts the country’s wheat production will fall 25% in 2021/22 compared with last year’s crop, which was boosted by La Nina rains. It predicts a lower area and reduced yields will produce a 25mln t crop.
  • However, India is likely to harvest a record 109.2mln t of wheat this year, further boosting stocks for government granaries that are fast running out of storage space.
  • The International Grains Council reported no change to its preliminary outlook for 2021/22, holding projected wheat production at a record 790mln t.
  • Turning to old crop, the IGC raised its forecast for global 2020/21 wheat production by 5mln t to 773mln t, citing increases for Australia, Kazakhstan and Russia.
  • However, Ukraine’s grain exports have fallen almost 20% year on year to 31.7mln t so far this season. The country had exported over 78% (13.7mln t) of its 17.5mln t wheat export quota as of the end of February, with exports in March expected to reach 950,000t.
  • Soft wheat exports from the EU had reached 17.56mln t as of 28 February, down from 21.48mln t cleared by the same week last season.
  • Internal demand for EU wheat is increasing, mainly due to lower maize imports. As such, EU prices are expected to remain firm overall to try to limit exports
  • That said, Matif futures prices for May have traded down €3/t over the week, after the front month (March) reached an eight -year high earlier in the week before falling back due to profit taking.
  • UK futures prices have fallen £1/t on the week, although physical prices remain underpinned by the ongoing tightness of supply and forward expectation of increased domestic demand in the ethanol, industrial and animal feed sectors next season.
  • USDA updates its US and global supply and demand estimates next Tuesday, with the trade looking for some fundamental direction for wheat prices, although any support is more likely to come from corn and soybean markets.

Malting Barley

  • Spring malting barley sowings in France are progressing well and expected to be completed on schedule.
  • UK spring barley plantings have also started on the lighter soils and are going into good seedbeds.
  • The old crop market was a little firmer over the last few days but with few offers.
  • Crop 2021 remains well supported throughout the EU with more buyers than sellers.

Feed Barley

  • Feed barley markets remain ill-defined and values have tracked sideways over the last week.
  • Origination is once again very slow across all positions and sellers, cautious of the tightening S&D, are reluctant.
  • Very high nearby freight values are still causing difficulty in export markets.
  • New crop markets are quiet and showing little change. Wet weather in the forecast has the potential to cause a setback to the spring planting campaign, although farmers have made progress with land work/drilling over the last week.

Rapeseed

  • CBOT soybeans continue to trade within a narrow range this week.
  • USDA released January soybean crush figures, reporting the second biggest month on record at 196.27mln bushels.
  • Brazil is still very wet, while Argentina remains very dry with above average temperature Overall, South American weather remains supportive.
  • Brazil’s harvest progress is put at 25% complete compared with 40% last year. Logistics are now improving, with and the port line-up at 8mln t with 4.9mln t reported have been loaded in February.
  • Buenos Aires Grain Exchange reduced Argentina’s crop ratings again, by 4%, to 15% good/excellent compared with 64% last year.
  • China remains quiet with no sales made to the country in the past five weeks, which pressures the market slightly.
  • African swine fever remains a concern, with a few new cases now starting to be reported, which is keeping the meal market on edge.
  • Oil markets are back on the rise. Palm oil traded higher on Wednesday and again this morning, despite some prospects of stocks increasing. Soy-oil is back above $50 this morning.
  • Soy oil rose to eight-year highs last week and continues to rally. Malaysian palm oil futures traded down at the start of the week on disappointing end of February export data, but have since recovered.
  • Matif rapeseed hasn’t had a downward session in eight sessions and continued to make another new high on Thursday. This highlights how tight the seed supply is on the nearby positions.
  • May futures broke through €500 with little resistance. The May/Aug inverse getting even wider at nearly €80, a record.
  • Sterling brushed off the budget report and is slowly making its way back up to 1.1600.

Pulses

  • The old crop bean market remains a domestic affair.
  • At current parities, Baltic origin feed beans are continuing to undercut UK beans on the export market, although Baltic offers have moved higher on the week.
  • New crop bean prices continue to track UK wheat futures and very strong values for feed beans are currently available.
  • Basis current new crop prices, Baltic human consumption quality beans are offered at only a €10 premium to UK feed beans.
  • Old crop pea values are coming under pressure, with most domestic and export consumers covered for the remainder of the season.
  • We are seeing increasing interest in new crop pea buybacks in recent weeks, with marrowfats and large blue buybacks still available. New crop bean buybacks and ADM Agriculture’s marketing pools remain available.

Seed

Spring Barley

  • ADM has RGT Planet, the most widely grown cereal variety in the world, as well as dual purpose varieties Laureate and LG Diablo to offer.

Peas

  • Large blue pea seed is now becoming very limited. Get in touch with your farm trader now to avoid disappointment. Marrowfat pea seed is in good supply with agronomically strong Kabuki available on ADM’s market leading buyback.
  • Catch up on our latest YouTube video with Head of Seed, James Barlow, at DSV’s rapeseed trial plots, showing benefits of TuYV resistance and focusing on new variety Duplo. Duplo is an extremely vigorous hybrid with a wide sowing window. Click here to find out more.

Fertiliser

  • Little news from the global granular urea market has left prices unchanged week on week. UK pricing has stabilised and cooler weather is giving growers an opportunity to use the 46N product.
  • UK AN values have also remained stable, following strong gains through January and February, although European values continue to climb higher.
  • Liquid UAN spring fill terms remain, and delivery can be arranged in good time. AdvaNShield, the liquid inhibitor, is a good way to protect your crops’ nitrogen with changing temperatures and weather around application.
  • Phosphates have stabilised above two-year highs with potash values remaining unchanged.
  • Demand is relatively strong in the UK on most fertilisers and this will help underpin current prices across the board.
£/€ £/$ €/$
1.157 1.3935 1.2045
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Mar21 164-172 204-214 223-228 436-443
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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