Market Report

Thursday 8 July 2021

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This week’s videos include: the grain market update, an overview of the ADHB recommended list Group 3 wheats, and information about sampling for harvest 2021.

Wheat

  • US markets have been driven lower by an improved weather outlook across the key growing areas of the Mid-West and Northern Plains. EU and UK futures markets have followed their lead.
  • CBOT wheat for Sep21 is down 56.5cents/bushel, week on week, while Nov21 ICE London wheat is down £6.60/t andSep21 Matif wheat has fallen s €9.25/t.
  • Europe, Northern France, Eastern Germany and Poland continue to see significant rainfall, which may hamper progress for the coming harvest. However yield expectations remain positive, with the EU remaining on course for a potential -record wheat crop.
  • Initial reports from France suggest adequate quality is likely in the early harvested crop. However, intermittent rain is slowing progress and causing quality concerns, although it is too early to tell if this the start of a wider trend.
  • The weather outlook for the UK looks to be improving in the 15-day forecast, with a steadily decreasing amount of rain, whilst temperatures steadily climb as crops progress through the key grain filling phase.
  • Turning to the Black Sea, recent rains have been favourable for the coming crop, although there have been instances of torrential downpours in Ukraine. Overall though, with a drier outlook in the 15-day forecast, the weather continues to support an outlook of large cereal crops across this region.
  • In summary, the weather continues to rule the roost, with all eyes turning to Monday’s USDA supply-and-demand update for the global picture.
  • Wheat crops look healthy away from the US and Canada, where corn remains in a delicate position, with continued potential for spill-over support in to the wheat markets.
  • However, in the short term, the outlook for big EU/Black Sea wheat crops could be the catalyst for some further downward pressure on prices through harvest.

Malting Barley

  • Rain continues to hamper France’s winter barley harvest, with reports that specific weights are now starting to decline.
  • France’s spring crop is still looking likely to produce above-average yields.
  • Rain is also delaying the UK harvest, but there are no quality concerns at present.
  • Overall the market is very quiet with few farmer sellers and no maltster buyers. Prices are lower this week, following the feed markets down.

Feed Barley

  • Further delays to harvest in the UK have caused a spike in spot/old crop prices, as supply runs short and consumers/trade shorts compete to buy barley to tide them over until new crop arrives.
  • New crop markets are quiet for another week. Domestic consumers are happy to wait for harvest to arrive still before making a move.
  • Export markets are once again muted. We see continued buying interest from Spain/Portugal and Ireland, though buyers and sellers are not connecting, as freight values continue to climb and, for a further week, the UK farmer remains absent from the market.
  • Harvest pressure in the Black Sea continues and has started to set in in France/Germany. We still expect to see further pressure to harvest prices here in the UK when combines start rolling.

Rapeseed

  • CBOT soybeans closed sharply lower after a long weekend, with July soybeans trading over 90 cents/bushel down by close of play, with meal and oil market following.
  • The weather in the US has started to look more favourable, with rain forecast for some key areas for the rest of this week, but perhaps less than some had expected.
  • As a result there was a big profit-taking session with funds heading to the sideline for the time being, the length being cut significantly in the past few months.
  • Rumours that China may take more US soybeans for 2021/22 did lend some support to the market, but no trades have been reported yet.
  • In Brazil, a sharp correction in currency meant the country had the upper hand on export prices which also pressured US beans. Shipments out of Brazil are now slowing and Argentina is still experiencing logistical issues with low water levels.
  • After a five-day up trend, Malaysian palm prices eventually closed lower after reports of higher stocks and increased production.
  • Energy markets also reversed trends. Crude oil traded at new six-year highs before closing lower on reports that OPEC and producers failed to agree on plans to increase supply in the face of rising global demand. Talks are expected to resume in a few months.
  • After trading limits up on several occasions last week, Canadian canola closed limits down yesterday. The weekend weather called for cooler temperatures and rain across parts of Saskatchewan, Manitoba and the major growing regions of Alberta, which producers hope will continue throughout July. Temperatures are expected to creep higher next week.
  • Matif rapeseed prices fell sharply in the last few sessions, having traded €20/t off the season high, touching €500 again in yesterday’s session. Whist the EU harvest is delayed, prices are likely to follow the wider oilseeds complex in the short-term.

Oats

  • Old crop markets are few and far between, with very little interest in either the milling or feed sector, as buyers are reported to be covered until new crop.
  • Millers and feed compounders continue to wait for harvest before coming into the market to make any fresh purchases, as quality will very much dictate the price direction for the season.
  • Exports into Europe remain at big discounts to barley, with values currently calculating at £120-124/t ex-farm (subject to distance from a port).
  • Bottom line – it is all about the weather before and during harvest so all to play for!

Pulses

  • Harvest is likely to be at least two weeks later than the past couple of years and as a result old crop values are holding up. It is likely that August sales will have to be executed with old crop beans.
  • New crop bean prices continue to track wheat futures, but there remains very little demand at current levels both domestically and for export. Confidence in the UK crop size is increasing and with few very few bids, sellers are starting to reduce their selling ideas relative to wheat futures. It is likely that the premium over wheat will reduce further once harvest begins and farmer selling increases.
  • Pea crops are generally looking excellent across the country and yields are expected to be above the long-term average. New crop marrowfat pea buybacks are available. Please contact your farm trader for further information.

Seed

  • OSR: Looking for alternative ways to help with establishment of your oilseed rape crops? Companion crops can help by protecting against flea beetle, fixing nitrogen and reducing weed pressure.
  • Winter wheat: Click here to view this weeks seed YouTube video focusing on Group 3s, including newly recommended Merit, with preferred end-use characteristics and consistent baking quality, and yields particularly excelling in the east.
  • Click here for more information in our seed varieties guide.

Fertiliser

  • Indian tenders are supporting current prices, with trade completed at $470/t FOB. Commentators suggest that current Indian stock levels will require further tonnage as they enter kharif season, India’s peak demand.
  • The possibility of Chinese export duties are helping to drive markets higher. Speculation around export availability is also driving other origin markets, such as North Africa, due to increased demand.
  • UK ammonium nitrate producer, CF, has increased prices further with spot and September delivery following the global nitrogen markets and reflecting the European price rise seen last week.
  • Liquid UAN levels continue to rise since the first summer fill offering, with importers being forced to pay higher prices to secure availability on later vessels.
  • Phosphate markets are stable. Potash markets have risen in the UK and globally around speculation of sanctions on the one of the world’s largest potash producers, Belarus.
£/€ £/$ €/$
1.1612 1.3748 1.1836
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Jul21 149-157 195-205 235-240 420-425
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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