Market Report

Thursday 9 July 2020

SAMPLING HARVEST 2020

We have sent a communication to all our farmer customers regarding our plans for sample testing for the forthcoming harvest. If you have not received this important information, please speak to your ADM farm trader to be fully informed and for us to be able to provide you with an efficient, smooth service in the coming weeks and months.

Wheat

  • The week has seen gains across the board on the main wheat futures markets since last writing: Matif Dec20 up €5.5/t, CBOT SRW Dec20 up 23c/bu & London Nov20 £5/t.
  • Much of the buying has stemmed from US fund short covering ahead of the 4th July long weekend, which has spilled over into this week, with funds net short 38,812 contracts on CBOT wheat (up 9,401 on the week), along with net short on CBOT corn 201,648 contracts ( up 75,831 contracts on the week). All figures correct as of CFTC report 6/7/20.
  • NASS reported US winter wheat harvest @ 56% complete (last week 42%), in line with the 5-year average. US corn conditions @ 71% good/excellent vs expected 72% and 57% last year.
  • Concerns on the Continent surrounding a drop in French wheat area, resulting in French Agriculture Ministry forecasting 31.3mln t production vs 39+mln t last year. Meanwhile IKAR dropped Russian wheat production by 1.5mln t to 78mln t on the back of disappointing early yields.
  • Russia’s wheat harvest is reported behind last year’s pace at 3m ha to date, same time last year 4.5m ha, owing to precipitation events across the southern regions which have also spilled over into the eastern reaches of the EU and further hampering early harvest there too.
  • AHDB yesterday released its UK spring planting and variety survey, putting UK all wheat area at 1.363m ha (-25% year on year), with all regions showing double digit % area falls on last year. Skyfall was the most popular wheat variety by area at 10% of total.
  • Barley harvest has started across southern stretches of the UK, despite damper weather over the last two weeks, albeit too early to state yield reports.

Malting Barley

  • The French winter barley harvest is 90% complete.
  • Quality is good overall, but yields are disappointing.
  • The German harvest has started, and quality looks good so far.
  • The first UK winter malting barley looks promising with good yields and quality.
  • The cooler EU weather is positive for spring barley.

Feed Barley

  • Another week of extremely thin volumes coming onto the market as growers remain on the fence.
  • The winter barley harvest is underway in the UK, although rain has caused delays towards the end of the week. Still very early days but first cut yield reports are promising, with good moisture/bushel weights being reported.
  • Nearby FOB markets rising despite firming FX as shorts cover positions in an illiquid market.
  • Still little to no interest from domestic consumers in the UK, and firming ICE wheat futures not helping the cause.

Rapeseed

  • US stocks remain volatile with investors growing wary over the economic and health impact that a second wave of Covid-19 might have. This comes after US Covid cases hit a single day record of 60,000 on Tuesday. There are also concerns that President Trump calls for congress to cap the next Covid-19 stimulus package at $1 trillion or less.
  • CBOT soybeans react to weather changes. Scattered rains in the forecast in the next few weeks and lack of Chinese buying in the last few days pressured soybean prices. Should the weather become hot and dry again the market will again add in some risk premium, with funds positioning themselves to add to their long positions.
  • This week USDA left crop ratings unchanged at 71% good/excellent. All eyes will be on tomorrow’s USDA report. Estimates are:
    • US soybean ending stocks: average trade estimate: 0.584 bbu vs. 0.585 in June.
    • US soybean production 20/21: average trade estimate 4.150 mbu vs. 4.125 mbu.
    • Soybean world ending stocks 19/20 average trade estimates: 99.35mln t vs. 99.19mln t in June.
    • Soybean world ending stocks 20/21 average trade estimates: 96.71mln t vs. 96.34mln t in June.
  • Brazilian officials CONAB peg the soybean crop at 120.88mln t vs 120.42mln t last month and also raise export estimates to 80mln t from 77mln t.
  • In Canada, parts of Saskatchewan welcomed showers over the weekend. Northern parts of Saskatchewan and Alberta need the warmer weather to help crops catch up on where they would normally be.
  • Matif rapeseed saw further gains this week on EU harvest delays. August futures expire at the end of the month and in recent days has become very technical. November futures trading back to recent highs we saw at the end of last month.
  • UK prices edge higher but capped by the firmer sterling/euro. Although there seems to be an improvement in sentiment towards the British economy, we have a long way to go before things return to normal.

Pulses

  • There has been little activity over the last week in the pea or bean markets.
  • The current weather conditions should benefit the crop conditions, with most considerably more optimistic regarding yield prospects than they were a month ago.
  • Prices are unchanged on the week. Farmer selling is very limited and as harvest approaches and farmer selling increases, prices may come under pressure.
  • Pea buybacks are available for harvest 2021. Please contact your farm trader for further information.

Seed

  • Autumn cereal seed market is now moving fast, with stocks changing daily. Discuss your full autumn seed requirements with your farm trader now. KWS Saki and KWS Extase are in high demand with limited seed available, so orders should be placed as soon as possible.
  • Winter OSR – we have leading varieties supported by establishment schemes to help share the risk of establishment between the grower, merchant and breeder.

Fertiliser

  • India fertiliser sales this year have been strong. The government recorded the highest movement of fertilisers from plants to port to meet demand on 30 June. Sales have been buoyed by continued healthy rainfall.
  • India will need to tender again this month due to strong demand and inability to achieve target tonnage on the last two tenders. Brazilian demand is strong also and Chinese export urea prices are firm. Supply limitations and demand from some of the world’s largest consumers of fertiliser are supporting current global levels despite reduced demand in Europe.
  • 33.5% AN for September movement on the Continent is up €2/t from August and €4/t from July offers. CF remain firm in the UK having moved pricing up following historically low new season levels that were below £200/t.
  • P and K fertilisers are at attractive levels today, and with expectation of an increase in demand as harvest gets underway in the UK, price rises are anticipated. Lows have been seen on the global market with manufacturers eager to increase levels to a more sustainable level again. Alternative PK products offer consistent value, year in, year out, and there is availability for August/September movement at buyer’s call.
  • Liquid UAN terms could be withdrawn again soon with prices firming and positions almost filled.
£/€ £/$ €/$
1.115 1.265 1.135
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Jul20 123-135 155-165 200-205 328-334
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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