- Prices have steadied since last weekend when the markets were rocked by lack of progress in US/China trade talks and threats from President Trump that tariffs would be introduced on Chinese exports this Friday.
- US spring sowings and crop development continue to lag last year and the five-year average, due to poor weather. But moisture is benefiting winter wheat.
- Increased area and favourable weather seen producing record Brazilian and Argentinian wheat crops.
- Return of rain in the EU and Black Sea region enhances prospects of a sharp rebound in wheat production for 2019, with current Russian estimates now seen at 83.4mln t, up 12mln t y/y.
- UK prices gain support from a weaker UK/£ as concerns over Brexit takes sterling lower.
- USDA will release initial 2019-20 global crop forecasts tomorrow, with the expectations of larger wheat and corn crops, and stocks that may continue to weigh on market values.
Thursday 9 May 2019
- EU malting barley market continues to be driven by the weather.
- Beneficial rains have been well received by growers over the last few days.
- There are only a very few crop 19 sellers and even fewer buyers.
- Prices nominally lower on the week.
- US/China trade negotiations stall as President Trump threatens to increase tariffs.
- Stats Can estimate 2018/19 Canadian canola ending stocks at the end of March to be 10 mmt, vs. 9.1 mmt LY (+10.5%).
- Heavy rains in the US cause water levels on Mississippi river reach historical high levels, exceeding levels recorded in 1993.
- CBOT Soybeans made new contracts lows this week. Optimism of a US/China trade deal on hold as President Trump threatens to increase tariffs on $200bn of Chinese goods. Goods currently taxed at 10% would be increased to 25% and some goods currently untaxed could also be taxed at 25%. Trade negotiations resume in Washington this week. Vice Premier Liu He and Chinese delegates will still attend but have shortened their trip from what was originally planned. Should President Trump increase tariffs, China will also impose retaliatory tariffs come Friday.
- US weather remains a concern. Widespread flooding causing substantial logistical problems. High water levels forces some processing plants to declare ‘force majeure’ with more rain in the forecast. Farmers concentrate on planting corn where they can, Soybeans plantings fall behind the 5-year average of 14%, currently 6%.
- USDA WASDE report will be released on Friday and is predicted to be bearish. Soybean harvest in Brazil is virtually complete – average trade estimates are 116.9mmt vs. the USDA’s last estimate of 117.mmt. Harvest in Argentina reaches 60% complete. Yields are better than expected average trade estimates increase to 55.72 mmt vs. USDA’s current estimate of 55mmt.
- In Canada, the situation remains political. Despite Stats Can estimating 2018/19 ending stocks to be 10 mmt at the end of March (9.1 mmt LY), prices have bounced from contract lows.
- Despite rain making its way slowly across parts of Australia, the optimum time for planting canola is running out. Rain is needed to replenish soil moisture before farmers make their final decision at the end of May.
- European rapeseed prices trade below recent highs. Veg oils prices weaken as a result of higher than expected stocks of palm oil stocks. The trade is still concerned over the state of next years rapeseed crop. Soil moisture across a number of regions in France and Germany are significantly below average – crop estimates are now as low at 18mmt, the lowest level in 13 years.
- In the UK, prices trade within narrow range. Sterling continues to play a key role in farm gate prices.
- KWS Fireflyvery limited – Septoria resistance has proved the key selection criteria so far for growers this.
- Lumiposa – growers wanting this insecticidal seed treatment on OSR need to get orders in promptly – talk to your ADM farm trader for details on what varieties it is available on.
- Winter bean orders will need to be covered early as the area is forecast to increase for harvest 2020 and there is limited seed production.
- Game cover – the rain has presented ideal conditions for establishment, talk to your ADM farm trader for advice and availability.
- Globally granular urea continues to firm. 10,000t of Algerian urea was traded at $270/t fob this week, over $7/tonne above the previous trade.
- Energy costs have been close to a six-month high. This and the expected return of India and Pakistan for large orders in May/June have supported prices.
- The UK market continues to sell at below replacement, as efforts continue to clear remaining stocks.
- As we now enter the 4th week of globally firmer prices. Questions are being asked as to what impact this firming global trend (now into its fourth week) might have on new season offers. Current indications suggest a higher start price.
- Ammonium nitrate prices are relatively stable. Imported and UK nitrogen prices are being supported by the extended downtime of a Russian production plant.
- In the UK, Brexit is still driving the direction of sterling, while the threat of tariffs on imported AN still hangs over traders, stifling commitment to long positions.
- ENhancePro, ADM Agriculture’s unique liquid foliar product, is available to increase milling wheat proteins and maximise premiums.
- It is available in IBC and pump-off options to be applied at growth stage 69-75. For enquiries, please contact your ADM Agriculture farm trader or the fertiliser desk.
|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.