WELCOME TO THE ADM AGRICULTURE WEEKLY MARKET REPORT
Wheat
- The US market has traded up less than $1/t over the past week as declining US winter wheat crop ratings and the perceived closure of the Black Sea grain initiative (BSGI) provided some underlying support.
- Despite recent rains, US winter wheat crop ratings slipped on the week. The good/excellent rating rose one point, but the poor/extremely poor rating was down two points.
- There remains a lot of uncertainty over the looming deadline of the BSGI, although Turkish officials stated they were optimistic a further two-month extension could be reached.
- Ukraine, Russia, Turkey, and the UN have so far failed to reach agreement to authorise any new vessels, and the export pace is slowing due to growing concerns over ships getting stuck if the BSGI deal is not renewed later this month.
- Russia is still not satisfied with how the issue of Russian Agricultural exports as part of the BSGI is being resolved.
- USDA is due to release initial 2023/24 US and global supply and demand estimates on Friday, with the trade expecting bearish US data. This has provided resistance for higher commodity prices.
- Statistics Canada estimated all-wheat stocks as of 31 March at 13.26mln t, up from 11.22mln t the year before. The figure remains below trade expectations of around 14mln t.
- Massive Brazilian harvests have seen global export business move away from the US, as seen with recent Chinese sale cancellations, as the lack of storage space drives prices lower in a bid to increase exports.
- China has imported its first ever cargo of South African maize last week, even though the origin has been approved for many years by Beijing.
- BAGE (Buenos Aires Grain Exchange) kept Argentina’s maize output estimate unchanged on the week at 36mln t, stating the harvest had progressed to 20% complete.
- India’s 2023/24 wheat production is estimated at 110mln t, according to the USDA’s attaché, on reports of higher-than-expected yields despite recent weather issues.
- Global wheat production in 2023 is now at 785mln t, according to the UN’s FAO, as harvest prospects rise in the EU due to favourable rains during April in most nations.
- EU soft-wheat exports had reached 26.5mln t as of 7 May, up 11% from a year earlier. Morocco, Algeria, and Nigeria remain the top destinations. Maize imports were reported at 23.2mln t, vs 13.9mln at the same time last year.
- UK prices have traded down about £2.50/t over the week on both old and new crop as a firmer currency, favourable weather prospects and the general uncompetitiveness of UK export supplies continues to weigh on the market.
Malting Barley
- Old crop malting barley values continue to slide, with near total lack of interest from the malting industry, and all the while we are coming across available malting barley on the farm. We are not competitive on the export market compared with old crop Danish barley.
- New crop markets saw a flurry of activity last week as some maltsters stepped in to cover some brewer requirements. However, the tonnage purchased was small and did nothing to add a bullish story to prices.
- New crop values are being propped up by a reluctant farmer, despite historically decent quality premiums, and once again we are uncompetitive against Danish FOB markets. Across the globe, industry demand is limited because of these high premiums.
- We would not be surprised to see a sell-off as we get closer to harvest, provided we are able to harvest a crop of sufficient quality.
Feed Barley
- The old crop feed barley market is becoming increasingly technical as we continue to draw down remaining stocks. Small quantities of export demand are still present to Spain/Ireland/Netherlands, but other origins are out-competing the UK for now.
- Domestic consumers are not showing any interest in old crop and are still sitting on their hands going into new crop, with markets continuing to drift and prospects looking good for the developing crop.
- All eyes in the trade remain focussed on selling the harvest position for export to facilitate as available movements off the farm.
Rapeseed
- Global politics and economic data continue to impact volatility in outside markets. Ukraine states that Russia has ended the Black Sea grain initiative ahead of its official end date by not registering incoming vessels. Negotiations will continue later this week.
- A short week in the UK this week but US/EU markets continued their slide into tomorrow’s USDA WASDE report. Having struggled to break overhead resistance, soybeans are trading back to levels we saw at the start of the month. US beans are still trading at a premium to Brazilian beans, which added to poor demand prospects against expectations is weighing on prices.
- US weather remains favourable for plantings, though rain at the end of this week and over the weekend may slow progress slightly. However, with growers reported to be 35-40% complete this week they are significantly ahead of the five-year average of 21%.
- Brazil’s harvest is reported at 93.7% complete, but storage space remains limited.
- The trade now awaits the USDA’s May WASDE report to be released on Friday. Funds continue to reduce their long positions heading into the report. Argentinian crop prospects are likely to fall 2-3mln t whilst Brazil will be raised to 1mln t.
- Energy markets rebounded from the sharp sell-off we saw at the start of the month. Higher stocks reported by the EIA seemed to cap price gains for West Texas oil above $74. Veg oils were mixed – soy oil following beans lower this week, though palm oil did try and buck the trend. Reports yesterday estimated palm production for April being below expectations (1.2mln t v. 1.3mln t) which offered little support to prices overnight.
- Canadian Canola prices traded back to nearby highs before following the wider complex lower in the last few sessions. Statistics Canada estimated March stocks at almost 5.96mln t, below the average trade estimate of 6.9 mln t. However, news that tensions may be escalating between the Canadian president and China may once again impact on canola exports going forward. MATIF rapeseed traded to nearby highs last week but was subject to a sharp correction on Monday when August futures closed €20 lower at the end of the session. It made new contract lows on Tuesday. Better EU crop prospects and a large old crop carryout continue to weigh on prices as we head into the final stages of the season.
Pulses
- The UK feed pea market still has some demand heading into the summer months as consumers look for some cover prior to 2023 crops’ potential influx of peas. Please let your farm trader know if you have any remaining on farm.
- As plantings get underway, we have heard reports of sugar beet being pulled out of the ground and growers looking for alternatives. We still offer great pea buybacks on large blue peas and marrowfat peas, which have a later planting window.
- ADM can provide free agronomic advice, whether for those who have already started their cropping or those who are considering peas as a sugar beet replacement. Please contact your farm trader for more information!
- Old crop beans prices have drifted slightly lower on the week, but are still at a premium to new crop, so we should see some farmers selling into the summer months.
- New crop beans are developing well in the fields, and we could be set for a higher production number than expected, beating that of 2022 crops harvest.
Seed
- Winter wheat KWS Dawsum is the perfect combination of quality and yield, inheriting an exceptional specific weight from its Costello parentage and yielding 104% of control.
- Dawsum also has the second-highest untreated yields on the AHDB RL, only after KWS Extase. It is no surprise that this variety is the current leader for certified seed market share.
- Lots of our most popular countryside stewardship mixes are available for fast delivery, mixes ranging from AB1 to AB16.
- ADM has a vast portfolio of grass seed from Italian Ryegrass and Westerwolds to Permanent Pasture and MeadowMax.
- Westerwolds is a great option for short-term ley, that is suitable for silage, grazing, hay production, and green manure.
- Our permanent pasture is a perfect long-term mix suitable for grazing or cutting and includes Timothy for a very palatable forage.
Fertiliser
- Granular urea remains firm on the global spot market, whilst any doubt is cast over further forward price direction. Volatility could be expected as the balance of supply and demand fluctuates amongst new market dynamics.
- According to market participants, India is likely to tender over the next month, whilst expectations are growing of China’s ability to export. Ammonia in both Europe and the US has fallen significantly over the last few weeks, and some are indicating a sealing for ammonia prices given ample supply.
- Imported AN values have risen in the UK as European manufacturer Yara increased prices last week by €27/t for July offers on the continent, supported by strong demand following price adjustments.
- The UK AN market has seen some offers for nitrogen sulphur products issued and withdrawn and increased over the last week. Scarcity due to various factory closures in Europe is a concern for importers and growers alike.
- MOP and TSP prices have stabilised, but regional differences remain. As we head towards harvest, UK demand could pick up and support prices, potentially closing the regional price gaps.
- ADM has alternative PK products available for this harvest with a wider range of grades available in different regions. Why not speak to your ADM farm trader today about your requirements for this harvest?
| £/€ | £/$ | €/$ |
|---|---|---|
| 1.1500 | 1.2565 | 1.0925 |
| Feed Barley £ | Wheat £ | Beans £ | Oilseed Rape £ | |
|---|---|---|---|---|
| Apr2023 | 165-175 | 177-187 | 230-235 | 350-355 |
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.
