Thursday 12 December 2024

Wheat

• US prices have managed a small gain, with front-month March 2024 up $1.84/t.
• Markets have taken a bit of support from the USDA report released earlier in the week. Although US wheat stocks were lowered by 20mln bushels, the rise in exports was mainly a reaction to perceived declines from the Black Sea region during the second half of the marketing season. Weekly exports have fallen below the pace required to achieve the yearly, now updated estimate, and as of  December 5th were reported as reaching 11.22mln/t, up 30% year on year and exactly 50% of the pre-report projection.
• EU prices have firmed €3.50/t, following the global trend. Non-EU soft wheat exports have now reached 10.239mln/t as of December 8th, still 29% lower than the 14.414mln/t shipped by the same week a year earlier. French farmers have ‘caught-up’ with wheat sowings for the 2025 harvest, with the crop reported as being 86% in good, or very good condition, compared with 87% year on year. The main talking points this week has been the announcement that the Egyptian military agency has taken over the country’s import of strategic commodities, replacing a decades-old state institution to take over international buying tenders, and conduct direct purchases with suppliers.
• UK market has also firmed, with May 24 up £2.25/t week on week. Market in general remains lacklustre, with growers finishing off fieldwork, or showing little appetite to extend their marketing activity. With wheat now more attractively priced against imported corn into feed rations, we have seen some consumers steadily chipping away at extending their coverage, while some still believe UK wheat is still too expensive. Over the next few weeks delivery premiums should remain supported as the supply squeeze tightens and the producers ‘shut up’ shop’, but they may come under pressure in the new year as producer selling increases.
• In general, the USDA report was supportive, especially for corn, allowing wheat to trade on its shirt-tail. The market has already factored in the loss of Black Sea supplies due to government intervention on export policy, but this will be partially offset by higher year on year production seen from Canada, Argentina, and Australia. How Egypt and Russia interact with each other in the new set-up waits to be seen, as will be Egypt’s approach to other key suppliers. Global wheat stocks are tightening, but remain more than adequate. With northern hemisphere crops in dormancy, it will now not be until the spring that better crop assessment, and their potential, can be obtained.

Malting Barley

• Malting barley markets are nowhere to be seen, and there is no real news to report. Premiums continue to look unattractive with the weight of supply and slow demand outlook.
• Traders are cautious around new crop pricing, with the all-important spring barley drilling campaign a long way off.

Feed Barley

• An unusual piece of news has bought some interest to feed barley markets this week. The Mosel River has been closed to shipping after a vessel collision damaged a lock, with repair works expected to last until spring 2025. This disruption reportedly affects around 70 ships, impacting deliveries for a range of products. As a result, we have seen some traders in the Dutch market switch their books into other methods of execution, including UK coasters, which has brought some much needed demand to the feed barley market for January.
• Meanwhile, farmer selling continues to be on the slow side as we head towards the Christmas period. This is helping to keep feed barley supported, particularly as feed barley still looks competitive into domestic feed rations vs wheat and corn.

Rapeseed

• The main focus this week has been the USDA report on Tuesday afternoon. There wasn’t much excitement to markets as the US yield and production figures were left unchanged. US ending stocks were also left unchanged, as was Brazilian production. Although Brazil production was increased from 1mmt to 52mmt and world ending stocks for 24/25 were increased, though less than estimates. We did see the Soyoil balance sheet tighten slightly, in line with expectations following very large export sales recently. Now that we have come through the report, the focus will return to the South American weather market, which continues to look promising for crop prospects. Safras have said that Brazil’s soybean sales so far have reached 31.2% of expected production vs. 27% this time last year.
• Crude oil has seen a positive turn this week on an improvement in the Chinese economy. The Chinese Politburo said that they will adopt an appropriately loose monetary policy next year and boost fiscal spending. This would be the first easing since 2010. China’s oil demand growth will still be limited by their embrace of EV’s. We also see Chinese crude imports in November up 14% from last year. This week’s API report wasn’t as positive, with crude stocks up 499,000 barrels for last week.
• China’s November edible veg oil imports fell 28% year on year and soybean imports fell to the lowest we have seen since 2018. The USDA dropped world vegetable stocks to a 7 year low on lower palm oil. The Malaysian palm oil board pegged November palm oil exports down 14.25%. China have also cut their 24.25 palm oil import estimate.
• Canola has continued its move higher this week following both last week’s StatsCan report dropping their production estimate by 1mmt, and this weeks USDA report dropping their production figure by 1.2mmt to 18.80mmt. This has not helped crush margins, which have fallen nearly $40 recently, not spurring much interest from crushers to pick up additional coverage at these levels.
• MATIF rapeseed has been supported this week, mainly by news from Euronext that the Moselle river will not be available to use for the tender of MATIF rapeseed. This means that those who have the option of taking tender, now have more favourable options to receive the seed. This has left prices boosted for now, though margins remain very suppressed, limiting crusher engagement, especially in the UK. This does mean that product prices will need a boost if rapeseed wants to hold on to its gains.

Oats

• Oat markets in Europe have seen minimal trade activity as neither buyers or sellers are actively pushing to do business. Farmers are happy to wait until 2025 before they sell and consumers are well covered for nearby positions, and believe prices could come down in the coming months.
• Milling oat supply remains good with tonnages widely available in Europe and this could result in limited upside potential to markets providing farmers sell it.
• Feed demand remains slow, some trade was reported into ARAG but this was very limited.
• Furthermore the prices being quoted out of the Baltics is a long way from calculating down to Spain.
• Here in the UK the focus remains on December logistics, with large tonnages moving in what is a short month.
• Demand for milling oats has been poor with the key millers being well covered for December and into Q1.
• New crop prospects remain good with benign weather over the last week, however all eyes are on spring plantings as this is where the bulk of the tonnage will come from this year.
• Bottom line… markets are quiet.

Pulses

• It’s beginning to look a lot like Christmas… A very quiet week on the Pulse markets this week, with little interest from growers or consumers alike. There is still a steady stream of beans coming available, however in limited volume, and with December homes now full up, January and February space is also rapidly closing up too. There are still wet beans out there – for those that can’t dry, please contact your farm trading representative, as we have drying options available.
• With Australian New Crop Beans afloat and on their way to Egypt, the window is steadily closing on interest in UK beans to North Africa. With this in mind, expect Human Consumption premiums, for export to start coming under pressure continues to be a buyer of human consumption beans. There will be some limited domestic demand, so keep speaking to your Farm Trader and send in any samples which could have some quality to them.
• Domestic feed demand is exceptionally quiet, and beans remain c. £20-25/mt away from competing compared to imported feedstuffs, which is limiting their wide-spread usage in many diets. With this in mind, we will likely see beans come under further downward pressure in the New Year. For more information, please tune in to this week’s YouTube recap on the Bean Markets.
• Looking to the week ahead, England is in for a broadly drier week this week, although Scotland and Wales are still due plenty of precipitation. Temperatures will again be slightly warmer than normal, especially in the South East.
• We’re still actively purchasing across the UK and can offer competitive origination markets. There’s also the potential to upgrade crops that meet human consumption specifications, with processing available at one of the most advanced pulse processing plants in the UK and Europe. This provides an excellent opportunity to earn an additional premium on your crops. Speak to your farm trading representative today to discuss your marketing options and discover potential upgrade opportunities.  
• Pea values dip from recent highs on better supply prosects as we head into 2025. There are still very competitive buybacks available for large blue varieties for those still to secure a contract. Please speak to your farm trader for further detail.
• Finally, a reminder for those eligible for PGRO membership, if you’re not already on the PGRO mailing list, sign up here, where levy payers can access a wealth of free advice and support, drawing from PGRO’s extensive knowledge on pulses.

Seed

• Looking ahead to the spring plantings we have a number of buybacks on offer on all of our cereal & pulse products.
• On the pulses, we have a demand for large blue peas for both Human consumption and seed production. We are able to offer various options to suit, if you have an interest in growing peas or beans, please contact your local Farm Trader to explore what we can offer.
• For spring cereals we are pleased to offer Laureate, RGT Planet, RGT Asteroid & SY Tennyson. We also offer buyback contracts in all areas of the UK. Spring wheat is becoming sort in the market place, we have limited stocks to offer so if spring wheat is in your rotation plans, please give us a call.
• We have various varieties of Maize for AD, forage, grain & game cover usage, along with various mixtures suited to SFI schemes.

Fertiliser

Market Overview

• The fertiliser market this week is marked by significant movements in nitrogen markets, primarily driven by India’s urea tender and supply adjustments in the UK and Europe.
• India’s NFL tender for 1.5 Mt of granular or prilled urea, closing on December 19, has provided strong price support globally. Since its announcement, FOB prices have surged, with Egyptian granular urea now trading as high as $380/t FOB for January 2025 loading. However, China remains absent from the tender due to ongoing export restrictions, limiting supply flexibility.
• In the UK, both urea and AN markets are facing widespread withdrawals as reissued prices reflect global trends. Rising costs and tightening availability have prompted some farmers to return to the market, though the UK remains significantly behind its nitrogen needs for the cropping season. European AN prices continue to climb, with Yara’s CAN now priced at €317/t bulk CIF, a €12/t increase since October.
• Potash and phosphate markets remain seasonally quiet. Potash prices in Northwest Europe declined by €10/t, with standard MOP at €300-320/t CIF and granular at €320-340/t CIF. In phosphates, US DAP prices fell further to $555-562/st FOB NOLA, but tight global availability is limiting further bearish movement.
• The nitrogen market remains a focal point as global price increases and tightening supply highlight the urgency for buyers to secure stocks ahead of the spring season.

Natural Gas

• European natural gas prices are trading at €45 per megawatt-hour, marking the lowest level in nearly four weeks, as mild and windy weather alleviates pressure on inventories. Current European gas storage stands at 80.4% full. Over the weekend, Storm Darragh bolstered wind power generation in the UK, reducing reliance on gas for electricity. While a brief drop in temperatures and slower wind speeds is forecast, mild and windy conditions are expected to return next week, keeping gas demand subdued.
• European LNG imports have surged to their highest levels since January, with multiple shipments arriving despite delays caused by the storm. In Asia, weak demand in China has prompted the country to resell LNG cargoes, capitalising on higher spot prices. Meanwhile, Russia has eased payment rules for gas purchases, allowing third-party banks to convert payments into Rubles, calming fears of supply disruptions amid US sanctions.
• Despite bearish price action, the seasonal decline in natural gas prices is occurring later than the historical average. This delayed trend is unlikely to translate into lower AN prices in Q1, particularly given the ongoing pressures faced by European ammonia producers.

Ammonia

• Ammonia market demand remain subdued, despite some price easing on both sides of the Suez as suppliers have begun offering at reduced levels. Improving supply, coupled with limited demand across multiple regions, signals potential declines as the market moves toward the final weeks of 2025.
• Restarts at AOA and Fertial are already contributing to downward pressure, with recently cited offers at lower levels still failing to stimulate significant interest beyond piecemeal purchasing.
• In NW Europe, this trend offers some relief to buyers, where demand remains muted and importers show little urgency to secure delivered prices, which have been at the highest notional levels of the year until this week.

Ammonium Nitrate

• The UK AN market has seen widespread withdrawal since last Friday as importers adjust to the replacement costs observed in European production, which are significantly higher than the delivered prices seen in recent weeks. Despite a return of liquidity, the UK market remains far behind the levels needed to meet cropping demand, with estimates suggesting current nitrogen stocks suffice for a 9.8-million-tonne wheat crop, compared to an estimated 14.4-million-tonne estimated requirement.
• Upward price adjustments have been observed both in the UK and across Europe. In the UK, AN prices have increased by approximately £10-15/t delivered on-farm, depending on the grade. In Europe, Yara’s latest pricing for its CAN grade is now at €317/t bulk CIF, reflecting a €12/t increase since mid-October.
• Given these upward adjustments and the recent pressures on AN, UK supply is expected to remain tight through January 2025.

Urea

• India’s NFL has issued a tender for 1.5 Mt of prilled or granular urea, closing on December 19 2025. Delivery terms request 1 Mt to West Coast India and 500,000 t to East Coast India. As anticipated, this tender has provided strong price support for the global urea market. The market began rallying from December 4, with FOB prices increasing by $8 week on week for both Black Sea and Middle Eastern spot trades.
• Egyptian FOB prices have surged significantly this week. Abu Qir sold granular urea at $371/t FOB on Friday (December 6 2024) for January 2025 loading to Europe, followed by Mopco selling 5,000 t at the same level on Monday this week. Today, Abu Qir recorded the highest trade of the week, selling 6,000 t at $380/t FOB for January 2025 loading, marking a $2/t increase on previous business.
• Chinese urea remains unavailable for the Indian tender due to China’s indefinite suspension of new export inspection applications since June 7 2024. This constraint limits supply flexibility globally and adds further upward pressure to prices.
• The British pound has rebounded from its late November low of £1.25 against the US dollar to mid-£1.27 levels. While this provides marginal relief for UK importers, it does little to offset the sharp price increases driven by the Indian tender and broader global market movement.
• In the UK, the urea market has mirrored AN’s widespread withdrawal since last Friday. Reissued prices now reflect global market trends more closely, aligning with the strong upward movement seen in Egypt and other regions.
• Domestically, Chinese urea prices remain under pressure, with producer inventories exceeding 1.43 Mt. This oversupply, combined with restricted export activity and weak inland demand, continues to weigh on prices in the Chinese inland market, contrasting with the bullish international sentiment.

Potash

• Potash prices in Northwest Europe declined by €10/t for both standard and granular grades this week, reflecting continued seasonal demand softness. Standard MOP prices were assessed at €300-320/t CIF, while granular potash was pegged at €320-340/t CIF. Market participants expect demand to remain subdued through the end of the year, with an uptick anticipated in late January 2025 as preparations for the spring application season begin. Prices are expected to stabilise in the short term, with some noting ongoing consistency despite the recent decline.
• In China, potash prices also saw a slight decline late last week due to resistance from downstream buyers. Reduced NPK product sales have slowed purchasing, though inland demand is projected to improve by late December. Supply continues to outweigh demand due to strong MOP imports and limited transactions.
• India’s next round of potash contract settlements is expected to bring higher prices. Discussions during the recent FAI conference in New Delhi indicate a potential $10-15/t CFR increase from current levels, potentially pushing prices to $295-300/t CFR in 2025. The Indian MOP market is also closely monitoring developments in the next China potash contract, though Chinese buyers remain absent as of December 11 2024.

Phosphates

• Granular phosphate prices saw further declines this week despite tight availability globally. The US led the downward trend, with DAP barge prices at New Orleans assessed at $555-562/st FOB, down from $565-575/st, following a series of trades. MAP prices also softened to $600-610/st FOB NOLA, down from $610-620/st, reflecting weak demand despite low availability.
• In the Midwest, DAP prices dropped to $590-610/st FOB, while MAP prices fell to $640-670/st FOB, down from $615-635/st and $680-700/st, respectively. Sellers are actively moving tonnes to limit inventory carryover risks, but reduced domestic production and lower imports are expected to keep US prices supported in the medium term.
• FOB prices in Morocco and Jordan declined slightly following recent sales. Moroccan producers moved granular phosphates to destinations in both the east and west, while Jordan sold a 50,000 t DAP cargo believed to be headed for India.
• Market uncertainty persists over China’s export restrictions, which have tempered further bearish sentiment. While these restrictions have pressured some domestic Chinese benchmarks, their continuation limits the potential for steep global price drops.

£/€	£/$	€/$
1.2105	1.2730	1.0515

NB: Prices quoted are indicative only at the time of going to press and subject to location and quality.

Although ADM Agriculture takes 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.