Thursday 13 April 2023

Malting Barley

• For further week malting barley markets are without activity. Old crop demand is done, and the market continues to drift lower as barley keeps making its way on to the market from the farm.
• New crop prices are also dropping, due to lower futures combined with selling pressure creeping in on the continent.
• Spring plantings in Denmark have started, although progress is slow with continued rains in the area, which is a potential flag for production in the region.
• Overall, ex-farm premiums look attractive in the UK at around £45/t, particularly with the improving trade relationship between Australia and China potentially looking burdensome for the EU balance sheet.

Rapeseed

• China is still continuing to play war games close to Taiwan, which has led to some tech companies pulling out of Taiwan in case tensions escalate.
• IMF released its latest economic outlook report, which suggested the financial uncertainty is not over yet. The US dollar traded sharply lower whilst energy markets rallied. 
•  It was a long weekend for all markets this week with only the US open on Monday. This week traders were focused on the latest USDA WASDE report which came out on Monday evening. The April report is not normally one for substantial changes but given recent circumstances many were left wondering what the USDA may do to South American production.
• The report itself fell largely within expectations with US ending stocks remaining unchanged from March. World ending stocks increased very slightly to 100.3mln t vs 100mln t back in March.
• Brazilian production increased by 1mln t to 154mln t whilst Argentinian production fell from 33mln t to 27mln t (2mln t below the average estimate). Imports increased 1mln t, but crush was cut by 3.25mln t.
• So, whilst the overall South American production figure came in lower, USDA kept stocks unchanged, which balanced the books for now. 
• The new “Soy Peso” in Argentina has enticed little to no farmer selling with farmer holding on to stocks as a hedge. This went live on Saturday to try and incentivise some farmer selling, but farmers are holding on for better values.
• Weather remains largely unchanged from last week. In Brazil, AgRural estimated the soybean harvest at 82% complete now vs 84% last year. 
• There is nothing to report out of China for now, although the USDA did reduce Chinese soybean crush estimates by 1mln t to 91mln t. 
• The trade will now refocus on weather developments and plantings until the next USDA report. In the US showers/snow fall are expected in the Northern Plains this coming weekend, whilst in the Central Plains it remains extremely dry. Other areas temperatures remain cool with light rains which will help planting progress. 
• Energy markets were mixed but crude oil closed higher on lower-than-expected stocks and the weaker US Dollar. Veg oils traded either side of unchanged pre-report. The USDA revised world veg oil stock slightly lower than March and talked of further increases in usual for 2023.
• At the same time, the Malaysian Palm Oil Board estimated March production at 1.288mln t, up 3% on February. Yields are still behind last year, but with nothing new to trade on markets have drifted in the last few sessions. 
• Canadian Canola futures and Matif rapeseed struggled to make any significant gains following the USDA report and drifted lower in the last few sessions. Both exchanges are experiencing some positional changes with funds/position holders rolling positions from May to August. 
• Sterling dropped back below 1.1400 last night following the economic outlook reported by the IMF. 
• In summary the USDA was a non-event, so the market now starts to look at US weather and any further potential changes to South American production. Matif/canola started to drift post report with nothing new to trade on. EU carryout still looks heavy and priced are likely to drift until we can buy some further demand.

Pulses

• Old crop beans are unchanged on the week, with origination slowing and no flurry of demand to speak of in the market.
• Consumers do have to get cover for the summer positions but do not seem too keen to sort currently. We believe there are still plenty of beans remaining on farm and expect this demand to be covered over next month or two.
• New crop beans are following wheat futures so have seen a drop in prices week on week.
• Most consumers are covered on the old crop until the summer. If there are any open market peas remaining our Long Sutton processing facility will be able to intake them and we are buyers! Please get in touch with your farm trader for more information.
• Should any grower be pulling up their rapeseed, peas remain a great alternative due to the later drilling options as well as the benefits for your following wheat crop. With free agronomic advice available should you book a buyback with us; it is an exciting time to get into peas and learn more about a quickly growing alternative protein!
• Historically high values on farm for peas only add to the enticing offers we provide, please contact your farm trader for more information.
• 2024 crop buybacks are likely to be released over the coming months, so please keep an eye out!

Fertiliser

• Granular urea prices FOB Egypt increased this week with expectations of an Indian tender for June beginning to emerge.
• US NOLA urea traded higher this week also, hitting 10-week highs, as the erosion of prices appears to have ended.
• Brazil imports for urea are down through Jan-Mar in comparison to the previous year. This compares to the majority of other regions that are reporting a 10% increase through this period. 
• ADM has spot and forward urea; nitrogen sulphurs and some ammonium nitrate options available.
• Spot activity for AN, nitrogen sulphurs and NPKS in the UK remain relatively subdued given the time of year. However, the weather has been pushing applications back and spot demand is likely building.
• UAN levels continue to adjust accordingly against other nitrogen spot options. Delivery timescales are quicker than solid bagged fertiliser in most cases. 
• Potash prices remain relatively weak, with regional differences appearing depending on stock levels and demand.
• TSP prices are trading around MOP levels. MOP historically has traded at a discount to TSP but given geo-political challenges and trade flow changes this norm is being challenged. 
• DAP is unchanged week on week. 

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.