Thursday 14 September 2023

Malting Barley

• The malting barley market continues to slide as domestic demand remains elusive, meanwhile farmers continue to readily sell malting quality at historically excellent premiums of over £75/mt.
• FOB markets are similarly slow, and we would not be surprised to see further pressure to quality premiums; particularly in the OND’23 position as most buyers are focussing on procuring JFM’24/AMJ’24, and farmers continue to look favour movement in the pre-Christmas window.

Rapeseed

• The main news this week has been the USDA report we saw on Tuesday giving a neutral to bearish outcome vs. the bullish expectation. Both Russia and Ukraine unfortunately continue to launch drone and missile strikes on enemy port infrastructure and grain facilities, adding additional war premium. Russia have continued their attacks along the Danube River and Ukraine struck a Russian landing vessel and submarine in Crimea.
• CBOT soybeans trade close to nearby support levels despite trying to push higher at the start of the week. Crop ratings fall 1% to 52% good/excellent ahead of the report though this is seen as a seasonal adjustment for this time of year. As expected, the USDA reduced the average yield to the expected level of 50.1 bpa vs. 50.9 bpa last month. Ending stocks came in at 220 mbu, lower than 245 mbu in Aug but higher than the expected tonnage of 209 mbu. World ending stocks came in at 119.25 mmt vs. 119.4mmt last month but the trade did expect a fall to 118.5 mmt.
• Weather in U.S has been dry this week with seasonal temperatures, although they are set to rise in the coming days across the Midwest, with showers in the longer-term forecast.
• The USDA announced one sale of 121,000t beans this week to an unknown and one sale of meal to the Philippines.
• Energy markets have had another strong week, with crude reaching new highs at levels we haven’t seen in 10 months. Saudi Aramco has notified five North Asian buyers that it will supply full contractual volumes of crude in October, prolonging the 1 million barrel per day cut to the end of the year. This week’s EIA report showed surprisingly higher stocks of crude and gasoline, capping gains on Wednesday.
• Veg oils have struggled this week as Malaysian reserves rise 23% to 2.12 million tons in August, the highest jump in two years. Exports fell 9.8% to 1.22 million tons and local consumption dropped 27% to 251,000t. Soy oil saw some positivity as diesel prices rallied and saw support from the slight increase in Soybean oil usage in biofuels, but it still fell slightly behind expectations.
• Canola markets are down this week as yields improve through harvest progression. StatsCan reports canola stocks at 1.506mmt as of July 31, nearly double last year but still below expectations. If improved yields continue, we could see a crop higher than 17.5mmt  compared to the current expected 16mmt.
• MATIF rapeseed has now broken €440 support and is heading towards next support at €400 following USDA support giving weakness to soybeans. The Nov/Feb spread now sits at the lowest level in 5 years with Nov looking short-term oversold. We still see no farmer selling in the UK at these levels.
• Sterling trades at 1.16300.

Pulses

Peas

• The pea harvest is now complete. Growers who left it late to cut their peas surprisingly found relative success in quality and had average yields for the season – initially, the view was those late crops would be very poor.
• Samples are still coming in to be tested each week for peas providing a clearer picture on the overall quality of the crop. Marrowfat peas still look excellent quality wise, with bleaching figures averaging at just below 7%, moistures around the five-year average of 14.5%, and insect damage low in comparison to last year, with an average of 0.9% vs. 2% in the 2022/23 season. Green pea samples were slower to reach the lab. Over the last week however, we saw a large spike in testing and sampling, providing us an average figure of 8.5% bleached with 67% of current growers meeting packing grade specifications.                                                                                                                              
• Yellow peas performed particularly well at harvest both on yield and quality performance this season, strong resistance against disease and standing ability in our varieties appears to have aided this impressive year.
• Open market values for green peas are still firm on the week as the global planting rate was down year on year. The need for high quality and sub 5% bleached across Europe is driving demand and thus increasing the premium between packing (below 10% bleached) and decort (over 10% bleached) greens.
• We are in the market for either type of green peas and will provide a competitive bid. Please get in touch with your farm trader for more information.
• Long Sutton will continue to produce marrowfats up until the end of this week before moving on to Green Peas for 2 working weeks to provide cover for our customers as well as meeting contract requirements of our growers.
• We are planning the next VIPea event for Q4 of 2023 and will circulate more information to our grower’s group in the coming weeks. We would like to discuss this season’s harvest performance and ways to improve for the 2024 campaign. If you are not part of our grower’s group, please contact your farm trader to become a VIPea!

Beans

• Feed bean prices saw very little movement week on week and are around similar levels to this time last week. Growers have started popping up more in terms of sales to try to get their beans off the farm as quickly as possible.
• Yields in the Baltics are coming out better than expected. Quality is worse, however, meaning more feed will be available than in a typical season. Baltics traditionally are strong sellers for Q3 & Q4. Currently, they are undercutting UK values taking up a lot of the general export demand at 10 Euros cheaper than our current bids. Most of their exportable surplus will be shipped during or before January, which could lead to demand for UK feed in Q1 of 2024.
• Human consumption wise, both the UK and the Baltic’s crops are very poor quality and there is not a huge amount of volume available, meaning that premiums are likely to be firm to seek out the higher quality. Insect damage is much higher year on year in the UK, which results in the lack of HC-grade beans.

Fertiliser

• Prilled and granular urea pricing appears to have reached a short-term price floor but looks set to remain firm heading into Q4. Values are supported by an earlier-than-expected follow-up Indian import tender, set to close on 15 September, along with uncertainty over future Chinese export volumes.
• We have granular urea available for delivery September through to March next year, with or without inhibitor technology.
• UK AN offers remain withdrawn at present, and any imported offers are limited with many continuing to avoid the UK market.
• Obtaining new prices for AN product from European producers is continuing to prove difficult for UK importers.
• Given the change in the North African nitrogen markets, firm energy costs, and spiraling ammonia prices, most suppliers appear reluctant to make any commitments.
• We have granular NS products to offer in the October/November delivery window. Borealis 27N + 10SO3 and SKW Piamon 33N + 30SO3 are both granular compound products and continue to be favoured by buyers.
• The phosphate market’s current focus is on whether suppliers can achieve further DAP price increases in India following last week’s rebound. East of Suez the feeling seems to be bullish as Indian buyers have jumped to replenish stocks and Chinese DAP/MAP exports continue to be restricted.

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.”

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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.