WELCOME TO ADM AGRICULTURE WEEKLY MARKET REPORT
Wheat
- US wheat futures have fallen $15/t over the past week as the current ‘risk-off’ sentiment continues to weigh on commodity prices.
- USDA’s recent Outlook Forum projected a bearish outlook for US supply/demand for 2023/24, although yields were deemed ‘optimistic’, and a long way from being achieved.
- USDA reported that 57% of the country’s winter wheat area, mostly down to hard red winter varieties, remains in drought condition, while soft red winter areas remain well watered.
- Russia has reiterated it would only agree to renewing the UN-brokered deal that allows grain to be exported from Ukraine if Russia’s agricultural goods and fertilisers have ‘unhindered access to global markets’.
- Australia’s 2023/24 wheat crop is likely to face risks from dry weather due to an El Nino weather pattern in the second half of 2023. However, there is ample soil moisture currently or the wheat crop, for which planting will start next month.
- Analyst SovEcon has lowered its Russian 2023 wheat production estimate to 85.3 million tonnes, down from 86 million tonnes previously and down from 104 million tonnes harvested in 2022.
- Ukrainian grain exports shrank by almost 27% in the year to the end of February according to official data. Maize was down 18.2 million tonnes (6%), wheat 11.2 million tonnes (38%) and barley 2 million tonnes (64%).
- Argentinian farmers, currently being hit hard by a prolonged drought, will hold a protest to demand better taxation, foreign exchange rates and financial support conditions
- Buenos Aires Grain Exchange has again reduced its estimates for the country’s soy and maize crops by 4.5 million tonnes and 3.5 million tonnes respectively, saying further reductions are possible if adverse weather prevails.
- Analysts report that the late sowing of Brazil’s second maize crop may expose much of the crop to an early frost, reducing its potential.
- The EU Commission has lowered its estimate of the 2022/23 soft-wheat crop to 126 million tonnes, down from 126.4 million tonnes on January, with exports outside the EU projected at 32 million tonnes.
- EU soft wheat exports had reached 20.5 million tonnes as of 26 February, up 7.2% on the same date last year.
- Despite increasing concerns over the lack of moisture, state agency FranceAgriMer reported the condition of France’s soft wheat crop as being 95% in either good or excellent condition as of 20 February, up from 93% last week.
- French futures for May 23 have fallen €7.25/t over the same period, driven lower by continued aggressive offers from the Black Sea region.
- UK prices have fallen £7/t w/w (May23) following the bearish market sentiment, with the £17/t fall since mid-February deterring farmers from increasing their selling activity.
Malting Barley
- Old crop prices are coming under pressure as the lack of demand weighs on the market.
- New crop has started to liven up over the last week or so.
- Plantings are progressing well across Europe; however, traders are becoming more and more concerned about the continued dry weather in France.
- Dry conditions in the UK are also a topic of conversation. Cash prices are holding steady to slightly up on the week, which is pushing quality premiums higher as feed barley comes under pressure.
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Feed Barley
- Feed barley markets are quiet. We still see small pockets of old crop demand to Spain, but overall, there is little demand and farmers are not selling.
- New crop prices continue to track London wheat futures, and there is no physical activity to discuss.
Rapeseed
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Oats
- The recent €27/t fall in the Paris wheat futures market has only exacerbated the bid price for oats over the last two weeks. The slide pressured feed barley prices, which on feed oats into western Europe.
- Bids for feed oats into ARAG (Amsterdam, Rotterdam, Antwerp Gent) have largely dried up over the past week, with consumers happy to withdraw from the market given the current negative trend.
- Milling oat bids into ARAG or Spain remain non-existent and this continues to weigh on long holders of oats in the key exporting nations.
- Here in the UK, the export pace of oats continues to be rapid with total year to date figures already exceeding last year’s record of 123,000t.
- Demand for feed and milling oats into UK markets remains challenging. Oats continue to be priced out of rations and millers reporting a lack of bids from end customers.
- Bottom line, the ongoing lack of buying interest for oats in Europe could weigh on prices for months, provided the geopolitical situation in the Black Sea and China remains stable.
Pulses
- Human consumption demand is still limited, as Australian and Baltic beans are the cheapest option into North Africa.
- Domestically beans still look to be good value against other mid proteins, but demand remains quite steady.
- Feed peas demand remains consistent after the first few quarters, with some domestic consumers looking for cover. The export market is flat.
- Human consumption buybacks remain available across our pea crops. Peas are a great option for those pulling up rapeseed sprayed with propyzamide, which precludes cereals being drilled for 30 weeks. Pulses crops can be sown after 10 weeks. Peas can be drilled as late as April and make a brilliant gross margin option if land is available.
Seed
- Now we are in March sales of spring seed have started to tail off for cereals. We still have stock of spring barley for any late cropping changes.
- We’ve seen an uptake the in the demand for pea seed in the last few weeks replacing OSR that’s not survived the winter (see above). We can support the seed sale with a buyback contract if you find yourself in this position.
- Over the next few months keep an eye out for signs of BYDV damage in winter cereals. We have genetic resistance to BYDV with RGT Grouse in winter wheat and tolerance in several winter barley varieties. Government support is also now available to those growers opting out of insecticide usage. For more information call your farm trader.
- ADM has a great portfolio of grass seed including lawn, paddock, and agricultural mixes. Whether you are looking for a short- or long-term ley, ADM has a mix to suit your needs.
- We also have a range of environmental stewardship and cover crop mixes available as well as cover crop straights.
- Speak to your farm trader about maize seed, we have some a – maize -ing varieties to suit multiple end uses.
Fertiliser
- UK ammonium nitrate manufacturer CF has withdrawn the current offer for its 34.5 product. Speculation is rising that the next set of terms will be for April, with March logistics already filling up.
- Granular urea in spot markets remains stable. UK and imported AN prices are offering support to urea on a £/kg N basis.
- In the UK the preference for ammonium nitrate remains. However, we sense this year may be different as more and more farms look to urea with a urease inhibitor as a genuine alternative. This helps remove the worry of emissions as temperatures start to warm up.
- Forward urea prices need to be watched. Firmer new crop grain prices, higher natural gas prices from September onwards and an anticipated strong global demand for nitrogen 2023/24 is maintaining confidence in the market.
- UAN markets remain relatively active with spring fill offerings available from ADM-Nitrasol with a 48-hour delivery time from call off guarantee.
- Sentiment towards phosphate markets remain weak but prices have stabilised in the UK as the need to have product on farm overrides the ability to wait for further drops.
- Potash markets are stable-weak with little movement in UK pricing, but long-holders know that time is reducing to get product on to farm for this application season.
| £/€ | £/$ | €/$ |
|---|---|---|
| 1.1275 | 1.1980 | 1.0625 |
| Feed Barley £ | Wheat £ | Beans £ | Oilseed Rape £ | |
|---|---|---|---|---|
| Mar 2023 | 195-205 | 216-226 | 250-255 | 450-455 |
NB: Prices quoted are indicative only at the time of going to press and are 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.
