Thursday 23 January 2025

Wheat

• Chicago prices have firmed $2.58 per tonne week on week, as South American weather continues to provide support for corn and bean markets.
• Weather concerns, and declining corn and bean crop ratings out of Argentina, have provided some spillover support into the wheat complex. Albeit that US wheat exports are routine at best, having only reached 57% of the USDA projected figure, the support from the recent WASDE release, and Argentinian concerns have pushed global corn prices higher, dragging wheat along for the ride.
• European prices have also firmed, up €1.75 per tonne week on week. As exports from within the Black Sea region decline, the expected pick-up in EU demand still hasn’t ‘kicked in’ with exports as of  19^th January being reported as reaching 11.74mln t, down 36% year on year. Longer-term support for the market is still apparent, with Russia’s end-season wheat stocks likely to be only half of a year ago, and 2025 crop estimates currently seen at sub 80mln t.
• UK growers have seen marginally better prices, trading just 25p higher week on week. Currency seems to have steadied from the recent declines on concerns over the Government’s borrowing, providing resistance from higher prices. With growers now fully operating, we have seen a marked increase in seller activity over the past week, and this is starting to add pressure to the historically high delivery premiums.

In summary, we have mentioned before that for wheat to sustain any potential rally, it would need external help, well the corn market seems to be helping, but for how long? Global wheat stocks remain plentiful, import demand is far from robust, and exporters remain competitive even with the envisaged lower Black Sea activity.

Malting Barley

• The malting barley market remains lacklustre, with old crop trade largely stagnant. There is minimal farmer selling, and consumer demand is once again almost non-existent.
• New crop markets are starting to develop, with contracting taking place as farmers prepare for the spring drilling season. However, cash markets are still quiet, and end users appear content to wait for clearer indications regarding spring planting progress before making any major purchasing decisions.
• ADM Agriculture have a range of buy-back contracts available to growers, including our innovative barley fund model, which offers a low-risk price management service.

Feed Barley

• Feed barley markets are stable to slightly firmer on the week, with farmer selling slowing down from the better pace of recent week. Meanwhile, domestic and export demand continues to keep a bid under the market.
• We have seen a few positions trade to Ireland over the last week and have now started to hear enquiries for both Spain and Portugal, which is a promising develop for marketing the UK’s old crop surplus.
• New crop markets continue to track futures one-for-one, with limited news to drive the feed barley market independently.
• The first pieces of export business for new crop have started to trade which is pleasing to see. Spring planting prospects will be the key driver of the UK’s balance sheet for harvest 2025, a factor which will not be fully known for some weeks to come.

Rapeseed

• It has been a choppy week so far for agricultural markets with the main feature being the inauguration of President Trump, and the trade trying to position themselves around his policies. The first point to note was his phone call with China’s President Xi as it seems they are of the opinion that they will be able to work through a number of previous issues and build positive relations, easing some concerns over a possible trade war. We are yet to see any tariffs introduced on goods from China/Canada/Mexico, although he has reminded us of his intentions that now look like we will be seeing a 10% tariff on Chinese goods and 25% on Canada/Mexico starting Feb 1^st.
• In South America, The Rosario Grain Exchange says that recent drought damage to soybeans in Argentina is irreversible. We did see some rains arrive over the weekend and through the week they have been slowly arriving. Brazil’s crushing agency ABOIVE expects bean exports to reach 106.1 mmt now, higher than last month’s 104.4 due to a higher production figure, now 171.1mmt vs. 168.7mmt previously.
• Crude oil prices have come lower this week as Trumps plans to boost already record US production and fill stocks to the brim have painted a heavy picture. US production may need to battle with Saudi Arabia trying to win back market share. Saudi Arabia exports in November were at their highest in eight months. 10% of China’s oil refining capacity is expected to be closed within the next 10 years due to an early peak in Chinese fuel demand refiner margins.
• Canola prices have stalled this week, largely in anticipation of some direction from a decisive tariff from the US. Price levels have reached a good point where Farmer selling is positive at around $14/bushel and is ahead of average levels with farmers well committed and consumers making the most of the good availability of seed.
• MATIF rapeseed prices remain volatile as ever, now coming back from highs which has again slowed down farmer selling, especially in the UK, now that £450 ex is no longer a possibility. The EUR/USD is not helping EU prices as recent strength in the Euro (due to dollar weakness) has been keeping prices pressured. Weather forecasts look positive in Europe for crop production with Romania still the star of the show. The inverse into new crop now sits at €40 with no concern over tightness so far.

Oats

• Milling oat bid and offers remain wide apart with neither side pushing hard to compromise.
• Feed oat demand remains minimal also with Spain reporting to be covered with recent imports.
• Here in the UK millers are reporting to be covered for Q1 but some demand remains for Q2 and Q3.
• New crop prospects remain fair however spring crops still need to be planted before we gain a greater confidence in UK production.

Bottom line, European oat markets saw another quiet week with minimal trade activity being reported, with the direction currently flat.

Pulses

• A slight increase in interest in domestic feed this week, with consumers starting to look towards the summer runs. Pricing is still holding beans back from reaching their full potential, with feed still c. £15/mt away from competing against many imported feedstuffs. However, with interest from some of the more niche diets coming, this does mean there is some potential traction to be had, although in general, beans still need to do more work to close the gap further.
• Ramadan is fast approaching, so we’ll see how this plays out in the Egyptian market, and what this means for demand.

Looking to the week ahead…

• The UK is in for a wet week, with 25-50mm of precipitation forecast across most of the UK, whilst temperatures are due to be around the seasonal average of 5-7 celsius. With many fields on the verge of being waterlogged, with ponding being seen in a number of areas, we could certainly do with some warmer, drier weather – however, we need to get this weekend’s storm out of the way first.
• Spring drilling is not a million miles away now, so it is worth talking to your Farm Trading Representative about what yield enhancing inputs we have to offer, as well as some of the marketing options we have available. With another strong Pool result about to be recorded for our Nov/Dec24 Bean Pool, and the updated Futures Related contracts on offer, there are plenty of options for your bean marketing away from just playing in the cash market after harvest that can help manage your risk.
• The global pulse market remains subdued at the moment as nearby supply outweighs demand on nearby positions. Buyers take the high ground until they need to return to the market later in Q1. As spring approaches consumers will start to look at new crop availability which may also entice a few back into the market. 
• Weather conditions both in the UK and Canada start to look favourable for spring plantings and with UK pea prices at current levels it’s a great time to take the opportunity to book your buybacks for 2025.  Please speak to your Farmer Trader Representative for more information on our Large Blue contracts.

A slightly more exciting week on pulses this week, with there being both some domestic and export demand coming online.

Seed

• Drilling of spring crops is now just around the corner and seed stocks of certain types are beginning to tighten up. Both spring beans and spring oats have been very popular in the last 2 weeks so if they are going to feature in your plans please call us to discuss options available on these products.
• Malting barleys are now gathering pace with deliveries being requested, Laureate , Plant & CB Score are creating a lot of interest as they all have buy back contracts available, if you are interested in any of these barleys along with RGT Asteroid and the new Belter, please contact your local Farmer Trader Representative.
• Small seeds for SFI,  Maize and Linseed  are now being sought after, ADM Agriculture are pleased to offer a wide range of market leading quality products to fit all requirements with buyback for Linseed

Please talk to your local Farmer Trader Representative to discuss any seed requirements you have and the options available.

Fertiliser

Natural Gas

• A stabilisation in European natural gas prices saw futures hold at €49-50 per megawatt-hour, near a three-week high. Market sentiment reflects mixed signals, with forecasts for warmer, windier weather in Europe suggesting a potential decline in gas demand. Notably, storage levels remain at 59%, significantly below last year’s 74%, keeping supply concerns in focus. Additionally, cold weather along Texas’s Gulf Coast disrupted operations at Port Freeport, the US’s second-largest LNG export facility, adding further complexity to global LNG flows.
• A significant development came from the US, where President Trump lifted a moratorium on LNG export licenses, opening the door for increased exports. This policy shift is expected to boost US LNG demand from Europe and Asia, with European LNG imports projected to rise by over 15% this year.

Ammonia

• Ammonia prices remain steady, hovering around $600/t CFR across the regional market, supported by reasonable downstream demand. In the UK, an ammonia vessel arrived in Teesside last week, delivering up to 23,500 tonnes of Trinidadian spot material for CF.
• On the supply front, production constraints in Europe are escalating. A major European producer has halted ammonia production at its site in northern France, citing rising production costs. Readers of last week’s report will note that this follows on the heels of a major German fertiliser manufacturer suspending one of its two ammonia lines and scaling back fertiliser production due to the challenging economic environment. These moves reflect the increasing pressures on European producers as they navigate high energy costs and tightening margins.

Ammonium Nitrate (AN)

• In the UK, ammonium nitrate (AN) prices continue to climb, reflecting sustained weekly increases. These rises are underpinned by a combination of factors, including the return of European demand from major buyers, tightening supply chains, a rebound in gas prices, and strong bullish sentiment in the urea market.
• Any longer term downside is now too far out to impact pricing through the spring season. Current market fundamentals remain robust, offering strong support for sustained price levels. Notably, traded levels for straight AN in the UK are still below replacement values, a situation that is contributing to an unwillingness by importers to take on additional risk. As domestic supply tightens further, markets are expected to adjust upwards to close the gap between replacement costs and traded prices.

Urea

• Details of India’s long-anticipated tender through RCF for 1.5 Mt of prilled or granular urea finally hit journals this morning, with 21 offers totalling 2,660,450 t. This follows India’s prior tender, which secured fewer than 200,000 t after traders found better returns elsewhere, rejecting India’s counteroffers. The levels at which these offers were made which is likely to come out in the coming hours will be critical to gauging market direction in the immediate term.
• On the continent, granular urea prices remained steady this week at €450-455/t FCA, with demand continuing at a moderate pace. However, logistical challenges loom as market players assess how to meet spring season requirements. This concern mirrors the ammonium nitrate narrative, with domestic importers in the UK remaining cautious about increasing physical positions due to persistent retail discounts against replacement costs and the pressure of a weak GBP/USD currency pair.
• These dynamics point to an exceptionally tight urea and nitrogen supply in both the UK and Europe by late February, potentially exacerbating pricing pressures as demand builds further.

Potash

• The potash market is beginning to show the expected Q1 price advancements, driven by renewed demand as producers gear up for the spring application season. After remaining largely unchanged last week due to sluggish spot demand, upward price movements have now emerged across key markets.
• In the US, prices have risen by $15-20/st to $305-320/st FOB, reflecting increasing demand and tighter supply sentiment. China has also seen notable price gains, adding to the global momentum.
• In Europe, domestic retail prices are climbing as demand begins to awaken, with the UK observing a £15/tonne increase since the Christmas break. These early movements set the stage for firmer prices as seasonal demand strengthens in the coming weeks.

Phosphates

• Granular phosphate prices remain firm, supported by tight global availability despite affordability challenges and sluggish demand. Major buyers continue to adopt a “wait-and-see” approach, which has tempered any significant market activity. However, downside risks in the coming weeks are expected to be minimal, especially as fresh Q1 sales out of China appear increasingly unlikely.
• In the UK, DAP prices rose by an average of £5/tonne this week, reflecting ongoing bullish sentiment.

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.