WELCOME TO ADM AGRICULTURE WEEKLY MARKET REPORT
Wheat
- US market has traded down just over $14-15/t week on week, as continued external macros (banking sector), extension of the BSGI, and an improved weather outlook weigh on commodity values.
- The Black Sea grain initiative was extended for 60 days, although Russia have stated any further extension would be because of a relaxation of sanctions, to facilitate Russian ag products exports.
- BAGE again cut their estimates for the Argentine 2022/23 soybean and corn crops due to adverse weather, with the outlook now seen at 25mln t and 36mln t respectively.
- Harvesting of the summer corn crop and sowing of the second winter crop are progressing in Brazil thanks to more favourable weather, but both remain behind last season’s and the 5-yr average pace.
- Ukraine’s Ag Ministry forecasts grain production will drop by over 15% in 2023, to 44.3mln t, including 16.6mln t of wheat, 21.7mln t of corn and 4.8mln t of barley, mainly due to an expected 12% drop in sown area.
- Total grain production in Russia this year is seen at 128mln t, down almost 20% year on year, including 82.6mln t of wheat, down 21% year on year. However, wheat exports could rise due to large stockpiles carried from the current season.
- Russia’s winter crop has endured the winter well, and although crop conditions are somewhat worse than last year, they are not terrible, as warmer temperatures should erode the snowpack and improve moisture levels across western areas.
- Untimely rain, hailstorms, and now frost, could damage India’s key-winter-sown crops just before harvesting begins, with plants already suffering some heat stress.
- International Grain Council sees global grains stockpiles in the 2023/24 season at 580mln t, which would be the lowest since 2014/15.
- EU’s crop monitoring unit MARS, in its initial estimate, pegged that the average soft-wheat yield for the 2023 harvest would reach 5.99t/ha, up 3% year on year.
- EU soft-wheat exports had reached 22.1mln t a/o March 19th, up 7.8% from the 20.5mln t a year earlier. Morocco, Algeria and Nigeria remain the top destinations.
- EU prices are down €24.25/t week on week as the agreed BSGI will keep the flow of cheaper Black Sea wheat offers competing against EU markets, as demand wanes and key importers’ harvests approach.
- French soft-wheat stockpiles for 2022/23 are now seen at 2.51mln t, down 10% year on year, as outlook for total exports trimmed slightly to 17.1mln t
- UK prices are down £21.25/t week on week, and are now £52/t below levels seen at the beginning of the year. Weaker EU markets and a growing UK surplus, due to reduced demand from both the industry and feed sectors, continues to drive prices lower.
Malting Barley
- Malting barley has eventually found some pressure, after shrugging off the lower moves in feed and futures for the last few weeks. The drop in MATIF in combination with French farmer selling has pressured new crop FOB markets, and as a result, offers from UK sellers have dropped over £10/mt on the week.
- Demand remains side-lined on old and new crop.
- Wet weather continues to hamper the final acres of spring barley being planted, although the market is relaxed, and the developing crop looks promising so far.
Feed Barley
- Feed barley markets have plummeted over the last week, as the lack of demand continues to bite, and the downtrend in futures continues.
- A small amount of old crop trade has been written to Ireland, but elsewhere buyers are relaxed. Domestic markets remain non-existent.
- Farmers are still not sellers of new crop, and we see little activity to report going into crop 23.
Rapeseed
- Marcos were once again a driver in this market yesterday. UBS announced the purchase of Credit Suisse as the government tried to give confidence to the banking sector. The Federal Reserve increased interest rates by 0.25 bps, which put pressure on US stocks. The US dollar fell to a five week low whilst energy markets bucked the trend to close higher.
- Ag also suffered another blow to prices with increased fund selling continuing to weigh on exchanges. In South America, showers scattered across inland Brazil, but phased out by the end of the week. Harvest will continue to progress in the areas that are behind crop prospects increase, with AgroConsult raising their forecast by 2mln t to 155mln t. In Argentina, rains will continue later this week into next, but it’s too late to benefit the soybean crop and temperatures remain above normal. BAGE lowered their production estimates down 4mln t to 25mln t. A 23 year low!
- No further purchases to China yesterday, but officials did state they would buy to build state reserves again at some point. An increase in ASF cases is still a concern on meal demand.
- Energy markets bounced off recent lows. Crude oil rallied on stronger demand prospects and OPEC being likely to cut production by 2 million barrels per day until the end of 2023. Veg oils remain under pressure following the complex lower.
- Canadian canola and MATIF rapeseed have seen sharp falls in the last few weeks. Farmer selling increased, as long holders became nervous of price direction from here. Equally, with canola trading at a premium to MATIF, then canola looked the attractive sell/hedge. Global seed stocks are ample for this season. Prices are now having to come lower to try and buy back demand. Rape-oil has come down significantly vs rival oils recently, but is still unable to buy significant market share.
- Sterling fell from weekly highs yesterday, which negated some of the price fall we saw on MATIF.
Oats
- European oat prices continue to fall with oat buyers following the negative trend in other grain commodities (May’23 MATIF wheat contract down €24/mt week on week).
- The weakness in European feed barley and feed wheat remains the main driver in displacing oat demand. Consequentially, oats are not featuring in feed ration formulations.
- Sellers of both milling oats and feed appear to be selling into a market void of bids. and with only four months remaining before new crop, we could see further downside direction as long holders look to liquidate positions.
- EU oat millers are reporting lower demand, and this is only adding to the reasons for the lack of bids in the market.
- Here in the UK, the millers are reporting to be covered through until July, and many are sighting a reduction in overall milling demand like that seen in Europe.
- Prices have naturally fallen over the last week, but it will be interesting to see what surplus comes onto the market as we approach harvest.
- Bottom line, the market has fallen around £25/mt in a week for oats, but we may not have seen the bottom yet. Time will tell.
Pulses
- Old crop demand for feed beans is quite stagnant as we stand. Prices have fallen considerably in the past week and farmers are reluctant to sell given the values just a few weeks ago.
- The human consumption bean market is still very quiet for both old and new crop, with other origins still being a cheaper option than here in the UK.
- Old crop prices have remained around the same levels as last week, unlike other commodities, which means there is still good value for growers with any old crop left on farm for human consumption.
- New crop buybacks are still open for pulses, with later drilling available and plenty of seed across our three main pea types. Please get in touch if you have pulled rapeseed up or you have some spare land.
Seed
- We have a great autumn seed portfolio, including winter wheat KWS Ultimatum. A truly exciting alternative milling wheat that ticks all boxes on farm. Contact your farm trader now for more information.
- With spring fast approaching, now is the perfect time to start thinking about countryside stewardship schemes, grass seed and cover cropping.
- We have countryside stewardship mixes to suit many requirements from AB1 to AB16.
- Whether you are looking for a short or long-term ley, we have grass seed for all situations.
- Spring sown cover crops are a great option to stop land being left bare whilst also providing a range of benefits to the soil.
- As well as this, we can offer an amazing game maize blend perfect for birds to feed from and all-season cover.
Fertiliser
- Granular urea FOB values in Egypt remain under pressure. With European import tariffs temporarily removed, traders continue to cover demand from other cheaper origins.
- The UK continues to benefit from the $/£ FEX rate. Moving up to 1.23 this morning, it improves our buying power when purchasing urea.
- Interest continues to build in the forward positions and we now have attractive options for autumn and January – February 2024 delivery.
- Ammonium nitrate prices remain quite flat/stable, with offers still in place for March and April delivery.
- No mention of any new season terms yet in the UK, but with gas prices continuing to move lower, distributors and co-ops in Europe are expecting pricing for the summer campaign soon.
- Potash prices continue softening in England and Wales, alongside TSP. The question remains if product can arrive on time for usage as we head into the busier spring period and two shorter weeks in April.
- DAP prices remain unchanged despite global adjustments of $10/t following the Indian tender for 100kmt and improving £/$ rates.
| £/€ | £/$ | €/$ |
|---|---|---|
| 1.1295 | 1.217 | 1.0775 |
| Feed Barley £ | Wheat £ | Beans £ | Oilseed Rape £ | |
|---|---|---|---|---|
| Mar 2023 | 200-210 | 230-240 | 255-260 | 470-475 |
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.
