WELCOME TO THE ADM AGRICULTURE WEEKLY MARKET REPORT
Wheat
- US market has traded down $20/t week on week as talk of favourable rains across much of the US hard red winter wheat area and an apparent unfazed outlook over the potential closing of the Black Sea export corridor weigh on values.
- Winter wheat crop ratings in the US declined again over the week. While 26% of the crop was reported as being in the good/excellent category, the percentage deemed poor or very poor increased a further two points to 41%.
- Russia sees no progress in meeting its demands regarding the implementation of the Black Sea grain initiative, following the foreign minister’s talks with the UN’s secretary general.
- Buenos Aires Grain Exchange expects Argentina’s wheat area to reach 6.7mln ha in 2023, up from last week’s 6.1mln ha forecast, due to good margins and continued strong domestic and international demand.
- USDA attaché sees Argentina’s wheat and maize production rebounding in 2023/24 to 19.5mln t and 54mln t respectively, resulting in exports of 13.7mln t and 38mln t respectively.
- Moscow has stated it may retaliate if G7 countries proceed with a total ban on most exports to Russia, by withdrawing from the Black Sea export initiative and banning exports of its own agricultural goods and products.
- Ukraine’s grain exports have fallen 11% week on week to 40.6mln t as of 19 April, including 13.9mln t of wheat (down 25% week on week), 23.9mln t of maize (up 15% week on week) and 2.4mln t of barley (down 57% week on week).
- APK Inform puts Ukraine’s 2023 wheat and maize production at 16.2mln t and 22.9mln t, with exports at 18.2mln t and 8.8mln t respectively, considerably lower than the USDA numbers for this season.
- China has issued an agricultural outlook report, setting out plans to grow 88.4% of the grain, mostly rice, wheat, maize, and soybeans, it needs within a decade from the current level of 82%, whilst aiming to cut its import requirements.
- The EU has agreed the ‘unilateral’ banning of sales of Ukrainian wheat imports in five member states (Poland, Hungary, Bulgaria, Romania, and Slovakia), only allowing transit to other member states and non-EU countries.
- FranceAgriMer reported that 93% of the country’s soft wheat crop was rated good or excellent in the week ending 17 April, down one point week on week, but above the 91% reported a year earlier.
- EU crop monitoring unit MARS sees the 2023 average soft-wheat yield at 5.96t/ha, slightly down from a March estimate, adding surplus rainfall in part of the north during March were welcome, following a dry February.
- The International Grains Council raised its 2023/24 global grain forecast to 2.291bln t, mainly due to larger barley and maize harvest, although global stocks projected at 581mln t would be the lowest since the 2014/15 season.
- EU soft-wheat exports had reached 25mln t as of 23 April, up 10% from a year earlier. Morocco, Algeria and Nigeria remain the top destinations.
- UK prices have fallen just shy of £10/t week on week. They have followed the weaker global trend and have been pressured by a continued lack of demand, both domestic and export, as cheap Brazilian maize imports into the EU and undermine wheat values.
Malting Barley
- Malting barley is still a very quiet affair. Old crop continues to slip as demand remains absent, meanwhile old crop supply is finding its way out onto the market.
- New crop remains very illiquid for another week. Lack of farmer selling is starving the market and has pushed the UK to a significant premium to Danish origin.
- Domestic consumption is at this stage uninterested in engaging, the maltsters have made a good start to their new crop coverage and are happy to sit back now that we have made it through the spring planting window in the north of the EU without any disasters.
- For a further week malting quality premiums look attractive in the £40-£50 range.
Feed Barley
- The feed barley market has been all about Spain for the last week. Prolonged dry weather in the region has resulted in production forecast cuts, which has pushed some buying interest into the market.
- Most demand has been in the nearby positions; however we have also seen some trade take place for harvest. This demand has helped to support old crop prices in the UK, particularly with farmer selling remaining slow.
- New crop barley markets continue to slide, once again feeling the pressure from falling futures. We expect to see further demand from Spain in the coming weeks, however we will have competition for this demand from other northern EU and Black Sea origins.
- UK domestic markets are totally quiet and consumers are more than covered against their old crop requirements. They seem happy to wait before locking in any significant new crop commitments.
Rapeseed
- Outside markets remain mixed following bearish economic data and the approach of the month-end.
- Soybean prices fell from recent highs to trade down to levels not seen since March. Favourable planting conditions, discounted Brazilian beans and lower than expected US export figures pressured the market over the past week.
- Cooler weather shouldn’t adversely affect soybean plantings. US sowings were actually reported at 9% complete, ahead of the five-year average of 4%.
- In South America, harvest is progressing in Brazil, with over 90% of the soybean harvest complete this week and weather remaining favourable for those left to finish. In Argentina, harvest is now likely to be around 17% complete vs the 4% last week. BAGE lowered its crop production estimate last week to 22.5mln t from 25mln t before, vs the USDA at 27mln t. Dr. Cordonnier reduced estimates to 23mln t, down 1mln t from his previous estimate. Farmer selling remains slow with farmers holding on what they have left as a hedge against inflation.
- There is nothing new to report out of South America. The record Brazilian crop continues to weigh on market prices, especially when they are trading significantly below US beans.
- In China there are no soybean purchases to report, although the fact that Chinese buyers cancelled several US maize purchases pressured the ag complex.
- China is rumoured to have purchased a few more Brazilian cargoes for May/June and cancelled some maize purchases.
- Energy markets saw significant pressure yesterday with crude oil closing $2.75 down by close of play, amid ongoing concerns over global economic recovery and the EIA in the US reporting larger-than expected-stocks. Soy-oil and palm markets closed lower on the week.
- Canola continues to trade in a $20, awaiting something new to trade to give direction from here. StatsCan estimated an increase in plantings to 21.60 mln acres, less than a 1% increase in area vs last year.
- MATIF rapeseed has experienced another volatile week, trading higher on Monday before closing €18 down on Tuesday. The May open interest has fallen significantly in the last week as it expires at the end of the session tomorrow. It’s month-end and contract expiry, so we would expect another couple of choppy sessions. It’s also May Bank Holiday for many, so traders may not want to leave much on the table, but without a new story to trade and large carryover this season the market may continue to drift.
Oats
- Oat markets have seen a pickup in activity over the last week, with more bids and offers working their way into the market place.
- The dry weather in Spain has been the catalyst to the majority of this activity, with buyers taking cover for the May-Jul position.
- Oat prices in Europe continue to look expensive vs feed barley and this is tempering buyers price ideas.
- Here in the UK, millers are reported to be covered through until July, with some even saying they are now covered through until new crop.
- Feed oat prices are scarce, but with a lack of feed quality and low feed demand, it is not surprising to see a very illiquid feed market.
- Exports continue to be high and this has lowered the carryout figure. However the on-farm feed usage is still the key to determine whether we are going to have a large carryout or not.
- The cold, wet weather during March and April has caused some problems with the planting of spring oats, therefore we could see mixed quality next year.
- Bottom line, oats remain relatively expensive vs other feed grains and the inverse vs new crop will have to narrow in the coming months. However, good growing conditions are needed to support the development of next year’s crops.
Pulses
- Old crop feed pea market remains subdued as consumers have cover for most of this quarter. We expect some demand to come out of the domestic during the next couple of months to cover any shortfalls.
- A large Canadian supplier of pulses has recently ceased trading of pulses, which could bring a lot of fresh demand for UK peas and beans into Europe for 2023 crop.
- We are hearing sugar beet crops failing in some areas. There is an opportunity to take action should you want to replace the land using peas – we offer swift seed delivery and still have movement plans available for the finished product pre-Christmas. Please get in touch with your farm trader for more information.
- 2024 pea contracts are likely to be launched during the month of May so please keep an eye out.
Seed
- Establishing rapeseed is proving to be more difficult than ever. The first step to success is varietal choice. Our seed portfolio consists of some of the most vigorous varieties in the marketplace, to give the crop the best chance of getting away from the flea beetle in the autumn. LG Aviron and DK Excited are also supported by an establishment scheme to give extra peace of mind.
- Companion cropping can also help aid establishment of OSR crops by protecting against flea beetle, fixing nitrogen and conditioning the soil. Buckwheat, berseem clover and fenugreek can be found in our popular mixes, all providing different benefits to the OSR. It is likely that buckwheat will sell out this year so it is best to get orders on as soon as possible.
- KWS Dawsum is set to be another popular choice for the 2023 autumn drilling campaign. This variety is the perfect combination of high yields and quality, with a specific weight of 80kg/hl and yields 104% of control.
- ADM also offers a great variety of countryside stewardship mixes ranging from AB1 to AB16, available for fast delivery.
Fertiliser
- Granular urea markets stabilised through this week, following continued last-minute demand in various markets. South American activity has also increase.
- In European AN markets, the spread between prompt delivery and forward delivery prices narrowed, as some more buyers entered the market. The spread is circa €30/t between Apr/May delivery and June.
- UK nitrogen markets saw similar movements with granular urea and ammonium nitrate spreads for the 2022/23 and 23/24 season also closing.
- Plenty of activity has been seen on farm, with fertiliser applications happening across the UK this week. Sprayers and spreaders alike, the weather has finally offered an opportunity to apply.
- Some May/June delivery options have appeared for AN and ANS in the UK, although many await UK AN manufacturer’s pricing to be released before making any decisions on AN requirements for 23/24.
- MOP and TSP have stabilised in the UK as various contracts and trade on the global market (India, China) have been concluded recently, albeit at levels significantly lower than Q1.
- UAN in the UK remains available, although sits on the higher end of price per kg/N chart at present. Yield benefits and prompt delivery are factors to account for on pricing also though.
- Foliar products for quality wheats are available for May/June delivery from ADM. As stated by the RB209, ‘foliar applications during the milky ripe stage will result in a larger increase in grain protein content (than soil-applied) but cannot be expected to increase yield’.
| £/€ | £/$ | €/$ |
|---|---|---|
| 1.1275 | 1.2445 | 1.1035 |
| Feed Barley £ | Wheat £ | Beans £ | Oilseed Rape £ | |
|---|---|---|---|---|
| Apr2023 | 165-175 | 183-193 | 235-240 | 375-380 |
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.
