Thursday 28 November 2024

Wheat

• US prices have fallen $5.42/t w/w, as the agreed cease-fire in the Middle East, and no further escalation of tensions in the Black Sea conflicts have eased the commodity markets.
• Despite the dollar index falling to a two-week low on treasury forecasts, US markets have remained weak. US wheat exports, although up w/w, are running below the required pace to achieve the current yearly projection. Recent rains have seen crop ratings improve dramatically over the past weeks, with ratings now at their highest for six years, at 55% either in good, or excellent conditions. The winter wheat area in drought has also plunged to just 28%, well below the 62% peak of a few weeks earlier. This benign, favourable weather, is also supporting the outlook for record US bean and corn crops.
• EU prices have also fallen, trading down €5.50/t w/w. The non-escalation of Black Sea tension has also attributed to the current weaker sentiment, and with both Russian and Ukrainian export values falling, EU export opportunities remain limited, even with the weaker MATIF and euro. Non-EU soft wheat exports were reported as reaching 9.15mln t a/o 24^th November, down 30% y/y.
• UK prices have also fallen, down £3.65/t basis May 25 position. The recent changes in weather, from heavy rain, to drier, cooler conditions, continues to play a major part in growers’ attempts on getting crops sown for harvest 2025. This was confirmed by the release of the AHDB’s early bird planting survey, which showed just a 5% increase y/y, to 1.613mln ha in the wheat area sown a/o at early November.
• In summary, the cease-fire in the Middle East has given hope to many that a cooling effect may be seen in the Black Sea too. The forthcoming inauguration of President Trump (20^th January) has been pre-empted by talk of the likelihood of higher import tariffs on Chinese, Canadian and Mexican imports, which may have a ‘retaliation impact’ upon US trade to these countries, which is also seen as a negative factor to the markets. Weather, in general, remains favourable, which should support new crop sowing and development conditions, and with no apparent fresh bullish impetus, markets may continue to drift lower.

Malting Barley

• Old crop malting markets continue the theme of recent months. Price are rangebound, and there is little news or trade to report. Overall, the market remains heavy, and the crop continues to perform on quality which is keeping a lid on premiums.
• New crop is similarly quiet, although there is potentially more to discuss here with the lower area of spring barley (due to improved winter wheat planting conditions) adding a more supportive tone to the market. Consumers and farmers, however, are not really engaging, which is keeping the market slow. We do not expect to see significant activity until the new year when the spring drilling campaign commences.

Feed Barley

• Feed barley markets are feeling more supportive over the last few weeks, as the prospect of export demand, which has evaded us for much of this season, starts to look more promising. Due to good buying interest over recent weeks, other origins such as Germany and the Black Sea have appreciated to the extent that UK values are looking more attractive.
• Domestic prices have closed the gap vs competing feed products such as wheat and corn, supported by slow farmer selling, and inclusion rates still high vs the historical trend.
• We expect that there could be some tightness at least until the new year, as we do not foresee significant engagement from growers before Christmas. The question will be, in what fashion could export demand arrive, and will it be enough to clear what remains a comfortably surplus for the 24/25 season?
• New crop values are appreciating with the spread vs wheat narrowing by approx. £5 over the last few weeks, once again on slow farmer selling combined with a large drop in the forecast spring barley acreage y/y.

Rapeseed

• It has been a choppy week for ag markets, with the main store coming from the Trump Administration after he announced on his first day of his term, there will be a 25% tariff imposed on Mexican and Canadian goods as well as an additional 10% on Chinese goods. This supported US soy oil markets, but did not help the wider veg oil picture, especially considering that a 25% import tariff on Canadian imports would equate to a larger penalty than the elimination of biofuel subsidies on imported vegetable feed oil stocks. This means that there will be a lot of canola oil that was previously destined for the US that needs to find a new home. We are also yet to hear any further news from China surrounding anti-dumping, though this would not help Canada. We also see Canola inventories above 5-year average for mid-October at 1.665mln t. Prices now are approaching the low we found in September.
• This week, US soy crush margins have taken a hit due to early weakness in soy oil and meal, despite Trumps plans. South American weather events have kept a lid on any gains for beans as the picture still looks positive. We have seen some further flash sales announced to China and unknown as well as some shipments of oil/meal, but this was not enough to bolster demand prospects. Weekly export inspections were 2.102mln t, just lower than last month’s 2.266mln t. 59% of these bean shipments were destined for China. From here, these numbers are likely to fall and decline through to spring. Since July, EU bean imports have reached 4.95mln t up from 4.62mln t last year. It is a short week for the US with markets closed Thursday/Friday for Thanksgiving.
• Crude oil has been lower this week. Russian deputy prime minister Novak said that the global oil market is balanced, thanks to actions taken by OPEC+ applied quotas. He also said that Russia is preparing to lift its gasoline exports ban. China’s crude oil imports are expected to reach 11.4 million barrels per day in November, the highest since August 2023. OPEC+ are set to have a meeting on December 1^st, in which they are expected to delay their planned production increase until February due to low prices.
• MATIF rapeseed also fell sharply this week, after breaking the uptrend from reaching a significant premium to other markets, as well as announcements out of the US. This will impact the EU picture, as we would expect further Canadian canola to trade into Europe, helping the previously tight S&D. From here, the picture has definitely changed now we have established a downtrend, so we will need some help to find support.

Oats

• This week saw further minimal EU trade activity with a general lack of trade being reported in both the milling and feed sectors.
• Millers continue to demonstrate the fact that they are well covered for Q4’24 and Q1’25 positions through a lack of fresh purchases and currently they are largely reluctant to cover Q2’25 positions.
• Feed oats have been traded into Spain from Scandinavia and the Baltic states, however, due to the large crop produced in Spain this year, demand for fresh import business is a lot less than previous years.
• Here in the UK, the market is focussed on resolving nearby logistics, with many starting to focus on the festive season, which often causes logistical headaches.
• Milling oats continue to trade for Q1 ’25, though tonnage demand is increasingly being covered for nearer-term positions. However, demand for Q2 ’25 remains significantly more open.
• AHDB released its latest Early Bird Survey for 2024 plantings, reporting an estimated 3% increase in oat area ahead of 2025 harvest. This data is from a survey which was run from the beginning of Nov to the 9th Nov, with 70 agronomists covering 620kha reporting their findings. However, given the good planting conditions in November, we are not seeing the same feedback from farm, with most growers favouring planting wheat to oats, which is demonstrated in seed sales.
• Bottom line, markets remain quite quiet with neither side of the supply and demand equation pressurising the market to define price direction.

Pulses

• This week has seen an increase in activity in the pulse market across the UK, with an uptick in interest in feed beans, surprisingly. Growers are still not engaging strongly from an origination front, with a whiff of Christmas quietness seemingly starting to creep in. For those still with wet beans out there, please contact your farm trading representative, as we have drying options available, although these crisp winter days should at least allow some cool air to be blown through the heaps. Human consumption interest also still remains in the market, with Egypt still interested in UK origin ahead of the widely anticipated new crop Australian imports that will start in the coming weeks. Imported feedstuffs continue to be more competitive than beans into domestic feed rations, with beans again remaining relatively unchanged week on week, still needing to be c. £20-25/mt lower relative to other raw materials in order to buy some demand in to pig and ruminant diets.
• Looking to the week ahead, it looks like we are in for a similar week of weather again across the UK. Plenty of precipitation is forecast for the week, especially for Wales, Shropshire, Cheshire, and Lancashire, and again temperatures look to be a degree or two above the seasonal norm, so we should not see too much, if any, snow. Continental Europe should see light rain over the coming week, with heavy rain limited to North-western Spain and the Balkans. With winter drilling now more or less complete however, this is of little concern, and if anything, the slightly warmer, damp conditions should help early establishment of the crop, and leave it in good stead for winter dormancy.
• As the drilling season wraps up, it is time to start having a look at what your unsold stocks are and how best to market them. We are still seeing many good quality beans being offered and coming forward, so a good excuse to speak to your farm trading representative to organise getting some samples sent over to our lab for testing and potentially netting yourself a nice upgrade premium if they are fit, just in time for Christmas! We are still actively purchasing across the UK, and can offer competitive origination markets, with the added opportunity to upgrade any crops meeting specifications for human consumption pulses for processing at one of the UK and Europe’s most advanced pulse processing plants, earning an additional premium for your crops. Please speak to your farm trading representative about what marketing options we have available for you, as well as the potential upgrade options.
• Finally, a reminder for those eligible for PGRO membership. If you’re not already on the PGRO mailing list, sign up here, where levy payers can access a wealth of free advice and support, drawing from PGRO’s extensive knowledge on pulses.

Seed

• Looking ahead to the spring and rotations, pulse crops play a major part in the rotations and with conditioning of the soils going ahead .
• ADM Agriculture has a magnificent portfolio of pea and bean crops, all supported with buy back contracts, which are taken directly and processed at our human consumption plant in Long Sutton. We are pleased to offer Kabuki & Adder marrowfats; Kabuki has been around for years, but remains the industry benchmark for both colour retention and canning, and has demand across the world. Adder is a new introduction from the same breeder as Kabuki. Adder shows better resistance to Downey Mildew and better standing coupled with increased yield.
• On the large blue front, we are pleased to offer Butterfly and Daytona. Daytona has been on the market for a number of years and is renowned for its consistency and colour retention. Butterfly is the large new blue from NPZ, which has shown better disease and higher yields with good colour retention.
• We are also looking for experienced seed growers to produce seed crops of large blues and spring seed beans for our own use within ADM Agriculture. Please contact your local farm trader for further information regarding any of the attached.

Fertiliser

• European fertiliser markets faced mixed conditions this week. Natural gas futures dipped to €46/MWh due to warmer-than-expected weather and strong LNG arrivals, but gas storage, now at 87.4%, is over 10 percentage points lower than this time last year, raising winter supply concerns.
• In the UK, subdued activity in the urea and AN markets persists. Urea imports remain 30% lower year-on-year for July-September, with significant spring nitrogen demand still uncovered. AN 34.5% is priced at £330-340/t bagged delivered, but limited on-farm buying interest is keeping volumes low and highlighting concerns of mass return to purchasing in the spring risking tight domestic supply.
• Potash prices stayed stable, with standard MOP assessed at €300-330/t CIF in Northwest Europe and granular material at €330-350/t CIF. Sellers are now focusing on spring demand as piecemeal buying continues.
• Phosphate markets steadied this over the last two weeks after a three-week downtrend, with a Moroccan producer reporting 23,000 tonnes of DAP sales to Western Europe. Demand remains muted but shows signs of improvement ahead of the spring application season.
• Natural Gas: European natural gas futures dipped to €46 per megawatt-hour, marking a one-week low as warmer-than-expected weather and higher wind power output reduced gas demand. Average temperatures in northwest Europe are currently 2°C above seasonal norms, easing immediate pressure on the energy market. Strong LNG arrivals at French terminals have further bolstered supply.
• Concerns over an immediate halt to Russian gas supplies have lessened, with Austrian auctions suggesting flows will likely continue into December. However, US sanctions on Gazprom bank are creating payment complications for European buyers, while the looming expiry of the Russia-Ukraine gas transit deal at year-end continues to raise uncertainty. Reports indicate that Gazprom is not planning for gas flows via Ukraine beyond December 31, consistent with Ukraine’s refusal to extend the agreement.
• Despite these easing pressures, increased heating demand due to colder weather in parts of Europe and faster withdrawals from EU gas storage—which is now 87.4% full, over 10 percentage points lower than this time last year—are providing price support heading into the winter months.
• Ammonia: Despite recent tightness in North Africa, availability from Algeria could improve by December as Fertial reportedly prepares to bring its two Arzew lines back online. This development would be welcomed by NW European buyers, where average CFR price levels of $625/t – the highest this year – continue to deter significant activity. Downstream margins and rising raw material feedstock costs remain key challenges in the region.
• Across the Atlantic, the market anticipates another $560/t CFR rollover at Tampa for December shipments. Seasonal domestic demand, coupled with North African outages, is expected to offset improved supply from Trinidad and the US Gulf, where five cargoes are lined up for export by early December.
• Ammonium Nitrate: In France, LAT Nitrogen issued a price for 33.5% AN at €370-375/t CPT late last week, only to withdraw it days later following an improvement in CAN 27 prices. LAT subsequently raised the price of CAN in Germany to €305/t CIF, aligning with other European producers at the same level. The producer later announced a higher price for AN in France at €375-380/t CPT, although this remains below Yara’s previously issued list price for EXTRAN 33.5%.
• The higher AN prices reflect the recent rise in natural gas costs, although demand in France remains subdued. Farmers remain focused on winter crop sowing, with limited new buying activity expected for the rest of the year. The French market is reportedly 60-65% covered for the crop year, leaving little urgency among buyers.
• In the UK, AN 34.5% is priced at GBP330-340/t bagged delivered. Farmer activity has remained somewhat subdued this week although some purchasing has been made over the past two days following concerns surrounding security of supply for the spring.
• Gas prices in Europe suggest potential further plant closures, posing risks to nitrate supply. With limited imports and low grower demand, but significant volumes still to buy, the market remains in a precarious balance.
• Urea: With the dust settling after India’s two recent tenders, the market now turns its attention to other potential buyers to provide support. Expectations suggest India may return to the market before the end of Q4, while some buying from the U.S. and South America is anticipated as they begin covering their new season demand. However, further developments remain to be seen.
• In France, granular urea offers remain around €385/t FCA Atlantic Coast, but buyer interest remains non-existent. European importers show no urgency to re-enter the market, and clarity on when this might change remains elusive. Unless a significant shift occurs in the global market, further buying activity appears unlikely before year-end.
• Port stocks in key European import nations, including France, are reportedly sufficient to meet any immediate interest that may arise but are not considered excessive. Farmer demand is muted, and distributors remain reluctant to take further positions. Ample supply from North Africa has so far discouraged risk-taking, especially given limited on-farm appetite for significant purchases.
• In the UK, current nitrogen volumes secured to date are insufficient to meet upcoming spring demand. Estimates for a circa 14-million-tonne wheat crop suggest a significant portion of nitrogen requirements remains unmet, leaving growers exposed to potential supply pressures as application season approaches.
• Potash: Global potash benchmarks remained broadly stable this week, with growing expectations of modest price increases in the weeks ahead on the back of strong expected demand in Q1 2025.
• In Northwest Europe, potash demand continues on a piecemeal basis, with limited fresh sales reported. Prices for standard MOP remained steady at €300-330/t CIF for the fifth consecutive week, while granular MOP held at €330-350/t CIF, unchanged since June. Sellers are now looking ahead to the spring season for increased buying interest.
• Phosphates: DAP spot prices remained steady this week and last, following a three-week downtrend that began after reaching highs in early October. Prices had previously risen 26% between May and October before stabilising at their current levels.
• A Moroccan producer reported additional DAP business to Europe this week, selling 23,000 tonnes to Western Europe. While overall demand remains subdued, this sale signals a slight uptick in interest as buyers begin preparing for the spring season. Tight availability continues to provide underlying support to prices, even as affordability challenges persist.

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.