WELCOME TO THE ADM AGRICULTURE WEEKLY MARKET REPORT
Wheat
Another sluggish week for Chicago wheat, trading down $3/t, as cheaper offers emanating from the eastern EU states and Ukraine continue to undercut US demand. US wheat exports are running 28% lower year on year, although the current pace is still on target to hit the historically low USDA export projection number for this marketing season.
EU markets are firmer week on week, with MATIF up €2.50/t, mainly supported by a weaker euro/US$ base. Egypt’s state buyer purchased three cargoes of eastern EU wheat, and two extremely cheap cargoes of Ukrainian wheat yesterday, with prices well below the Russian ‘state-imposed’ export floor of $270/t. These ‘cheaper’ offers are also seeing exports from the main exporting powerhouses of Europe (France and Germany) reduced year on year, with official data showing that of the 6.88mln t of wheat exported so far this season (down 27% year on year), France is accountable for less than 20% of the total exported volume.
UK prices have mainly followed the movement in the European market, with prices moving up £1.80/t week on week. Again, some support for ex-farm prices is seen from a weaker UK£, albeit the UK’s export potential continues to be hindered by cheaper export quotations from the EU and Black Sea region, as mentioned above. Domestic demand remains lacklustre, and official EU data should show that UK wheat exports into the EU will amount to only 100kmt by the end of September.
The fundamental outlook for UK wheat still points to an over-supplied market. We would advise growers to increase their marketing strategy on any ‘non-fundamental’ upward movement in farm-gate prices.
Malting Barley
Malting barley markets are flat on the week. Domestic buyers are still not showing any real demand, meanwhile farmer selling continues to tick along nicely.
FOB markets are trading sporadically. Buyers are keen to include the Jan-Mar window in any purchases as demand for Oct-Dec shipments is all covered. As a result, we expect to see this position come under further pressure.
For another week, malting barley premiums of around £70 look like an attractive sell for January onwards in particular, trading well above historical average levels, albeit now well off the highs of earlier in the season.
Feed Barley
Feed barley markets are rather quiet once again as we still lack any significant farmer selling impetus.
It is noticeable now that domestic demand for feed barley, which has been strong for weeks, is starting to slow down, as barley has priced itself to reduce inclusions in feed rations and consumers have bought well over the last few months.
We are edging closer to competing into Spain and Portugal with the help of the weaker GBP, however demand there remains muted.
We expect that barley will need to chase demand a little harder in the coming weeks due to the current lack of buying interest, particularly if we see an increased appetite for selling from growers.
Rapeseed
The US dollar rallied to a nine month high this week and crude oil touched new highs. Markets entered risk-off mode on fears the US recession could worsen given the high interest rates set by the US central bank and the potential US government shutdown at the end of the week. Following last week’s attacks by Ukrainian forces on the Russian Naval Command, Russia launched further drone attacks on Odessa, which caused damage to loading and storage facilities.
A mixed week for CBOT harvest progress is estimated at 12% complete as of Sunday 24th vs. 11% this time last year, but 14% expected. Farmer selling is slower than normal, with growers hoping for some post-harvest price appreciation. Approximately 53% of soybean production is within drought and crop conditions fell 2% on the week to 50% good/excellent. Weather in the US is no longer looking as favourable for harvest progression, with showers spreading across Midwest in the next 10 days.
We have seen no new daily reporting from the USDA this week and no further Chinese purchases to report.
Energy markets are higher again this week, with crude now between the $93-$94 mark, as we saw a higher than expected decline in EIA crude stocks to 14.604 million barrels below the five year average, along with a weekly crushing crude oil reading below 22 million for the fifth time since 2014. This has further exaggerated demand concerns seen recently. India have posted that oil imports in August were 6.2% higher this year compared to last year. Nigeria aims to increase oil production to 2.1 barrels per day by the end of next year. Nigeria is Africa’s largest oil producer, but its output has been in decline. Oil companies have now committed investments of $13.5 billion. Vegoil markets struggled to compete with the recent rise in energy markets, palm and soy-oil prices trading lower on the week.
Canadian canola is unchanged this week, following an uptick in prices on Wednesday. Weather conditions remain favourable across the Prairies, which will see harvest advance. Farmers are selling what they need for cashflow and movement, despite some selling for less than the cost of production, however any that can leave seed in the shed for now are doing so. The canola and veg oil markets now look oversold, which may lead to some month-end short covering, but longer term Chinese crush margins are still negative, meaning prices may have to continue to grind lower to try and buy demand.
MATIF rapeseed is up on the week, breaking nearby resistance levels, although it remains to be seen if this is short lived. News yesterday of further cargoes now being loaded in Ukraine will impact the spread going forward. Managed money will also play its part as we had into expiry. We do see a seasonal change, which should give some positivity this week and as we go through October.
Sterling trades at 1.15700 close to unchanged on the week.
Oats
Oat markets remain supported given the relative tightness in the global balance sheet.
Demand for milling oats into the EU continues to see buyers looking for offers, however sellers are nervous about selling large volumes.
Spain continues to have demand for feed oats at large premiums to feed wheat, however, buyers have lowered pricing ideas in the last week following the arrival of a number of feed vessels in September.
Quality in Scandinavia remains a concern with some high mycotoxin levels being reported.
Here in the UK, the spread between milling oats and feed oats continues to widen, as merchants look to try to find markets for substandard oats.
Millers continue to be buyers in the spot position, with most offering fallbacks on specific weights in an attempt to use the poorer quality.
Domestic feed buyers are few and far between, and given the large premium for oats over other grains, this is not surprising.
Bottom line, UK oats continue to see strong demand from the milling sector, but less so in the feed sector. However, the wide range of quality could see a very wide market between export grade milling oats and low grade feed oats.
Pulses
Peas:
Feed pea demand is beginning to ramp up domestically, as consumers look for offers in Q4 & Q1 of 2024. Should any of your human consumption peas fail to meet the grade, we have options across the UK with our valued customers. Values of £265 ex, depending on location, are at a strong premium to other feed markets and provide a great fallback should peas run into issues on our weighbridge.
Pea prices on the week have stalled from recent highs and remained stagnant week on week. With green peas still seasonally high for sub 10% bleached and high quality, it provides a great opportunity for growers with open market parcels. Marrowfats are also in strong demand, which has helped underpin this strong market price. We are keen buyers of any variety available with pre-Christmas movement available.
Long Sutton is currently running decort grade peas before we head onto yellow peas. Please ensure you have sent in any samples of peas to our laboratory so that we can understand the overall quality of the heap.
2024 buyback contracts are available for marrowfats and large blues, with a new contract becoming available next week. For the latter, it’s a great time to get in touch with your farm trader to understand the varieties on offer and the prices involved.
We are planning our next VIPea event and harvest data for our growers group – discussions will be based on this seasons harvest, yield and quality as a whole. Please look out for your invitation via email, or contact your farm trader for details.
Beans:
Feed bean prices on the week have stayed around the same levels with little change. Farmers are still struggling to engage at these levels, as we have seen a dip in selling week on week. This has coincided with a lack of offers from buyers on the export market, with the UK still being 5-10 euros more expensive than Baltic beans.
Overall, quality is still poor, as samples continue to arrive at our labs for testing. Some crops in Yorkshire and further north have finally been cut, which leaves the bean harvest all but done.
From a human consumption perspective, the market is very subdued. Offers are appearing out of Africa, but the UK is still out on price vs other origins. Premiums over feed are firm at the moment to acquire the low insect damaged and good coloured beans. If you have beans that meet the spec, please send samples to our labs for testing.
Seed
Availability is tightening across the board for most cereal seed, with KWS Dawsum, Champion and KWS Extase (among others), proving to be extremely popular winter wheats this year.
The AHDB harvest results are showing great promise for Group 3 soft wheat Bamford and Group 4 feed wheat LG Beowulf, both of which will have seed commercially available for drilling autumn 2024.
We have a vast portfolio of grass seed from shorter term leys like Italian Ryegrass and Westerwolds to longer term leys like Permanent Pastures and MeadowMax.
Italian Ryegrass is a great choice of fast growing grass, providing great yields for up to two years.
Permanent Pastures are an ideal longer-term option suitable for grazing, plus the option of cutting. Our permanent pasture also includes Timothy, which is a very palatable component. Check out our latest small seeds YouTube video about grass mixes for more information here.
Fertiliser
UK fertiliser markets remain relatively subdued. Phosphate and potash interest is slowly coming to the front, but markets on these nutrients are reportedly behind seasonal norms.
Participants in the granular urea market await to see if the final vessel from the Indian tender will be permitted to leave China before the mid-autumn festival.
India are expected to wait 2-3 weeks prior to issuing their next tender, in the hope that China will participate again after the Chinese mid-autumn national holiday.
Energy and ammonia markets have risen week-on-week, with expectations that this will lift nitrogen prices in the near-medium term.
Offers for DAP have moved up to $600/t FOB. China and UK prices could see a lift from current prices if global markets accept these new levels.
MOP prices remain flat on global markets despite upticks in demand from South East Asia and Brazil. UK prices also remain flat amid lacklustre buying and robust supply.
USD strengthened and a weaker GBP following central bank chatter last week, increasing replacement values for imported fertilisers into the UK at present.
| £/€ | £/$ | €/$ |
|---|---|---|
| 1.1575 | 1.2195 | 1.0535 |
| Feed Barley £ | Wheat £ | Beans £ | Oilseed Rape £ | |
|---|---|---|---|---|
| October 2023 | 165-175 | 184-194 | 220-230 | 360-365 |
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.