WELCOME TO THE ADM AGRICULTURE WEEKLY MARKET REPORT
Wheat
- The US market has traded down less than $1/t over the past week, helped by a swift rebuilding of ‘war premiums’ in feed grains as markets reacted to the alleged drone attack on the Kremlin.
- It remains unclear how the incident may impact this week’s scheduled talks to discuss the extension of the Black Sea export initiative, but it certainly will not help.
- US winter wheat crop ratings showed a slight improvement, with the good/excellent rating up two points, although the poor/very poor rating also increased by one point.
- Turkish state lender Ziraat Bank may mediate in payment for Russian grain and fertiliser according to the Foreign Minister, adding that Ankara was still in negotiations with the deal’s participants.
- Ukraine’s grain exports have fallen 9% year on year to 41.6mln t as of 26 April. The figure includes 14.4mln t of wheat (down 22%), 24.4mln t of maize (up 15%) and 2.5mln t of barley (down 57%).
- The EU Commission has set restrictions until 5 June on imports of Ukrainian grain and oilseeds into five member states to ease supply issues. Transit within the states is still allowed if the grain is destined for a country or territory outside the EU.
- Ukraine’s agriculture ministry believes the country will have 15mln t of maize and about 11-12mln t of wheat to export in the 2023/24 marketing season, well below the volume already shipped during the current season.
- Egypt’s state buyer GASC purchased 655,000t this week for shipment between 10-30 June and 1-20 July, most likely from Russia and Romania.
- India’s government had purchased 19.5mln t of wheat from local farmers as of 26 April. It plans to buy a total of 34-35mln t to rebuild stocks, allowing government-driven sales programmes.
- EU soft wheat exports had reached 25.7mln t as of 30 April, up 9.4% from a year earlier. Morocco, Algeria and Nigeria remain the top destinations. Maize imports year on year were reported at 23mln t against 13.5mln t.
- EU Commission sees soft wheat production in the 2023/24 season at 130.2mln t, slightly down from its March estimate of 130.9mln t.
- The amount of French soft wheat crop rated as good or very good rose to 94% during the week commencing 24 April, up one point on the week. Though supported by the news from Moscow, UK prices have still fallen £4/t on the week due to continued sluggish demand. However, the sharp rise witnessed over the past two days provides a selling opportunity for long-holders.
Malting Barley
- Malting barley old crop values continue their downward trend as consumers are absent from the market and tonnages on farm are still looking for homes.
- On new crop we see another week with a lack of consumer engagement as maltsters appear to be happy with the cover they have at present.
- We have seen some growers starting to engage in marketing their new crop due to a combination of good crop establishment and attractive premiums on offer.
- We have a variety of new crop contracts, please speak to your local farm trader for marketing options.
Feed Barley
- Another slow week for feed markets with consumers seemingly well covered for old crop and uninterested in engaging on new crop just yet.
- Likewise, farmer selling has also been slow for both crop seasons, despite the rapid approach of harvest.
- Export interest has also been lacking as the UK struggles to compete against other EU origins, particularly for the harvest position.
Rapeseed
- A pullback in outside markets has knocked on into agri-commodities. The US banking crisis continues, and the Federal Reserve increased interest rates by 0.25 basis points. The US dollar closed lower over the last few sessions, along with a sharp correction in crude oil prices.
- Yesterday markets reacted to the alleged assassination attempt on President Putin. Whilst Ukraine denies involvement, NATO is now concerned over Putin’s next move, which will undoubtedly bring into question the extension of the grain corridor.
- US weather still favours soybean plantings, with the Midwest receiving much-needed rain. US sowing progress is reported at 19%, in line with expectations and above last year’s 7% and the five-year average of 11%.
- However, demand remains reasonably poor given the premium for US prices over Brazilian offers.
- Brazil’s soybean harvest was reported at 94% complete at the end of April. StoneX has retained its crop estimate at 157.7mln t against USDA’s 154mln t.
- In Argentina, the “Soy Peso” hasn’t enticed much farmer selling but harvest continues. Buenos Aires Grain Exchange has indicated it may need to reduce its soybean production estimate from the current 22.5mln t, given the poor yields. Harvest is now 28% complete and crop conditions do not seem to be improving.
- Energy markets have fallen sharply since the start of the month. WTI crude oil lost over $7 and is trading below $70 per barrel as global energy demand weakens and the overall market sentiment lends itself to a sell-off.
- Whilst veg oils followed energy prices lower, they did see some reprieve following yesterday’s drone attack on the Kremlin. Malaysian palm export figures for April were reported to be as much as 20% below March, which capped price gains.
- Canadian canola prices have risen since the start of the month despite disappointing export sales, which were below expectations owing to a recent decline in Chinese buying interest.
- Despite some price appreciation at the end of April, Matif rapeseed prices are now trading within €15 of the contract low. Whilst the market saw support from several EU countries banning Ukrainian imports on certain products, the large EU carry out for the end of this season continues to pressure prices in the short term.
Oats
- European oat markets have seen a slight rise in buying activity of the past few weeks. Spain has been the main buyer following concerns over the effect of dry weather on the coming harvest.
- Sales from the UK and Baltics have filled the Spanish buying demand, but with further gaps to cover for Jun/Jul it will be interesting to see whether prices will or won’t follow the wider grains markets lower.
- Milling oat buying interest remains largely non-existent, with many buyers reporting a lack of buying interest from their end customers.
- Production prospects for many areas of Europe could be negatively affected by cold wet spring conditions, with many countries reporting spring drillings being behind normal.
- Canada’s oat carryout figure for 2022/23 of 1.469mln t as reported in StatsCan’s latest figures would be a 283% increase on the five-year average and will add a buffer to any production concerns around the world.
- Australia has near optimal soil moisture levels which has set up a high yield potential for their 2023 crop.
- Here in the UK milling and feed markets remain hard to find for both old and new crop positions.
- Exports continue apace with around 146,000t shipped for the year to date, meaning the AHDB’s estimate of 155,000t by the end of June’23 remains likely.
- Demand according to millers has tailed off and this should be reflected in coming S&D figures. However, the on-farm feed usage figure remains the key unknown and this will determine what the end-of-season carryout figure will look like.
- Winter oat crops look to have great potential with 81% of the crop rated good to excellent (vs 85% last year) according to the AHDB. However, much of the spring crop is yet to germinate, raising concerns about yield and quality potential.
- A rally in the pound/euro rate has weighed on UK export prices and could temper further fresh sales to the likes of Spain.
- Bottom line, feed oats look expensive vs other feed grains and old crop milling oats are struggling to find a home aside from feed. But with new crop all being about the weather you could argue it is still all to play for.
Pulses
- Old crop bean prices have firmed on the week as shippers look to cover their nearby requirements and origination volumes slow down.
- New consumer demand has been limited as other mid-range proteins have fallen sharply in recent weeks and bean prices have appreciated, reducing their competitiveness in the ration.
- New crop prices continue to follow wheat futures and are now trading at a significant inverse to old crop. Buyers remain reluctant to step in to take new crop cover with prices of grains and proteins falling week on week.
Seed
- As we look ahead to autumn drilling, our cereal seed availability is currently good across the board with the exception of the newly recommended varieties which are sold out.
- If you are considering drilling rapeseed, watch our most recent YouTube video for more information about our portfolio. https://youtu.be/PNdL5N7-RK8
- Companion cropping is a great option to help aid establishment of oilseed rape. ADM has three amazing mixtures available all providing different benefits to the land and crop.
- Game maize is selling very fast. Our all-seasons game maize is now sold out, but we can still offer late straight game maize. This is very limited, so it is best to book ASAP.
- We have a range of countryside stewardship mixes available for fast delivery.
Fertiliser
- Granular urea has seen little movement week on week in the UK despite some large moves in the US ($7st increase and circa $15/t FOB Egypt).
- Imported ammonium nitrate offers continue in the UK for late May/June deliveries. UK AN remains available for spot delivery.
- Moves in US Tampa ammonia prices last week indicate that CF AN could be highly competitive against imported options when further forward offers are issued.
- There has been plenty of activity in the fields over the last week in both arable and grassland.
- NPK blends keep edging lower as weakness in potash and phosphates continue. Slightly lower spot levels for AN are also helping the NPK buyer.
- ADM has ENhance Pro ATS to offer for quality milling wheat growers as well as any last-minute spot UAN and UAN + ATS grades.
- Alternative PK products are likely to become available for harvest delivery in the coming weeks.
| £/€ | £/$ | €/$ |
|---|---|---|
| 1.1380 | 1.2575 | 1.1050 |
| Feed Barley £ | Wheat £ | Beans £ | Oilseed Rape £ | |
|---|---|---|---|---|
| May23 | 165-175 | 179-189 | 235-240 | 365-370 |
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.