Ukraine 2013/14 grain exports are reported at 28.6mln t – including 8mln t of wheat –their total export projection is still seen at 33mln t  
Ukraine grain stocks as of  Apr 1st reported at 12.3mln t, up 14% year on year 
Russia’s 2013/14 grain exports reported at 21.5mln t, up 47% year on year  – including 15.9mln t of wheat
Egypt’s GASC purchases 230,000t (Russia/Ukrainian and Romanian) for May 1-10 shipment – the cheapest offer  was $20 lower than French wheat
Brazil is seen producing a record wheat crop in 2014 at this early stage  – if it is realised and if Argentine production rebounds, US exports would be  set to decline sharply
Global wheat prices jump as tensions escalate in the Ukraine – stoking fears of potential supply disruptions 
US winter wheat crop ratings decline – 34% reported as in good/excellent condition, down 1% on the week 

 

It was said ‘a week in politics is a long time’ – well, this has truly translated into the grain markets. The escalation of tensions between Russia and the Ukraine has caused grain markets to react, posting strong gains over the past week. The US wheat market has firmed $9/t (although the corn market is actually down $1 ), MATIF is up €8/t and LIFFE futures are up £3/t, as fears of potential supply disruption from one of the world’s largest exporting regions intensifies. The recent rally in global prices has resulted in US / French supplies becoming  expensive against Black sea / Romanian wheat, as witnessed in the latest Egyptian tender, at a time when across much of the EU farmers are finding more ‘supplies of old crop wheat’ than might have been anticipated .

The EU, when not caught up in current Russian/Ukrainian politics, continues to ‘tick-over’ tonnage, with soft wheat exports now reported at 24.3mln t, compared with 16.3mln t a year earlier  . The weather remains favourable for new crop prospects, with the German farm co-operatives recently raising their estimate of the 2014 wheat crop to 24.7mln t

Although UK LIFFE futures have firmed, delivery premiums continue to be squeezed. UK wheat imports fell in February, to just 82,009t, the lowest single monthly volume for 20 months. With wheat imports likely to be well down on last season’s, many are still questioning the actual 2013 UK crop size of 11.9mln t, and we are not ruling out the potential of a re-surge in wheat imports in the last quarter of the campaign

In summary, falling US crop ratings and the historic slow-pace of US spring wheat / corn plantings (although similar to last season) would be enough to support the market – however, currently it is all about politics. Unless we see evidence of a port blockage or sanctions are imposed , Black sea grain will continued to be exported, with on paper another 3-4mln t of wheat to be shipped. In the longer run , if the situation in the Ukraine worsens , there may be issues regarding Ukrainian farmers ability to put the required level of inputs on their crops , but this is conjecture which is what is driving our markets for the moment .  In short the return to markets after Easter could see another price spike  if the Ukraine situation worsens , or a pullback in prices if tensions ease . Second guessing the next event or price move is a punters game and number 3 in the 2.20 at Newmarket  might offer better value

                   

The oat market remains stuck in a tight range as the oat millers edge toward their requirements from harvest 13.
Compound demand also slackens as expected for the time of year and only the high wheat price ensures that oats are continued in the ration.
One comment from the feed oat users have been reports of good quality animals which have benefitted from above average quality oats.
                   

With the spring seed market for most cereals and spring beans coming to a close marrowfat Kabuki peas are a worthwhile break crop. Kabuki peas are suitable for all end users and an attractive buyback remains available which makes them a very appealing late drilling option.  
 
Gleadell are also in a position to be able to offer prompt delivery on a variety of fodder beet and stubble turnips. Root and fodder crops are a great way of both varying animal feed and maximising home forage production, producing fresh yields of highly palatable, high energy feed.
 
Autumn 2014 welcomes Evolution to the winter wheat market. Evolution, from breeder Limagrain, is the new high yielding group 4. Evolution is the perfect companion to Kielder and Santiago due to its excellent disease resistance.

Belepi, a soft wheat variety, is another exciting variety which will be marketed outside of the RL lists. Branded ‘ Last In First Out ‘, it is suitable for late autumn planting (mid-October onwards) and is very early maturing. This variety will be of interest to many growers in different situations – including those looking for delayed drilling opportunities for black-grass control backed up with an early maturity for OSR entry – as well as those behind roots crops such as potatoes and sugar beet. Seed availability is limited and the variety has already seen a lot of interest, and we would urge growers to cover their requirements early.

Looking forward to the autumn Gleadell have access to the top yielding conventional and hybrid winter oilseed rape varieties on the recommended list for Autumn 2014, some with deferred payment options. Incentive from breeder DSV and Harper from Bayer CropScience are both new hybrids on the recommended list this year.

Incentive is top of the new HGCA recommended list for the E&W region – 2% higher than PR46W21 and 5% higher than Compass. Incentive has medium maturity, stiff straw, high oil content (45.8), and high LLS resistance.
Harper is a high gross output variety that is early maturing, stiff strawed and has good oil content (45.1). Harper has a 9 for stem canker and is the perfect companion variety to Incentive.

On the candidate list SY Harness is the highest yielding hybrid candidate variety, with a high seed yield and outstanding disease scores - however tonnage is limited so it is advised requirements are covered early.

                   
Feed Barley 

The UK’s 79,460t of barley exports in February were the second lowest monthly figure of this season, highlighting the reduction in export demand since the turn of the year.

The 13/14 season total has now reached 927kt, a figure that’s 140% higher than all of last season’s exports between July 2012 and June 2013.

Despite old crop supply continuing to feel relatively tight, the discount to wheat has been maintained at £25-£30 across all regions.

Consumer demand remains lacking from both the old and new crop feed barley markets.  There has been very little fresh fundamental news over the past week to bring them to the market.


Malting Barley 

Old crop demand continues to decline, although there are some pockets of demand for 1.85 springs into east Anglia.

The domestic spring and winter crops look in good condition. Drier and warmer conditions for much of the country have enabled disease control to be applied and helped to aid development. 

Crops on the continent are developing well in key parts of eastern Europe and the Black Sea Region.

Dryness concerns continue in northern France/ southern Germany although the extent of the problem continues to be a topic of debate.

Malting Barley export values have increased further in the last week for new crop due to  dryness concerns aiding new crop premiums.

Gleadell still have contract options available for both Brewing and Distilling markets for crop ’14 across both spring and winter varieties to suit all risk profiles.

                   

The old crop rapeseed market remains underpinned amidst  slow trade. The UK appears to be well sold with very few significant parcels left on farm however demand is equally un-impressive. The sharp rally in rapeseed prices that we have witnessed since early Feb has not been reflected on a 1:1 basis in the oil and meal products and old crop crush margins are not encouraging the crushers to chase seed prices higher.

The shipping delays in Canada that had resulted in Australian seed destined for Europe being swapped to alternative destinations is now beginning to get sorted out, but there is still a significant backlog and by the time the Canadian canola exports get back into full swing the combines could well be rolling in Europe – not good timing from a price perspective for UK markets at harvest .

In the short term politics in the Ukraine and the tight supply situation should keep prices underpinned but with a €50 differential between old and new crop the two market will have to come together and in the end it looks more likely that the old crop will come down to meet the new.

                   

Urea
The global urea situation has calmed  down in the past week with some price stabilisation being seen  . Egyptian prices for prompt vessels are remaining firm with no immediate price corrections in the short term expected. In the forward market, the tonnes already traded have been sold at well below replacement values and the speculators who were driving it downwards seem a bit more hesitant to move it much lower. Events in the Black Sea area has made a few traders take a step backwards and move values higher across Europe – prices in Germany are € 15 tonne higher this week as we start to see a sense of reality return to the market. To date , the market has only been driven by traders / speculators taking a guess as to how low it may trade one day  , hence the July / January delivery spread on most of the offers available.

With the cold mornings across the UK this week, conditions for urea applications remain good and on a unit per unit basis, urea remains the most cost effective nitrogen source.  Gleadell can deliver Granular Urea with immediate delivery.  For more information please contact your local Gleadell farm trader.

Alzon 46 – The stabilised nitrogen fertiliser.
A stabilised 46% granular urea, for less work, more yield and it is environmentally friendly. This product is unique to Gleadell in the UK and can be included in any fertiliser programme - so if you are planning your options for next year , we now have new season terms for consideration.

AN
The ammonium nitrate market remains supported by many spot trades and as we approach May , a late Spring will help to see this support continue.  Imported product is still trading at similar levels to the last few weeks and  UK domestic product similarly is holding firm with more tonnage to be placed for delivery in the weeks ahead and a grassland market still to surface. It is unknown when or even if we will see any price correction but we are certainly not likely to see new season levels released until late May/June at the earliest.

P&K
Today as demand shelves off, DAP/TSP prices have corrected again.  This price correction has provided good levels for grassland buyers.  Potash still remains relatively tight in the UK with prices upheld by limited supply. 

                   
MARKET INDICATOR KEY: Upward market pressure Downward market pressure Neutral
£/€ £/$ €/$
1.2130 1.6809 1.3859
  Feed Barley  Feed Wheat
                   Beans Oilseed Rape
£ +/(-) £ +/(-) £ +/(-) £ +/(-)
May
12
133.00 -
145.00
Depending
on area
162.00 -
175.00
Depending
on area
275.00
- 380.00 -
335.00
Depending
on area

Nov
12
137.00 -
147.00
Depending
on area
149.00 -
159.00
Depending
on area
225.00
- 293.00 -
298.00
Depending
on area

 

The UK’s only national , fully transparent  , long term Grain Pool is open for the 2014/2015 season

Speak to your Gleadell contact to see how we can help you in challenging grain markets

 NB: Prices quoted are indicative only at the time of going to press and subject to location and quality.

Gleadell Agriculture cannot accept liability arising from errors or omissions in this publication.

Gleadell trade under AIC contracts which incorporate the arbitration clause.

GRAIN PASSPORTS

Please do not use your old grain passports. Many consumers are rejecting any loads that turn up with the old passports so please contact your Gleadell farm trader if you need some new passports.

HGCA RISK ASSESSMENT TOOL

Please visit the HGCA online portal for calculating your risk assessment score to go onto grain passports for any premium grade wheat that you may be having collected. www.hgca.com/mycotoxins

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.