Market Report 24th April 2014

  

The Ukraine 2014 early spring grain sowings are  97% complete (2.55mln hectares of the 2.63mln intended)

Kazakhstan has raised its 2013/14 grain export forecast to 9.5mln t, from 9mln t previously

Russian farmers have planted spring crops on 3.7mln hectares, or 12% of intended area – corn seen planted on 18% of intended area

Egypt’s Ag Ministry has estimated local wheat crop at 9mln t and are  hoping  to purchase 4mln t – less imports
 
French AgriMer reported corn plantings are 39% complete, versus 4% last year – also reports  75%  winter wheat crop are in good/excellent condition

Strategie Grains estimates 2014/15 EU-28 soft wheat crop at 137.2mln t, down 0.5mln t from last month – still 2mln t above last year

The US markets are mixed on crop ratings/slow planting pace and weather concerns 

US winter wheat crop ratings decline – 34% has been reported as in good/excellent condition, 43% reported in poor/very poor condition 

The Ukrainian situation continues to cause concern as Ukrainian forces attempt to retake government buildings in Eastern Ukraine and Mr Putin threatens to use Russian forces to protect Russian interests .

The major news of the past week was the agreement reached in Geneva to ease tensions in the Ukraine (for now), and with reports of rain easing concerns over winter wheat crops, this was enough to trigger US fund selling whilst the EU was basking in holiday sunshine. Since then it is hard to see the Geneva accord being enacted to date and if anything tensions are still mounting  .  As EU markets re-opened, playing catch-up with the falls in the US market, prices eased €4/t and £2/t respectively on the MATIF and LIFFE future markets. Corn prices have rallied over the past few days, as a ‘slower-than-average’ planting pace, plus concerns that current conditions will delay planting further prompted buying interest.

The EU market continues to keep ears open for news from the Ukraine, while having eyes open on new crop prospects. Despite Strategie Grains lowering its views on the size of the 2014 soft wheat crop, AgriMer reported 75% of the French crop in good/excellent condition, against 66% at this time last year. Spring grain plantings (barley and wheat) in both Russia and the Ukraine are ahead of last year although corn plantings still have some way to go. EU soft wheat exports, seen last week at 421,000t, now total 24.29mln t for the season to date, compared with 16.3mln t at the same time last season. Export demand is expected to slow over the next 6-8 weeks, as domestic harvests loom closer and importers look to scale down buying activity.

In the UK, market values have eased slightly, although decent volumes of short-covering persists in certain parts of the country. Crops in general look in good condition and the weather outlook remains favourable for a sharp rebound in wheat production.

In summary, keep away from the horses and stick with what you know best, which in the current market may not count for much. Black sea politics are never far from the front page at the moment and  global weather ( El Nino ) US crop ratings and planting progress are other major factors. US farmers are geared up to accelerate the pace of plantings, given the weather window, but market shorts will monitor weekly progress and react accordingly. Short-term, the likelihood is that these factors will keep markets underpinned, but overall the supply side still looks a bit top-heavy. The Ukrainian factor remains a worrying  factor which, to date, has not affected the grain supply chain nor the planting of spring crops .

                                     
         

The recent significant rains in the Midlands and the South have given spring crops the best of starts . Uncertainty will centre around the spring oat acreage as this will hold one of the keys to the direction of the 2014 market.


The old crop market is all but played out and carry-over tonnages are expected to be only slightly above the five year average.


There are no firm values for new crop as millers watch the state of the crops and remain relaxed.

 

                              
 

The old crop bean market seems to have been concluded, demand is sporadic and values appear to be weakening.

 

New crop human consumption demand would seem to be overvalued, according to end users. It would seem that there is plenty of stock in Egypt to cover the expected increase in usage for Ramadan, so we would not expect to see much demand now until new crop.

 

Canada is expected to produce an exportable commercial crop of human consumption beans for the second year running. This should be available for export during December/January and will compete with UK/French and Australian crops. Values being indicated at present would suggest  European crop premiums will fall but this is obviously all subject to quality.


We are still open to contract peas for 2014 harvest, please contact you Farm Trader for details.

                                      

Feed Barley

 

A quiet market for old and new crop barley, as values continue to follow the general trend of the overall wheat market.

Whilst old crop supply still feels tight, this week has seen more of a seller-heavy market across the UK.

Favourable rainfall across the key growing regions of Europe have aided developing barley crops; northern German crops are looking particularly well.

There has been little fresh significant news though to influence the new crop discount to wheat. Domestic consumer demand remains limited, as has been farmer selling.

 

Malting Barley 

 

Old crop demand continues to decline, although there are some pockets of demand for 1.85 springs into East Anglia for Tipple and Propino varieties. 

Domestic crops look favourable, beneficial moisture has fallen for most of the UK, proving beneficial for both winter and spring barleys. However  it has been reported that some parts of East Anglia have repeatedly missed out to date on rain. 

Timely rain has been added to key growing regions in northern France/ southern Germany over the weekend. Further rainfall is forecast this coming weekend.

FOB values decreased on the back of the moisture outlined above - malting barley export values look set to decrease further if the forecast of rain becomes a reality. 

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 soybean harvest nears completion in Brazil and is progressing in Argentina with good weather forecast for the next few weeks. Traders continue to talk of tight old crop supplies in the US against perceived waning Chinese demand.

Canadian canola prices have weakened with analysts predicting a sizeable increase in new crop plantings when statscan report this week.

The matif rapeseed contract has also weakened for both old and new crop contracts and we feel this is a reflection of what we see in the physical market. In Europe good volumes of seed are offered for most destinations, some crushers are washing out old crop purchases with margins currently poor, if you combine this with the new crop at a €50-60  discount you can understand why we have seen more volume offered. In the UK the old crop market is still very tight but crushers appear fairly relaxed and aren’t willing to chase prices.

New crop is currently looking good across Europe and we see no major problems anywhere at present – politics notwithstanding. 

                                     
  

Seed

Marrowfat Kabuki peas are a worthwhile break crop for growers looking for a late drilling option this spring. Kabuki peas are suitable for all end uses and an attractive buyback is available.

 

Gleadell is 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.

 

This week has seen Gleadell release prices for autumn 2014 cropping options to cover early requirements and ensure availability.

 

Gleadell has 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 has medium maturity, stiff straw, high oil content and high LLS resistance. Incentive is 2% higher than PR46W21 and has a 5% increase on Compass making it top of the new HGCA recommended list for the E&W region.

 

Harper is a high gross output variety that is early maturing, stiff strawed and has good oil content. Harper has a 9 for stem canker and is the perfect companion variety to Incentive.

 

The oilseed rape candidate list is home to Syngenta’s SY Harness, the highest yielding hybrid candidate variety. SY Harness boasts a high seed yield and outstanding disease scores however tonnage is limited so we advise requirements are covered early.

 

Evolution, from breeder Limagrain, is a welcome addition to the winter wheat market. Evolution is the new high yielding group 4 and 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. Seed availability is limited and the variety has already seen a lot of interest, as such we would urge growers to cover their requirements early. This variety will be of interest to many growers in 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.


Fertiliser

Urea
Although recent UK trades for forward tonnes would suggest that the global market is relatively weak, there was in fact a rebound in global pricing last week. In the short term, both US and late European buying is helping to support values and while these levels may well correct in coming months, many importers have today decided to take a more cautious approach as values have some way to fall before they can successfully execute the forward business already done. For spot tonnes, there is still an opportunity whilst we see cold, damp mornings and these levels are landing on farm at a £10/tonne discount to replacement levels.

 

Prilled urea is the one to watch at the moment, prices have been correcting over the past few weeks and are now trading at levels that are encouraging a few buyers to enter the market.  Prilled buyers should start to think about purchasing a percentage of their requirement at these levels -  Gleadell are offering competitive values for the forward positions at approximately £10/t discount to granular.

 

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
Imported pricing in the UK has moved downwards over the past week as many now look to clear port stocks prior to the summer.  Demand is now subsiding for arable farmers but grassland buyers are very active and this will continue for several weeks. UK domestic product is trading down slightly but in general not trading outside the range we have seen for many weeks.  New season is the topic for  discussion  although it is doubtful that we will see a national price released in France much before June, history would then dictate that UK prices will follow shortly after.

 

P&K
Global phosphate prices continue to drift lower as minimal traded tonnes are concluded for TSP/DAP & MAP.  In the UK, the NPK and PK market has reflected this as blended fertilisers corrected slightly over the last week. Reduced demand has also caused some blenders to reduce prices further.  Regarding the Potash market, things are unchanged.  Prices continue to remain stable on a global level and tonnes still remain short in the UK.

                 
MARKET INDICATOR KEY: Upward market pressure Downward market pressure Neutral
£/€ £/$ €/$
1.2149 1.6794 1.3822
  Feed Barley  Feed Wheat
                   Beans Oilseed Rape
£ +/(-) £ +/(-) £ +/(-) £ +/(-)
May
14
134.00 -
144.00
Depending
on area
160.00 -
173.00
Depending
on area
270.00
- 318.00 -
323.00
Depending
on area
Nov
14
135.00 -
145.00
Depending
on area
147.00 -
157.00
Depending
on area
220.00
- 282.00 -
 287.00
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.