Market Report 28th August 2014

US SRW wheat crop reported as ‘variable quality’ including the highest levels of vomitoxin seen in the last 10 years.  

Russian Ag Ministry sees 2014/15 grain exportable surplus at 27.5-30mln t – with the crop ‘no less than 100mln t’.
Russian grains exports a/o 20th Aug were reported at 5.86mln t, up 22.7% on the year – wheat accounted for 5.15mln t.
Ukraine almost completes its 2014 wheat harvest at 24.4mln t (bunker weight) – this should result in a loss of around 5% on a clean weight basis – Ag Ministry.
Algeria’s state grain agency reports ‘it will reject blended cargoes containing wheat from different origins’. 
Egypt’s GASC purchases 175,000t (60 Romanian / 115 Russian) for Sept 20-31 shipment – French wheat offered but about $7-10 too expensive.
Romania has reaped a record wheat crop in 2014 of about 7.4mln t. 

Rain-damaged European wheat may hurt corn sales in Asia.
Australian western and eastern regions seeing less rain than expected – local crop forecasts being trimmed.
Drought seen trimming China’s corn output in northeast by about 3.5mln t – may increase import requirements.
Markets continue to be supported, on an almost weekly basis, by continuing tensions plus reports of a ‘Russian invasion ‘ in South-eastern Ukraine. 

 

Another week where markets remain divided between reports of bumper US corn / spring wheat yields (although harvest remains delayed by rain) and tension in the Black Sea region, despite Ukrainian peace plans currently being discussed – albeit that as we go to press reports of a Russian invasion have spooked the market again. 

 

Over the week, US corn market is weaker on the potential of record production, although wheat has gained on quality issues (SRW) and harvest delays in spring wheat, which has supported the KCBT exchange, dragging up CBOT in spread trading. Current peace talks over the Ukraine don’t seem to have weakened aggression at ground level, which normally excite the markets at the end of a week – although to date the market gives it back by Monday!

 

European markets have remained steady over the week, as traders are still trying to understand what they have, and more importantly where it will go! The blunt statement from Algeria threatening to reject ‘mixed origin cargoes’ will make their next tender very interesting, as the French will be unlikely to offer, the Germans are already heavily committed on quality sales to the Middle East, leaving the question, where do they buy it from? The MATIF wheat futures contract, given that most are unaware what quality they are actually trading, remains surprisingly supported, rising around €3/t on the week, but with the spec only being feed wheat at best  many are questioning what exactly the MATIF contract is or stands for anymore – other than some sort of French farce.

 

The UK remains gripped by the current wetter weather, delaying harvests in many regions and potentially having a major impact upon overall quality – although to date it has held up surprisingly well. We have seen photographic evidence of large amounts of wheat being stored outside at co-operative central stores. A sign of the size of the crop and the lack of an adequate export programme to move supplies off the market?   

 

In summary, a week without much fresh news to push the market either way. Good crop potential in the US keeps their markets under check, and in the EU, quality, or lack of it rules! Politics between Russia and the West, and what that means at ground level will provide market movements, both up and down, but fundamentally the market continues to be over-supplied, and, market lows will surely be tested again. 

  

LEAD SHOT IN WHEAT  

We have had several recent instances of flour millers and breakfast food manufacturers finding lead shot in wheat. The knock on effects of finding lead shot on delivery are obvious – rejection, extra haulage, loss of premium and the cost of cleaning – and if it gets into finished products the potential costs will be significantly greater still. In the light of this information we would strongly advise all farmers to check their stores and grain stocks thoroughly for lead shot.

The quality on most farms remains good and continues to give the millers satisfactory quality. A few of the later-harvested winter oats in particular have marginal bushel weights and should end up in the feed trade.
Growers remain price-resistant hoping for an upturn, which does not appear evident before January 2014.
•Harvest progress remains slow as weather holds back the combines.

 

•The quality of the spring beans combined to date remain good with the exception of high moisture content. Winter bean quality has improved too.

 

•Markets still remain slow from both sides, due to lack of fresh buying interest and very little being offered from the open market.

 

•Peas are difficult to place on the open market as buyers concentrate on buyback commitments.
Malting barley 

Crop 2014

  The EU malting barley harvest is drawing to a close.

 There are a few quality issues in Scotland and mid Sweden but no supply worries so far.
 Export demand for UK malting is non-existent for the Oct/Dec period. 
 However demand for the January-June period is good. 
 Malting prices are slightly down over the week but premiums are still good. 

 

Crop 2015

  The only winter malting variety in demand is SY Venture which is selling well.

 There is very little malting demand for Cassata, Flagon or Pearl.
 Concerto is currently the only distilling variety that is in demand, as Odyssey is still being trialled by the industry. This is likely to change as results come through.
 Irina the potential new spring malting variety is out performing Propino in trials and looks likely to be the next big brewing variety.
We still have a variety of winter, distilling and brewing contracts available for crop’15. 

 

Feed Barley 

 The overall competitiveness of  EU feed barley is improving given price movement and EU  production over recent weeks.

 The domestic trade is still seeing an absence of consumer demand with the current discount to wheat unattractive.
Rapeseed prices in the UK have firmed over the week driven by a lack of farmer selling. UK seed looks expensive versus European seed but with a lack of volume sellers prices have continued to rise and £240/t ex farm is obtainable in the vast majority of the country for spot positions. Crushers have been reluctant to buy at these levels so short covering merchants are dominating the trade.


 In Europe we see a similar stand-off between farmers and crushers but flat prices haven’t moved as aggressively as in the UK.  Consequently the MATIF futures contract has seen little movement. In summary the record EU crop and low prices compared to recent history creates a mixed picture with directionless trade.

Seed 


For growers looking for oilseed rape top-up deliveries, Gleadell is in a strong position to offer many varieties on a next-day delivery service. This includes Campus from KWS, which has been topping the trials this year for gross output and excellent tolerance to Verticillium wilt. Stock levels are now becoming tight on this variety due its popularity so we would urge growers to cover their requirements in order to avoid disappointment. Incentive also remains a popular variety with growers as it is the highest yielding hybrid on the 2014/15 Recommended List, with a solid all round package, high oil content and great disease resistance. A strong contender for recommendation next year is SY Harnas, a new hybrid from Syngenta, as it has performed well in trails this year. There is some seed available now, although this is limited. 

 

Now is the time for growers to be making varietal decisions if they are looking for early-drilled winter wheat seed to ensure availability and timely delivery. Additional seed treatments should also be added if required, Redigo Deter particularly is once again expected to be in short supply at some point during the season. 

 

KWS Glacier and KWS Tower continue to lead the way in the winter feed barley market due to their consistency and yield potential. For malting barley growers Talisman is one to watch as it is currently progressing into its second year of testing for full IBD approval. It is early to mature, has excellent lodging resistance and outstanding disease resistance. SY Venture is the highest yielding malting barley on the 2014/2015 Recommended list with full IBD approval for brewing. SY Venture is a consistently high yield potential in all regions, has good agronomics and is resistant to BaYMV. For six-row barley growers Volume has continued to perform well and once again Syngenta will be offering its cashback yield guarantee. 
 

Fert

 

Urea
Markets would appear to have stabilised but product will remain tight for the short to medium term. Continued demand from the US, India and Latin America  will keep the momentum going and the supply cuts in North Africa and Ukraine will continue to influence pricing. In the UK, over 50% of the Uurea market is covered and so buyers have taken a step backwards, happy to watch and see where the market heads in Q4. Supply issues may ease at some point and farms may become less willing to pay the higher numbers with falling grain prices, which could put pressure on prices towards the end of 2014.

 

AN 
It is becoming very apparent to all that the nitrates market is going to get squeezed across the whole of Western Europe and that manufacturers are now waking up to this fact. The Achema factory in Lithuania has one production line going down for maintenance in early September and as this is the preferred Imported option of choice to many in the UK this will only help to add fuel to a fire that is starting to develop. We have seen a £ 10/t price rise on imported offers over the last 10 days, manufacturers are starting to sense an opportunity and our advice is that customers at least take some cover at the pricing on offer today. The longer buyers” sit-out” the more this market will get pressurised, GrowHow is indicating another rise on Monday, 1 September and do not be surprised to see another rise as early as mid September. This “stepped” approach to price rises will continue while we see slow demand – after all we are still at the lower end of pricing seen over the whole of last year and even today the market is only where it was in June having traded sideways for over three months. Once volume buyers return to this market, do not be surprised to see some “larger” step increases implemented. 

 

SKW Alzon 46
A product used widely in Germany and a new approach being adopted by many now in the UK. The stabilised nitrogen fertiliser is environmentally friendly, involves less work, can be included in any fertiliser programme. Gleadell now has product to offer on a November / December delivered farm basis. If you are planning your options for next year this is a product well worth considering. With urea and ammonium nitrate prices firmer, Alzon is currently a very cost-effective alternative.  

 

SKW Piamon 33-S
A granular fertiliser unique to Gleadell in the UK, its 33N + 30SO3 analysis and guaranteed quality will suit most arable farm demands. The £ / € rate makes this an extremely competitively-priced product when compared to other N + S granular fertilisers, while the October and November delivery period and a later payment makes this an even more attractive buy.

 

Phosphates 
Internationally the market is firm everywhere, demand is brisk and likely to continue going into the autumn. In the UK we have seen an extremely busy week on DAP sales as farms continue to plant oilseed rape and are looking for ways to establish their crops as quickly as possible. Applying DAP will provide both the nitrogen and phosphate that young plants require in this period. Gleadell has DAP to offer in both bulk and bags for August delivery. Please contact your local Gleadell Farm Trader today for competitive terms
MARKET INDICATOR KEY: Upward market pressure Downward market pressure Neutral
£/€ £/$ €/$
1.2577 1.6565 1.3187
  Feed Barley  Feed Wheat
                   Beans Oilseed Rape
£ +/(-) £ +/(-) £ +/(-) £ +/(-)
Sept
14
98.00
108.00
Depending
on area
110.00 -
120.00
Depending
on area
183
- 241.00 -
246.00
Depending
on area
Nov
14
100.00
120.00
Depending
on area
113.00 -
123.00
Depending
on area
185
- 243.00 -
248.00
Depending
on area


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.