International Grain, Seed and Fertiliser Merchant

Market Report

Thursday 20 April 2017

Feed Wheat

US wheat prices are about $5 lower on the week, due to more favourable weather patterns.  Continued rains sweeping across the US southern plains have improved crop ratings, providing impetus for fund managers to extend their short position in US wheat markets.  Although beneficial to the drought-affected areas, the rainfall has slowed spring wheat plantings, and is seen delaying early corn and soy plantings in some regions.  Heavy rain in Canada is likely to reduce the all-wheat area to a six-year low, as farmers switch to more profitable canola crops.  In Argentina, a forecast of an 8% jump in area to 5.5mln ha could produce a wheat crop of around 17.5mln t, an increase from this season’s 16.3mln t, and would likely take some Brazilian demand away from the US.

EU prices are slightly lower on both crop years over the week.  Old crop is still a technical market, as traders try to unwind the large open interest ahead of the higher revised Matif specification for Sept 2017.  Although the US weather has turned more favourable, EU weather has shown the opposite.  Growing concerns over dryness in the west, and recent snow and lower temperatures in the east, have traders on ‘stand-by’ over new crop prospects, especially with the knowledge that this year’s ending-stocks (if you believe the USDA) equates to only 3-4 weeks’ usage.

UK prices are slightly lower despite another hike in sterling following Theresa May’s apparent U-turn in calling for a snap election.  The move higher makes imports more attractive, and further reports of imported feed cargoes being concluded will provide a ceiling price on old crop values.

Domestic buyers are still condensed to the spot market, with buyers unwilling to indicate a carry going forward and with sellers looking to sell the deferred positions with a carry.  Someone will have to give soon one way or the other!

In summary, there is little fresh to report.  Record global stocks provide a level of security against any new crop issues, and although the US outlook has improved, spring crops are not even planted yet!  EU weather concerns remain, although some weather reports indicate that next week could provide needed moisture for France and the UK.  A potential repeat of last year’s French crop debacle would mean a significant shift in the EU’s balance sheet, at a time when all other key exporters are likely to have increased inventories to sell.  In short, it’s about weather.

Malting Barley

UK malting crops look good to very good on average, with many areas receiving much needed rain last weekend.  However, more moisture is needed soon if favorable growing conditions are to be maintained.  The weather forecast looks colder for the next couple of weeks, but is set to warm up mid-May, and rainfall is expected in most parts of the UK next week.  Reports from France continue to be positive, but like the UK, there are concerns over the lack of rain.  However, like the UK, the weather forecast is predicting rain next week.

Plantings in Scandinavia have progressed well and are close to completion with no weather concerns at present.

The market is firmer on the back of the dry weather and sellers are few and far between.  If everywhere receives some rain in the coming weeks, prices could quickly drop back.

Rapeseed

Rain and flooding issues in Argentina have largely been discounted in the past week, with storms confined to the north-east and a drier outlook in longer term forecasts.  Whilst this weather threat may have initially offered support to the soybean complex, funds have negated any weather worries as they continued to sell soybeans, and now hold a 4 mln t short position.

Political murmurs regarding the US administration halting bean oil imports from South America could threaten local prices further and increase the usage of domestic US beans.  Shuffling of product on a global level does little to detract from stocks that remain 10 mln t higher than a year ago.

European OSR markets have this week also become weather focused, as both the UK and France have seen little precipitation recently, although current forecasts now look more favourable for rain.  Last Tuesday’s call by Theresa May for a snap election has strengthened sterling against the euro by over 3%, and this has translated into a decrease in UK farmgate prices by £8.  Euro weakness remains a threat with the first round of the French election due this weekend.

Oats

The favourable weather conditions have allowed for significant progress to be made on the drilling of spring oats.  Winter crops are looking well, but any further protracted periods of dryness may start to cause concern.

Old crop oat supply continues to tighten as the millers take cover to see them through to harvest.  New crop demand is slow as the millers assess supply.

Pulses

New crop bean prices are £1 lower on the week as a result of the firming of sterling against the euro. Beans look expensive against other protein sources, and therefore buyers remain unwilling to dip their toe in the water and take any cover.  The vast majority of new crop peas have been drilled into good conditions, and the lack of recent rainfall is not a concern as there is adequate soil moisture in most regions.  Gleadell new crop pulse pools are still open.  Please contact you Farm Trader for further information.

Seed

In March 2017, the European Commission submitted new proposals to a Standing Committee of Member States called SCOPAFF (Standing Committee of Plants, Animals, Food and Feed), to ban all outdoor uses of neonicotinoid seed treatments in non-bee-attractive crops such as wheat, barley and sugar beet.  This ban can be blocked, but it is imperative that all growers who will be affected contact their local MP and MEPs in their area to express their views.  How will it impact on your ability to grow a high-quality crop of wheat, barley, or sugar beet?  Why do you use them?  What are the alternatives?

To find your local MP, input your post code into the box on the right-hand side of the screen at http://www.parliament.uk/get-involved/contact-your-mp/.  To find the MEPs for your area, take a look at http://www.europarl.org.uk/en/uk-meps/your-members-in-the-european-parliament.

Gleadell has a number of spring oilseed rape varieties available for growers looking for later drilling options.  We have two hybrid varieties available, Dodger from Bayer and Mirakel from DSV, both having excellent spring vigour to get them through the establishment period.  Lumen, another variety from DSV, is a new high yielding spring hybrid that is the earliest maturing variety available with very high oil content and strong scores for stem stiffness and lodging resistance.

Linseed remains available for both open market and buyback contracts; Batsman has excellent yield and is very early to mature.

Daytona and Campus large blue peas also remain available.  Both are market leaders with good agronomics and colour retention.

Small seed orders are very active.  Gleadell’s Small Seeds Site offers growers a wide range of over 50 high quality mixtures and straights to cater for all your small seeds needs.  Bespoke mixtures can also be made to suit individual grower needs upon request.  Visit https://store.gleadell.co.uk/ for more information.

Fertiliser

Granular Urea

After a short period of support due to the recent Indian tenders, this week has been a quiet week in global urea markets.

With sales into the recent tender, some producers are in a comfortable position through until mid-May, and are able to reject lower offers.

In the UK, prices remain unchanged as the final positions are being sold.  When new season offers are released, prices will be heavily influenced by the change in currency.

The drop in the £/$ from this time last year from 1.5 to 1.28, equates to an increase in urea prices of approximately £30/t, so where does currency head next?

Ammonium Nitrate

The increase in demand for top ups and the grassland sector has limited stocks of imported material.

Prices remain unchanged and CF is rolling the current Nitram offer for April delivery into May.

At present CF is in the best position to get product onto farm promptly as importers await the arrival of new vessels.

CF has reviewed the price of a number of its NPK compound grades to reflect the growing demand for after-cut products.

With the premium between blends and compounds narrowing, it is well worth taking advantage of the quality of a compound NPK.

ENhancePro

One of the leading foliar sprays in the UK for ENhancing proteins in milling wheat.  ENhancePro is a concentrated foliar spray available for delivery in bulk and IBCs.

ENhancePro terms are now available from your Gleadell Farm Trader.  Don’t let your crop fail at the last hurdle.

£/€ £/$ €/$
1.19 1.2795 1.075
Feed Barley £ Feed Wheat £ Beans £ Oilseed Rape £
May17 116.00-126.00 143.00-153.00 170.00 329.00-334.00
Nov17 108.00-118.00 127.00-137.00 155.00 296.00-301.00
NB: Prices listed may vary depending on area.

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

“Although Gleadell take steps to ensure the validity of all information contained within the Gleadell Market Report , it makes no warranty as to the accuracy or completeness of such information. Gleadell will have no liability or responsibility for the information or any action or failure to act based upon such information.”

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

Gleadell 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.

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Lindsey House, Hemswell Cliff,
Gainsborough, Lincolnshire DN21 5TH.

Company Number: 534118