International Grain, Seed and Fertiliser Merchant

Market Report

Thursday 21 September 2017

Feed Wheat

Wheat futures markets continue to trade within the recent range, with little to suggest that they will break out either way at present.  Egypt’s GASC import agency bought 175,000t of Russian wheat at its recent tender and paid $10/t more than in the previous one.  The higher price was mainly linked to increased freight costs and to sellers building in a risk premium, as the risk of rejection for issues such as ergot and poppy seed admixture represents a serious potential cost.

In Canada and Australia crop sizes are being downgraded, whilst in Russia the crop continues to grow and capture most available export business that will take Russian wheat.

In Europe, German wheat is struggling to find export outlets, and whilst French wheat is more competitive than a fortnight ago, it still remains difficult for French wheat to buy any significant demand.  In short, the EU exportable surplus is building and not being shipped.

In the UK, harvest is still not complete, albeit less than 5% remains to be combined.  Sterling seems underpinned after its recent rally and UK wheat is not competitive for export.  It is evident that we will be a net importer again this season.  Regional feed wheat prices vary greatly and quality premiums depend on who wants what and where they want it.  It does appear that nationally there is enough wheat of milling quality to satisfy demand, but there might not be enough in certain regions, which means that wheat will have to travel further than normal to fulfil this demand.  This is a particular factor in the central south and south-west milling wheat markets.

Malting Barley

There has been little progress with the spring barley harvest in Scotland this week.  Aberdeenshire has roughly 45% left in the field and 5-10% still to do elsewhere.

The market has moved higher this week due to the quality problems in the EU and the resultant tight supply and demand situation.

Looking ahead to crop18, the planted area is predicted to be little changed on this year. However, there are currently some good prices on offer due to the 2017 crop, and many growers have been taking advantage of these high premiums.

Gleadell is looking to contract a new variety called Diablo for harvest 2018.  Diablo is a variety from Limagrain, which looks set to be about 3% higher yielding than Planet, and has been bred as a dual-purpose variety which aims to meet the demands of both the brewing and distilling markets.  Please speak to a Gleadell farm trader if you have interest in contracting this new variety.

Rapeseed

StatsCan has released its latest production estimates, revising canola production upwards.  Despite the dry summer weather, Canada is now forecast to produce a bumper 19.7mln t, up 0.5% on last seasons near record.

Australia however, is still suffering with dry weather and frosts, and the forecast is for more of the same into October.  This is having a negative impact on the potential production this campaign.  So, whilst things are looking really good in Canada, Australian production could decline by as much as 30% year on year.

Coceral has upped its European crop estimate this morning to 22mln t, up an additional 500,000 with French production being revised higher.  This comes as European crush demand could potentially decline by upwards of 1mln t, following the EU commission’s ruling to cut the anti-dumping tariffs on Argentine bio-diesel. It was noted this week that reported exports of bio-diesel from Argentina are already increasing, with circa 150,000t in the vessel line-up destined for Europe.

Despite a 2mln t UK harvest, our domestic consumers continue to import as farmers withhold material from the market.  Both crushers have brought in foreign material, with Cargill about to discharge its delayed 33,000t of Romanian rapeseed in Liverpool.

The UK’s balance sheet, like the rest of Europe, is looking increasingly burdensome.  The market is already pricing the potential declines in Australian production, and without an additional crop problem or some political intervention, the threat to the market is looking increasingly to the downside.

Oats

Scotland has an estimated 70% of oats still to harvest, the vast majority of which are spring oats.  Results from their winters and early springs are encouraging, however the crop is only just becoming fit in many regions.

The harvest in England is all but finished, and looking at the samples from our laboratories, the top performer has been Mascani, averaging 53kg/hl from over 250 samples.

The market looks towards the Scottish harvest to give direction for UK ex farm price action for the remainder of the marketing season.

Pulses

The bean harvest remains very slow in the north of the UK.  Quality remains an issue with insect damage being the main problem.  Feed prices have fallen back with the weight of downgraded material, and human consumption premiums have risen for the opposite reason.

The rise in sterling has stopped any further feed exports for the time being.

Seed

Winter Wheat

Winter wheat is now in the main sowing window, with most varieties well suited to being drilled from now onwards.  Zyatt, Skyfall, Siskin and Lili will take the bulk of the quality wheat area with Gravity, Kerrin, Shabras, and Graham taking the majority of the feed demand.  Hardwicke is available for growers looking at a high yielding soft wheat, with the potential of a soft premium and very short straw for maximum standing power.  For specific advice on which variety will best suit your personal situation, please contact your farm trader or the seed team.

Seed Treatments

The weather has been unpredictable to say the least over the last few months.  If this continues, it is imperative to get winter crops off to the best start possible. Using Turbo, a specific phosphite and zinc complex, will allow for faster emergence and increased root growth to help cope with extremes of stress these crops may experience.

For growers thinking about delaying drilling until mid-end of October, the inclusion of Vibrance-Duo on the seed has also been proven to help wheat emerge faster.

Seed Rates

Remember when ordering winter cereal seed that the thousand grain weight can have a massive impact on the final tonnage of seed required.  If you take a nominal seed rate of 350 seeds/m2 and a wheat TGW range of 40-50g, it equates to drill settings of 140 kg/ha – 175 kg/ha.  Gleadell will always be in a position to advise of TGW at point of order or confirmation pre-delivery.

Hybrid Rye

For best results hybrid rye needs to be drilled ASAP.  Please contact Gleadell to see what seed is available for prompt delivery.

Fertiliser

Urea

The market has seen further increases in prices this week, as traders continue to step in and purchase further requirements.  First thoughts were that this rally would run out of steam as short positions were covered. However, as time moves on, the increasing opinion is that these prices could be sustained for a longer period and any correction is not just around the corner.  UK markets have reacted, with suppliers increasing values to reflect today’s replacement cost and granular urea is now at the highs seen last season.

Ammonium Nitrate

New CF terms are yet to be released, but Yara, after pulling terms on Monday to evaluate the impact of the increases seen in the urea market, has released new terms in Europe.  New list prices for nitrate are showing increases of €20-21/t on previous levels and 33.5%N in bulk is now trading at the equivalent to £238/t, although the UK market for the majority of this season has run behind Europe.  The likelihood is that CF will follow YARA with increases of its own, and that offer will remain below those in Europe, continuing to offer the UK grower excellent value compared to European levels.

UAN Liquid

As FOB values for both urea and AN have seen significant rises, global liquid levels are starting to see similar increases on latest trades.  Liquid in the UK is still trading at significant discounts to both urea and AN and yet to implement the most recent increases.  For a very short time only, both autumn and spring tank fill is available from Gleadell Liquid at exceptional values compared to other nitrogen sources.  To find out more about Gleadell Liquid please speak to your farm trader or the fertiliser desk on 01427 421241.

£/€ £/$ €/$
1.1321 1.3489 1.1911
Feed Barley £ Feed Wheat £ Beans £ Oilseed Rape £
Sept17 115.00-123.00 129.00-140.00 151.00 312.00-317.00
Nov17 117.00-125.00 131.00-141.00 153.00 316.00-321.00
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