International Grain, Seed and Fertiliser Merchant

Market Report

Friday 13 July 2018

Feed Wheat

Yesterday’s USDA report gave contrasting views on global grain production, as perceived crop increases within the US (mainly on revised higher acreage figures), were offset by lower crop production for foreign producers. Global stocks for wheat and corn were reduced by 5mln t and 3mln t respectively, although some of the crop numbers used by the USDA still gave plenty of scope for further downward revisions against local estimates, especially in the EU and China. Due to lower foreign production, export projections for the US were increased, promoting the impression that the US is open for business.

European prices have followed the US markets, initially lower on the week, prior to the bounce following the release of the USDA data. Concerns are still present over continued dryness in parts of the EU, which led to Strategie Grains reducing its 2018-19 soft wheat production by 7.5mln t to 132.4mln t, with the biggest reductions being forecast in France and Germany. Adding to the positive sentiment was news today that the Russian agriculture ministry has further reduced its estimate of the 2018-19 wheat crop to 64.4mln t. Despite the forecast, Russian wheat remains the price benchmark that other origins need to follow for the moment, as seen recently when Russia secured all the Egyptian 175,000t tender.

The UK old crop market is now purely regional. The North West is still attracting buying interest, whereas the North East, Midlands, East Anglia and Southern regions have more sellers looking for buyers. New crop values remain attractive for growers and maize imports are certainly now a factor to consider for some regions. As the harvest nears, and traders gain the first credible information on UK yield and quality, better market assessment can be made where the UK lies. Until then, we expect markets to follow other exchanges whilst sterling bounces around on the latest Brexit news. However, it is important to recognise that the UK crop may well be below 14 mln t and that we will be a sizeable importer of feed grains in 2018/19.

In summary, global stocks down, US stocks up – how do the markets react? The USDA firmly pinned its thoughts on the market, expecting the world, at some time, to come knocking at the US’s door. While this may be the reality, it may not be a feature until early 2019, as currently the erosion of price spreads between the US, the EU and Russia isn’t producing any significant improvement in US export sales and shipments. In addition, the likelihood of increased corn and soy yields in next month’s reports could increase US supplies further and, with the ongoing trade dispute with China, it may be of interest where the USDA believe all the supplies will go!

Malting Barley

Malting barley prices have eased in the second half of this week due to the weaker feed barley market and a lack of malting buyers given the uncertainty over this year’s crop. Concerns over the impact of the hot, dry weather on crop yield and quality are still present across the EU. However, first results from France indicate a better picture than some anticipated. Many buyers want to see more harvest results before entering the market. The spring harvest should start in the UK and Scandinavia towards the end of next week.

Rapeseed

Last night’s USDA report found little to fundamentally support US soybeans. With the China/US trade war showing no signs of easing, USDA cut its projected US export numbers by 6.8mln t and added an additional 5.3mln t on the forecast ending stock figure for the 18/19 harvest.

The only support came from the tightening of the old crop stock situation, but with no current weather concerns, the market needs a change in the political environment, or in the Trump’s rhetoric towards China, if beans are going to stage a run back to $10.

In contrast, the rapeseed situation is very different. European crops continue to get smaller, with the French and German estimates being cut sharply again this week. The yield reports we have heard so far from early-cut UK crops are disappointing and, with parts of Scandinavia looking disastrous, EU production is now set to decline circa 10% year on year.

There is similar news coming out of Australia. Whilst the Black Sea region does not appear to have suffered as badly, oil yields from these crops are down 2% from last year. With good winter biodiesel demand and the anti-dumping legislation now in place for Argentine SME, there is good underlying support for rape oil.

So, on one hand we have a bearish US soy situation, and on the other, extreme volatility being created by Trump’s politics, off-setting the outright bullish rapeseed fundamentals for the winter! For the UK farmer, current ex-farm prices at circa £300/t are pretty good, but the market is still offering a decent carry for those who can store.

Oats

The UK is still yet to see any volume of harvested oats enter the market. Reports are that the earliest winter oats are still a few days off being ready.

Trade on new crop oats remains very quiet, with no oats being offered on farm or from merchants, as the UK waits to see whether the concerns over yield come to fruition. This is especially relevant on the later-drilled spring oats.

Pulses

Beans have had a choppy week following wheat futures. Values of £180/t plus ex farm are available for most growers for November ’18 onwards. Despite these higher numbers, farmer selling has been non-existent, with many concerned about the impact the persistent dry weather has had on yields, particularly on spring crops.

Demand from compounders has been thin, with beans not looking particularly competitive against other proteins at these levels.

Pea crops have been more resilient to the drier weather and, on the whole, most crops look well. Pea buybacks are available for harvest 2019, please contact your Gleadell farm trader for further information.

Seed

Seed Catalogue

Struggling to decide on a variety section for next year? Look through the Gleadell seed catalogue with the latest views and advice on all our main options this autumn – http://www.gleadell.co.uk/products/seed/

Wheat – What’s New For 2018?

  • Elicit – Group 3 with yield on a par with KWS Barrel, the current highest yielder in this sector. Elicit has a much-improved disease package over existing Group 3s, especially with a 6.4 for Septoria and a 9 for yellow rust. Elicit also has midge resistance.
  • KWS Jackal – Soft Group 4 recommended for the north, has midge resistance.
  • Elation – Soft Group 4 – has midge resistance.
  • RGT Gravity – Highest-yielding wheat in first and second slots and heavy and light land, tillers well and is very consistent. RGT Gravity is resistant to midge.
  • Gleam – New high-yielding feed wheat from Syngenta. Good early driller and very high yield potential. Agronomics are good, and Gleam is midge resistant.

Product Focus – Vibrance Duo

Vibrance-Duo is the go-to single-purpose wheat dressing for growers who struggle with establishment or are delaying drilling due to grass weeds. Made up of two fungicide active ingredients, one of which s an SDHI (Sedaxane), which has a growth stimulation effect on the plant at emergence and in the early growth stages. When coping with stressful situations and in general for maximum yield potential, the more root structure a crop has, the more chance it has of nutrient and water uptake. Vibrance Duo facilitates this. Syngenta trials have proven that more often than not that crops treated with Vibrance Duo out yield others by up to 0.25t/ha. This provides a very healthy return on investment for growers.

Fertiliser

Granular Urea

Another week has passed with no sign of a new Indian tender. As the market waits for an announcement, we have seen little change this week to pricing.

With the continued lack of Chinese exports and concern over the availability of Iranian product, India may have to look elsewhere to secure its requirements and buy more expensive product.

North African producers are all-but sold out for July and are maintaining current offers around $295/t FOB for August shipment.

At this value, replacement on farm values in the UK are now circa. £285/t for August delivery, but there is little to no interest at this price today.

In general, the demand for nitrogen products has eased this week now that the first signs of harvest are here.

Ammonium Nitrate

In Europe, Borealis has moved its price for 33.5%N up to €273/t, for November delivery, representing a €10/t increase on its previous October terms.

Yara is yet to announce new terms, but at this new level that values the equivalent UK 34.5% now at £257/t on farm.

After last week’s increases, CF has left its November delivered prices unchanged, offering exceptional value in the current market. CF’s competitive levels continue to discourage importers from bringing in significant quantities of imported AN. Latest terms also indicate imported product is unavailable until Sept-Oct.

P&K

Both markets remain firm as demand starts to appear for autumn applications and blenders continue to firm values in line with the cost of raw materials.

This year, more than ever, growers are looking for alternative products to replace more conventional bagged PK fertilisers.

Gleadell has seen growing demand for products such Fibrophos, P-Grow and Kalfos, which not only offer a good source of P&K, but also a range of secondary nutrients and trace elements.  Working out at an exceptionally low cost per unit, these alternative fertilisers offer fantastic savings over conventional bagged fertilisers, before considering the added benefits of the secondary nutrients and trace elements.

Applied onto stubbles and grassland by experienced contractors, now is the time to be looking at your PK requirements.

£/€ £/$ €/$
1.129 1.312 1.162
Feed Barley £ Feed Wheat £ Beans £ Oilseed Rape £
July18 130.00-140.00 156.00-168.00 174.00 302.00-307.00
Nov18 143.00-153.00 163.00-173.00 187.00 312.00-317.00
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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Company Number: 534118