Market Report 8th October 2015
- Feed Wheat
New crop weather concerns in the US and FSU has kept markets underpinned. Continued dryness in parts of southern Russia and the Ukraine is seen delaying winter sowings, and with reports that in key US winter wheat states soil moisture levels are declining, this has allowed the market to bounce off the lows. With the surprise drop in last week’s forecast for US wheat production, any further weather-related losses will increase fund activity, although US exports continue to run well behind last year, and US supplies remain heavily priced onto the export market. Support has also come from a weaker US$
EU futures have moved higher this week, ignoring the supply-demand for EU wheat. Egypt again purchased Black sea wheat in its recent tender, and with the thin French vessel line up, the market will closely monitor the Algerian tender to see at what level it trades. News that the first ever Black sea vessel is currently loading for shipment to Algeria just gives the French market another competitor to compete with. One of the MATIF delivery silos re-opened for intake, but given the current French market logistics, it may be very short-lived!
UK futures are mixed this week – down in the nearby position and slightly higher in the deferred. With the harvest all but over, the spot delivery premiums continued to be squeezed as growers / merchants remain actively looking for delivery destinations. As the apparent ‘harvest pressure’ eases, it will be of interest to see how the market pans out, and whether delivery premiums return to ‘near-normal’ levels. Although some export trade is ongoing, the UK balance sheet still looks top-heavy, and if the NFU’s comments of a crop size similar to last season are correct, it could get even heavier!
Dryness concerns seems to be ruling the roost at present, although the pace (or lack of it) regarding US and EU exports will need to be addressed. The USDA are out tomorrow with their latest supply and demand estimates, and although we expect several changes to the US balance sheet following last week’s reports, the overwhelming fundamental fact will be one of the same – too much wheat with little demand , with farmer selling reluctance and technical chart support all adding to a tricky market situation .
- Milling Wheat
- UK milling premiums are still lacking any real support in the short term given the weak demand from domestic millers and ample supply of usable quality.
- On that note, the AHDB’s second provisional quality survey this week showed that average Hagberg numbers this season averaged 293 seconds – representing a normal level of decline from the September results, comfortably above the required 250.
- The AHDB’s figures also highlight a spike in average protein year-on-year by 0.6% – to 11.9% – which comes in just above the 3-year average (excluding the anomaly year of 2012).
- Pre-Christmas space is tight in to the majority of milling homes, however the forward-carry in the market is placing much of the focus towards January onwards prices.
- Malting & Feed Barley
- Malting barley prices are currently lacking price direction and premiums have narrowed following firmer feed barley prices.
- Maltsters remain out of the market and there are few trade shorts at present.
- Growers with any unsold stock wanting movement before Christmas should sell into available markets sooner rather than later.
- It is possible that the EU could see a similar situation of big supply and limited markets next year, following expectations of an increase in area, big carryover stocks and a reduction in beer sales.
- The Feed barley market has found support from firmer export values over the past week for coaster sized vessels.
- However this is currently focused within a short catchment area of Lincolnshire, East Anglian and Southern Ports.
- The ‘big port’ market for larger sized vessels has seen a lack of demand of late, despite attractive prices still being offered in the Black sea.
- Consumer interest remains limited as the focus is still on hand to mouth buying for the current month and a lack of interest in the forward months.
- The US soybean harvest continues with no problems at present and runs ahead of last year’s pace.
- MATIF rapeseed futures have ticked higher on the week breaking out of the recent price channel with no strong clear driver however we do see some dryness in Australia and the palm oil regions. We’ve seen firmer soybean oil futures and also crude, all providing some help with a small uplift in prices.
- In the UK ex farm prices hit £260 for spot positions, we have seen some selling at these levels but many farmers continue to hold rapeseed looking for better prices later in the season.
- The market remains at a standstill for spring oats which are especially difficult to sensibly market in the south.
- Winter oats have better legs and growers should consider their marketing strategy with unsold parcels.
- South coast exports have slowed while the continent assess the milling quality harvested in Finland and Sweden.
- This week’s wet weather has put a hold on drilling in some areas but it has allowed growers to take stock on their current drilling and look for further seed enquiries. Gleadell have a number of varieties available for delivery as growers continue to look for top up orders.
- Redigo deter seed treatment remains available at present however availability is now extremely tight so we would urge growers to cover their final requirements.
- For growers looking for a wheat variety to go in following potatoes, root crops and maize there is Belepi – a winter wheat that benefits from a very wide sowing window from October right through to early April. Belepi is very vigorous in the spring, outcompeting blackgrass and yields have been competitive with other feed wheats of farm. It is also extremely early to harvest which allows for early oilseed rape entry.
- Tundra winter beans have been popular again this week. Tundra is a pale skinned winter bean with a pale hilum colour, its yield is 9% higher yielding than the current market leader, Wizard.
- After a period of relative inactivity in all global markets, buyers are finally showing signs of interest.
- Offers for Egyptian product have moved up and the latest trade concluded $7/t above the previous week, indicating we have perhaps seen the end of recent lows.
- In the UK, offers remain below where many bought last year and are competitive on a cost per unit basis compared to other sources of nitrogen.
- Extensively used across Germany and becoming more popular throughout the UK, this stabilised nitrogen fertiliser guarantees consistent high quality.
- Alzon is a large granule, averaging 3.5mm with a bulk density of 800kg/m3, with trials spreading accurately at widths of 32m.
- The stabiliser is added during production so is completely incorporated with each individual granule, allowing for earlier and higher application rates without the risk of nitrate loss or any luxury uptake.
- Developed for the Northern European climate, the nitrification inhibitor creates a sustained release of nitrate for up to 14 weeks and should be strongly considered as part of any fertiliser programme.
- Gleadell has a limited tonnage available in 600/1000kg bags for November – February delivery.
- AN across Europe has remained firm with recent price rises, although in the UK prices have been slow to follow after a long drawn out harvest.
- With only 35 to 40% of the UK nitrogen market complete compared to 50% at this time last year; there is an increasing pressure to execute a large tonnage in a shrinking window.
- Current prices present a good buying opportunity and should be considered before price rises are implemented in the UK.
- Blenders continue to offer tonnes below cost of production, presenting a good opportunity to cover tonnes at extremely competitive levels.
- Gleadell supplies GrowHow NPK, PK blends plus cost effective options such as Fibrophos and P-Grow. Please contact your local Gleadell farm trader or call the fertiliser department on 01427 421237.
|Feed Barley £||Feed Wheat £||Beans £||Oilseed Rape £|