Market Report 26th November 2015
- Feed Wheat
- US markets continue to weaken as lower prices fail to encourage a pick-up in US sales. Exports continue to drag behind the pace required to achieve the current USDA projection, as talk of a fed hike in interest rates supports a stronger US$, leaving export values still heavily overpriced. The election results in Argentina could result in a more transparent trade, and as exporters are currently long of physical supplies (no licences) freeing up trade could further hit the potential of US exports, especially into South American destinations.
- EU MATIF prices are unchanged on the week, supported by the continued weakness of the euro, Cash premiums remain firm on another share of the recent Egyptian tender and a second Indonesian vessel in their line-up. The intake silos remain closed leaving traders wanting to deliver against MATIF having to ‘juggle positions around’ – French wheat is now cheap on a fob basis, as over 350,000t was offered to Egypt, although only 120,000t was booked, as the other offers lost out on the freight rate.
- In the UK, market activity, both for domestic and export requirements continues to increase pace. The reality of general farmer retention, and the oncoming seasonal logistical issues, should keep spot cash premiums firm, although as reported by DEFRA this week, the UK balance sheet still looks extremely heavy with a reported balance – for stock or export – of over 5mln t. Even though export interest has increased, the heavy supply will continue to weigh on values, especially with sterling over €1.42, and the knowledge that growers will eventually have to bring supplies to the market
- In summary, over the next few week cash markets should remain supported as seasonal issues provide challenges to all sectors. However, long-term fundamentals remain bearish with Global, EU and UK supplies all looking heavy. Politics has raised it’s profile, with the scale of exports out of Argentina unclear, and now the Russian-Turkey situation. Russia supplies much of Turkey’s gas and oil supply, and the majority of their wheat imports, although Turkey controls the waterway Russia needs for its Syria operation – one to watch
- Malting & Feed Barley
- Domestically the market remains quiet with little fresh demand seen
- Maltsters are still withdrawn for Crop15 and there are only a few trade shorts cropping up to bring any opportunity to move extra pre-Christmas tonnage.
- The market looks towards the supply from the southern hemisphere for any change in price direction.
- Reports from the Australian harvest suggest the availability of premium barley is below average following hot and dry weather conditions throughout September and October. This may bring some support to prices, March onwards.
- Beer sales seem to be improving in the EU which is good news for crop 2016 demand.
- Gleadell have a wide range of contracts available for Crop16, please speak to your Gleadell Farm Trader for more information.
- Firm currency and a growing global feed barley balance sheet continue to put prices under pressure.
- Recent North African feed barley tenders have been aggressively priced, bearing little resemblance to replacement values.
- The domestic market continues to operate hand to mouth as buyers await colder weather to create further feed demand.
- An interesting week on US soybeans, the market traded to new lows early on Monday following the Argentinian elections but reversed in the afternoon to post a higher close. We have since seen further gains which offers caution to bears with the market exposed to large short positions. Brazilian weather continues to be a talking point with too much rain in some key areas.
- Margins remain poor for crushers but we see very little farmer selling across Europe, MATIF has ticked higher on the week with little new input.
- Euro GBP has moved higher aiding UK prices. The market is having a slight pull back after the down trend got a little over extended.
- Quality issues in some areas and a slow release of free market parcels maintains the demand for winter varieties in England.
- Vessels of milling and feed oats continue to be loaded off the south coast which is beginning to clear the surplus in this region.
- A prolonged cold spell would help the industry.
- Markets for human consumption beans into the New Year remain hard to find.
- The difficulties the Egyptians have in accessing hard currency have caused problems for the execution of existing contracts.
- The market seems to have got used to the increase in the supply of feed beans with traded values unchanged from last week.
- Farmer favourite spring malting barley Propino is already proving to be popular with growers once again this year however new variety on the 2015/16 Recommended list RGT Planet is 7% higher yielding than Propino. RGT Planet is a consistent variety that performs well across all regions and has a solid agronomic profile.
- Mulika has been the most popular of the spring wheats so far due to its premium potential and grower confidence in the variety. KWS Kilburn is a high yielding feed alternative at 106% of controls, compared to Mulika at 99%. KWS Kilburn is a tall variety but is very stiff and has a good disease package making it easy to manage.
- An alternative wheat variety is Belepi that can be sown right through until the end of March. Belepi’s vigorous nature in the spring helps to compete with blackgrass and is branded “last in, first out” due to its earliness to harvest.
- Spring bean varieties Vertigo, Fanfare and Fuego all remain available.
- Activity in the Urea market has picked up internationally, all plants in Egypt are in production and the new line in Algeria is also running.
- Demand in Europe is surfacing as the market is a long way behind a normal season and the shipping window gets forever smaller.
- Cooperatives in France and across Europe sense an opportunity exists today to take some tonnes in advance of the spring application season which is now only 8-10 weeks away.
- Values have “dipped” in tenders sold this week and interest everywhere has suddenly picked up with a few large parcels having been traded into Europe
- Gleadell can offer Jan/Feb and March delivery with finance terms if necessary.
- CF continue to price aggressively for movement before the new year, despite the price increases announced by YARA in Europe.
- Importers are feeling this pressure, they have expensive stock in store and prices can do nothing other than remain flat.
- Before buying any tonnage all imported AN buyers should be considering their options – including UK product – as opportunities are out there to be taken.
Phosphate and Potash
- CF Fertilisers NPK compounds are competitively priced against blends and with a range of grades available there is a product to suit the majority of fertiliser programmes.
- Blended PK’s and straights have settled at current levels and it is likely they trade sideways through Dec / Jan until spring demand picks up.
GLEADELL LIQUID SOLUTIONS
- UAN is priced competitively for immediate tank fill and Spring deliveries
- 50m3 and 30m3 free tanks available – terms apply
- FOC finance options available
- Speak to a Gleadell Farm Trader or call the Fertiliser department on 01427 421241.
|Feed Barley £||Feed Wheat £||Beans £||Oilseed Rape £|