Market Report 11th December 2014
- Feed Wheat
Russian grain exports as at 3 Dec reported at 18.27mln t – including 14.6mln t wheat, 2.6mln t barley and 0.82mln t of corn.
Ukraine grain exports as at 3 Dec reported at 15.6mln t – including 7.5mln t wheat, 3.3mln t barley and 4.6mln t of corn.
Statistics Canada reports Canadian all-wheat production for 2014/15 at 29.28mln t, up from 27.48mln t in October estimate.
Russian regulator yet to start using new rules for grain exports – deputy PM states ‘not discussing export restrictions’.
UK regains export status in October (first month for almost three years) but season-to-date figures still place UK as net importer.
French soft wheat export reach season high of 1.7mln t in October – crop bureau FranceAgriMer increases non-EU export projection, lowers carry-out stocks.
USDA trims US corn stocks, slightly raises US wheat stocks and increases global stocks of both commodities.
Kazakhstan cuts grain export outlook as rains dent crop quality.
Markets have re-traced off the recent high, amidst diminishing concerns over the threat of Russian export restrictions. Analysts report that Russian grain exports are expected to remain high during December, fuelled by a weaker rouble. Given the statement from the Russian deputy PM that the government is not considering any form of export restriction, this would point to early next year before any further move could be expected. Add the 30 days notice required in the official journal and this would allow exports through February, by which time any interruption to the market would be significantly reduced.
EU markets have also weakened despite the record export pace, pressured by the news from Russia and an improving euro / US dollar exchange rate. A season-high figure of 1.7mln t of soft wheat was exported from France during October, supported by the first shipment of the season to Egypt. These and recent sales to the US and Korea has resulted in the French crop office, FranceAgriMer, increasing its non-EU wheat export projection for the season and trimming end-season stocks accordingly. Opinion remains mixed on how long the export pace can be maintained, both in terms of quality and actual demand, as much as the recent import interest was due to stock-building on the perceived threat to Black Sea grain exports.
UK values are also weaker on the week, although spot premiums remain high on continued short covering. The rally in prices has kept end-users away from what they see as an over-inflated market, while farmers are relaxed sellers on firming prices.
In summary, the Russian news could be a major move for future pricing. If the timetable above is realised, the horse may well have bolted before exports doors are shut, as the current pace would project exports to the end of February close to the current USDA forecast. That would mean any announcement would be less significant to the market. The USDA, as expected, has confirmed an abundance of grain stocks which, even allowing for the current concerns over new crop prospects (US/Black Sea region), argues for lower prices based on the sheer weight of 2014/15 global supplies. The news from Russia that potential export restrictions may be imposed made the market. The reality is this threat is diminishing and, if it doesn’t materialise, we could see further price falls.
At last some colder weather has arrived, encouraging shoppers to reduce porridge stocks on supermarket shelves, leading to reordering.
The oat market crawls along as the millers steadily continue to assemble their forward stocks at prices that have remained in a tight range in recent months.
Uncertainty remains over spring oat planting levels in the south of England, which could affect 2015 supply and demand figures.
- Values are virtually unchanged. Supply is still difficult to find for both feed and human consumption.
- The new crop planted area looks like it will be significantly higher than 2014-15, as we have mentioned previously, premiums over wheat reflects this increase.
- With demand domestically being small, most major consumers have reformulated their rations to include cheaper sources of proteins. The premiums being offered at present are an attempt to bring these consumers back to the domestic market.
- Malting & Feed Barley
The UK barley market remains dominated by export homes as a lack of interest continues in the domestic market.
Old crop prices have seen little change on the week and have not been susceptible to the drop seen in wheat prices whilst export demand remains for UK barley.
Total barley exports for October were up circa 113,000t compared with September, aided by increased exports to Algeria, Saudi Arabia and Portugal.
- UK export data shows that total barley exports for October were 136,281mt.
- Old crop malting prices have stabilised for now.
- Domestic demand is limited pre-Christmas, UK maltsters are full and struggling to intake the barley they have bought for December.
- Malting demand in the New Year is slow and UK exports are increasingly reliant on third country demand as the majority of EU maltsters are full.
- Unfavourable weather in Australia has caused delays to harvest and concerns of damage to grain quality.
- Growers should take advantage of the colder weather to condition their stored malting barley.
- New crop prices have felt the pressure from the weaker old crop market but premiums remain attractive.
- In Russia, harsh winter conditions are increasing the risk of damage to winter plantings.
- Black-grass issues and wet weather have led to increasing demand for crop 15 malting barley contracts.
- The spring malting area is predicted to increase by around 10%.
- Irish winter barley plantings are estimated to be 25% higher than last season, overtaking estimated wheat plantings for the first time.
- Gleadell has a wide range of malting varieties available for sowing this spring, including the new high yielding brewing varieties, Irina and Planet.
US soybean futures rallied throughout the early part of the week, helped by strong export figures. On Wednesday the USDA released its latest figures, with US exports increased by just over 1mln t but US ending stocks still remain at the highest level since 2006/2007. Beans closed lower following the report.
There is little new to add on the European markets. The MATIF rapeseed contract remains in a tight trading range with no clear direction at present, while the physical market represents a fundamental picture of plentiful supply but a lack of volume sellers at current levels.
- Seed & Fertiliser
Seed Market Report
Enquiries have remained balanced this week between spring and autumn 2015, after the release of the 2015/16 HGCA Recommended List.
High yielding spring malting barley, KWS Irina, has remained popular due to its yield potential and disease package as it has no disease weaknesses. Irina is rated 8 for mildew and 7 for Ramularia. Propino, although lower yielding, has also been of interest to growers. Propino is the highest yielding spring malting barley on the 2014 HGCA Recommended List with full IBD approval for brewing.
Belepi and KWS Willow continue to be available for spring wheat growers looking for a variety with sowing flexibility.
Looking ahead to autumn 2015, this week Gleadell has launched terms on Incentive and Campus winter oilseed rape varieties. Incentive has medium maturity and rapid autumn development, combined with a high yield potential and good oil content. Campus is new on the 2015/16 Recommended List and is a solid all-rounder, again with a very high yield potential and excellent oil content. Please speak to your farm trader for more information on either variety.
New winter wheat varieties Reflection and KWS Lilli, which were launched last week, have been very popular with growers. Reflection, from breeder Syngenta, is the highest yielding variety on the 15/16 Recommended List and has good disease resistance and earlier maturity than its competitors and a high specific weight. KWS Lilli has an excellent untreated yield, good grain quality and a great disease package.
Fertiliser Market Report
As the year draws to a close the market has become quieter with minimal trades into the US and Europe. From sales that have taken place, levels for Egyptian product are at $345/t FOB, slightly down on previous weeks. It is worth noting that there is still a strong possibility that Q1 2015 will provide some uplift for global urea prices, as Egyptian product for export remains tight and key northern hemisphere markets will be requiring spring tonnage. With an import programme in full flow, Gleadell can offer both granular and prilled urea for Jan/Feb delivery.
A product used widely in Germany and one that is gaining popularity in the UK. This stabilised nitrogen fertiliser is a large granule, averaging 3.5mm with a bulk density of 800 kg/m3. A nitrification stabiliser is added during the manufacturing process so it is completely incorporated within each individual granule. This environmentally friendly product can be applied in fewer passes and it can be included in any fertiliser programme. Gleadell can offer Alzon on a February-delivered farm basis. Alzon should be strongly considered as part of a fertiliser programme.
In the UK, the market continues on a similar trend, with pockets of imported ammonium nitrate continuing to trade at below replacement value, as importers look to empty stores in anticipation of new cargoes. Imported product is trading at around a £10/t discount to UK product, but with product on the ground GrowHow will be in a strong position as we enter January as prices get squeezed and deliveries become ever more difficult at short notice.
UK blenders this week released new prices for TSP and MOP, up £5/t on previous levels. With this and increasing nitrogen prices in mind, we expect to see a steady increase in NPK values as we enter the new year. There is a huge UK spring market to service and to avoid disappointment Gleadell would advise taking product as soon as store space becomes available. We can offer flexible finance options to encourage this. It is also worth noting that with logistical problems expected in spring, blenders have warned that only standard blends will be available from January 2015 to maximise efficiency. If you require any specific blends it would be a good idea to get these ordered prior to Christmas.
|Feed Barley £||Feed Wheat £||Beans £||Oilseed Rape £|
|Dec 14||111.00 - 121.00||119.00 - 130.00||204||254.00 - 259.00|
|May 15||116.00 - 126.00||124.00 - 134.00||209||258.00 - 263.00|