International Grain, Seed and Fertiliser Merchant

Market Report

Friday 10 November 2017

Feed Wheat

The USDA report released yesterday, again did little to shake the markets from their current bearish trend.  Although US wheat stocks were lowered, these were in the hard wheat classes and mainly reflected the recent Iraqi trade.  Chicago wheat, which competes with European supplies, continues to struggle to attract additional domestic or international demand, not helped by the surprising rise in US corn yields to a new record of 175.4bpa.  This equated to around 7.5mln t of additional production and should limit any additional feed or food demand for US Soft Red Winter wheat.

EU prices are mostly stable on the week, with a level of support coming from a weaker euro/US$ rate.  Brussels reported EU soft wheat exports a/o Nov 7th at just over 7mln t, down 25% on the year, and with the current rate projecting a yearly figure of around 25mln t (all-wheat exports), the current USDA projection of 28.5mln t is looking increasingly unrealistic.  Egypt again purchased only Russian wheat (120,000t) at its recent tender.  No French or Ukrainian supplies were offered, and Romanian wheat is unlikely to feature much more, given that the Russian business traded at $8-10 below Romanian replacement values.

The UK market, showing great resistance given the global situation, is actually trading marginally higher on the week, supported by a lower currency and a continued ‘more buyers than sellers’ scenario.  Market dynamics continue to trade a fairly balanced supply/demand position with limited demand in the deferred positions as end-users look for global conditions to pull values lower.

In summary, USDA continues to project abundant supplies of coarse grains, which gives US fund managers, the major market short, little incentive to excessively trim their short positions.  Northern hemisphere weather continues to post non-threatening prospects onto winter sowings, which leaves the markets mainly open to bouts of short-covering, as and when the funds decide to move.  Until then expect the sideward price action to continue with further re-testing of both US wheat and corn contract lows.

Malting Barley

The crop17 market is quiet across the EU and prices are little changed on the week.

Maltsters appear to be well covered in the run up to Christmas, but we expect some buying interest to return in the new year.

Prices for harvest 18 are losing support, but premiums are still attractive, and many growers have been booking a proportion of tonnage at these levels.

Newer varieties are receiving a lot of interest, including the new dual-purpose variety Laureate, and Chanson, which is a spring variety bred with the Null-Lox trait.

Rapeseed

The market chatter ahead of last night’s USDA report was calling for a generally bullish outlook for soy from the USDA’s revised numbers.  The reality was rather disappointing.  The market had looked for a cut in the yield, but this was left unchanged, with global ending stocks increased by nearly 2mln mt and CBOT soybeans closing at their lowest point for 10 days.

The Matif rapeseed market had rallied in recent days.  The lift in market prices was aided by the uptick in mineral oil, and this in-turn drove a round of bio-diesel pricing.  This saw the crush selling rape oil, and the lack of first hand sellers (farmers) across the continent has forced the crush to come and buy Matif futures to cover sales, but with last night’s disappointment from the USDA and a firming euro, the Matif looks likely to see a setback, at least in the short-term.

In the UK, the currency continues to add an additional level of complexity, and we have seen some significant volatility in sterling/euro since last week’s interest rate rise.  UK farm gate prices have seen a good uptick in the last week, partially aided by the FX, but these higher values are bringing fresh sellers to the market, and given the large volumes of rapeseed that are in Europe, it may well be sensible to add to sales at these higher numbers.

Oats

UK oat prices have trended higher in the last week with mills and merchants having covered their autumn/early winter positions.  However, as these positions have been filled, pre-Christmas bids have started to disappear, and the focus has moved towards the new year.  Farm sellers seem relatively uninterested in selling this position at this time.

The variable quality from harvest continues to make itself known, with high screenings and discolouring being a strong theme.  This poses questions as to what percentage of the crop will be of milling quality, and what will be sold as milling vs sold as feed.

Pulses

Feed bean prices in the pre-Christmas positions are getting heavily discounted, as there are a number of sellers chasing very few bids.  This is particularly evident in East Anglia where there is a £3 carry between Dec 17 and Jan 18.  At current levels beans are starting to calculate into compounders rations.  However, many have already bought other mid-range proteins in replacement of beans in their winter rations.

The UK is competitively priced to capture export demand for feed beans as and when it arises. However, this is unlikely to be until the new year as Spain and Italy have imported significant volumes since harvest.

Gleadell has marrowfat and large blue pea buybacks available for harvest 2018.  Please contact your Gleadell farm trader for further information.

Seed

The first week of November has already bought more rain than the whole of October for many.  The crops in the ground have now received enough moisture to get up and away, and now drier areas in the east where drilling had halted due to the dry conditions, can now recommence.

With this, more ground has now become fit to plant winter wheat into very good conditions.  We have good stock of Shabras, Hardwicke, KWS Siskin and KWS Crispin for immediate delivery, dressed up to spec with Vibrance Duo, our preferred seed treatment at this stage in the calendar.

It is still advisable to drill winter wheat varieties at this stage for maximum yield potential, rather than switching into spring wheat varieties, as tried with limited success in previous seasons.

Spring cereal prices are now widely available for most varieties.  Please contact your Gleadell farm trader to start to cover requirements.  Please let your farm trader know if you are planning to drill any spring cereals pre-Christmas, so that production can be planned to accommodate at the time of order.  Turbo, our phosphate/zinc growth promoter, should be applied to all spring cereals to help establishment and increase further nutrient uptake through an enhanced rooting system.

Spring wheats are tight across the trade, so please get requirements covered to avoid missing out.

Fertiliser

Granula Urea

Last week’s Indian tender saw offers $10/t above the previous tender, but was later scrapped, leaving suppliers with November stocks, which will need selling.  This may now force producers to accept lower values as all sites are up and running and they will want to keep moving to avoid building stocks, so some buyers may now sit out and wait.  Despite this, the factors driving the market higher have not changed, as India will need to tender again for the 800,000t it cancelled under this tender, although it may now hold off for a further 2-3 weeks.  Chinese production remains low as high coal prices continue and exports are significantly lower year on year.  The US, European and Turkish markets all remain short of urea for the spring and need to buy substantial quantities come January/February.

Ammonium Nitrate

CF released new terms this week indicating a £10/t increase to both straight nitrogen and nitrogen sulphurs.  Levels still represent excellent value compared to European markets, where 33.5% is offered at an equivalent to £260/t.  The £10/t increase will allow for stocks of imported AN which have been purchased earlier in the year to feature again, however with such firm markets, replacement vessels remain expensive in comparison to UK levels.

NPK

Phosphate markets firmed significantly over the week and importers have reacted, pushing prices of TSP and DAP up by £10/t.  Whilst demand has remained steady for PK and NPKs, the spiraling raw material costs has pushed both blends and CFs compounds up.

£/€ £/$ €/$
1.1295 1.315 1.164
Feed Barley £ Feed Wheat £ Beans £ Oilseed Rape £
Nov17 120.00-128.00 131.00-143.00 150.00 321.00-326.00
May18 124.00-134.00 138.00-150.00 157.00 327.00-332.00
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