International Grain, Seed and Fertiliser Merchant

Market Report

Thursday 23 November 2017

Feed Wheat

US markets have managed minimal gains on the week as signs of fund short-covering entered the market with the long Thanksgiving weekend holiday ahead. Although old crop US demand remains lacklustre, some support is surfacing from lower US winter wheat crop ratings and, with moisture levels seen also lower y/y, a few concerns are being raised over new crop production, especially with another expected drop in US wheat plantings for the 2018 harvest.

EU prices are marginally weaker on the week, with little change to report re market dynamics.  Tunisia’s recent purchase looks like Black Sea origin with the price well out against French execution.  With the continued aggressive stance seen from the region, crop bureau FranceAgriMer recently lowered its projection for French non-EU soft wheat exports from 10.2mln t to 9.9mln t, increasing carry-out stocks by 0.1mln t to 3.3mln t in the process.  Total EU soft wheat export as of last week were still down 23% y/y, reported at 7.5mln t.

UK futures are also slightly weaker on the week, although have bounced from the three-month low witnessed earlier in the week.  The market still remains driven by merchant short demand. As the seasonal logistics kick-in’ growers able to load over this period may be able to take advantage of decent spot premiums against the deferred positions, where long-holders are more confident to offer supplies into the market, albeit at the market carry.

In summary, as the US tuck into their turkey, global markets continue to show little change in their grind-lower trend.  Northern hemisphere weather, in general, remains non-threatening, although southern hemisphere production remains uncertain.  EU markets and export prospects remain at the mercy of aggressive Black Sea shipping campaigns, and the UK, with a balanced demand/supply sheet is seen trading in a narrow range.  Farmers who want to take risk off the table should look at increasing their percentage sold in the light of the current market.

Malting Barley

The differential between pre- and post-Christmas prices has narrowed in the 17/18 market due to a lack of sellers this side of Christmas, supporting prices in the nearby.  Nov/Dec buying interest is limited and mainly from trade shorts, while there are more first-hand markets available in the new year.

17/18 prices in the EU remain firm on the back of a tightening supply and demand situation.

Growers are reminded to aerate their sheds on cold, dry nights to avoid quality degradation.

The 18/19 market is little changed on the week.  The spring barley area in the UK is expected to decrease slightly on last season.  However, in the EU as a whole, the area is expected to increase, most notably in Scandinavia.

Rapeseed

With Thanksgiving in the US this week there has been little news of note from the soy complex.  We continue to keep a close watch on developing crops in South America, although whilst it seems unlikely that last year’s record production will be repeated, we will still see ample supplies this campaign.

Prices on the Matif rapeseed futures are largely unchanged on the week with UK domestic prices coming under pressure from the rally in sterling.  The pound found support last week as inflation continues to underpin thoughts about further interest rate rises, and on the back of news that the UK is reportedly getting close to reaching a financial settlement with the EU on the Brexit divorce bill.  Despite the OBR downgrading its growth forecast, sterling has maintained its strength after an uneventful budget on Thursday, taking the shine off what has been the recent market highs.

Pulses

Pre-Christmas bids for feed beans are few and far between and as a result there is a wide carry to the new year.  Values post-Christmas seem to have remained supported with some buying interest returning on the back of the rise in rapemeal and DDGs over the last week.

Human consumption prices continue to drift lower on the back of limited demand.  Most of the processing plants have covered their requirements until the middle of January 2018, when Sudan’s import restrictions come into force.

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

Seed

There is strong demand for spring seed in the run up to Christmas with spring barley in very high demand, leading to Laureate being sold out.  We would urge growers who have sorted out their cropping plans for spring sowing to get their seed requirements covered. We would not want to see buy-back customers missing out on their preferred varieties.

Pea varieties Campus and Daytona are available for growers looking at large blue buybacks.  Campus has superior standing ability, but both provide a solid all-round agronomic package.

Higher-value marrowfat growers have Kabuki available to honour their buybacks.

Spring bean variety availability is very variable.  We would urge growers wanting a specific variety to order pre-Christmas.  Lynx and Vertigo remain the most in-demand varieties and there are limited amounts of both still available.

As with all spring pulses, the biggest yield differentiator are seed-bed conditions and keeping on top of pest and disease pressure throughout the growing period. We would urge growers to base variety selection around end-market availability and agronomic features to get the most out of their crops.  Beans tend to suit heavier soils that warm up less quickly in the spring, while peas favour warm sites with good drainage.  Both peas and beans leave a very fine tilth for drilling a following wheat crop into and also leave a high nitrogen legacy, making wheat following a pulse crop one of the best-performing crops on the farm.

The new AHDB Recommended Lists are available on the 4th December.  We will update on any major changes in future Market Reports.

Fertiliser

GRANULAR UREA UPDATE

Buying has been limited since the scrapping of the latest Indian tender which left producers with nearly 800,000t of urea to resell.  In order to avoid building stocks, producers have had to accept lower values in order to move urea that was earmarked for the tender.  This has meant the majority of markets have seen prices slip.

Egyptian producers have sold at $280/t FOB, down $27/t from the highs seen a fortnight ago. At today’s £/$ rate that puts replacement urea at £265/t on farm in the UK.

In most countries, importers are stretching out existing inventories and delaying buying until the market stabilises.  A new Indian tender will be the most obvious event to stabilise the market.  Indian stocks at the end of October were about 681,000t lower than the same time last year, and coupled with 588,000t more sales between April-October compared to the same period last year, India has to buy and buy soon.  Once this happens there will be a surge of buying from pent-up demand from those that have deferred enquires, which would lead to a price rebound.

Gleadell can offer granular urea both bagged and bulk for January/February delivery at competitive levels.  Please speak to your Gleadell farm trader for more information.

£/€ £/$ €/$
1.12535 1.3315 1.1845
Feed Barley £ Feed Wheat £ Beans £ Oilseed Rape £
Nov17 121.00-129.00 130.00-145.00 149.00 316.00-321.00
May18 125.00-135.00 136.00-148.00 155.00 322.00-327.00
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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