International Grain, Seed and Fertiliser Merchant

Market Report

Thursday 15 November 2018

Wheat

The US market is unchanged on the week. Support remains intact from declining production prospects in Australia together with the impact of adverse weather on both yield and quality in Argentina and Brazil. However, on the negative side, US exports continue their sluggish tone, with exports running 21% behind last year, against the perceived 14% yearly increase current being projected by the USDA.

European prices are about €1/t higher on the week, although off the weekly highs, as a firmer euro/dollar rate weighs on values. As in the US, exports continue to drag last year, with soft wheat exports to non-EU destinations reported at 5.9mln t, down 24% y/y. Yesterday saw the French farm office slightly reduce its French intra-EU wheat exports by 100,000t, increasing 2018-19 ending stocks by a similar level. Non-EU soft wheat exports were left unchanged at 8.75mln t, of which 2.89mln t had been shipped as of Monday. With key importers seemingly covered into the New Year, the emergence of new crop Argentine wheat poses a threat to achieving this target, as the current pricing structure undercuts French supplies into Algeria.

In the UK, prices are currently trading up £2.50/t on the week, but at present it’s all about Brexit and the turmoil in Westminster as the ‘agreed draft agreement’ is released with implications not just for tariff free access to the EU but also for the value of sterling. Brexit aside, market dynamics continue to portray a bearish fundamental scenario, as wheat imports for the first quarter (July-Sept) were reported at a massive 758,179t, compared with exports at only 79,054t for the same period. EU imports, at 607,658t are already almost half of the level imported through the entire 2017-18 marketing year, with non-EU imports running in line year on year. The UK balance sheet is becoming heavy increasing the need for export competitiveness, especially with the expected fall in domestic requirements due to the closure of the country’s bioethanol plants.

Uncertainty over southern hemisphere production has increased, although US and EU exports remain sluggish. The long-term outlook still points to a slow-down, or stop in Russian exports, and the possible export shift into the EU, US or both. However, until there are signs of this actually happening, it will limit buyers’ hunger to move to a longer position, thus keeping market rallies limited. Meanwhile in the UK, as mentioned above, it’s all about Brexit and its government and currency implications which in the end will impact upon farm levels.

Malting Barley

Another quiet week on malting barley. The markets remain thin and maltsters are all but covered pre-Christmas. The logistical problems of low water levels on the Rhine are ongoing and continue to effect export demand.

Crop 2019 prices are pressured due to currency and reports of increased spring plantings in France, but values are still historically high. We have a variety of attractive contracts for next season, please speak to your local farm trader for details.

Rapeseed

The soy market continues to speculate whether the trade meetings between the US and China will result in a softening in the levy situation on US soybeans, but so far it looks unlikely. It would appear that China is continuing to find enough material from South America, and increasingly Canada, to maintain supplies, and even with the 25% duty US soybeans may well calculate. One thing is clear, there are enough soybeans in the world, the problem is that trade politics has put them in the wrong place!

The rapeseed market is largely unchanged on the week. The market had found some support on the back of crusher buying, but the firming euro and ongoing issues with logistics and low water in central mainland Europe continue to raise some questions about demand. However, the focus for the UK market continues to be the Brexit draft agreement and the money markets’ perception of the effect on the UK economy.

Pulses

Feed bean values are unchanged on the week. Shippers are gradually getting covered against existing sales and there is limited fresh export demand on the horizon. With the domestic consumer not interested in adding fresh bean purchases to the books at these levels, and feed peas continuing to arrive from Europe, it is difficult to see a further rally in the short-term.

Old crop large blue and marrowfat peas continue to firm, with merchants chasing little available supply. It is likely that the UK will have to import green peas at the end of the year and this will be the ceiling to the rally.

We have seen good interest in the new crop pea buybacks over the last few weeks and these remain available.

Seed

Winter Wheat

There is still plenty of winter wheat seed being sent onto farm after beet has been lifted and getting drilled into very good conditions. RGT Gravity, KWS Crispin and Shabras are available for immediate dispatch and all wheat being drilled now should have Vibrance Duo on as standard.

Spring Barley

A lot of spring barley has been sold in the last few weeks and now our advice would be to get any outstanding requirements covered as soon as possible. Laureate is sold old and popular varieties such as RGT Planet and Propino won’t be far behind.

Peas

There has been a lot of interest in our pea buyback contracts this year on the back of poor spring bean availability and general lack of spring break crops which will pay their way. Peas give a fantastic opportunity to have a very profitable break crop while also bringing a lot of agronomic benefits and excellent entry into a following wheat. The two new large blue varieties LG Stallion and Kingfisher are proving popular due to bringing increased yield and quality to the sector. For all buyback details on combining peas please ring your farm trader.

Maize

We have some very good deals available on maize seed for early orders placed pre-Christmas. Please call for more details and specific variety advice.

Fertiliser

Granular Urea

The Metals and Minerals Trading Corporation of India held a tender yesterday to buy an unspecified quantity of urea for January shipment. It received 21 offers for a total of 3.6mln t and is thought to conclude between 1-2mln t. This will undoubtedly short the urea market once again and we may well see prices firm, something that we don’t typically see at this time of year. Gleadell is offering urea today for December delivery. Please contact your local Gleadell farm trader for more information.

Ammonium Nitrate

The market remains quiet for AN in the UK. CF Fertilisers issued new terms last week for January delivery. Prices remain higher than their November and December offer we saw last month, however in line with European levels.

£/€ £/$ €/$
1.1315 1.2795 1.13
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Nov18 154.00-164.00 160.00-170.00 218.00-228.00 325.00-330.00
May19 160.00-170.00 165.00-175.00 224.00-234.00 331.00-336.00
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