International Grain, Seed and Fertiliser Merchant

Market Report

Thursday 17 January 2019

Wheat

The US market is down £2-3/t on the week, as the US continues to struggle with its export pace and the lack of meaningful data due to the partial government shut-down. US exports were reported still being down 11% y/y, against a perceived yearly increase of 11%. Colder temperatures are forecast for most of the main wheat growing areas during the remainder of January, although significant snowfall in the eastern parts should insulate crops.  The southern and central plains have little snow cover and may be exposed, although moisture levels remain adequate.

European prices have eased €2/t on the week despite a weaker US$ exchange rate. Soft wheat exports to non-EU countries remain sluggish, reported at 8.67mln t so far this marketing year, down 26% y/y. However, with soft wheat imports up 164% and maize imports up 148%, it appears that the EU is not short of feed grains, although analysts may have to start readjusting internal S&D estimates. Despite the Russian agriculture minister denying any discussion on limiting exports, the market is already doing the job. The rise in the country’s domestic wheat prices should see January wheat exports fall substantially to around 1.5mln t. If the trend continues for the remainder of the season, that would project a seasonal total of around 33mln t, well short of Russia’s aspirations.

The UK has been dominated by Brexit. Against expectations, sterling firmed after the prime minister’s deal was rejected as the city viewed the outcome as positive to sterling, due to the now likelihood of a softer Brexit. However, the PM now has to come up with a “Plan B” and has asked for cross-party talks to try and find a way forward for Brexit, although Jeremy Corbyn has refused to join talks unless the threat of a no-deal exit was ruled out.

In summary, global prices continue to try to reallocate export demand, although with the potential of US, EU and Russian exports being lower than projected, genuine concerns are being raised over actual global demand. EU traders wait to see if the recent slowdown in Russian exports will be sustained and whether demand is switched back into the bloc. The UK remains focused on Brexit and its ramifications upon the UK’s financial, economic and currency markets, and thus grain prices.

Malting Barley

Domestic markets for crop 18 remain thin, with prices unchanged on last week. Maltsters have little tonnage left to buy, but merchant shorts are keeping prices firm. The EU market continues its downward trend with little trade taking place.

Domestic markets on crop 19 are difficult to find, with maltsters holding back on committing to purchase tonnage. The EU market is bearish with prices coming under pressure. We have attractive malting barley contracts available for crop 19 including our pool contracts, please talk to you farm trader for more details.

Rapeseed

After the positive news that had initially come from the US president on the developments on the US/China trade discussions, the market was disappointed to hear comments from Senator Sen Grassley that there had been little real additional progress in the trade negotiations with China.

The US has made some soybean sales since the postponement of the increased tariff structure, but the US is still way behind its historical export numbers.

In Europe, the Matif rapeseed market has firmed over the past week, finding support from the weaker euro and some fresh buying demand. However, this uptick in the Matif has not been reflected in UK farm-gate prices.

The fundamentals of the rapeseed market remains supportive in isolation, but the on-going US/China trade discussions and Brexit negotiations continue to provide considerable volatility to the oilseeds markets.

Pulses

The UK feed bean market continues to be driven by export demand. Domestically feed beans continue to price themselves out of the animal feed ration, with the extruders using imported peas in replacement of beans, and the ruminant compounders looking to other cheaper mid-range proteins. With continued demand for feed beans to the Continent for April onwards, it is likely that feed bean values will continue to be supported as shippers chase supplies left on farm. However, any further firming of GBP/EUR will add resistance.

New crop feed beans have started to trade. Values of £190/t ex farm plus are available and are unchanged on the week, despite the wheat market trading lower. There are some requirements for export at these levels, however, some compounders have indicated that they are too expensive to be used in formulations. Much of the spring crop is still to be planted in the UK and northern Europe, with final planted area and timeliness of planting driving market direction.

New crop pea buybacks remain available at competitive prices for large blue and marrowfat peas.

Seed

Spring Barley

Supply of key varieties is now getting tight as the kind drilling conditions have brought a lot of orders forward in the past few weeks. As such, we would advise that spring barley orders are placed promptly, while your preferred variety is still more likely to be available.

Peas

Gleadell has pea seed available to service all of our market leading pea buyback contracts for combining peas. Kingfisher remains the popular choice this spring, the newest recommendation to the recommended list having the best standing power and excellent colour retention.

Winter Wheat

With conditions as good as they are, it is worth considering if you would be better drilling a winter wheat currently than a spring wheat or feed barley. The yield potential is always going to be higher from a late-sown winter crop in comparison to spring alternatives. We still have suitable late drilled varieties such as KWS Crispin available to be treated to order.

Fertiliser

Granular Urea

The urea market has remained relatively unchanged despite a potentially very volatile week. The Indian tender was announced yesterday with current offers supporting the European urea market price. Bulk and bagged Egyptian urea is still available for delivery in January, February and March.

DEFRA announced amendments to the Clean Air Strategy, which has removed specific dates to reduce emissions from urea-based fertilisers to the ‘shortest possible time’ and that government will be ‘consulting on this policy in 2019’. With other issues in Parliament to be decided in the first quarter of the year, expectations of this legislation hitting the immediate market are minimal. For future applications of urea, ALZON® neo-N by SKW Piesteritz, a UK exclusive product to Gleadell, has urease inhibitors and is available for purchase today.

Ammonium Nitrate

CF’s terms remain unchanged at £15/t below previous levels as the company continues to compete for business. This has created an increase in demand for Nitram at the farm-gate and currently blue bag and imported ammonium nitrate are trading at parity. The expectation is for January terms to be withdrawn soon and so purchasing any outstanding AN tonnages should be considered today. To take advantage of these CF terms contact your local Gleadell farm trader today with your enquiry or the Gleadell fertiliser desk on 01427 421241.

£/€ £/$ €/$
1.13 1.2885 1.14
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Jan19 157.00-167.00 162.00-172.00 232.00-242.00 320.00-325.00
May19 161.00-171.00 166.00-176.00 236.00-246.00 324.00-329.00
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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Gainsborough, Lincolnshire DN21 5TH.

Company Number: 534118