International Grain, Seed and Fertiliser Merchant

Market Report

Thursday 20 September 2018

Wheat

Wheat

While the soybean and corn markets are caught up in trade war politics, the wheat market seems to have found some support. Talk of further reductions in the Australian crop, and possibly Canada, due to early frost and freeze damage has supported the Chicago market. Funds are now reported to be square, after liquidating their long position over recent weeks. Gradually the global export availability is tightening and, with the expectation of some sort of control being placed on Russian exports, we may have witnessed the low of the US market.

European prices in general have followed the US market. Egypt purchased a volume of wheat for November, with Russia again the major origin, and Saudi Arabia bought wheat thought be mainly sourced from long holders of German and Baltic wheat. French wheat, thought to be in line to grab a share of the Saudi tender, looks to have lost out on quality, leaving the French to take care of Algeria. Although Russian prices have started to rise after several weeks of decline, they are still by far the cheapest origin, and continue to be aggressively offered.

UK prices have weakened over the week prior to yesterday’s bounce. Official data showed July wheat imports rising and exports limited to the odd Irish vessel. With this trend likely to continue through the early months of the season, end users seem very relaxed over extending coverage. With the closure of the Hull ethanol plant and the likelihood of increased maize usage in feed diets, the current supply of wheat seems more than plentiful, adding to the negative sentiment overhanging the UK grain market.

In summary, it looks in the short-term that the US market may have bottomed, although a near-record maize crop will keep rallies in check. Long term, the likelihood of further global crop reductions and possible Black Sea government export intervention may support the US markets. However, both the EU and UK market are trading a more domestic supply and demand balance sheet and may only be partially influenced by any rise in the US market. The market is still a complex picture and, when adding in weather, geopolitics and the uncertainty over Brexit, it remains a difficult market to call.

Malting Barley

At the start of the week we saw one or two buyers appear in the market, but only for small tonnages. UK traders were happy to sell at levels below the previous week before and the demand was soon covered. At present, prices seem to have found a level that buyers and sellers are happy with. Growers that need movement this side of Christmas should consider selling their barley sooner than later, as homes are becoming difficult to find. We have a number of different types of 2019 buyback contracts available for both winter and spring barley. Please speak to your farm trader for details.

Rapeseed

Rapeseed prices have come under further pressure this week, as the market is struggling to find fresh demand. Ongoing low water levels are affecting barge freight on the Continent and restricting demand, causing a spot logistical bottleneck with imported seed.

This slowdown in crush and the on-going switch from rapeseed to soybean crush by multi-seed plants is also affecting demand. Whilst the bio-diesel market will remain strong buyers of rapeseed oil into the winter, the market is not seeing this turn into fresh interest today.

In addition to declines in the Matif, the UK market has also been hit by a further rally in sterling. Higher-than-expected inflation data released this week, combined with improving Brexit mood music, has supported the pound, pushing it up nearly 1c vs the euro, and taking circa £3/t off our values.

Whilst the global balance sheet for rapeseed is tight and the situation in Australia continues to worsen, the market needs to find some demand. With a record US soy crop just around the corner, it may be difficult for prices to rally in the short term.

Pulses

With the faba bean harvest approaching completion in the UK, we now have a better idea of yields and total production, with current estimates suggesting a crop size 40% lower than last year at just over 400,000t. Feed bean values are firmer on the week driven by continued export demand. However, there are signs that at these higher numbers for export demand will begin to wane, with some fish food buyers starting to indicate that they will take de-hulled beans out of formulations.

Feed demand in Australia is very strong due to the continued drought in the east of the country, which will reduce the amount available for export to north Africa. With a smaller poor-quality crop in the UK, and a smaller crop in the Baltic states, availability for human consumption is tight and prices are expected to remain firm for quality beans.

New crop pea buybacks are available. Please contact your farm trader for further information.

Seed

Second Wheat

The current wheat price suggests growers can lock into a good gross margin on both first and second wheats for harvest 2019. Second wheats have seen a slight decline in previous years, mainly due to grassweeds dictating rotations, and being blamed for a large increase in weed prevalence. However, many farms have had a period of years of spring barley and other break crops, allowing for better blackgrass control, cleaning up fields, and now making a second wheat much more tempting with higher grain prices.

Top second wheat varieties include KWS Zyatt, Skyfall, KWS Siskin, RGT Gravity, Gleam, Shabras and KWS Kerrin. Of these, Skyfall remains very tight in supply and Gleam is sold out, but all others remain available.

Latitude is still the go-to seed treatment for controlling take-all, with Vibrance Duo and our phosphite dressing Turbo, helping to offset the effects of the disease.

Winter Barley

On the same basis as above, plus the long time between harvest and autumn sowing this year and spring barley crops proving they are not invincible drilled in late April/early May with next to no moisture, many growers have switched some spring barley back into winter, which has meant winter barley seed has more or less sold out across the trade. Hybrid variety Bazooka is still available in a limited quantity. Please speak to us regarding your individual requirements.

Fertiliser

Granular Urea

Demand continues to build for Q4 urea. One Egyptian producer has now sold out of October tonnes after concluding a 50,000t sale yesterday at $307/t FOB. The main Iranian producers have committed all October supply and have now moved onto offering November tonnages. Chinese urea has seen a jump in prices, with offers now between $315-320/t FOB, but with gas shortages expected to hit the country, availability of exports will remain limited. On top of the announced state tender by Bangladesh to buy roughly 1mln tonnes of urea, expectation is that both Pakistan and India will have to tender soon. The latter is thought to need to purchase over 2mln t of urea for shipment up until the end of the year and will need to hold two to three tenders to do this. At a time when global supplies are limited, this will only help to support prices further. In the UK, the firmer £/$ has gone someway to mitigating the firmer prices seen globally. However, with such uncertain times ahead, our advice would be to look at securing at least a proportion of your nitrogen requirements at current levels as a means of managing risk.

UAN

Attractive terms remain available for both autumn and spring tank fill. With urea markets firming and the likelihood that further increases are to be implemented by CF Fertilisers shortly, following the firmer AN market on the Continent, the ability to lock in spring requirements now looks an attractive proposal. Gleadell can offer straight N and NS terms for both tank deal customers and open market buyers. Please speak to your farm trader or the fertiliser desk on 01427 421241.

£/€ £/$ €/$
1.1285 1.328 1.1765
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Nov18 162.00-172.00 168.00-178.00 205.00-215.00 311.00-316.00
May19 168.00-178.00 174.00-184.00 208.00-218.00 314.00-319.00
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