International Grain, Seed and Fertiliser Merchant

Market Report

Thursday 13 December 2018

Wheat

Despite USDA raising both US and global wheat inventories this week, markets have consolidated and moved slightly higher. Support is seen spilling over from the soy and corn pits, where renewed optimism over Chinese buying has buoyed prices. Yesterday saw reports circulating that China had purchased 500,000t of US soybeans, the first acquisition since the Trump/Xi Jinping meeting earlier in December. Adding to the current trend is Egypt; while still purchasing non-US wheat, it, paid almost $6/t more than the previous tender, amid reports that the volume of offers had declined, especially from the southern port areas of Russia.

European prices are €3-4/t higher on the week, reacting to the firmer Chicago markets. Exports have picked up, mainly due to previously reported weekly shipments being revised higher but remain 24% down year on year. The French farm office this week increased its projection for end-season soft wheat stocks to 2.7mln t, up from 2.5mln t a month ago, due to reductions in domestic feed usage and EU exports.

The UK market is up £4/t on the week as Brexit continues to dominate. The decision to delay the Commons vote on the Brexit document and the Theresa May no-confidence vote has led to much volatility in sterling and farm-gate values. Given the continuing uncertainty, we can expect further major currency swings. As the festive period nears, seasonal logistics have intensified, with the lack of physical supplies and of lorries providing spot price opportunities for growers able to load, deliver, or both.

In summary, the US/China situation seems to have provided more optimism to potential buyers, and therefore higher prices. Wheat values have benefited from firmer soy/corn markets, and suggestions that competitors’ supplies seem to be declining. Traders will continue to monitor the Russian exports, as most are still of the opinion that some curbing will take place, shifting demand to other origins. However, back in the UK, the focus will remain squarely on Brexit and its implications.

Malting Barley

It was another quiet trading week for crop 2018 malting barley. The main focus has been executing domestic and FOB contracts. There has been a limited amount of crop 2019 trade, all of which has been domestic due to there being no export selling opportunities. Most of the interest has been around Laureate due to the fact that it is a dual-purpose variety and can be used for both distilling and brewing. The new dual-purpose variety Diablo is also proving popular.

Oats

Another week with no real fresh news on old crop oats. Millers have cover through to January and farmer selling has dwindled as the Christmas break approaches. As such, prices remain unchanged and continue to be underpinned by Scandinavian and European levels.

The AHDB’s Early Bird Survey of UK cropping intentions points towards a growth in oat area of 9% for the 2019 harvest. Factors supporting this growth are the drilling of oats as a break crop, spring oat benefit in grass weed control, and the higher than average prices achieved by farmers this year.

Seed

Spring Seed

Spring oats and beans are now sold out in the main and key malting barley varieties such as Laureate and RGT Planet won’t be far behind.

The maize seed season has got off to an earlier start than normal this year, with pressure on stocks and key seed treatments. Our advice would be to sort out requirements before Christmas.

Autumn 2019

Following on from last week where we went through the new additions to the wheat Recommended List, it’s worthwhile thinking of the key criteria when making cropping decisions, as variety choice can be made a year in advance without physically pulling apart trial plots in the spring, based on recommended list data and known local markets.

  • Decide your end market – contract options and location to end users should really be considered as the number one priority to cut down on haulage costs and lock into premium potential. There are currently excellent buyback opportunities for KWS Firefly and very good premium potential for LG Skyscraper and LG Spotlight.
  • Disease rating – once you have a relevant end market sorted, chose a variety with good resistance to Septoria tritici and yellow rust. Septoria tritici is the hardest disease to control with the biggest impact on yield and should therefore have priority. KWS Extase takes Septoria tritici resistance to a whole new level with a score of 8.1 and KWS Firefly also has an exceptional score, being third highest.
  • Yield – grain yield is obviously very important for growers, as this sets the base for gross output. However, having a high yielding variety with potential to lose it all to disease is a risky strategy, hence why this is not point number one. LG Skyscraper and LG Spotlight both have very high yield potential while having a good balance of points 1 & 2.
  • Orange wheat blossom midge (OWBM) – 2018 has highlighted that OWBM can still pose a significant threat. Even in areas that haven’t typically had issues with this pest were caught out. Having varietal resistance is the best way to avoid issues and reduce the use of insecticides. Nearly all new additions have OWBM resistance for 2019/20.

Fertiliser

Granular Urea

Global markets remain quiet. Manufacturers face low demand and weaker prices, although it’s difficult to pin point exactly where FOB prices are or how low they will trade. When demand is low at this time of year, global traders offer numbers aggressively to liquidate stocks prior to the year end. This doesn’t always mean the short-term forecast is weak, as when buyers resurface in the new year, prices could rebound. The global picture does not reflect the UK market, however. Many UK importers discharged vessels in Q4 of this year, so there are plentiful stocks. Prices should maintain a stable outlook going into January.

Ammonium Nitrate

There has been no change in the UK AN market over the past week. British producer CF Fertilisers continues to offer product at a £20/t premium to imported AN. However, the spread between UK and imported product does look to be narrowing for Q1 2019, with European producers offering prices similar to UK produced product.

ALZON® neo-N

From German producer SKW Piesteritz, ALZON® neo-N is the world’s first all-weather fertiliser to offer both a urease inhibitor and nitrogen stabiliser integrated within the product. Reducing both ammonia losses and nitrate leaching, ALZON® neo-N takes stabilisation technology to a new level. Trials have shown that the integrated inhibitor system can reduce nitrate leaching by up to 50%, nitrous oxide emissions by up to 75%, and prevent ammonia losses almost completely. Today’s price represents a significant saving against AN and tonnes are NOW LIMITED for Jan/Feb delivery. Please speak to your local Gleadell farm trader today to avoid disappointment.

£/€ £/$ €/$
1.112 1.265 1.1375
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Dec18 158.00-168.00 166.00-178.00 223.00-233.00 323.00-328.00
May19 163.00-173.00 171.00-181.00 228.00-238.00 328.00-333.00
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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