International Grain, Seed and Fertiliser Merchant

Market Report

Thursday 14 February 2019

Wheat

Another quiet week for the US market, with market values $1-2 lower. The latest USDA report did little to excite the trade last week. US wheat stocks were forecast higher, while winter wheat plantings were put at their lowest level ever recorded, but both were within trade expectations. US wheat continues to hang onto the shirt tail of any impending US/China trade deal, buoyed by recent comments by President Trump that he might let the 1 March deadline ‘slide for a little while’. He added that he would prefer not to and expects to meet with the Chinese President to close the deal at some point.

Likewise, European wheat has shown little price action, trading about €1.50/t down on the week. Wheat exports to non-EU destinations have picked up slightly, mainly on weekly revisions supplied by Brussels, but are still seen down 22% y/y at 10.1mln t. Russia’s agriculture ministry confirmed there was no need for export restrictions at a routine meeting with exporters, with total yearly exports still projected at 42mln t. However, with the forecast showing exports of circa 37mln t to the end of February, the rise in domestic prices seems to have already done the job, as Russian wheat is no longer competitive on global export markets. Ukraine’s wheat exports have reached 12mln t, 75% of the agreed volume, leading to its grain association again asking exporters to submit data on shipping plans for the rest of the season.

UK prices are marginally higher on the week, although Brexit continues to dominate. Talk of a possible extension to the 29 March deadline has surfaced, although Theresa May says she is still committed to delivering Brexit on time, ahead of further talks on the Irish backstop. Official data released this week showed domestic wheat usage slowing in Q2 (Oct-Dec 2018) as maize usage increased. Wheat imports were reported at 1.17mln t to the end of December. That suggests further reductions in domestic usage, or increased imports, may be required if the lower-than-expected wheat area reported in last week’s Defra BPS data is correct.

In summary, another week of political spiel and little reaction in prices. The US/China trade talks, EU/Black Sea export demand/availability and Brexit will continue to dominate. However, with new crop prospects remaining positive for a sharp rebound in Russian and EU wheat production, the likelihood for any sustained price rally would need a major weather problem. However, talk of colder weather entering the US southern plains, where there is no snow cover, may increase the threat of winterkill.

Malting Barley

A very quiet week for EU and UK malting barley, with prices slightly weaker for both crop 2018 and 2019. UK buyers have mostly finished buying for crop 2018 and only require a few tonnes of lower nitrogen springs or winter malting barley. There was no reported trade for crop 2019.

Rapeseed

The Matif rapeseed futures market has drifted lower this week as a slowdown in crush demand and the impending arrival of some Australian boats triggered some selling activity. This provided UK crushers with opportunities to source competitive imports, which has affected domestic prices. Currency continues to have a significant effect on UK farmgate values, but the competition from EU imports is having a negative effect. And, as we move towards the start of spring, the necessity for bio-diesel manufacturers to use rapeseed oil will wane. With this in mind, we continue to suggest that growers with old crop rapeseed still to market, should be looking to exit their old crop positions on any dips in currency.

Oats

Last week’s BPS data showed the oat area down 10% compared with the June AHDB estimate. Following on from this we saw the AHDB animal feed production figures for July-December 18, which show feed oat usage by compounders and and integrated poultry units rose about 52% compared with the same period last year. The high availability of lower quality oats, and their relative value against wheat and barley this year, is the likely cause of this sharp increase.

The timing of the arrival of new crop oats in the domestic market will affect the tightness of supply towards the end of this marketing season. An early harvest would undermine old crop ex-farm values in the latter part of this year and conversely a later arrival will add further support to current values.

Pulses

The old crop bean market continues to rally, with feed beans up circa £3-5/t on the week. But very little volume is trading, as farm sales are very slow. The rally continues to be driven by export demand, with a number of buyers still looking to take cover for April ‘19 onwards. With a significant old crop/new crop inverse, old crop prices will likely fall once the export demand has been satisfied. Imported peas are trading at circa £15-20/t discount to beans, so there is little domestic demand for beans at these numbers.

The new crop market is unchanged on the week and remains at a significant premium over wheat. The current premium is £20/t higher than the same time last year, so it is unsurprising that compounders have not rushed to take cover. Some question marks remain over the total EU crop size for harvest 2019. Current prices should encourage growers in the EU to plant more beans, but seed availability is an issue in some countries, as it has been in the UK.

New crop pea buybacks remain available for large blue and marrowfat peas for harvest 2019.

Seed

Spring Barley

Stocks across a range of varieties are now very limited, therefore we would urge growers to get orders in ASAP.

Peas

Seed stocks are now getting well sold across some varieties and Daytona is sold out. Growers considering one of our buybacks should make their intentions known so that we can accommodate for the seed requirements.

Spring Beans

Gleadell still has stock of non-derogated spring bean seed. Please speak to your farm trader for the latest stock update.

Fertiliser

Granular Urea

Internationally, more sales are being reported this week. Purchases from both Egypt and the Baltic confirm that values in both these origins have slipped again.

A 25,000t vessel of granular urea has been sold by a producer for second-half February collection at a further $10/t below the last sales made.

In Europe, retailers and distributors have already sourced a large quantity of urea and, like the UK, many would like to see stock on the ground cleared before re-entering the market.

Applications have started in most areas on winter wheats and barleys, and also on flea beetle-damaged oilseed rape crops to improve establishment.

This has encouraged a few buyers back into the market and, with the current weather and outlook ideal for urea application, interest is expected to continue to build.

Gleadell has both bags and bulk available for immediate delivery. Speak to the Gleadell fertiliser desk on 01427 421241 for pricing.

Urea fertilisers in the future?

Details in the recently published Clean Air Strategy state the government’s intention to reduce ammonia emissions by 8% in 2020 and by up to 16% in 2030. With 88% of ammonia emissions in the UK coming from agriculture, the spotlight is on farming, and in particular the use of straight urea, which is an area that has been identified as being one such source of ammonia emissions when spread on arable crops. Germany has already announced a ban on the use of straight urea from 2020.The UK will now consult on a similar policy in 2019, with a view to introducing legislation in the shortest possible time-frame.

The use of both urease and nitrification inhibitors in the UK will increase. Through its exclusive partnership with SKW Piesteritz in Germany, the largest producers of urea in Europe, Gleadell is already selling SKW Alzon® neo-N in the UK market. This contains both a urease and nitrification inhibitor, so is ideal for use in both wet and dry conditions, and the slow release means it can be applied early using a larger dose reducing the number of applications.

In autumn 2019 Gleadell will launch a new product, SKW Piagran Pro, to the UK market. This contains a urease inhibitor only so will be ideal for all situations as it can be used all the way through the fertiliser application period, especially during periods of dry warm weather. Reducing the risk of ammonia emissions almost completely, Piagran Pro will be marketed as being the “urea for problem conditions”, and like the Alzon® neo-N product, it has the benefit of having the inhibitor added during the granulation process, not just “sprayed on” at bagging point like other products available. Gleadell has 1,000t of this product currently on trial in the UK. For further information and product updates, please contact your local Gleadell farm trader.

£/€ £/$ €/$
1.138 1.2825 1.127
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Feb19 145.00-155.00 165.00-176.00 240.00-250.00 317.00-322.00
May19 148.00-158.00 168.00-178.00 243.00-253.00 320.00-325.00
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