Gleadell wishes all our customers a very happy Christmas and a prosperous new year. Our next market report will be issued on Thursday 3rd January 2019.
Thursday 20 December 2018
The US market is unchanged on the week. While the spill-over from firmer soy/corn markets has provided some support, wheat markets are still suffering from a general lack of international demand, with shipments still running 15% lower year on year. Egypt has issued an international tender for today, which will be of great interest, as tomorrow the Russian agriculture minister and exporters are due to meet to discuss the current and, more importantly to the markets, future export aspirations. As we have mentioned in previous reports, the market is waiting for signs of a slowdown in Russian exports, and any official confirmation would be deemed as a positive factor for US supplies.
European prices are slightly weaker on the week, as the euro/dollar exchange provided resistance to higher prices. Although markets are winding down, the results of both the Egyptian tender and the Russian export meeting will be closely watched. In addition, the trade is also wary of a possible Algerian tender next week that, given recent rises in Argentinian export values and logistical issues, would probably rule out Argentine execution, thus making French supplies more likely.
The UK market is up about £1/t on the week as currency slips back below €1.11 on the ongoing Brexit saga. This morning DEFRA released its 2018 UK wheat crop production figure. At 13.95mln t, this would represent a 6% decline year on year, despite a small increase in harvested area.
While the release will only provide a slight adjustment to the overall UK balance sheet, the ongoing political issues surrounding Brexit will drive currency and thus farm values, although the winter recess of Parliament may provide a few needed weeks of stability.
In summary, the festive wind-down is in full swing, although the markets will need to monitor events closely. Eyes will be on today’s Egyptian tender and whether the result gives any early indications of tomorrow’s Russian export meeting. The outcome of tomorrow’s meeting will be of great interest to both EU and US exporters, as it may provide confirmation of the expected slow-down in Russian exports and the expected shift in international demand, which in the long-term may provide support for both EU and US prices.
After a very difficult season, UK maltsters seem to have started Christmas early with most buyers unwilling to talk about any fresh business until after the new year. Buyers in the EU are reporting that water levels on the rivers are rising and easing the logistical problems. Prices have dropped slightly over the past week. Due to Brexit, buyers are unsure of crop 2019 prices. There are a few EU internal FOB sellers at prices around £25/t below this year’s levels. Although this sounds a big drop, this still puts next season’s prices at an historically attractive level.
The resurrection of Chinese buying of US soybeans has provided some support to prices in recent days. Reports suggested that deals have been struck for upwards of 5mln t, following the truce to the disruptive import taxation’s between the two key trading nations at the G20 summit in November.
The rapeseed market in Europe has been slow and range-bound in past weeks, with the front month February contract stuck in a €5 range. The fundamentals of the market still point towards the need for higher imports, following the sharp decline in production this year and another expected slump in output from the 2019 harvest due to reduced winter plantings in key producing countries.
However, our domestic market will continue to be heavily influenced by fluctuations in currency. Given the current political uncertainty, it is difficult to call where farm-gate prices will eventually end up. With this in mind, today’s old crop values still look good for UK farmers.
There has been very little trade this week with limited volumes coming forward from farm. There remain a number of shorts in the market for feed beans post-Christmas and some demand for export, which is likely to keep the feed market well supported in the new year.
The window to make fresh sales of quality beans to Sudan is effectively shut. There is not enough time to get bags printed and containers loaded before the middle of January, the latest date that beans can be shipped, and custom cleared before the import restrictions come into place. However, we have seen some fresh demand from Egypt in recent weeks as the Australian price firms. We expect this demand to continue into the new year.
New crop pea buybacks are available at attractive levels for harvest 2019. Please contact your farm trader for further information.
The spring season continues to march on with deliveries already on farm ahead of the spring. Spring oat seed is now extremely limited, with small amounts of WPB Elyann still available. There is little change in spring barley availability, with Laureate continuing to be sold out and RGT Planet in limited availability.
Variety Focus – KWS Firefly
Group 3 wheats have continued to be strongly supported by end-user demand, as the area of quality biscuit wheat has been declining over the past decade. Varieties like KWS Firefly will not only provide millers with the quality raw material they require, they will also give growers an excellent all-round wheat variety backed by the security of a buyback for the grain. A score of 7 for Septoria (third highest), group-topping yields, short stiff straw and excellent grain quality makes KWS Firefly a very attractive option for soft wheat growers or those looking for premium potential to increase gross margins. Please speak to your farm trader for further details.
The seed department would like to wish you a very merry Christmas and prosperous 2019!
After a few weeks of inactivity, urea prices have fallen more than $60/t globally from the previous highs. More demand from January will be needed, to stop prices correcting further, especially in Europe. In the UK, with potentially 30%+ of the urea market remaining, the spring market is predicted to be a busier buying period than normal. Prices may rebound, but with most of the urea stocks in Egypt unsold for January, the market direction is not as clear as it typically would be.
Ammonium nitrate prices are unchanged in the UK and are likely to hold current levels throughout the festive period. Importers are still interested to move tonnes at port side stores at £20/t less than UK produced nitrogen. However, yesterday CF Fertilisers UK announced a withdrawal of all terms tomorrow afternoon, with new levels to be issued in January. It’s unknown where prices will go from Q1, but CF is keen to move spring tonnes onto farm in time for top dressing.
For more information on markets and prices, please contact your local Gleadell farm trader or the fertiliser department on 01427 421241.
|Feed Barley £||Wheat £||Beans £||Oilseed Rape £|
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.”
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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.