International Grain, Seed and Fertiliser Merchant

Market Report

Thursday 21 February 2019

Wheat

European prices are down $10/t on the week, following the global trend. The market continues to pull export trade away from Russia, although to date, this has not resulted in a significant rise in either EU or US exports. As expected, France took the majority share of this week’s Egyptian tender (180,000t) with Romania, the Ukraine and Russia each doing 60,000t. Whilst the French value was close to replacement, both the Romanian and Russian figures were well below. Traders suspect the sales were trade longs dumping tonnage ahead of a possible realignment of the current old crop/new crop inverse. Supporting this idea is the expected rebound in 2019 wheat production in the EU and Russia, following this season weather-related harvests.

UK prices are down £8/t on the week, with sterling firmer against both the euro and the US$. Market dynamics remain little changed, with the current spot-position supply squeeze lifting delivery premiums. Deferred positions remain relatively quiet on both sides.

The past week seemed to have all markets racing for the bottom as a new-crop two-year low was hit in Chicago. Both Paris and London closed at the yearly lows set in February and March 2018 respectively. While trade optimism over a potential US/China deal should lend support to soybean and corn markets, the wheat complex is slowly running out of time. Unless US sales show a significant upgrade in the next week or so, the markets could see selling pressure, especially if Russian exporters continue to gamble on the current market inverse.

Malting Barley

It has been another quiet trading week for both EU and UK malting barley with prices relatively unchanged on the week. Most of the talk has been around spring plantings and how different drilling conditions are to this time last year. French spring sowing is progressing very quickly and at this rate will be finished before the end of the month. It is a similar picture in the UK with some English regions having already sown over 50% of their intended area. Overall, we estimate England to be 15% sown with Scotland just getting underway. If the weather forecast is correct, there will be a lot of spring barley in the ground by this time next week.

Rapeseed

The Matif rapeseed futures market is sharply lower on the week due to falling demand and the imminent arrival of large-scale southern hemisphere imports into the EU. The old-crop supply-and-demand picture is starting to look heavy, highlighted by the narrowing of the carry by the old- and new- crop contract months on futures markets. With the potential for a big fall in production in the EU in 2019 and ongoing drought issues as the growers prepare for plantings in Australia, one could argue that the market will need to carry out bigger stocks. We wouldn’t be surprised to see the old crop/new crop market structure move to encourage old crop seed to be carried, however this is likely to manifest itself in further relative declines in the old crop market.

The bearish week on the Continent has affected UK farmgate prices. Values have continued to slide as a firmer £ and the temporary closure of a major processing plant in France create further opportunities for imports into the UK. We understand multiple vessels have been traded and import shipments are arriving into both of the UK’s major domestic crushing facilities.

Oats

There is little fresh news on the week in the oat market. Feed oat values have come off, in line with domestic wheat and barley prices. Milling oat values have remained largely unchanged, with millers looking to buy in the April/May/June position.

Overall, winter drilled oats are looking well and have benefited from the recent milder temperatures. Spring drilling on oats is expected to start imminently. Soil condition reports are generally very positive and rain in the forecast adds to the positive tone.

Pulses

Old-crop feed bean markets have rallied aggressively this week, driven by demand from the shippers in the east coast ports trying to cover existing sales. Beyond April ’19 there is little export business on the books, with the prospect of EU import tariffs if the UK leaves the EU without a trade deal, along with limited supply coming forward from farm. Import feed peas are currently trading at a significant discount to beans, for which there is no domestic demand.

New crop prices are unchanged on the week, despite firmer sterling and a weaker wheat market. At current levels, beans will struggle to attract much demand in the compound feed ration. However, demand from EU dehullers has helped support the market.

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

Seed

Spring Cereals

Spring wheat and barley seed is now getting well sold across all varieties. Our advice would be to get requirements sorted out as soon as possible to stand a chance of securing preferred varieties. Spring oats are sold out across the board.

Pulses

We still have stock of Lynx spring bean seed to offer for anyone considering beans as a break. We are now sold out of Daytona large blue peas, but still have Kingfisher, LG Stallion and Campus to offer against our market-leading large blue buyback. We also still have some Kabuki seed to cover marrowfat requirements.

Winter OSR

Gleadell have a fantastic portfolio of OSR varieties to offer for the autumn, covering everything from the highest yielding hybrid to the ever-developing Clearfield sector varieties. For early orders there is an extended finance offer covering our main portfolio material, speak to you farm trader for more details.

Fertiliser

Urea

The weather this week has encouraged top-dressing applications with spring-like conditions pushing up soil temperatures. Many growers have returned to the market to avoid application delays during the good weather. With demand increasing in the UK, distributors and retailers are looking to replace diminishing stocks. Manufacturers are hoping that demand will stabilise the current price, which has weakened around $50/t over the past month. Gleadell has granular urea available for immediate delivery in bulk and bags.

Unpredictable Weather

With unseasonably high temperatures today and thinking back to the ‘Beast from the East’, which caught many off-guard this time last year, it is clear that weather patterns are becoming less predictable. Those wanting to ensure full utilisation of their nitrogen applications should enquire on ALZON® neo-N by SKW, a product exclusive to Gleadell. ALZON® neo-N has urease and nitrification inhibitors which enables efficient nitrogen release in weather that otherwise would have previously been too wet for fertiliser applications. Because of its slow release of nitrogen, larger and fewer applications of ALZON® neo-N can be made, protecting your crops nitrogen supply against unpredictable weather. For enquiries into ALZON® neo-N call the fertiliser desk on 01427 421241.

Ammonium Nitrate

The ammonium nitrate market is becoming active once again following the large uptake in early January. The market has been particularly busy in the west and south west of the country. Many growers are making the most of the good weather and a desire to get ahead, avoiding a repeat of last year with the inclement weather that limited the ability to apply fertiliser. Those looking at making just in time orders will find it difficult to do so. Sterling continues to oscillate but is currently overall up on last week. This, as well as the reduced market in Europe due to a cut in the area of winter cropping following last summer’s drought, has helped weaken the import market Prices are also dependent on stock locations, creating price disparity between products on the east and west coast. CF February terms for Nitram will be withdrawn next week, if not before. Emphasis is being put on orders being placed earlier rather than later in the ammonium nitrate market to ensure no delay in application.

£/€ £/$ €/$
1.1495 1.3035 1.134
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Feb19 134.00-144.00 157.00-170.00 247.00-257.00 307.00-312.00
May19 137.00-147.00 160.00-172.00 250.00-260.00 310.00-315.00
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