International Grain, Seed and Fertiliser Merchant

Market Report

Thursday 22 November 2018

Wheat

US prices are down on the week, as the market continues to struggle with the slow pace of US sales and exports. The slow pace of this year’s soybean harvest is seen delaying the final 10% of winter wheat acreage to be planted in the Southern Plains, although this week’s rise in crop ratings is offering resistance. Concern over final southern hemisphere wheat crops still provides a level of support, albeit the trade is still awaiting signs of additional demand coming into the US export book.

European prices, also down on the week, are mainly reacting to euro/US$ currency movements. EU exports remain sluggish, now seen down 27% y/y (non-EU soft wheat), although talk of lower yields, and more importantly, quality concerns relating to the Argentine wheat crop, may provide a reprieve for French exporters at the next Algerian tender. Due to the uncertainty, it is expected that traders may shy clear of offering a volume of Argentine wheat until more details are known regarding the actual quality of the crop. Talk is also increasing regarding Russia and whether domestic usage is being underestimated, as it appears export quality grain is becoming harder to source. This may be of relevance, as today GASC (Egypt’s official buyer) has issued a buying tender, which due to the US being closed, seems a surprising day to tender!

UK prices are slightly higher on the week, despite slightly better sterling values. Seasonal logistics are starting to kick in as consumers start to issue fixings, with the physical market seemingly short of December wheat, with offers few and far between. However, Brexit remains the main driver for wheat prices (currency movements), as the political declaration outlining how trade, security and other issues will work has been ‘agreed in principle’, and is expected to be signed off at this weekend’s EU summit. The Prime Minister will then turn her attention to getting the deal through parliament.

In summary, markets continue to move sideways, and there appears little to change the current trend in the short-term. Long-term fundamentals factors still provide support, but that won’t concern US traders today as they prepare to enjoy Thanksgiving!

Malting Barley

The EU malting markets continue to drift on a lack of news or fresh buying interest. The low water problems on the Rhine are still causing logistical problems which is slowing down the pace of UK malting exports. As far as new crop goes, the market is very quiet, not helped by reports that France may have a potential spring barley area increase of up to 20% due to the extremely dry autumn. There are a few interesting contracts available for Laureate, Diablo and Planet. Please contact your local farm trader for details.

Rapeseed

The US soy complex remains mixed, still seesawing on US-China trade uncertainty, with some support coming from a rise in bean oil values on record biofuel demand. Harvest in the US is almost complete, albeit slightly behind last year’s pace due to adverse winter weather in the Central Plains/Midwest.

The UK rapeseed market is slightly down on the week, although declines have been limited by a weaker pound resulting from the ongoing Brexit turmoil. Low water issues in Europe persist undermining demand and going forward the market will continue to be ruled by developments in the Brexit talks and the effect that this has on currency. Looking ahead to new crop, further news continues to come through of significant acreage and production losses in all of Europe’s major producing areas, although some could argue this news was already priced in to the market.

Seed

Spring Cereals

There is still a lot of demand for spring barley seed. As mentioned in previous reports, putting your name against your favoured/contracted variety is critical, as there is unlikely to be enough to go around. Laureate is still sold out, with other popular malting varieties not too far behind.

Pulses

Pea buyback contracts remain available for spring 2019 drilling for all types of combinable peas. Two new exciting varieties have joined the large blue group this season, Kingfisher having superior quality traits and excellent standing power while LG Stallion steals the show for out and out yield. A reminder that all spring bean seed is sold out for the time being.

Fertiliser

Urea

It has been confirmed that India’s Department of Fertilizers have purchased one of the largest tonnages ever under the recent tender held on 14 November. Additional confirmation of sales this morning has boosted the final tonnage to a TOTAL of 1.821mn tonnes.

This news has immediately stabilised the market, which has drifted $15-20 lower over the past two weeks, with any further buyers in other markets now concerned that spot availability east of Suez has been swept up by India.

Urea producers were happy to sell for December at $20t below the previous tender in October. By doing this it has cleared stock and should help them avoid any price slump which is what happened a year ago.

Attention will now switch to markets in the west to see what the reaction is to the news from India, but a lot of producers are now cleaned out for December and are in a good position under no pressure.

We still have a large tonnage to surface in January, so values look to be supported now through Q1 and any sign of a downturn looks highly unlikely until we are well into Q2. For competitive urea prices please contact your local Gleadell farm trader.

Ammonium Nitrate

No fresh news with Ammonium Nitrate this week and the market remains quiet. Imported product in the UK continues to trade at a £20/t discount to UK product, however this is for product taken in November and December. CF are only offering January delivery as they finalise their scheduled maintenance programme.

£/€ £/$ €/$
1.128 1.287 1.1405
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Dec18 155.00-167.00 160.00-172.00 219.00-229.00 322.00-327.00
May19 160.00-170.00 165.00-175.00 224.00-234.00 327.00-332.00
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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