International Grain, Seed and Fertiliser Merchant

Market Report

Thursday 24 January 2019

Wheat

The US market is trading up on the week as markets continue to consolidate. Extreme cold weather, increasing the risk of winter kill, continues to prevail across many areas of the Midwest and Plains through into early February. This, and talk of record low US winter wheat sowings, is helping to underpin the market, although snow cover is more than adequate in most places. Rumours of possible purchases of US wheat by China, if US/China trade talks due next week progress well, higher global prices and talk of lower-than-expected Russian supplies are also seen as supportive factors to US prices.

European prices are also higher on the week as firmer global markets help to support. Despite sluggish non-EU wheat exports, still reported 27% lower y/y, markets are reacting to signs of falling Black Sea supplies, as both Russian and Ukrainian ministry officials have raised concerns over the current export pace. Russia’s Ag Ministry has asked exporters to submit all export sales for the remainder of the season to determine the full extent of their export program. In the Ukraine, the ministry has put exporters ‘on warning’ over further exports, as milling wheat shipments have already reached 83% of the agreed 8mln t target. The big question is, what is the level of demand still to be covered?

UK remains Brexit driven, as sterling has strengthened on the likelihood of a softer or delayed Brexit. The rise in sterling has seen London futures, on both old and new crop, ease back to their lowest levels since mid-November. Consumer coverage appears adequate, with little enthusiasm to extend cover in the deferred position, due to the uncertainty over Brexit.

In summary, the apparent decline in Russian availability is at last pushing global prices higher and, if the US/China trade talks go well, the rumoured Chinese purchases of US wheat would clearly be supportive – but it is certainly true the US has the stocks to sell! However, while this would also support European prices, the outlook in the UK is less clear. If the UK drops out of the EU with no deal, the pricing mechanism of future UK wheat shipments into the EU would then fall under the current EU import quota system and we would have to compete against other third-country supplies, including the Black Sea countries.

Malting Barley

Old crop domestic markets are quiet with only small tonnages trading and markets are becoming increasingly difficult to find. The EU market continues to slide downwards, with little trade taking place.

New crop markets remain bearish due to the uncertainty surrounding Brexit and the 25% intended increase in French spring barley plantings. UK maltsters are holding back on buying and FOB markets are not trading due to the unknown. Our pool contracts are still available to book for crop 2019 and are a very good marketing option in these uncertain times. We have a small tonnage of an exciting new spring malting variety, Cosmopolitan, to trial for brewing use with impressive yield, disease resistance and overall agronomic strength. Please contact your farm trader for more details.

Pulses

Old crop beans of all qualities are unchanged on the week, despite sterling continuing to firm against the euro and the US dollar. With much of the exportable surplus already sold in the Baltic States, buyers of feed beans on the export market continue to look to the UK to cover their requirements. However, enquiries are getting fewer and far between as the price moves higher.

New crop bean values have also held up well, with bid values unchanged on the week. Feed beans are trading at a significant premium to wheat, currently £15/t higher than the same time last year. At such a significant premium, beans are unlikely to be in significant demand from the domestic feed compounder. A new crop bean buyback linked to LIFFE wheat futures is available and the marketing pools in all positions remain open.

New crop pea buybacks continue to be booked as growers look at their spring cropping plans. Buybacks remain available for large blues and marrowfat peas. Please contact your farm trader for further information.

Seed

Spring Barley

RGT Planet is now very limited in availability, with Laureate sold out and one or two other key players running short. It is therefore our advice to not hold off ordering any top ups or new orders if you have not got around to it yet.

Conditions remain excellent for drilling and we have seen a lot of spring barley drilled in the last fortnight. If you require seed delivering urgently, please let us know so we can make plans to accommodate your requirements.

Peas

Market leading pea buybacks offered through Gleadell/Dunns are proving a popular option this year as growers look for alternate break crops and struggle to get hold of bean seed but want to keep pulses in the rotation. Kingfisher, the new large blue with excellent colour retention and standing performance, is the go-to variety while seed is still available.

Fertiliser

Granular Urea

Markets are now looking to the next round of tenders after India’s MMTC confirmed tender awards of 515,000t. Urea prices in the UK have firmed since this announcement, and subsequently we saw a very active market last week after a period of dry cold weather, which started to focus attention towards first dressings. Any future direction of the market will be guided by another round of tenders. Energy costs are up on last month and this could yet have an impact on producer costs across the market. Gleadell Egyptian urea, bagged or bulk, is available now for immediate delivery.

Ammonium Nitrate

As we come to an end of the third week of CF terms being £15/t below pre- Christmas levels, Nitram still remains the centre of attention in the ammonium nitrate market. Imported ammonium nitrate prices have remained stable, although the current strength of the pound against the euro is putting downward pressure on pricing, which CF will be monitoring. With the spring season almost upon us, and with both factories now operational, the company will want to keep moving tonnes, so remaining price competitive in February and March will be their intention. Those considering Blue Bag today can still take advantage of these CF terms by contacting your local Gleadell farm trader with your enquiry, or the Gleadell fertiliser desk on 01427 421241.

£/€ £/$ €/$
1.1475 1.302 1.1345
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Jan19 150.00-160.00 163.00-175.00 232.00-242.00 317.00-322.00
May19 153.00-163.00 167.00-177.00 236.00-246.00 321.00-326.00
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