International Grain, Seed and Fertiliser Merchant

Market Report

Thursday 29 November 2018

Wheat

US prices are up on the week (deferred positions) on talk of an improved export outlook. A further sale of two cargoes to Egypt and reports that the US may have secured some of the recent Algeria tender has lent support to the markets, although current shipping is still reported as being down 19% year-on-year against the perceived 14% yearly increase currently being projected by the USDA. Additional support has also surfaced due to late harvesting of US corn/soybean crops, thus delaying the final 5% of winter wheat planting being concluded, now threatened by current rain and snow and the forecast of much colder temperatures to covering much of the US.

EU prices are marginally lower on the week as the forecast is seen turning more favourable, with the likelihood of needed rainfall in the driest parts of the central EU. News that the Argentine shipping line-up has a 30,000t vessel due for Algeria, and the recent sale/talk of US wheat to Egypt and Algeria, does little to bolster French non-EU exports, although the expected slow-down in the pace of Russian exports is more a when, and not an if. How that then affects EU competitiveness is still to be determined.

UK prices are unchanged on the week, although the news continues to be driven by Brexit. The signing-off by the EU of the UK withdrawal document leaves just over two weeks of frantic lobbying before the Commons vote on the 11th December. Until then, currency will have its fluctuations, which will drive market prices more than current UK fundamentals. The seasonal slowdown seems to have commenced, with both selling and consumer buying very limited, leaving the market looking for external assistance to generate some activity.

In summary, market trend remains side-wards, although signs of support for US markets are slowly finding their way through into improved pricing levels. However, a major rally would be the last thing the US wants, as it needs to create export opportunities, and actual shipments.

Short-term, this weekend’s G20 summit and the US/China trade talks may provide some fireworks to the markets, but the long and short of it is, if they agree a deal the markets will rise, and if they don’t, the markets will fall! Back in the UK, it remains all about Brexit and the upcoming vote on the 11th December, the same day as the USDA releases its next set of US/global supply and demand projections – could be one heck of a day!

Malting Barley

There has been very little trading activity in the EU or UK over the last week. Planet continues to find demand due to the fact that this year’s crop is much lower nitrogen than Propino. There seems to be a lot of higher nitrogen parcels of Propino around still looking for a home due to buyers so far refusing to accept over 1.85. Crop 2019 demand is very difficult to find due to the lack of an export market.

Rapeseed

Volatility on the CBOT Soybean market has increased ahead of this week’s G20 summit in Buenos Aires. The last few days have seen a c.30c/bu move higher, as fund shorts partially liquidate positions against upside risk that could result from a potential easing of US-China trade rhetoric. Further support was found from a weaker USD after a speech from Federal Reserve Chair, Jerome Powell, indicated a softening of the tone on US interest rate rises. MATIF rapeseed continues to follow the US market.

UK prices have continued to be ruled by the ongoing Brexit debate, its perceived impact on the UK economy, and so the value of sterling. Sterling has lost most of the gains of last week, following the Bank of England’s warning of a 25% risk to the currency if an exit from the EU were disorderly.

Oats

Fresh traded volume has been light over the last week, with farmer selling interest dwindling as we move into the festive period, and buyers look to focus on the new year. As such, ex-farm prices have remained largely unchanged for good quality milling oats.

For the 2019/20 crop year, focus is now shifting towards spring drilling as a reduction in acreage on the back of poorer quality and yield this year could lead to see a downturn in overall domestic production.

Pulses

The Australian harvest is approximately 50% complete and current yields suggest a crop size roughly 30% lower than last year, in line with expectations. The beans are slightly smaller than previous years, which is unsurprising given the drought experiences in New South Wales and Queensland, although the colour is excellent. With the onset of harvest, there has been greater liquidity in the market and increased confidence to sell, and as a result we have seen Australian beans into Egypt this week at $70 off the highs.

The window to export UK beans to Sudan is rapidly closing, as UK beans need to be loaded by the middle of January ’19 in order to arrive before their import restriction comes into place, and sales need to be made well in advance of this date in order to make the necessary arrangements for shipments. The UK market has therefore cooled to an extent and values for quality beans have stabilised. We are unlikely to see the significant rallies week on week that we have been seeing for quality beans in the short term.

Feed bean values have been virtually unchanged for the whole of November. Fresh domestic demand from the compounders is virtually non-existent, with beans pricing themselves out of the formulation against cheaper alternatives.

Seed

Spring Cereals

We are busy processing spring barley seed for those who have requested pre-Christmas deliveries. Supply remains tight on the popular varieties, with Laureate currently sold out in most places, subject to out-turn from production, and RGT Planet not too far behind. We still have availability of a range of spring cereals including WPB Elyann spring oats.

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. The new PGRO recommended list was launched yesterday and a copy can be found using this link http://www.pgro.org/downloads/A4-rec-list-2019.pdf

Autumn 19

The new AHDB recommended lists will be launched next Monday and will feature some exciting new additions, which we will start to feature over the coming weeks, across many commodities, but particularly winter wheat, winter barley and winter OSR.

Fertiliser

Granular Urea

After the record-breaking purchase by India last week, the market has stabilised and traded yesterday at $315 FOB Egypt. That puts replacement today at close to, or just over £300/t on-farm UK in bags. The market in the UK continues to reflect what is happening in Europe – flat today, but remaining some 10-15% behind on where it normally is at the end of November. Wheat plantings appear to be up, and although the fertiliser market is quiet, the general feeling is there is still a good tonnage to surface at some point Dec – February. India is busy calculating what further tonnage it needs to purchase in December to replenish their stocks, which had been allowed to slip. Rumour today is up to another 500,000 tonnes are needed, which will only help to tighten supply. Gleadell is offering granular urea for December and January delivery. Please contact your Gleadell farm trader for more information.

Ammonium Nitrate

This week CF Fertilisers withdrew its January offer in the UK across the full product range. These terms have been replaced with a new February delivery offer. Prices have remained at the same levels, but with February terms already issued, our advice would be to ensure you place any outstanding requirements needed for spring applications.

£/€ £/$ €/$
1.1225 1.276 1.1364
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Dec18 155.00-167.00 160.00-172.00 218.00-228.00 321.00-326.00
May19 160.00-170.00 165.00-175.00 223.00-233.00 326.00-331.00
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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