Gleadell wishes all our customers a happy and prosperous new year!
Thursday 3 January 2019
The US market closed the year on a negative tone, pressured by sluggish exports (reported down 13% y/y as of December 27th) and confirmation of higher Russian exports, following the recent meeting between the Russian Ag Ministry and exporters. Total grain exports were raised to 42mln t, up from 38-39mln t previously, with the ministry stating 14mln t would be shipped during the January-June period. While this provided the normal knee-jerk reaction, the 14mln t of exports projected for the new year would still represent a 50% fall on the level exported during the first six months of the marketing season.
European markets are still getting up to speed with many traders in the EU and Black Sea region still away on holiday. European prices eased slightly over the Christmas period, mainly on the news from Russia, which also eased that country’s domestic values as the rouble firmed. However, the perceived tightness in supply has widened the spread on Russian wheat in the deferred positions, leaving EU, and more importantly US supplies, more competitive.
UK market is little changed from the pre-Christmas levels, although currency has eased, especially against the US$. With the UK grain trade slowly getting up to speed, markets remain very pragmatic, with buyers and sellers in most cases a few pounds apart. Next week will see the Brexit agreement discussed in Parliament, with the impending vote due sometime the following week. This should dominate the financial and economic markets during the period, and may cause currency fluctuations, up or down, depending how the debate is proceeding.
In summary, as the grain trade returns from the festive holiday, many things will need to be watched. Weather in many parts of the world is deemed less than ideal, with colder weather expected in the US, EU and Black Sea regions, where variable levels of snow cover could potentially cause crop damage and losses. Adverse conditions in South America are seen limiting the Brazilian soybean crop, along with potential crop issues relating to the Argentinian wheat crop. The US/China trade issue rumbles on, although President Trump has more concerns at home with the government shutdown due to his budget proposals. Add in the recent Russian export news and what that means long-term, and Brexit in the UK, and it leaves a level of great uncertainty on where prices are going from here.
A quiet start to the new year with little to no malting barley business reported. The focus for the EU trade will now be on the outcome of Brexit and the effect that this will have on S&D for crop 2019 and beyond. Growers who still have their spring barley seed to buy are advised to do so sooner than later, as the most popular varieties such as Laureate and RGT Planet are in short supply. We still have buyback contracts available for winter and spring barley, including our popular barley pool. Please contact your local farm trader for details.
UK ex-farm prices have remained unchanged over the festive period, with the lack of farmer selling continuing to underpin values on milling oats, which remain around five-year highs. With oat millers still having volume to cover in this harvest year, and six months to wait until new crop arrives, the volume of farmer selling in the first quarter of 2019 will determine the next price move that we see.
For new crop, the market waits for spring drilling, and whether the UK sees a rise or fall in the spring oat acreage. The lack of availability of spring oat futures- related contracts has the potential to negatively affect this acreage figure.
Old crop beans remain firm. Demand for feed beans into domestic compounders is limited to market shorts against existing business sold rather than fresh interest, with feed beans pricing themselves out of the formulation at current levels and the extruders using imported peas. However, there remains demand on the export market which is keeping the market well supported.
The window to export to Sudan is now shut, although demand to Egypt remains, which is likely to continue well into the new year. However, most quality beans appear now to have been traded.
New crop pea buybacks at attractive prices remain available for Large Blue and Marrowfat peas. Please contact your farm trader for further information.
Winter Wheat Seed
Conditions are currently very good for any late-drilled wheat crops and don’t look like changing up until the middle of the month. We have stock of KWS Crispin or RGT Gravity ready to treat and deliver immediately.
Thousand grain weights have been quite high so far with a lot of spring barley varieties coming out around the 60g mark. This can have a big impact of the amount of seed required, especially on larger orders, so please bear this in mind when working out final tonnages.
Availability is still similar to before Christmas, with Laureate sold out and RGT Planet remaining limited.
A lot of decisions are now getting made on forage and biogas plantings for 2019, with the supply pressure being put firmly on the varieties in the FAO 180-200 window first. Contact your farm trader or the seed department for more information on current availability and offers.
Over the festive period it would appear as though market sentiment has changed, and we have now seen a shift from a buyers’ market to a sellers’ market. Buyers have returned to the market helping to reverse the trend of recent weeks, pushing values higher. We have now seen numbers trade at $30 tonne above the floor seen in early December. Producers in all areas now seem comfortable and are reporting sales for January shipment, so in general the tone now seems set as being firm/firming more as we enter the spring period. There is a lot of buying to be done, and with India still yet to announce a new tender in the first quarter of 2019 for another 600,000-800,000 tonnes, the market looks well supported.
Urea and overall nitrogen consumption is poised to rise for the 2019-20 season because of changes to the crop mix. Urea remains a relatively cheap source of nitrogen at the moment, when compared to other sources, and Gleadell has granular urea to offer for delivery January/February in bulk or bags.
After withdrawing terms before Christmas, CF Fertilisers UK is yet to release new prices. When released, this will set the UK AN level for the spring market and will be a crucial benchmark for all other nitrogen alternatives. Imported levels have not changed and are still being offered at a significant discount to the previous national AN level.
Yesterday saw UK blenders release new terms to the market with many testing the water to see where levels will settle out in the next week. The European potash market is firm and increases in straight MOP are up £5/t on previous levels. This increase is yet to impact NPK blended levels but will filter through in the coming weeks.
The Gleadell fertiliser team would like to wish you all a very happy, healthy and prosperous new year.
|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.”
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.