International Grain, Seed and Fertiliser Merchant

Market Report

Thursday 31 January 2019

Wheat

US wheat is trading $3-4/t down on the week as the market continued to be pressured by disappointing exports, still reported as 10% down year on year. However, severe cold weather concerns, the likelihood of record low winter US wheat plantings and cautious, but perhaps misplaced, optimism over the current US/China trade talks helps to keep the market bulls interested. With the US government slowly returning to work, key stocks and planting data delayed this month will be published on Feb 8th, and the re-commencement of sales data will provide an insight into any expected increase in US demand.

European prices are unchanged on the week, although France’s export outlook got a boost this week when it managed to secure some of the Egyptian tender. Prices showed that Russia had completely priced itself out of the export market, confirming the agriculture ministry’s latest export projection, which while keeping total exports at 42mln t, trimmed those of wheat to 36mln t, from 37mln t previously. With Romania (which also shared the Egyptian tender) close to running out and uncertainty on what export volume is left in the Baltic states, this leaves the French in prime position on future trades. However, the jury is still out on the actual volume of remaining export demand.

UK values are down £1 on the week, but Brexit continues to rule. Although Theresa May managed to get her revised Brexit proposal through parliament, getting it through Brussels looks a more difficult task as she looks to renegotiate the Northern Ireland backstop.

In summary, not a week of great change. The US market is all about Chinese talks, the EU market is all about reduced Black Sea supplies, and the UK is all about Brexit. In the meantime, the wheat trade rumbles on with the same scale of uncertainty overhanging the markets, and now the trade has also started talking about the colder weather – well, it is still winter!

Malting Barley

Another very quiet week for EU and UK malting barley, with prices falling yet again. In the UK, where the malting market has been a premium to the shipping market all season, we are starting to see signs that the premium is beginning to narrow. As buyers get closer to covering their needs, the more likely we are to see prices come down. Crop 2019 is also quiet, although we have seen more interest in farmer contracting over the last few days. Please contact your farm trader for contract details.

Rapeseed

The February Matif rapeseed contract expires today, and we have seen a technical squeeze in the front month as the nearby contract has traded at a significant premium over the May. This front-month squeeze highlights the short-term lack of available seed on the Continent, as strong biodiesel demand comes ahead of the arrival of the first Australian cargoes.

However, this spot squeeze could well be short lived. There are numerous Australian canola vessels destined for the EU, which will alleviate any immediate supply issues and, as the biodiesel market transitions back from winter oil requirements into the warmer spring months, the reliance on rapeseed oil will ease. This, combined with the EU approving the use of US soybeans in bio-fuels, could well take the shine off the latest uptick in the Matif rapeseed market.

In the UK, currency continues to dominate the headlines, and has largely undermined any rally that has been seen on the Continent. The uncertainty in FX markets that is being created by Brexit makes it very difficult to predict the flat price direction of UK farm-gate prices, but the underlying fundamentals of the old crop market on the Continent might suggest that any upside could be limited.

Oats

Domestic values remain relatively unchanged with traded volume still light. In conjunction with this, the lack of offers of old crop milling oats out of northern Europe could continue to underpin free market values.

Glyphosate has once again come into the headlines, with the French agriculture minister saying last Friday, that France expects to have cut the use of glyphosate by 80% by early 2021. This is of particular relevance as France accounts for circa 15% of EU oat imports, and further adds to the pressure that glyphosate is coming under globally.

Seed

Spring Barley

Now that most varieties have had a run through the plant, we are able to offer a few extra tonnes of previously sold out varieties, such as Laureate and RGT Planet. Please speak to your farm trader for the latest stock update.

Maize

Maize seed sales are running well ahead of where they have been in the past few years, mainly due to the banning of Mesurol and growers wanting to get their name against stock. Gleadell has a full portfolio of varieties covering all usages from breeders RAGT, KWS, Grainseed and DSV. Popular varieties in the FAO 180-200 range are already selling out, so ordering now would be advised.

Peas

We still have available a full portfolio of large blue and marrowfat pea seed to cover our market-leading buyback contracts. Peas are proving a popular option this year, as growers still look to have a nitrogen-fixing crop in the rotation, while generating good gross margin returns.

Fertiliser

Granular Urea

The Latin America Fertiliser Conference begins this weekend, with prices appearing to be in a period of calm. Many will be hoping to see some future price guidance for the spring period and internationally decisions will likely be taken with a large demand still to surface in the weeks ahead. Weather conditions across the UK have been variable, but it remains cold, which has kept a lot of attention on the first dressing of nitrogen. FOB values for straight urea have weakened, due to the strengthening of the pound against the US dollar following estimates of economic impact on the US after the government shutdown. These weakened FOB values have seen market corrections in the UK making granular urea a sensible and viable option for first dressing. A new direction of international urea prices may come following the conference which could alter UK prices once again, but to limit that risk Egyptian urea is available from Gleadell immediately. For urea enquiries contact your local Gleadell farm trader or call the Gleadell fertiliser desk on 01427 421241.

Ammonium Nitrate

After a very busy month, CF January terms have finally been withdrawn, although February and March terms remain unchanged and very competitive. For those who traditionally use imported ammonium nitrate, frustrations with imported price fluctuations is making many consider switching to Blue Bag. Further votes in parliament on Brexit have had an impact again on the currency this week and this will continue to play a part in pricing for the foreseeable future. With both CF factories once again producing 24/7, deliveries are back on track, and those with more to buy should now be considering their options.

The European Commission has delayed its provisional ruling for its on-going anti-dumping investigation into UAN. The investigation covers imports from the US, Russia and Trinidad and Tobago between 1 July 2017 to 30 June 2018. Provisional measures will be handed down in April if enough evidence is presented with definitive measures scheduled on 12th October.

£/€ £/$ €/$
1.143 1.313 1.1485
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Feb19 147.00-157.00 164.00-176.00 237.00-247.00 321.00-326.00
May19 150.00-160.00 167.00-177.00 240.00-250.00 324.00-329.00
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