International Grain, Seed and Fertiliser Merchant

Market Report

Thursday 6 December 2018

Wheat

US wheat prices are slightly higher on the week, mainly due to over-spill support from firmer corn and soybean markets resulting from last weekend’s agreement between the US and China not to escalate the trade war. However, the agreement is open to interpretation, as China would need to open up its vast market, and Chinese buyers still comment that current tariffs on bean imports need to be eliminated before purchasing US beans. Australia pegged its 2018 wheat production at 17mln t. This was higher than expected, as losses caused by adverse weather during the sowing/growing season appear lower than originally feared. Canada release their updated production numbers today, with the trade looking for a small increase on the previous estimate released in September.

EU prices are slightly weaker on the week, not helped by news that Egypt’s GASC failed to secure letters of credit for at least 16 cargoes that have been purchased, causing delays in payment and confusion among suppliers. Following reports from the Finance Ministry that nothing would be done until January, shippers have been asked by GASC to delay December arrival shipments until January. Reports that Russia will send trial cargoes to both Algeria and Saudi during the next four months, looking to boost exports, is seen as a long-term threat to the EU, as the country has struggled to break into this market due to historical quality issues. The importance of these markets is shown this year, as half of the total non-EU wheat exports to date have been shipped to these destinations.

The UK market is up about £2/t on the week, with the market still focused on the Brexit vote next Tuesday. Market fundamentals continue to tighten as the festive period nears, as fresh farmer selling, and lorry availability lessen. Long-term the current price structure would indicate good values to growers, although next week’s vote, and any currency implications, will influence the direction of the next movement in prices.

In summary, the US/China deal could be read either way, but it seems to have been taken favourably by US traders. The suspension of the tariff increase is not a suspension of the trade war, it is a suspension of any escalation of the trade war, and if the parties don’t agree in further talks, are likely to be re-imposed. EU markets continue to watch signs of falling Russian exports, and with an Egyptian tender today, it is expected that Russian will take the majority share. In the UK, it remains all about Brexit and the key vote next Tuesday.

Malting Barley

The malting barley market has remained unchanged this week, with little demand from UK maltsters or EU buyers. The only support has come from a few shorts appearing in the market for quick movement. Crop 2019 demand is very thin due to the lack of an export market. That said, we are still offering a variety of spring and winter barley contracts. Please speak to your farm trader regarding marketing options.

Rapeseed

The news this week has been dominated announcement of the temporary cessation in the US/China trade war after President Trump met with the Chinese leader following the G20 summit last Saturday. This was initially expected to be very bullish for US beans and a catalyst for sharply higher prices, but the reality has been rather disappointing as the traders have paused to see what the reality of this deal really means.

After all the noise and fanfare from last Saturday night, it is still not at all clear what will happen and when China will start to engage. The US Agriculture Secretary has said that it is “yet to be determined” whether the tariffs on soybean imports will actually be removed and the US stock market has seen a significant sell-off as the lack of clarity has spooked traders.

In Europe, rapeseed futures found some support, as news filtered into the markets that the EU is considering re-introducing the anti-dumping levies on Argentinian bio-diesel, but in the UK the main story is still Brexit and its effect on our currency.

The latest Brexit Minister, Stephen Barclay, admitted that there was no “plan B” if the Brexit bill fails next week and this pushed sterling to fresh multi-week lows earlier in the week, but this morning Mrs May is hoping that some tweaks to her proposal will help draw in some of the pro Brexit MPs. She is suggesting that an Irish backstop “parliamentary lock” plan will be put in place to give MPs a vote before any backstop would be implemented.

The currency market was reportedly pricing in a 15pct possibility of the plan getting through on Monday, but some pundits are now suggesting that it is a 50:50 call. If Mrs May does get the vote through and we move into the transition period, it should be supportive to sterling and negative to UK farm gate prices, but what will actually happen next week is still far from clear!

Seed

The 2019/20 Recommended List is live.

This Monday saw the RL list go live with some exciting new additions summarised below.

LG Skyscraper – received automatic recommendation for being 2% clear on yield. Good agronomics and grain quality provide a barn filler with additional premium potential being a group 4 soft. LG Skyscraper has a very vigorous growth habit in the spring, making it an ideal wheat for growers looking at a variety to out-compete grass weeds in the spring.

KWS Firefly – Group 3 with highest yield and best quality in the group. The third-highest Septoria tritici score on the list, combined with a 9 for yellow rust and 8 for brown rust, gives KWS Firefly an exceptional agronomic rating. There is currently limited tonnage available on a buyback, so speak to your farm trader ASAP to secure your tonnage.

LG Spotlight – Group 4 soft with excellent grain quality. Very high spec weight and a Hagberg to rival the top-quality wheats, make’s LG Spotlight an obvious choice for premium chasing soft wheat growers. Treated yield matches Gleam and RGT Gravity on 104% of controls providing an extremely attractive all-round offer for those who like to strike the balance between yield and grain quality.

KWS Extase – Group 2 with a continental heritage, and as such, has phenomenal autumn and spring vigour. KWS Extase sets a new standard in Septoria tritici resistance with a score of 8.1 – the highest ever! As if it doesn’t already offer enough, KWS Extase also has fantastic grain quality with a very high spec weight and Hagberg. KWS Extase has been an instant hit with growers and seed supply is already incredibly limited for 2019 plantings!

SY Baracooda – Joint highest yielding hybrid barley, with the highest untreated yield, makes SY Baracooda the best all round hybrid available for 2019. High bushel weight and low screenings bolster the package further and offer hybrid growers the next step up.

Please speak to your farm trader or the seed department for individual advice on which of the new varieties will be best suited to your system.

Fertiliser

Internationally the urea market is slow, as buyers remain on the side-lines watching prices continue to trade sideways looking for some direction. Very few sales are being reported for December, and the lack of business is likely to put some downward pressure on pricing, as manufacturers still have more tonnage to place.

Despite a forecast increase in demand this season, both the European and UK nitrogen markets remain behind where they normally are as the year draws to a close.

The whole market is pointing towards a very busy Jan, Feb and March period, which would move the market towards being a sellers’ market.

However, today we are in a buyers’ market and so farmers with tonnes still left to buy should be looking at the opportunities on offer now as prices will get squeezed when buyers return in volume.

CF nitrogen, nitrogen sulphur and its full range of NPK products are on offer today for February delivery. These all remain a very good buy.

Gleadell has Egyptian granular urea to offer for December, January and February delivery in bulk and in bags, so speak to your farm trader for terms.

£/€ £/$ €/$
1.124 1.2745 1.134
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Dec18 158.300-168.00 161.00-173.00 221.00-231.00 323.00-328.00
May19 162.00-172.00 167.00-177.00 225.00-235.00 328.00-333.00
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.

Latest Tweets

Follow Us

Get updates

Registered Office:
Lindsey House, Hemswell Cliff,
Gainsborough, Lincolnshire DN21 5TH.

Company Number: 534118