International Grain, Seed and Fertiliser Merchant

Market Report

Thursday 7th February

Wheat

The US market is up $2/t on the week as it continues to tread water ahead of tomorrow’s USDA data. Support is still seen emanating from the current US/China trade talks, and the assumption that China will purchases a quantity of US agricultural products, including wheat. However, while US winter wheat plantings are expected to be declared at their lowest level in over 100 years, the likelihood of reduced 2019 production could be more than offset by a reduction in 2018 US exports, and higher ending stocks.

 

European prices are down €2-3/t on the week as the market weakens under its own weight. Russian exports are declining due to higher domestic prices, although at present the EU export programme is not reaping the benefits. Exports of wheat to non-EU destinations are still reported 26%down year on year. French farm office France AgriMer did forecast an increase in such exports by 150,000t to 8.85mln t, but also lowered intra-EU exports by a similar quantity. However, due to a reduction in domestic feeding, end-season stocks were raised from 2.8mln t to 2.9mln t

 

UK values are unchanged on the week, although sterling is weaker. While Brexit rumbles on, it was the release of the Basic Payment Scheme data by DEFRA that caught the eye. The data, which is subject to further investigation, showed a greater- than-normal divergence from the June survey estimate for the wheat area in England. If correct, that would dramatically tighten the dynamics of the UK’s supply and demand balance sheet.

 

In summary, another week of ifs and buts, and whens and maybe’, but little overall action. USDA will provide updated information tomorrow, with US winter wheat sowings leading the interest. However, the trade will also watch for adjustments to the US balance sheet, and whether the USDA starts tinkering with the global export matrix, particularly for the EU and Russia, where current projection remains heavy. Otherwise, it remains all about US/China talks, Black Sea exports and Brexit, although the BPS data has thrown more uncertainty into the mix.

Malting Barley

The UK malting barley “trader short” market seems to have stabilised for now with the recent weakening in currency helping prices. That said, any fresh trade is all but non-existent and the trade shorts are chasing mainly low nitrogen Propino and distilling varieties. All buyers seem to have covered their Planet requirements as this variety had a good quality year and there are still good amounts available for sale. The cap between the theoretical shipping market continues to be around £25 to £30/t below the UK domestic short market, as there have not been any maltsters in the market for weeks. This is making life very difficult for all the export traders who still have a lot of their Jan/March “price-to-be-agreed” shipping contracts to sort out.

Crop 2019 sales mainly continue to be blocked by the uncertainly around Brexit, which has meant UK traders have been side-lined. They have had to watch the price come down by around £30/t from the highs, without being able to sell any of their normal volume of barley.

 

Rapeseed

Despite the US and Chinese government’s ongoing discussions about resolving their trade dispute, the market remains unimpressed. There have been further announcements of fresh soybean sales, but the overwhelming issue is the lost business and, more fundamentally, China’s general slowdown in consumption. This is keeping US domestic soybean prices on the back foot and CBOT futures are struggling to find any clear direction.

 

The ongoing concerns about the slowdown in China are also affecting the Canadian canola market, with prices in Winnipeg falling during the week. China is a significant export outlet for Canada and, with StatsCan increasing forecast ending stocks to record levels, the market is struggling to come to terms with what is becoming a burdensome supply situation.

 

European rapeseed futures have drifted lower on the week following a lacklustre trade, despite the weaker euro. With the February Matif contract now closed, and any futures related technicalities out of the way, the market is now able to re-focus on the fundamentals. The slowdown in the EU crush caused by low water levels in the Rhine during Q3 and 4 2018, together with the impending arrival of Australian seed, is likely to supress any significant old crop rally even if farmers continues to remain side-lined from the market.

 

The UK continues to be a follower and fluctuations in sterling remain the greatest influence on UK farm-gate prices in the short term.

 

Oats

Yesterday Defra released the BPs Crop areas in England which uses crop hectareage information sourced from Basic Payment Scheme data. This comparison for the 2018/19 crop year shows the oats area down circa 10% compared with the June AHDB estimate.

This reduction has a negative effect on this crop year’s production figure, and could act to further support domestic milling oat values through the rest of this season. However, the millers’ continued use of lower quality oats and relevant import parities will also need to be considered.

Pulses

Defra’s BPS-based crop areas put the total area of field beans in England for harvest 2018 at 143,000ha, almost 12,000ha below the AHDB June Survey. If true, this would reduce total production by 30,000t, further tightening an already very tight balance sheet.

Old crop beans of both feed and human consumption quality continue to head north, with shippers chasing increasingly dwindling supplies on farm. There remains fresh export business of feed to be done, with dehullers in the EU still requiring beans for the April ’19 onwards position and values are likely to remain well supported in the weeks to come.  

New crop beans are yet to trade in any real volume. At current prices, these are worth a significant premium over wheat and look expensive against other mid-range proteins. Consumers are reluctant to take any cover at these levels. 

New crop buybacks for large blue peas and marrowfats remain available. The marketing pool for both peas and beans is still open.

 

Seed

Spring Beans

Final germinations have now been finalised from most seed lots up and down the country and they have produced better-than expected results, providing some surplus stock for growers still needing to buy. Lynx will be the variety most widely available with non-derogated stock going to sell first and some derogated stock available between 70-80% germination thereafter.  

 

Pea Seed

Still available for 2019 spring is Gleadell’s excellent selection of pea varieties to service the company’s market-leading large blue and marrowfat buybacks. Peas represent an excellent opportunity to introduce a nitrogen-fixing break crop into the rotation, leaving available nitrogen for the following wheat crop. They also offer an opportunity to get on top of troublesome grass weeds, thanks to a later drilling slot compared with other spring crops.

 

Spring Cereals

Spring oats remain scarce, spring barley supply is OK, apart from popular varieties RGT Planet and Laureate, while most spring wheat varieties remain widely available.

 

Fertiliser

Urea

The Latin America Fertiliser Conference provided little guidance for pricing, resulting in a further week of relatively little change. There are questions being asked around the strength of sterling as we move towards the 29th March, as well as uncertainty in energy costs following political instability in Venezuela and the building of US-Russian tensions. Many are making the most of the circa £20/t fall from the January price. On top of these uncertainties, the Indian tender will also influence future prices, with 315,000t still to be awarded. Spring is approaching quickly and, with top dressings just around the corner, it is important to order today to ensure a timely delivery and to avoid delays in application. For granular urea enquiries contact your local Gleadell farm trader or the Gleadell fertiliser desk on 01427 421241.            

   

 

Ammonium Nitrate

The ammonium nitrate market is still dominated by competitively priced CF products. New uncertainties of a No-Deal Brexit and the impact on the pound will remain a significant factor for imports. Blue Bag continues to be a steady ship in a sea of uncertainty. CF has maintained its February and March terms and Nitram deliveries are available throughout these months nationwide. Those weighing up their AN purchase should consider Nitram against imported material. Preferable terms are available for February, so please enquire through your Gleadell farm trader today or contact the Gleadell fertiliser desk on 01427 421241.    

 

£/€ £/$ €/$
1.139 1.29 1.1325
Feed Barley £ Wheat £ Beans £ Oilseed Rape £
Feb 19 145-155 164-176 240-250 319-324
May 19 148-158 167-177 243-253 322-327
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