Thursday 18 April 2024

Malting Barley

• The weather is ruling the market for another week, although with conditions improving which is bringing some comfort to buyers. Overall, the feeling is that the UK crop will be in the ground over the coming week, although the late planting window is bringing some concern over yield and quality for harvest.
• UK FOB markets have found some support over the last week, as trade buyers continue to cover their risk, with French sellers happy to sell UK paper markets with farmer selling picking up in France.
• The main question is about when demand comes into the market to cover their requirements, with the brewing industry having been absent from the market for some time.

Rapeseed

• This week ag markets have been lower due to a lack of any fresh major inputs as well as no further escalations in the Middle East which has let energy markets fall back from the highs. For soybeans we have seen a sale of 124,000mt beans to unknown earlier in the week which did lend support but a higher dollar pressured prices. This month’s USDA crop production report didn’t provide much direction as the main difference between estimates and USDA figure was Brazilian production remaining unchanged at 155mln t, however, since CONAB released their estimate earlier that day and reduced expectations to 146.52mln t. There is usually a difference between the CONAB and USDA number but a difference of 9.5mmt doesn’t give much of an accurate indication for the trade. As for the rest of the report, US ending stocks were 340 million bushels vs 317 expected and 315 million bushels on the previous report in March. World ending stocks were higher at 114.22 billion bushels vs. 113.71 expected and Argentina production was left unchanged at 50mln t despite an expected 0.48mln t increase.
• Energy markets are lower this week as no further escalations in tensions between Israel and Iran haven’t supported the market. We have also seen recent economic data from China suggesting lower demand hopes after March throughput was up 1.3% to 63.78mln t. Political analysts suggest the Biden administration will not block Iranian oil exports as that would exaggerate gains in US retail fuel prices. EIA crude stocks rose 2.735 million barrels and are 5.975 below last year. Imports were steady week on week and the refinery operating rate was down 0.2% to 88.1%.
• Veg oils have been mixed this week as Malaysian palm oil stocks have fallen to a 10-month low as a jump in exports offset a rebound in production. Exports of Ukrainian sunflower seed are decreasing in the current year, although so far this marketing year Ukraine has processed and exported record volumes of rapeseed.
• Canola has followed outside markets lower this week, though we have seen crush margins rise. Increasing crush capacity in Canada continues to add pressure. Cash bids on farm in Canada have dropped below $14/bushel, farmer selling has slowed while any canola left on farm will likely be looking for a better price.
• MATIF rapeseed has turned lower this week also. Talks surrounding old crop are fading as most consumers are now covered. In Australia, the weather in growing states is mostly dry which will reduce the area planted and the window to plant cereals is longer than rapeseed, production is expected to be around 2.5mln t.

Pulses

Beans

• The main focus on beans over the last couple of weeks has firmly been around the planting progress and area. The AHDB early bird survey from the middle of March seems to be ringing true with the general feedback we’re hearing in the market. The big question now is around yield potential and establishment – we’re on course for a smaller crop this coming year, but beans are fairly resilient, so will it be that much smaller?
• The Eid celebrations following the end of Ramadan are now complete, and we are starting to see a little more activity from Egypt, although little fresh business. As we move into the North African summer, consumption rates start to slow down in line with the rising temperatures. Despite this, Egypt’s economic woes are still present, and with the recent devaluations of their domestic currency, plantings of all major ag commodities are up where in real terms, the farmer feels they are being paid more.
• Most beans are now in, following the end of the main drilling window. There will no doubt still be some odds and sods going in; however, the area is now the area within reason. As the beans that have been drilled start to emerge over the coming weeks, the industry will start to get a better idea of what new crop is likely to look like. Despite the record rainfall levels we have been seeing over the last months, the little and often showers we continue to see are no doubt welcome over some of the heavier areas to maintain soil moisture. There is still light rain in the forward forecast, but temperatures are below normal, which could hamper germination. Talk to your farm trader who will run you through the marketing options available!
• Finally, the obligatory PGRO plug to those of you who are eligible to be members. Their SFI survey is still active and available at https://rb.gy/uk49ix. It is super simple with just four questions to gauge general sentiment out there and takes just 30 seconds to complete. If you are not already signed up to the PGRO mailing list, you can sign up at https://www.pgro.org/, where levy payers are able to access all sorts of advice and support on all things pulses for free!

Peas

• Given adverse weather conditions, we are yet to see many peas planted in the ground for 24 crop; luckily peas can be drilled later than other spring cropping choices so currently we are not too concerned with the lack of plantings. Please contact our pulses team if you would like any advice surrounding this. We still have hectarage available should any growers have some space on the farm.
• Feed peas remain under-supplied across the UK and prices are still at a strong level due to the demand over the next two quarters, opportunities for quick movement at an impressive price point for feed are available.
• Human consumption-wise, we remain keen buyers of any open market peas which are left on farm. Long Sutton will continue to process and clean peas throughout the next few months ahead of the new season crop arriving.

Fertiliser

• Offers of granular urea around $350/t CIF have been offered to the UK for the New Season, but whilst the focus remains on Spring land work buyers are showing little appetite to engage today.
• The spot global outlook for urea appeared weaker, since RCF halved the purchases of its March tender, however, strong rumours are circulating today that China has suspended issuing export certificates which will tighten supplies once again and add much needed support to producers.
• Inhibited urea is available from ADM for spot delivery. The inhibited option remains the most cost-effective option for nitrogen in the UK on a £/kg N basis.
• UK and Imported AN are relatively flat and available for April and May delivery.
• In the UK Phosphate prices remain flat, potash prices, as they have been in previous months are variable across the UK so speak to us on those.
• TSP/DAP prices globally appear to be bearish, Chinese DAP producers are maintaining a price floor for DAP exports, however business into India is undermining these attempts.
• European MOP demand is lacking significant demand, prices are looking soft at present but as we have said movement in UK markets are yet to be seen.

NB: Prices quoted are indicative only at the time of going to press and subject to location and quality.

“Although ADM Agriculture take steps to ensure the validity of all information contained within the ADM Agriculture Market Report, it makes no warranty as to the accuracy or completeness of such information. ADM Agriculture will have no liability or responsibility for the information or any action or failure to act based upon such information.”

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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.