WELCOME TO THE ADM AGRICULTURE WEEKLY MARKET REPORT
Wheat
- Bullish sentiment has followed from the previous weeks to post gains across all major wheat markets, markets have rejected bearish news on China’s wheat cancellation and broken through technical levels.
- Chicago wheat has appreciated over 13c/bu week on week, as the trade keeps one eye on the weather forecasts in both North and South America, as well as renewed attacks on Ukrainian grain infrastructure fuelling short covering rallies.
- In more US specific news, the USDA’s National Agricultural Statistics Service has rated 55% of the winter wheat crop in the top producer, Kansas, as good/excellent, which represents a 2% lift on the week. This 2% lift was mirrored in Texas (the second-largest winter wheat state by area) with a lift from 44% to 46%. Oklahoma has seen ratings slip 4% to 62% good/excellent while Colorado looks more favourable, up 9% on the week to 65% good/excellent.
- Harvest is around three months away, with crop conditions up significantly from last year in key growing states as the core plains production belt recovers from a multi-year drought. Planted acres are down 6% on the year with approx 14% of the crop in drought areas as of 12th March compared with 53% of the crop in drought at the same stage last year, so overall prospects look good depending on the weather, but this continues to be a long-term watch.
- MATIF prices have followed the US higher, shrugging off recent Chinese cancellations to move up €5 week on week. The big hot-button topic in Europe is the proposed import tariffs on grain imports from Russia and Belarus, the European Commission has proposed a €95/mt on cereals. This is yet to be finalised, but very much looks like a done deal.
- It is a move that will likely curry favour with the farming community in the wake of recent protests, but given that only around 2% of Russian shipments went to Europe, it will likely have little material impact as Ukrainian grain continues to flood EU markets.
- Grain trade association COCERAL has revised down their 2024-25 European soft wheat figures to 134.1mln t, down 3.9% in their latest estimates. This downward revision was anticipated by the market as huge carryout stocks persist on the continent.
- London was also on the move, up £4/mt week on week. Strong basis levels are now present throughout the country with even southern levels improving bolstered by slow farmer selling. In fundamental news, the AHDB’s early bird survey dropped UK wheat acreage 14% to give a crop production figure of just over 10mln t, giving a potential greater reliance on imports which should keep a lid on new crop prices and premiums.
Malting Barley
- For another week, the barley market has its focus firmly fixed on northern Europe weather, with continued rains inhibiting planting progress in France and the UK. FranceAgriMer released their spring planting estimate on Friday at 39%, behind the trade’s expectations and over 50% behind last year’s pace. Later drilling this year is bound to bring a yield deficit, however, total acres will undoubtedly be higher y/y and the market still expects a comfortable surplus at this stage.
- UK spring planting has yet to really kick off, once again with continued rains keeping farmers off the fields. The forecast is starting to turn more favourable and those fortunate enough to have lighter soils can travel, however, some areas will need a prolonged dry spell before drilling can take place – not something we see in the forecast.
- AHDB re-released their ‘Early Bird Survey’ which first took place in October because of challenging conditions over the winter. They reduced the UK winter barley area to 355Kha, and increased the spring barley to 881Kha, which at 29% higher y/y feels high given the challenging spring conditions so far.
- The lack of demand continues to be a watchpoint for the market, and despite supply concerns, first-hand demand is not coming forward which is helping to keep prices from moving higher.
Feed Barley
- Demand for feed barley continues to dwindle, however, on the other side, UK farmer selling is slow, which we expect will keep an illiquid feel in the market. On paper, there is barley to come to the market in the UK, with most recent EU import figures showing only just 450Kmt shipped (350Kmt down y/y), however, it seems to be in strong hands today.
- Russian origin continues to be the cheapest old crop replacement into third country demand, with tenders in the MENA region all going this way over the last few weeks and limiting opportunities for northern Europe to export.
- The new crop domestic market is feeling firm, with the spread to feed wheat narrowing by around £10/mt over the last few weeks on non-existent origination because of the spring conditions. On paper, the UK should produce a healthy enough surplus of feed barley and we are currently uncompetitive to export. However, we do not expect prices to reflect this until the spring crop is established and growers coming to the table.
Rapeseed
- Tensions in the Middle East keep outside markets on edge, added to which China is now reported to be building three large military bases on Islands near Taiwan. Cuba is on the verge of civil unrest following food shortages and power outages. Equity markets rallied to new highs following yesterday’s Federal Reserve meeting, which indicated potential interest rate cuts in 2024.
- US markets rallied to break through the $12 resistance level yesterday, supported by the weaker US dollar. Soybean prices now sit at a two-month high. US weather shows showers heading into the weekend and next week. LSEG estimates the US soybean planted area to be 4.1% higher year-on-year.
- In South America, rain is again the topic of discussion, as showers spread across much of the central and northern parts of Brazil this weekend. Heavy rains will hit the southern parts of Brazil and northeast Argentina over the weekend, which may cause some further crop damage. Agrural estimated the Brazilian soybean harvest at 63% complete. SAFRAS lowered their production figure to 148.6mln t vs CONAB at 146.8mln t. While in Argentina, BAGE report bean conditions up 1% to 30% good/excellent, and Attaché lowered their crop production estimate to 49.5mln t.
- There’s nothing new to report out of China ahead of the start of their domestic soybean auction.
- Energy markets rallied this week to new recent highs. Prices saw a slight setback on Wednesday following a combination of profit taking, along with overbought technicals, triggered a sell-off. Palm oil prices took back the previous day’s losses and some, closing sixty-three ringgits higher. Soy oil started the session lower but surged to close 0.85 points up.
- Indonesia’s palm exports dropped 25.4% in February to 1.6mln t, with sales to India and China falling 50% and 31.5% respectively.
- Canola prices closed on Wednesday at a three-and-a-half-month high. Prices struggled to rally any further in the short term, with prices now firmer looking overbought.
- In Europe, markets saw support (mainly grains) following the EU’s decision to impose import tariffs of $104 p/mt on grain imports from Russia or Belarus, which followed through into the oilseed complex.
- MATIF rapeseed climbed to break the overhead €450 resistance. Despite lower energy markets, veg oils all closed firmer which lent support. Like canola, prices are nearing overbought in the short term. UK prices touched levels we have not seen since the end of last year.
- Sterling trades sideways at 1.1700.
Oats
- European oat markets have hit a bit of a rut of late with minimal fresh buying demand causing any stimulus to markets.
- Sellers of limited amounts of old crop milling grades are available in the Baltics and parts of Scandinavia, however, selling ideas remain high. New crop, however, is a different story, with most looking to lock into levels that are traditionally high relative to other commodities.
- Feed oat demand has fallen significantly, with buyers in Spain hopeful of a rebound in production, which should be available in Jun/Jul.
- Here in the UK, buyers appear to be more relaxed about their positions, siting a reduction in demand.
- Farmer selling has dried up and merchants are reporting that farmers are coming short rather than having surpluses to sell. This could make for an interesting end to the season if demand continues.
- New crop prospects look increasingly dyer with further rainfall over the last week and in the forecast. Growers will be struggling to get their intended areas in the ground ahead of mid-April.
- Last week the AHDB released the 2024 area intentions which showed an increase of 26% year on year, however it is likely that this estimate is heavily underestimating the impact of the constant rainfall experienced over the last few months.
- Bottom line, the milling oat market direction will be determined by old crop demand and new crop production recovery, but the weather over the next few weeks will be especially critical for the UK.
Pulses
Beans
- Feed beans remain uncompetitive in the ration, with other protein sources and cereals remaining more competitive, despite the recent pop in prices that the commodities have seen. We are seeing further de-formulation in certain livestock rations, but there is limited demand underpinning it. While broadly undiscussed, new crop will certainly start to become more of a topic going forward, and as we wait to see what gets drilled, it is worth discussing what is available and the best way of marketing them, especially if we see more beans going in and downward pressure on the premium vs London feed wheat.
- International markets remain quiet, as Australia continues to be the main supplier of beans into Northern Africa. Geo-political volatility and instability continues to rumble on quietly in the background on the international markets, although it is starting to be less talked about in our markets for now. Middle Eastern and North African trade remains slow as we approach the halfway point of Ramadan, and as we wrote last week, it is unlikely we will see any big inputs from these markets until mid April.
- As we steadily move towards the end of the spring drilling window, there appears to be few let-ups in the wet weather. The coming Bank Holiday seems to have sealed our fate, with as much as 20mm in the 7-day forecast for certain areas of the UK. Despite the latest AHDB Early Bird Survey putting the pulse area down 14% YoY, the weather is so changeable that we will not know until the area is drilled. Home Farm reportedly lost 30% of its winter wheat in Ambridge with this weather. Still, they are redrilling it with spring barley. If you are in a similar boat, beans also offer a good alternative for redrilling, be it either in that patch that has not yet had anything drilled, or if you need to be ripping up sickly-looking crops. The bean pool is still open, but with it due to close, it is worth considering putting your beans in the pool as a separate marketing option.
Peas
- The human consumption market remains in short supply of open market material, pushing prices for on-farm parcels higher again week on week. With the ongoing import duty situation in India further driving the market higher, it leaves any grower with tonnage left on farm with a fantastic opportunity to make an excellent value for marrowfats, greens, or yellows!
- Feed peas are also undersupplied domestically, with a lack of rejected material to meet customer needs. Please contact your farm buyer for a competitive offer.
- We are quickly running out of available hectarage for spring cropping options in relation to seed on peas. Peas have the ability to be drilled much later than other spring crops. Should you have space in your fields, please get in touch with our team for more information surrounding the buybacks, or watch the pea update video on our ADM Agriculture YouTube channel here.
Seed
- With spring on the horizon, now is a great time to start thinking about seed for the Countryside Stewardship or Sustainable Farming Incentive Schemes. At ADM Agriculture we have a vast portfolio of mixtures available to suit the various scheme requirements, including winter bird feed, legume follows, and more.
- Are you looking for some game cover? Our most popular game maize is a blend of different maturing varieties, helping to provide feed and cover all season. This is likely to sell out by the end of the season, so it is recommended to get it booked early to avoid disappointment.
- If you are planning on drilling OSR this year, why not drill a companion crop alongside it. Companion crops are a great option to help aid establishment of the oilseed rape plants.
- Due to the extreme weather conditions causing issues with the 2023 autumn drilling campaign, leading to undrilled or poorly established crops, winter cereal stocks will be limited for autumn 2024 drilling. Some of the newer and more mainstream varieties are already beginning to sell out. With this in mind, we would urge growers to cover their seed requirements early to avoid disappointment.
Fertiliser
- The UK £ has traded lower since last week, now trading at 1.27 vs US $ after hitting highs of 1.2867 last week.
- FOB Egyptian urea pricing has traded $10 tonne down through the week pressured by a weak sentiment. UK farm pricing has also edged slightly lower on straight urea whilst inhibited urea remains relatively stable.
- Imported AN remains available for spot delivery at a premium to Nitram pricing for May delivery. Inhibited urea continues to be the most cost-effective nitrogen option on a £/kg N basis and is gaining some traction at farm level.
- Liquid UAN and UAN+ATS products remain available for spot delivery with short delivery lead times. Inhibitors for UAN and UAN+ATS are also available mixed pre-delivery or in containers for on farm mixing.
- NPK(S) blends are available for spot delivery for spring cropping needs through ADM Agriculture.
- We are also offering renewable PK products for immediate delivery; spring delivery and unpriced contracts are available on renewable PK for harvest delivery for your PK requirements.
- Potash has reportedly traded higher in Brazil, but prices remain at a discount to European levels at present.
| £/€ | £/$ | €/$ |
|---|---|---|
| 1.1686 | 1.2747 | 1.0908 |
| Feed Barley £ | Wheat £ | Beans £ | Oilseed Rape £ | |
|---|---|---|---|---|
| Mar 24 | 145-150 | 163-178 | 245-255 | 360-365 |
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.”
ADM Agriculture cannot accept liability arising from errors or omissions in this publication.
ADM Agriculture 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.
