Thursday 7 March 2024

Malting Barley

• We have seen another slow week on old crop malting barley, with little to no buyers in sight and drifting prices as buyers appear comfortable with their coverage.
• New crop barley saw some buying interest this week and prices appreciated as rains continued to push the market in a firmer direction. We still see a lack of farmer engagement with very slow on-farm procurement and we expect to see a continued cautious approach.
• With a comfortable S&D, this market seems balanced on weather and lack of liquidity. With some drier weather in the forecast, and if plantings get underway, we could see this price appreciation fall back to previous levels.

Rapeseed

• Soybeans are close to unchanged again this week as the trade has been positioning ahead of Friday’s USDA report. Last week saw the first weekly close higher in 11 weeks, or since the week before Christmas. This shows that the market may be starting to find some value at these lower levels, however, the overall fundamentally bearish picture has not changed. Weekly export inspections were in the upper half of the range of estimates and near unchanged from last week. 82% of the shipments were destined for China. China Jan-Feb soybean imports have fallen to a five-year low, weighed down by poor crush margins and fewer ship arrivals during the Lunar New Year. Imports for January and February were 13.04mln t combined, down 8.8% from last year.
• Energy markets are lower this week, as optimism regarding the OPEC+ ability to keep global supplies balanced seems to be weakening alongside a lack of fresh bullish inputs from equity markets looks like it is continuing to add pressure. The possible return of US oil sanctions on Venezuela next month would again stagnate Venezuelan output. This week, EIA crude stocks rose 1.367 million barrels to sit 29.983 million barrels above last year and 5.817 million barrels above the five-year average. Imports for the week were higher at 7.222 million barrels per day vs. 6.385 last week. The refinery operating rate was up 3.4% to 84.9%.
• Veg oils are higher this week, as Indonesia’s biofuel mandate for 2024 could lead to a further strain on global supply. In southeast Asia, palm production is seen below expectations alongside anticipated higher demand from the food and energy sectors this year.
• Canola is higher again this week as we see further sales to China, having bought seven cargoes last week with Chinese crush margins looking positive. The canola/MATIF spread is now coming in towards single digits, reducing competitiveness into the EU. Prospects for new crop sowing of canola are improving as the canola/spring wheat spread has moved from a $10/acre loss to a $30/acre premium, however, we may need to see an even bigger gain to warrant farmers taking the risk of growing canola.
• MATIF rapeseed is higher this week. In India, recent rain and hailstorms have hit crops, delaying harvesting, and limiting growth and crop quality. And in China, we have seen 10k worth of rape oil as prices are competitive. As for Australia, new crop is expecting to see GM seed take a higher market share, which will mean that there is more GM seed available to flow into the EU and therefore less non-GM from that part of the world. Yield reports in Australia look poor compared to last year but remain above the five-year average. Crop estimates from ABARES sit at 5.68mln t, 2.6mln t below 2022’s record crop of 8.27mln t.

Pulses

Beans

• A relatively quiet week on the market, with muted consumer demand both at home and on the export front. This is being driven in part by the general lack of competitive beans compared to other cereals and proteins, which all continue to slide lower, whilst beans remain doggedly static in price. There are some signs out there for forward domestic demand, however, we need to see further price corrections to the downside to ensure their place in the ration.
• The international markets remain quiet under the seemingly constant cloud of geo-political volatility and instability that has been present in our markets for some time now. Egypt’s economic woes continue, which, as one of the world’s largest consumers of faba beans, is a demand flag to watch. The currency remains under pressure, and with the ongoing tension in the Red Sea significantly reducing Suez revenues, the situation remains tense. This comes just ahead of the start of Ramadan at sunset on Sunday 10 March, which will see a slowdown in demand.
• It may be a new month, but the weather remains pretty much the same! The seemingly constant rainfall continues, ensuring that land work is challenging at best. The long-term forecast is showing some limited rainfall in the 4-7 day slot, although it looks like things may be showing some signs of starting to dry out. Temperatures are pretty much in line with expectations for this time of year, but in the 8-14 day forecast, there are signs that it will start warming up slightly. We are hearing reports of drilling, and with some sickly-looking crops out there, beans offer a good alternative if all you can do is rip them up and start again.

Peas

• Domestic peas remain in strong demand on both the human consumption and feed pea side, with prices continuing to be driven by the Indian import duty situation we have referred to in recent weeks. We are keen buyers of open market and would be happy to discuss prices moving forward. Consumers need feed pea cover into Q2 and offers are at a very strong level.
• Our 2024 buybacks remain available for any late deciders. Please contact your farm buyer for information regarding movement and price. We have swift seed delivery, as well as reduced prices on certain seed, to try offer the best gross margin available for your spring cropping.

Fertiliser

• Although the UK weather is far from ideal, fertiliser applications are underway. Following such a prolonged period of wet weather, residual nitrogen levels in the soil are extremely low and so many crops are desperate for nutrition.
• The cool and damp weather today is ideal for urea applications. We have straight granular urea available now, in addition to Piamin our inhibited urea, for delivery to farm for applications to crops after 1st April 2024, when an inhibited product is required.
• CF are withdrawing 34.5% Nitram prices for April and May today. Imported AN is still available, with prices remaining stable although producers in Europe are watching with interest firming energy prices.
• Sterling has firmed from 1.264 to 1.274 this week, against the US dollar, following the UK budget announcement and US economic data releases. Imported fertiliser prices are slow to react though.
• MOP, TSP and DAP all remain unchanged whilst product is needed for immediate delivery and demand is forthcoming from the farmgate.

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.

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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.