WELCOME TO ADM AGRICULTURE WEEKLY MARKET REPORT
Wheat
- The US market has traded about $1.50/t weaker w/w, on contrasting news and rumours. Talk that China is showing signs of purchasing more US wheat keeps the market underpinned, although current US exports remain routine, running 30% lower y/y, in line with the current export projection. For tonight’s USDA reports, traders are looking for an increase in US stock following the publication recently increasing the 2023 wheat crop by 2mln t. On the global front, the higher US production may offset the possibility of further cuts seen for Australia and Argentina, but it will be of interest to see if any upward revision is put in for Russia, where local analysts have production 5-8mln t higher than the USDA .
- EU prices have slipped €3/t w/w as the EU export outlook continues to struggle. With the strong pace of Russian exports, and the potential for Ukrainian exports to rise as freight rates have been halved in recent weeks, due to vessels using the humanitarian corridor, and controlled by Ukraine without issue, will keep the pressure on EU export prices. News that Egypt purchased almost half a million tonnes of Russian wheat in a ‘private deal’ at a price below the ‘set export floor’, and are in negotiation for more, shows the strong competition from the Black Sea region. Strategie Grains have revised the 2023 EU soft-wheat crop up to 125.6mln t, from 125mln t previously, and although end-season stocks have also been revised higher to 12.1mln t, these are still down from last season’s 12.9mln t.
- UK continues to be a follower, with prices down almost £3/t w/w. Data showed that the UK economy grew 0.2% in August, in line with expectations after the sharp fall in July and will probably mean interest rates with be kept on hold next month.
- Market fundamentals remain the same, with the north/south price differential still enabling the transportation of grain from the cheaper to more expensive destinations. The rise in the value of sterling has done little to enhance the lack of competitiveness in UK supplies, and with growers seemingly more involved in fieldwork rather than marketing, the supply squeeze on the market is still apparent, although this may ease as we move into November, a more fluid month re supply!
Malting Barley
- Malting barley markets are very slow, as once again maltsters across the UK and Europe are not showing demand. The market remains cautious about falling beer sales and resulting high malt stocks, which are causing markets to drift steadily lower, helped along by the pressure in futures markets. Additionally, we are seeing malting demand moving from spring barley into French 6-row winter, which is available at a significant discount.
- Farmer selling is slow overall despite quality premiums of more than £70/mt, as samples are still being analysed to determine the usability, and farmers are busy focussing on planting next year’s winter crops.
Feed Barley
- Russian feed barley still trades at a significant discount to EU origin into the MENA region, which is keeping export demand away from the EU market. French barley is once again competitive to China due to firming FOB values in Australia; however, demand is fairly muted at destination which is limiting activity.
- The UK market is struggling for demand, and as a result, barley prices have pushed lower relative to wheat in an attempt to find buying interest. We are still uncompetitive into Spain vs a strong Black Sea handy-size programme. However, the UK now competes into Ireland where feed barley is competitive in feed rations (on paper). If demand from Irish buyers picks up, it could provide a much-needed lifeline for UK barley which, at present, has nowhere to go.
Rapeseed
- The unfortunate scenes in Israel continue to escalate with further missile attacks yesterday. Russian forces continue to attack more Ukrainian ports. The general increase in global conflict keeps markets on edge which will impact supply and demand.
- US Ag markets struggled to find anything new to trade on this week and prices ground lower. The USDA will release their latest S&D at 5 pm this evening which may lend some direction from here.
- CBOT soybeans closed 19 cents down last night, 21 cents off the high. Meal closed near unchanged. Soy-oil again closed lower.
- Weather in the US shows heavy showers across the northern plains and Midwest which will delay harvest progress over the weekend. Soybean conditions fell 1% to 51% good/excellent which fell in line with trade expectations. Harvest progress is reported at 43%.
- China stepped back into the market to buy 121,000mt and a further 213,000mt to an unknown buyer.
- Weather in South America shows showers across Brazil and Argentina for the next few weeks. This week Conab estimated the Brazilian Soybean production for 2023/24 at 162mmt vs the record 163mmt that the USDA posted.
- Energy markets all traded lower. Crude oil prices fall sharply from recent highs. Veg oil prices continue to get cheaper in a bid to buy further demand, not helped by a large Russian sunflower crop which is being priced aggressively in the market. The Malaysian Palm Oil Board released their latest stocks reports, estimating ending stocks at 2.314mmt, unchanged from September 2022 and slightly higher than their 2.1mmt in August (average trade guess 2.38mmt).
- Canola futures closed lower after a long weekend. Harvest conditions remain ideal with Alberta now 75% complete and Saskatchewan 95% complete. Farmer selling picked up on Tuesday as harvest sellers stepped into the market. Weaker veg oils pressured levels in recent sessions added pressure.
- In Australia, the crop in the East is expected to ready to harvest in the next 10 days.
- MATIF rapeseed continues to trend lower with futures trading through nearby support levels. Farmer-selling targets are getting further away.
Oats
- Oat markets in the EU saw further price rises week on week, with buyers continuing to cover retail business against a backdrop of tight EU oat balance sheets.
- Quality issues in both Sweden and Finland remain a concern, with high mycotoxin levels expected to see a greater proportion than normal making their way into the feed pile.
- Demand into Spain, for both feed and milling oats, continues to support prices, however, buyers have looked to pressure prices now that there are a decent imported supplies being offered ex-store, but fresh demand for Nov/Dec could restrict prices from falling.
- Here in the UK, demand for milling oats remains high with demand from both the domestic and export outlets actively in the market.
- Quality of the UK oats has continued to deteriorate with the average of samples through our lab showing 50.44kg/hl and 47.26kg/hl on the winters and springs respectively.
- Bottom line, oats remain well sort after, but the spread between milling and feed looks set to widen.
Pulses
Peas
- Feed pea demand has ramped up from a consumer perspective as they need cover before the new year. Given the quality of peas this year, it has meant feed parcels have been few and far between. Please contact your farm trader if you have any feed peas, as we are able to offer second half Oct movement and first half Nov.
- Human consumption-wise, green peas and marrowfats hold their strong ex-farm prices from last week due to strong consumer demand, sub 10% bleached lots on both commodities hold the best value. Please ensure our lab sees a sample so we can grade your product correctly and provide a competitive bid.
- Our 2024 buybacks are still available with Adder being booked up strongly and Butterfly running low for green peas. Please book to avoid disappointment!
Beans
- Flat price is relatively unchanged week on week, roughly £10/t higher since harvest, mainly driven by the trade being heavily short as well as the yields which took most by surprise.
- Demand on the feed side is few and far between domestically, and particularly in Europe, where we have seen next to no bids given the Baltics remain 10 euros cheaper than UK origin.
- Human consumption demand has picked up out of Egypt and Sudan, where we will look to make the most of this additional demand either through bulk vessels or containers via Long Sutton in both the November & December positions.
- Australian beans arriving on the market in 2024, may pose more of a challenge for UK-origin human consumption given the quality and quantity coming out of there.
Seed
- Get in touch with your farm trader or the seed team to hear our seed floor stocks available for immediate delivery. Champion, from DSV, has been a firm favourite with its extreme vigour giving the flexibility to push back drilling date. KWS Cranium and LG Redwald are also varieties which are popular in the later drilling slot, as such we expect demand of both varieties to increase over the next few weeks.
- Looking for a short-term grass ley? Westerwolds are a great option for producing large amounts of biomass in a short space of time. Whether you need it for silage, hay, grazing or green manure, Westerwolds is the choice.
Fertiliser
- The Indian tender closes on 20 October which should offer some near-term direction for urea globally which currently trades sideways.
- Global gas markets have risen on a variety of factors including the Baltic connector, Tamar gas field closure and the potential of more LNG strikes in Australia this week.
- UK nitrogen markets are yet to see any increases although ammonia markets have been rising week-on-week. Raw material costs are increasing the cost of production for all European manufacturers.
- The conflict in the middle east could be impacting future supplies of MOP as Israel was the fourth largest exporter of MOP in 2022 with concerns over accessibility to the port of Ashdod being impacted by the conflict.
- Current UK prices remain flat, whilst autumn drilling remains the main focus, although it is evident there is still a large amount of business to be concluded at some stage post drilling.
- ADM have Piamon 33N 30SO3, Granular Urea, Nitram as well as NPKs, PKs and straights available for a wide range of delivery windows to suite your needs.
| £/€ | £/$ | €/$ |
|---|---|---|
| 1.1580 | 1.2295 | 1.0615 |
| Feed Barley £ | Wheat £ | Beans £ | Oilseed Rape £ | |
|---|---|---|---|---|
| Nov 2023 | 155-165 | 176-186 | 225-235 | 340-345 |
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.
