Thursday 11 April 2024

Malting Barley

• Once again, the developing weather story is driving the malting barley market. The French crop is now circa 90% planted which is bringing some relief to the market. However, concerns still exist over the slow pace of UK/Danish spring plantings, both of which are now late. Concerns about the yield potential and quality of this late-drilled barley are hanging over the market.
• FOB markets have found further support over the last week on these concerns which are supporting domestic prices for new crop. The new crop strength is spilling over into old crop which continues to perform well, despite demand from consumers remaining slow in all positions.
• For another week, all eyes remain fixed on the weather, but we would not rule out further upside to premiums if the weather does not improve, particularly if demand does decide to step in for cover.

Rapeseed

• The main focus for this week has been positioning ahead of USDA’s April crop production report. The trade does not expect to have a massive reaction to this. The main change is thought to be Brazilian soybean production, which has lagged behind trade estimates, expected to fall to 151.68mln t vs 155mln t last month. World ending stocks are expected to drop to 113.71 billion bushels from 114.27 last month due to slower fresh sales and competition from South America. Argentina’s production is expected to rise to 50.48mln t from 50.00mln t last month. US ending stocks are expected to rise by 2 million bushels to 317 million bushels. We have seen reports from USDA this week of multiple flash sales on new crop beans but was not enough to bring positivity.
• In South America, the weather forecast remains favourable for the foreseeable future so has not given anything new to boost prices. China’s April bean imports are expected to reach 9.19mln t with 6.36mln t coming from Brazil and 2.83 from the US.
• Energy markets have posted a correction from recent positivity as talks of a ceasefire help ease nearby tensions, which has also convinced some longholders to start profit-taking. This week’s EIA report saw stocks rise much more than expected and are 5.841 million barrels higher than last week. Imports for the week were 6.434 million barrels per day vs. 6.618 million barrels last week and the refinery operating rate was 88.3% compared to 88.6% last week.
• Veg oils have been mixed this week, following crude to see a slight correction. Exports of Malaysian palm for April 1^st-10^th were 12.7% higher than the previous month, mostly to the EU and India. Sunflower oil price has risen in Ukrainian ports on the back of a similar pattern in global veg oil markets, Ukraine has exported 3.8 mmt of sunflower oil since September 23 vs. 3.2mln t for the same period last year. Harvest estimate for sunflower seeds in 2023/24 is expected to be 1.6mln t higher than the previous year and is expected to rise another 0.6mln t into 2024/25.
• Canadian canola is lower this week but remains within recent trading range between $625 and $650. Interest from China and Japan continues to bring support with Japanese crush margins now favouring canola, but positivity has been capped by volumes of farmer selling that we have not seen since harvest.
• MATIF rapeseed is higher this week as upward momentum continues. Coverage for old crop in the UK is ample now with few left to need to pay up for what is left on farm. Crush margins continue to rise in the EU for new crop. Crop conditions in the EU look similar to the UK, very advanced and flowering ahead of where we would seasonally expect, so weather from now on will be key to see how development continues and impacts yields. For now, there does not seem to have been negative weather impacts.

Pulses

Beans

• The bean market is quiet as we look to enter the summer diet for livestock nutrition, with beans currently uncompetitive compared to spot protein and cereal prices. New crop beans are also teetering between featuring or not, which given the state of plantings is no surprise. However, UK beans are to come lower, relatively speaking, to compete against European levels for new crop, so it could well be worth looking at pricing some up sooner rather than later.
• Time for another shameless PGRO plug to those of you who are eligible to be members. Their SFI survey is still active and available here. 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 here, where levy payers are able to access all sorts of advice and support on all things pulses for free!
• This week saw the end of Ramadan, so we will likely see Egypt come back into the market, starting next week. Egypt’s economic woes are still there though, so it remains to be seen whether they can offer any support to the market, or if beans will start to drift into the end of the crop year, as they are certainly lacking friends in terms of fresh demand at their current levels.
• The final push to complete spring drilling is well underway as the end of the window is rapidly approaching. Finally, a small reprieve looks to be in the forecast, with little rainfall forecast across the south and east of England for the next week, whilst temperatures are around normal for this time of year. For those that have managed to drill some beans, there is still time to get them in the CY24 bean pool, but with it due to close imminently, it is worth considering putting your beans in the pool as a separate marketing option. Talk to your farm trader who will run you through the marketing options available!

Peas

• Feed peas domestically remain in strong demand for the next two quarters as we head towards 2024 crop; customers are looking for supply driving price direction higher week on week. We are keen buyers of any domestic feed peas with swift movement opportunities available.
• Human consumption-wise, the market has remained stagnant on the week with consumers pushing back against some of these higher price levels we have seen since the turn of the year. Open market values are still at recent highs for green peas and marrowfat peas, with greens still nearing the £400/t ex mark for the first time in many years it provides a great opportunity to sell before we see a pullback.
• With better weather expected over the weekend, we are hopeful that growers will seize the opportunity to plant their peas, which can be drilled at a later date than many other spring crops. We still have some seed available should you have some space out in the fields. Please contact your farm buyer for more information!

Fertiliser

• Granular urea prices continue to drift lower in major markets, but spot spring demand is helping to maintain price stability in the UK at present.
• An increase in demand for both arable fertiliser top-up business and grassland requirements is likely late April/May, this will likely continue to support UK pricing levels.
• European natural gas prices are trading around June 2021 levels at present, but above previous lows seen in 2020 and 2018.
• Inhibited urea is available for immediate delivery as the most cost-effective source of nitrogen on a £ per kg basis.
• UK 34.5% Nitram is also available for April and May delivery. This is still the main ammonium nitrate product of choice for many.
• ADM have liquid UAN and UAN+ATS for prompt delivery. In addition, inhibited UAN/UAN+ATS can be delivered pre-mixed or AdvaNshield NBPT is available in canisters, to mix on farm to apply with the new requirements in place from 1^st April.
• TSP, DAP and MOP prices continue to be relatively unchanged as spring cropping and NPK and PK demand continues.
• Renewable PK products for harvest delivery are available to price today from ADM. These offer significant value both in the carbon neutrality of these products as well as the cost on a nutrient value basis.

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.