Thursday 14 March 2024

Malting Barley

• For another week we see stalemate on the old crop, with no buying interest and maltsters having ample coverage for their needs, prices again have drifted lower.
• On the new crop, we have seen activity on both the domestic and fob markets as customers take some cover on the back of the continuing unsettled weather and behind-pace seeding, with continued lack of engagement from growers we see prices firmer on the week.
• With reduced maltster demand due to the downtrend in beer consumption and on paper a comfortable S&D, we watch weather and seeding progress for further market direction.

Rapeseed

• Soybeans are higher this week, following last week’s gain, the first positive week this year. Markets saw support from further escalations in the Red Sea along with a CONAB report, which brought a large reduction in Brazilian crop, at 146.9mln t vs. 149.4mln t last month. USDA still lags with Friday’s report only reducing 1mln t to 155mln t. As for the rest of the USDA report, the numbers were relatively neutral. US ending stocks were unchanged at 315 million bushels, world ending stocks were lower, bang on the estimate of 114.27 billion bushels, and Argentinian production was unchanged at 50mln t despite a slight increase. The Argentina Grain Exchange says 80% of soy fields are growing well in normal to excellent condition, thanks to recent rainfall, bringing the Buenos Aires grain exchange estimate to 52.5mln t.
• Chinese soybean imports for 22/23 grew 3.5mln t to 104.5mln t with 23/24 imports estimated at 105mln t (+3mln t) with the increase mainly coming from Brazil.
• Energy markets are higher this week, after starting lower but were lifted by a decline in EIA crude oil stocks despite an expected 900,000 barrel increase. Stocks fell 1.536 million barrels and are 33.069 million barrels below last year. Imports were lower at 5.491 million barrels per day vs. 7.222 million barrels per day last week. The refinery operating rate was up 1.9% to 86.8%.
• Veg oils have been positive as the USDA reduced world veg oil stocks for 23/24 to 30.85mln t down 1%, despite reductions in consumption growth from China/India and Indonesia.
• Canola is also higher this week, as we have seen a pickup in commercial buying, reducing shorts as well as more engagement from China. We have also seen support from Stats Can’s latest canola plantings estimate at 21.4 million acres (-3.1%), below the 22 million acres that the trade expected.
• EU rapeseed prices have seen a strong rally this week, through €430 and €440 resistance, bringing prices back to levels we haven’t seen since January. Fundamentally, the market is still well covered in nearby positions. It will be interesting to see if levels are sustained. This has allowed both the EU and UK farmer to pick up on selling as ex-farm targets are reached.

Pulses

Beans

• A steady week on the bean market this week, although there is a glimmer of consumer demand out there on the domestic front. Beans continue to lack the zest of competition, particularly in ruminant rations, when compared to other cereals and proteins, however, limited underlying interest remains, but just for how long in the face of continually declining values for other raw materials? Longer term, we will likely see beans de-formulated from the ration in favour of other commodities until they start to come back in line on pricing, meaning that demand will continue to be sluggish in the meantime.
• We regularly write about the geo-political volatility and instability that we continue to see on the international markets, and this continues to have an impact on trade flows. The Muslim holy month of Ramadan has now started, and we have already started to see a marked slowdown in activity across the Middle East, as well as further field, so it is unlikely we will see any big inputs from these markets until the start of April. Egypt’s economy received a slight boost in recent weeks, following a 35bn US dollar investment from the UAE. However, with Suez transit fees still down by around $450m each month, the economic pressure remains.
• The challenging weather patterns that seem to have been ever-present since harvest continue to preside. The forecast shows that we are looking at yet more rainfall across much of the UK, especially the West Coast, primarily in the 4-7 day window, adding yet more moisture to an already wet seedbed. The one slight saving grace to all of this, is that we can at least expect slightly above-average temperatures during the same window to help offset some of this moisture. Drilling remains difficult for many, as travelling is posing issues in some areas still, however with the ability to broadcast on, beans do offer a potential backup plan if you’re wondering what to grow, be it either in that patch which has not had anything drilled, or if what is currently in is too sickly and needs ripping up.

Peas

• The market was overall quiet on the week, with farmers still withholding any open market parcels remaining on farm, and sellers covered for the nearby positions prices have remained stagnant week on week. Feed peas continue to be in high demand with prices pushing towards the £290.00/t ex mark for open market opportunities across the country, we are keen buyers at that level.
• Our 24/25 buybacks have been booked up strongly with marrowfat peas now sold out. We still have a small hectarage of large blue peas available so please book to avoid disappointment. Yellow and maple pea buybacks are still available and provide a much lower-risk crop than the aforementioned two profiles. Please get in touch with your farm trader for more information.

Fertiliser

• Granular urea continues to trade higher in the US whilst weakness is appearing in the East. No sight of Chinese export controls at present.
• Liquidity has picked up in Europe, although pricing remains flat as demand has yet to surface in any significant volume.
• Ammonium nitrate availability in the UK is limited, with Imported AN terms for spot delivery moving up by £10 tonne following the CF Nitram price increases for May.
• As a consequence of these increases in AN, pricing on all high nitrogen spring NPKS blends could remain supported with the potential to rise. 
• TSP, MOP and DAP all remain stable, although DAP has traded this week at $7/t lower than previous trades in the East. 

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.