Thursday 22 February 2024

Malting Barley

• We have had another week of close to zero demand for old crop malting barley as coverage remains good, today at least, for the remainder of the season, and offered prices continue to march lower as a result. Premiums remain at very attractive levels and feed markets are lower week on week.
• New crop remains similarly inactive and prices continue to fall across the continent under heavy production estimates, however, weather conditions are sub-optimal as we enter the key planting period for the UK and France, with rains stopping play. Once again, all eyes will be on the weather for the next few weeks, and we don’t see markets selling off much further in the short term, at least until conditions improve.

Rapeseed

• Soybeans are lower again this week, continuing the downward trend, as the South American harvest progress, alongside weak demand, continues to add pressure to ag markets. We have seen spells of price positivity throughout the week, as yields in Brazil continue to disappoint, leading to further reductions in crop expectations, with the majority now sitting around 145-149mln t (vs USDA’s last report at 156mln t). In Argentina, we have also seen reductions in crop production figures following the recent heatwave. This week, COAMO has reported carryover soy, corn, and wheat stocks 50% higher than this time last year, as supplies from last year’s bumper crop remain and farmer selling is slow. Due to current low prices, farmers are thought to have sold 10% in Brazil vs 30-40% seasonally by this time of year.
• Energy markets have been mixed this week, as a large jump in year-over-year EIA crude oil stocks deficit capped any significant gains. We also saw news that Russia’s February crude oil exports from its western ports were 2.1 million barrels per day, offsetting previous concerns about higher supply flow. However, private forecasts have said that commercial oil inventories will increase by 5 million barrels, and this week’s Reuters poll predicts a 4.3 million barrel build in EIA crude oil stocks. Saudi crude exports dipped in December after three months of increases. December exports were 6.308 million barrels per day, 0.4% lower from 6.336 million barrels per day in November.
• Veg oils are lower this week as reports that China plans to increase oilseeds production added pressure. NOPA soy crush marked the highest January on record as US crushers have extended their capacity to cope with larger veg oils demand.
• Canola is lower this week as farmers still struggle to catch up with the seasonal selling pace. Farmer deliveries are still expected to be 2mln t behind the five-year average pace. China has returned to the market this week following the Chinese New Year and has stepped in to purchase 6-7 cargoes of canola for April-May delivery. This wasn’t enough to keep the Winnipeg canola/MATIF rapeseed spread contained, as canola is losing value in comparison to the EU to gain competitiveness. Currently, canola is at a $30-$35 discount and will need to get to circa $50 to get into the EU.
• MATIF rapeseed is also lower this week after running into resistance at €430 again, which is proving to be strong. In the EU, crush margins favour soy for the remainder of this crop year and there is still plenty of rapeseed that will need to find a home. This is the case in the UK, as well as farmer selling being behind the seasonal pace. Some have taken the opportunity to cash out recently, as prices have reached the lower end of some targets.
• Sterling trades at 1.16700 which has slightly supported UK prices.

Seed

• Spring cereal seed is largely sold out across the board. If you are still looking to cover spring seed requirements, we have Kabuki marrowfat pea seed available alongside our market-leading buybacks. We also have a large portfolio of Maize varieties available to suit Grain, Forage, and AD.
• As we begin to look toward the 2024 autumn drilling campaign, there are some excellent varieties to choose from. Including newly recommended Group 3 soft wheat Bamford, which looks set to reinvigorate the Group 3 market, yielding on par with the highest-yielding feed wheats and boasting the best Septoria resistance across all recommended soft wheats.
• We would advise those planning their rotations to cover seed requirements sooner rather than later for autumn drilling. Due to extreme weather conditions causing issues with autumn 2023 drilling, seed crop area and yields are predicted to be down, therefore we expect seed supply to be limited across all mainstream varieties this coming year.

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.