WELCOME TO THE ADM AGRICULTURE WEEKLY MARKET REPORT
Wheat
- Chicago wheat has managed to post a small gain w/w, up 6.75 cents, or $2.50/t, as reports of a potential cold snap for the US plains later in February may have spurred some short covering.
- Prices have been moving sidewards for the last few months, trading in a narrow range, as the market tries to gain support from weather and global conflicts against a backdrop of a lack of demand for US supplies and increasing global competition. Weekly exports again were routine, with no Chinese shipments in the report, and are now estimated at 11.27mln t, down 18.4% y/y and at 57% of the yearly projection. The rise in the US/$ and Chicago wheat will do little to shake off the bearish fundamental outlook overhanging the wheat complex.
- European prices are lower w/w, down €1.75/t, as the market continues to be pressured by weaker Russian export prices. Exports from Russia have risen over the past two weeks, as exporters try and move supplies ahead of the implementation of the export quota due to commence on the 15 February. How these impact upon the flow of exports, especially wheat, is still to be seen, but the quota of 24mln t (mid-Feb-June) would still equate to just over 5mln t/month.
- The UK market is still moving lower, with another £4.70/t drop w/w and despite a slight decline in the value of sterling. The fundamental outlook remains negative, although the recent fall has allowed delivery premiums to rise, partially negating the fall in farm gate prices.
Malting Barley
- Malting barley prices are also starting to sell off more aggressively, as futures and feed base prices come under pressure. There is no demand to speak of on old crop, which is further helping to undermine prices.
- The new crop market is down again on the week, with the low demand theme continuing into the 2024 season, and the market is extremely relaxed about production prospects. As the planting season is underway, the trade will be glued to developing weather patterns across the continent and any effect this may have on the barley crop. As of today, all looks well and there is time to get the spring barley crop planted despite rain in the forecast.
Feed Barley
- Feed barley markets continue their sell-off under the constant weight of a falling futures market, meanwhile, the low demand theme for feed barley shows no real sign of changing.
- The UK has priced into a small amount of export business over the last 1-2 weeks, although day-to-day, destination buyers are not coming forward in a hurry with corn still undercutting barley significantly across Europe.
- New crop basis continues to widen, as feed barley sellers continue to look for outlets with little success. In general, demand from domestic and export buyers is relaxed, and all eyes are focussing on increased barley production as we head into the 2024/25 season.
Rapeseed
- Ag markets have been mixed this week as the trade has been positioning itself ahead of this afternoon’s USDA crop production report. The main points to watch will be South American production figures. Brazilian bean production is estimated to fall within the 148-157mln t range, with the majority of guesses coming to 153.15mln t, down from last month’s 157mln t. Argentinian production is expected to increase despite recent dryness. The average estimate is 50.84mln t, but estimates range from 50-52mln t, up from last month’s 50mln t. In the US, ending stocks are expected to increase from 820 million bushels to 284 million bushels. Estimates range from 245-310 million bushels. World ending stocks are expected to drop from 114.60 billion bushels to 112.48 billion bushels and within the range of 109-115 billion bushels.
- Harvest in South America is continuing at a very fast seasonal pace, with Brazil having surpassed the 15% mark vs 9% usually by this time of year, and Paraguay is at 50% vs 30% seasonal average. Yields in Brazil continue to disappoint, however, Brazil is still set to account for 38% of global soybean production for the current crop year. Argentina has started to receive much-needed precipitation, with more on the way. This has also helped reduce temperatures and improve crop conditions.
- Energy markets are higher this week, as we have seen support from a positive turnaround in Chinese equity markets, which improved China’s outlook for demand. Low temperatures in the US will continue to support demand for heating. Weekly EIA crude stocks rose 5.520 million barrels and are 17.243 million barrels below the 5-year average. US crude imports for the week are 6.907 million barrels per day, up from 5.605 million barrels. The refinery operating rate was 82.4%, down 0.5% from last week and 4.9% below the 5-year average.
- Malaysian palm reserves have dropped to the lowest level in nine months as production continues to slide. Stockpiles fell almost 9% from December to January to 2.09mln t and crude palm oil output fell 12% to 1.36mln t. Exports fell 7.5% to 1.23mln t.
- Canola has been mixed this week. Chinese crush margins continue to drop, reducing competitiveness and giving no reason for Chinese demand. They will also be noticeably absent from the market next week as many will be on holiday for the Chinese New Year.
- MATIF rapeseed is lower this week, breaking below €420 with next support at €400. Crush margins are convincing EU crushers to switch to soybeans, reducing OSR demand.
- Sterling trades at 1.17100.
Oats
- European oat markets remain relatively illiquid with minimal trade being reported.
- Buyers of milling oats into the EU continue to see greater activity for new crop positions than old crop positions, with consumers looking to see a weakening of old crop prices before being forced to pull the trigger.
- Feed oats have reportedly traded out of the Baltics for Mar/Apr at a level that is about €6-8 below previous levels reported in January, but given the weakness in the other grains markets, the feed oat price has held up very well.
- New crop drillings have become a greater focal point for all market participants, however, with another few months to go before we gain a greater understanding of production prospects, a weather risk premium remains in forward values.
- Here in the UK, millers remain buyers of nearby positions, with gaps still available for March onwards.
- Canadian oat imports continue to be the hot topic, however, as yet, nothing is reported to have traded.
- Bottom line, oat markets remain well supported relative to other grain commodities, but time will tell whether there is a sting in the tail or whether there will be a tailing off to prices as new crop gets closer.
Pulses
Beans
- Once again, beans continue to try and limit their competitiveness with minimal price moves on the week. However, consumer bids are starting to drift lower, with business starting to connect at these lower levels. This could certainly be the flag to expect prices to turn lower as we have previously written about. The same comments still stand; beans are too expensive on the relative value vs wheat/rapeseed meal/soybean meal and the balance sheet is telling us that there are beans out there to be sold. As the May24 ICE London contract continues to march lower and make new recent lows, beans surely need to start mimicking some of this downward move to remain relevant.
- On the international markets, we see geo-political turbulence continue around the globe. The situation in Egypt, one of the world’s largest consumers of faba beans, remains tense, with exceptional volatility being seen in the Egyptian pound. Whilst the unofficial exchange rate is variable and unclear, the consensus seems to settle around a figure of nominally twice the official rate, making it very hard for the internal markets to function at the consumer level.
- As we enter February, thoughts are starting to turn towards spring drilling, albeit that is hard to imagine from a snowy Hemswell! Further drilling has been reported on the week, with an increase in conversations around new crop taking place. As ever, beans offer a good alternative to failed winter crops or empty fields where the weather has disrupted the normal rotation. The CY24 bean pool is still open and taking additional tonnage for those who are looking for marketing options, and there are still active buy-back contracts on offer, so talk to your reps and they will be more than happy to help.
Peas
- Feed peas are still looking short vs overall demand in the UK, with some consumers looking to source peas from abroad due to the lack of supply from domestic growers – this is, we believe, at a detriment to the good quality human consumption peas that were in the market this year, as well as the poor yields from the past harvest. We remain keen buyers of any open market feed peas and prices still look strong, rising slightly week on week. Please get in touch with your farm trader if you are interested.
- Human consumption-wise, the market continues to be underpinned by the import duty situation in India, as major exporters are sending a large bulk of products across to them, leaving European consumers in need of additional demand. This is driving green pea and marrowfat prices higher domestically and is pushing green peas in particular to higher values week by week. With the UK crop area down, it has left any open market peas at a strong premium, which we are acutely trying to pick up at strong price levels. Please get in touch with your farm buyer if you have any free-to-sell material available!
- Looking forward to harvest 2024 and spring cropping, we still have limited seed available for marrowfats, large blues, and yellow peas, which provides a great opportunity for a high gross margin break crop, while also benefitting your following wheat crop with residual nitrogen. For those who applied Kurb to any failed oilseed rape crops, pulses are one of the only spring crops that can be planted following said application. Please get in touch with a member of our team if you would like any information surrounding peas. We are happy to help and also offer free advice surrounding plantings for those who book our buyback plan. Should you be a returning grower who has not yet booked, we also offer a loyalty bonus for returning to us as a little thank you for your consistent growing with us at ADM!
- Please watch this YouTube video to understand some of the benefits provided by us in helping you to get the best from your pea crop!
Seed
- As we begin to look towards 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 the 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.
- Our maize availability remains unchanged at this time, however, we would expect sellouts of some of the new varieties before the end of the season. We have a range of maturities available suitable for different end uses, including grain, AD plants, and forage.
- We still have good stocks of our game maize blend. It is our most popular game maize, providing all-season cover and feed. This is likely to sell out by the end of the season, so it is recommended to get it booked early.
- We have a vast portfolio of SFI mixes suitable for lots of the schemes. For more information on what we have to offer, please speak to your ADM farm trader.
Fertiliser
- Activity on global urea markets could pick up after the Chinese Lunar New Year holiday. Previous trades put UK replacement values ~£410/t on farm.
- However, granular urea in the UK today continues to trade below replacement and offers the most economic option for nitrogen applications pre-April 1st.
- Ammonium nitrate (imported AN) continues to carry a premium in the spot market and is weaker further forward with April delivery offers (for Nitram – UKAN) lower than the spot market.
- High sulphur ASN grades, such as 26N 37SO3, are limited in stock across the UK, whilst we have Piamon 33N 30SO3 compound that is available for immediate delivery.
- Liquid UAN prices remain stable-weak, with weather conditions also obstructing some applications and cropping changes, reducing UK on-farm requirements.
- MOP prices have been soft for the last three weeks – we are able to offer MOP and 0PK blends for immediate delivery.
- TSP, DAP have remained unchanged week-on-week. Some regional price pressures are appearing on the two phosphate products though. Enquire with your ADM farm trader for all fertiliser prices.
| £/€ | £/$ | €/$ |
|---|---|---|
| 1.1710 | 1.2600 | 1.0760 |
| Feed Barley £ | Wheat £ | Beans £ | Oilseed Rape £ | |
|---|---|---|---|---|
| Feb 2024 | 130-145 | 160-175 | 225-235 | 320-330 |
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.
