- World round-up
US wheat futures fell steadily this week following better forecasts for the drought-stricken Plains. This is good news for winter crops, but only time will tell if it will spell better news for crop ratings which currently sit at a 20-year low.
Matif wheat made a five-year high on Monday, following last week's firmer US markets and a sharp drop in the Russian rouble which made for higher competing export prices around the EU. Since then, this market has mirrored US futures on a steady downward trend-line.
- UK wheat prices firm
Old and new crop wheat prices firmed around £2 per tonne this week, driven once again by big demand in the North of the country. Consistent demand for ethanol production and animal feed for housed livestock remain the key drivers in Yorkshire and the North East. We also continue to see wheat migrating north from the discounted regions of East Anglia and the south coast.With a shrinking local supply and haulage becoming stretched, it looks likely we'll continue to see plenty of activity in the Northern ports over the coming weeks.
- New crop
2018 crop prices remain well supported in the UK. A fresh deluge of rain this week, particularly in the north and west, has again delayed spring drilling efforts and perhaps fuelled the bullish sentiment. Despite this, a better forecast for next week will hopefully make for a more productive week. With new crop prices comfortably sat above the cost of production for most UK growers, please speak to you Frontier farm trader for all marketing enquiries.
- EU planting progression
The EU malting barley market has fallen this week, although trade has been thin. Danish plantings have progressed well and based on the favourable forecast weather, they are likely to be around 50% completed by the end of the weekend.
- UK weather set to improve
UK weather continues to frustrate sowing progress of spring barley. However, next week's weather looks more promising so we should see some progress made.
- Contract specifications
There is plenty of uncertainty with both yield and quality for late drilled spring barley in England. As a result we would encourage growers to only sell flat-priced malting barley if they are confident of making the specification. If in doubt, we would encourage lower risk marketing strategies in the short term until the crop is established. Speak to your usual Frontier contact for more information.
- WASDE report
USDA released their world supply and demand report on Tuesday which, for soybeans, was constructive to values. Lower global ending stocks of 90.8 million and slightly lower US bean ending stocks (550.0 bushel/acre or 14.9 million tonnes) will help support the oilseed complex. Within this, rapeseed still struggles to find any traction due to heavy stocks and the need of European farmers to market the many tonnes remaining in their possession. This coupled with reports of biodiesel plants being forced to close in Germany, due to imports of Argentine SME (soybean methyl ester) adds to the negative sentiment in Europe. The current environment makes it difficult to get bullish to rapeseed in the short term.
- Strong exports
Strong soybean exports and comments from Washington favoring negotiation over tariffs were supportive to the soybean market. Soybeans remain the leader, as strong exports confirm a global willingness to extend coverage against falling Argentine soybean production at prices cheaper than from Brazil. Soybean oil suffers from lack of clarity on tariffs and renewable fuels reform.
- Palm oil price lows
OilWorld further commented that they expect palm oil prices to reach their lows around July or August as stock surpluses peak. Prices are expected to rise in 2019/20 as production levels fall off. By September 2018, global palm oil production is expected to hit 70.5 million tonnes for the season, up 3.8% from last year's production of 67.9 million tonnes.
- Is it too late to drill spring beans?
Beans sown in late April will still produce an acceptable crop, providing growing conditions are not too challenging.
Next week, we are finally set for some warm, settled weather with temperatures ranging between 17-20oC with strong breezes. The PGRO advise waiting for soils to warm up rather than force a seedbed and NOT to over compensate the seed rate, as this will produce a thick, fast growing crop that will grow very tall and cut out the light, reducing yield due to lower pod set.
In the last wet, difficult year spring of 2013 we still had an average yield of 3.4tonnes/ha, with subsequent years only achieving an average of 4tn/ha.
On a positive note, the cold weather we experienced from the two beasts from the East will certainly have hit the Bruchid population, so the outlook for quality beans is certainly looking better than the previous three years.
The Frontier bean pool is still open. We are also looking to buy new crop beans at competitive premiums to UK wheat futures so please contact your local Frontier farm trader for more information.
Weather changes are on the way next week, which will mean the welcome sight of fertiliser spreaders working.
- Product surge
Market prices in the UK remain unchanged due to recent climate conditions. Suppliers are generally keeping up with the steady demand of product, however a surge of activity is expected during the next ten days with top up requirements. Keep planning ahead of this, as expected demand could put suppliers and deliveries under pressure. Talk with your Frontier contact for information on delivery timescales and product options available.
There is no sign yet on any attractive forward (October - December) urea offers, as we have had in previous years. Traders/shippers are still holding off to see if prices can fall towards or below the traditional benchmark of £200 on farm.
There is some talk of lower imported nitrogen prices on the forward markets, which is adding speculation as to when CF Fertilisers – the UK's only domestic producer of ammonium nitrates – might make a move with a new season offer. However, with CF Fertilisers' recent aggressive pricing activity it would be brave to physically import products until they make a move.