WHEAT

  • Quiet markets drift

Fresh market features have been lacking this week and, helped by firmer sterling, UK wheat prices have dropped to a four-week low. Consumers have good cover through to the new year and with port stores bulging with imported wheat and maize, any short term price improvement looks unlikely. Bull traders continue to look to Russia for a price rally. Russian wheat exports to the end of September stood at almost 13 million tonnes, with a further four million tonnes expected to be shipped by the end of October. This would mean that in the first three months of the season, almost half the USDA wheat export target has been met, suggesting that it is a question of 'when' rather than 'if' any restrictions will be employed. Meanwhile, EU wheat exports to 14th October were 24% down on last year at 4.8 million tonnes, highlighting how uncompetitive prices are.

  • Argentina crop woes

Just a few weeks ago, Argentina were expecting to harvest a near record wheat crop topping 21 million tonnes. However, subsequent adverse weather conditions have proved damaging and production prospects in line with other major wheat exporters are now being cut. Recent estimates have fallen to 19 million tonnes and may prove hopeful. Harvest is just beginning, with 1.2% cut versus 1.5% this time last year according to the Buenos Aries Grain Exchange. Crop ratings continue to fall, with 34% rated good-to-excellent; three points down on the week and well below 51% a year ago.

  • Russia drilling progress

Similar to their record export pace, Russian farmers are drilling winter grain just as quickly. To date, they have completed over 96% of the planned area; 16.6 million hectares compared with 15.5 million hectares at the same time a year ago according to their agriculture ministry. Russian farmers plan to sow winter grains on 17.2 million hectares in total. However, warm and dry conditions persist with both Russia and Ukraine forecast to remain dry next week.

  • Canadian harvest edges forward

Despite widely reported snow cover in Canada, the spring wheat harvest has progressed slowly. Yesterday's Saskatchewan crop report showed the spring wheat area harvested at 72%, up from 65% last week. Lodging was also reported which is bound to impact on yield and quality. The forecast next week is for warm and dry conditions which will help but following that, a marked fall in temperatures is expected.

BARLEY

  • Feed barley

Feed barley values have been supported this week with export interest from Europe. This comes on the back of logistical issues caused by the low water levels on the European canal system as a result of the drought.

  • Malting barley

It has been a quiet week in the malting barley market. While there has been little in the way of fresh domestic or export interest, there have been plenty of existing contracts executed.

There still remains a lot of uncertainty about the stance of both domestic and European maltsters on spring barley above the standard maximum 1.85N level.

  • Pools

This year, the Frontier harvest barley pool produced a base price result of £143.40 ex-farm, with location premiums and quality premiums for malting grades added. The pools for crop 2019 feed and malting barley are now open.

With considerable uncertainty in the next year, we can expect volatility in the barley market. Pools will continue to help manage your risk. 

​OILSEED RAPE

  • Less volatile week for domestic OSR values

This week, UK OSR values saw a small fluctuation in price as the MATIF market experiences lower volatility and pound sterling remains nervous in the midst of mixed Brexit news. With continued uncertainty, the pound could well put a stop on an improvement for UK values. Any agreed deal should push the value of sterling higher.

Also this week, troubles for the euro around the Italian budget gave some offsetting effect to Brexit news; however, this is a side show in comparison.

The continent still sees good pre-Christmas demand for oil products which is helping to support our spot domestic rapeseed values.

  • Bullish sentiments developing in US market

On Monday, CBOT soybeans soared on the back of continued poor weather in Iowa, Minnesota and the Dakotas which led to expectations of possible yield and quality losses in these areas. Week-on-week, US soybean good-to-excellent ratings declined 2% to 66%. Bar the US-China trade war, this is some of the first bullish sentiment we have seen in a while. These same weather worries also continue throughout Canada, where canola crops are sitting frozen under heavy snow in Alberta and Saskatchewan.

On the upside, plantings of soybeans in Brazil hit a record pace last week with 20% of the crop planted in good conditions. A bumper South American crop could reduce China's seeming necessity for US soybeans.

 PULSES

  • Feed bean values plateau

Given the recent dramatic rises in bean values, at some stage market values had to level off. This is now happening as there is no new consumer business to be done and some of the UK compounders have started to use imported peas at a £10-£15 discount to beans. Human consumption beans are still keenly sought after but there is limited volume trading because so many of the parcels fail to make the quality specification.

Green peas are also getting tight and, with values now trading at £50/tonne higher than harvest levels, it's definitely worth getting parcels re-sampled to identify the best market outlets. Please contact your local Frontier farm trader to arrange sample collection.

 FERTILISER

  • Nitrogen

Markets were quiet this week as the latest price rises started to sink in. £300 per tonne for UK AN may have come as quite a shock for farmers who have been busy with harvest, cultivating and drilling. Some offers below £300 are available pre-Christmas but haulage is becoming very tight. As a result, orders should be placed as soon as possible to take advantage of these prices.

With cropping plans now finalised and drilling well under way in many areas, now is a good time to take stock and check that sufficient sulphur has been considered alongside nitrogen. There are a number of products currently available but again, stocks are not as high as we have seen in previous years. We can see a shortage of some key grades being a problem if orders are left to the spring.

  • PKs

Trade has been a little more brisk in P&Ks, both as straights (TSP/MOP) and blended products. This is leading to faster-than-expected stock turnaround and, as previously reported, new levels are expected to be higher. Regional offers remain so please talk to your Frontier contact for the best prices.

  • Market direction

​Next week sees a major fertiliser conference being held in Greece and this usually influences the direction for the remainder of the season. A firmer market is expected on the back of global urea, ammonia and gas prices combined with tight supply and strong demand, alongside the UK's challenging currency rate against the dollar.



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