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Earlier this week, Paris wheat futures dropped to their lowest level in over two years following disappointing export news.
Up to Sunday 26th November, the latest trade data from Brussels put EU wheat exports up to 11.995 million tonnes - 18% behind last year when 14.677 million tonnes had been shipped in the same period.
Morocco is the primary recipient and has taken 1.835 million tonnes so far, almost twice as much as traditional French wheat buyer Algeria which has taken 967,000. Meanwhile, Russia has successfully edged out France with highly competitive supplies.
Through November and December, China was expected to climb the customer leader board for EU shipments, with trade estimates suggesting 2.5 million tonnes of wheat had been secured from France, the EU's leading exporter. However, France was ultimately dealt a harsh blow when news broke that China had asked to roll its contracts from December to next March/April.
Silos at French port facilities now remain blocked with wheat and it seems unlikely China will be back for any fresh buying early in the new year.
The UK and France have suffered prolonged autumn rainfall which has prevented winter wheat drilling progress. Late drilled crops are struggling to establish due to waterlogged fields and flooding.
Trade estimates suggest the UK could see a drop of 15% compared with last year's winter wheat area. French farmers on the other hand had a good week, increasing their winter wheat planting by nine points to 83% complete.
This leaves a contrasting market picture for old and new crop.
Nearby, UK consumers are full and feed wheat market prices are too high to secure any export business. Worse still, continental feed wheat is offered cheaply into the UK at levels below those trading in the north of the UK.
The UK 2024-25 balance sheet could be in deficit but futures prices already reflect that possibility, with new crop futures trading at a premium to French prices. UK October animal feed consumption is down 8% on the year whilst ethanol margins plummet, leaving levels of new year UK wheat use uncertain.
As has been the case in previous weeks, export interest and domestic values are getting harder to find, especially in the nearby months.
Barley is around a £25/t discount to wheat in East Anglia. It's also at a £23/t discount in Yorkshire and north west England, and an £18/t discount in Devon.
In theory there is a good carry in the market from January '24 through to November '24 for those of you who need cash or space. However, it is rare to store feed barley beyond a year, especially with interest rates at the current levels we're experiencing.
While wheat seed may be going into the ground on frosty soils, the period for sowing winter barley in England is now over and no more drilling of note will take place. The size of next year's UK barley crop will be determined by how much spring barley seed is sown.
There has been some media attention on this but unlike previous wet autumns, this year you may find yourself in a slightly different set of circumstances with more options available than there have been in the past.
Oats, pulses and opportunities from the Sustainable Farming Incentive (SFI) are strong competitors against spring barley. No doubt many of you have learnt from previous years that there is not much profit in growing spring barley for feed (or oats for that matter), so while the spring barley area will be higher, it may not quite be to the levels some believe. We're also facing a crop that is second and third spring sown, which makes a friendly spring and early summer even more important.
Whilst there has been some trade this week, both domestically and for export, it's been in relatively small volumes. EU brewers and maltsters prefer to wait to see how many volumes of beer are selling in comparison to their budgets. Whilst there is in theory a tight supply and demand picture for malting barley both in the UK and on the continent, the markets will tend to drift lower in the absence of fresh demand.
China continues to present ships in French ports for winter malting barley cargoes which is good news. This takes away tonnage that could undermine EU spring barley values in the new year. One thing is for sure: EU merchants will be cautious about selling crop '24 supplies if they do not see a significant premium over feed for the risk they would be asked to take.
This week, rapeseed values have appreciated by around £15/t in UK ex-farm terms, as crushers across the continent fill nearby requirements in the absence of free-flowing Black Sea and Australian seed.
This is particularly evident in the MATIF futures, where the February to May carry reduced from €9/t a few weeks ago to €1/t this week, as crushers pay up in the nearby positions to own seed.
In the background, European and Australian farmers are also thought to be undersold in comparison to long term averages, making it more difficult for crushers to find supply despite a heavy amount of stock.
Elsewhere in the oilseeds complex, South America remains the key focus. There, Argentina's soy crop is looking better than last year's while Brazil's looks set to be smaller. The extent of both will be closely watched over the coming months as we enter pivotal growth stages.
The bean market has been relatively quiet this week, with most feed compounders full until after the new year following the large volume of buying in previous weeks.
There is little spot trade currently, but there is still domestic demand for quarter one in 2024. Compounders have done little buying beyond this, which we expect to see moving into next year - this should continue to support these strong values.
The cheap Baltic feed bean offers we have seen this year, which have resulted in low export demand for UK beans, are now proving harder to find. This may mean we'll see exports pick up again in 2024.
The human consumption market will be finished in the UK in the new year due to the global market's preference for Australian origin. Now would be a good time to sell what balance of beans you have left.
Global urea values have softened over the last two to three weeks but remain higher than the lows seen between June and July this year. This softening in values is expected to be short term and when demand picks up, so will the pricing structure.
The curtailment or complete closure of production at four nitrogen plants across Europe is integral to the outlook on nitrogen values and availability. This adds further pressure to supply and causes concern for the choice of products available in what is becoming a condensed market, especially in terms of delivery times before the usage period.
Despite these factors, it's important to continue discussing your outstanding nitrogen requirements and consider purchase timing. With a quiet market and low demand, producers and suppliers will keep stocks at a minimum and this could lead to delayed vessel arrivals once demand increases.
UAN values remain unchanged and continue to offer UK growers good value against solid systems.
As we enter December, the window for pre-Christmas deliveries into tanks with storage capacity is narrowing. Those of you looking to convert to a full or hybrid UAN system for 2024 can still commit to product for delivery in the new year ahead of usage, provided a suitable bunded tank site is available for storage or is installed in the early months of quarter one.
Some of you have been exploring nutrition delivery for planned root crops for spring 2024. The demise of OMEX suspensions is coming at the end of this year, however, the OMEX NPK solution range, MultiFlo, delivers accuracy and uniformity to these high value crops.
TSP, MOP and DAP remain unchanged from the previous week and are stable.
Suppliers are reluctant buyers of cargoes containing straights and it's likely deliveries will be delayed into early spring if the market doesn't show signs of waking up.
As with nitrogen products, the key is to continue discussing your requirements and ask about up-to-date market information to time purchases for your crop requirements.
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