WHEAT

  • Exports

This week, UK wheat markets have continued to focus on export trade flows in the south and east coast ports, with the north and west seeing limited fresh consumer demand. The port pull remains strong, with lorry freight significantly under pressure as vessels continue to arrive for wheat (and barley) ahead of the potential Brext deadline.

  • USDA report

This week's United States Department of Agriculture quarterly stocks report showed a small decline in corn stocks. The market did not expect this and it added a small amount of support to global values.

  • Wheat crop pressure

Southern Hemisphere wheat crops remain under pressure with less than ideal weather. In particular, Australia is under the spotlight following the prolonged heat and dry conditions reducing potential crop size. Overall, predictions for the Australian wheat crop now look nearer to 17 million tonnes.

  • Currency

Currency remains the short-term key market driver with the Brexit debate failing to give any certainty. A 'no deal' or a change in government would likely give a weakness to sterling which would be supportive to UK values, however, making that judgement remains impossible to call.

  • Premiums
Quality premiums remain under pressure as the larger UK yield has added to the surplus of biscuit and milling grades available to the domestic market. While feed wheat exports continue, we see little reason for quality premiums to rise in the short to medium term.

BARLEY

  • Feed barley

Feed barley markets have firmed this week on nearby merchant short coverings with plenty of export execution to be done before the end of October. The uncertainty around Brexit continues to be the most dominant factor – for both feed and malting barley – and the situation is still far from clear.

  • Malting barley premiums

UK maltsters remain largely absent from the market and appear to be well covered in the pre Christmas position. With a large exportable surplus and good quality, malting barley premiums remain under pressure.

  • Frontier contracts
Looking forward to next season, Frontier is offering a range of contracts to help growers manage the risk of winter and spring malting barley crops; these include pools, minimum premium contracts and futures related distilling schemes. For more information, please contact your local farm trader.

​OILSEED RAPE

  • Australian crop in trouble

Crush margins continue to be good in Northwest Europe, with no signs of price rationing in markets prior to the end of 2019. Domestic prices remain capped by the price of imports following the sharply lower EU production numbers coming out of the recent harvest.

EU imports are set to be at record levels for 2019/20 at around 5.5 million tonnes, with Ukraine expected to be the largest supplier and Australia, with deteriorating crop prospects, likely to see a reducing share for the third year running. Its 2018 harvest was at a nine-year low at 2.18 million tonnes and Oil World is forecasting only a marginal improvement for this harvest at 2.25 million tonnes. Some observers are already talking of a crop closer to 2.0 million tonnes. Buying interest from China, given the ongoing trade dispute with the US, is expected to limit EU imports of Australian canola to only 1.1 million tonnes. This would be a five-year low.

  • Buoyant US soybean exports to China
In the global oilseeds market the key talking point in the past few weeks has been the increased export numbers for US soybeans to China. Recent sales have lifted the cumulative to date volume to 3.61 million tonnes compared to only 1.27 million tonnes at the same point last year. However, the equivalent figure for two years ago was 10.67 million tonnes, which partly demonstrates the impact of the ongoing trade dispute but also the reduction in China's demand as a result of a lower pig population.

 PULSES

  • Feed markets

Feed bean markets have remained largely unchanged this week although, as the nearby vessels get covered, there is less spot demand with limited new buying interest. With prices lower inland, away from the ports there is some new interest from feed compounders. However, the volumes are very small and unlikely to make any significant impact on improving values.

Overall, we need to see some significant export sales made forward for the new year but prices will need to fall in order for beans to become more competitive in compound feed rations – both home and abroad.

 FERTILISER

  • ​Nitrogen

Despite the threat of higher prices due to increased ammonia levels as a result of tight supply, as well as higher natural gas prices in the UK, there has been little activity with ammonium nitrate and urea markets this week.

Yara have posted a new November price at £5/t over their current October terms. It's very likely that CF Fertilisers will make the same move soon.

For October, logistics are very tight so we recommend that you discuss requirements with your Frontier contact very soon.

  • PK

MOP/TSP and PKs are seasonally busy, with activity across the country. Blenders are keen to get product out before the Brexit deadline, avoiding the risk of potential import tariffs on replacement TSP and PKs stocks in November should we see a 'no deal'. With that in mind, taking product in October to manage risk is advisable. 



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