Important updates and advice regarding coronavirus (Covid-19)

Frontrunner - 5th October 2018

BLOG---Frontrunner-Post-Cover-Header

WHEAT 

  • Demand for UK feed narrows premiums

Consumer demand for feed wheat leant support to UK prices this week, with futures and physical grain trading up £4-£5 over the five days. Strong demand from the pig and poultry sectors, as well as ruminants, pushed some feed compounders to consider current lower prices as a 'buy.' Pitched against a well-sold UK farmer who is currently drilling into perfect conditions, prices had to rise to keep the farmer seller engaged.

On the other hand, milling premiums continue to feel the pressure of heavy domestic supplies against ever-dwindling demand. As such, while growers can still achieve an attractive premium over feed, they should consider marketing opportunities. The early harvest may have dampened UK yields around 5%, but the milling quality remained, so much so that the over-supply of milling wheat could further pressurise premiums. In some locations this could push high spec. wheat into feed wheat markets.

  • Russian wheat export uncertainty

Uncertainty over Russia – the cheapest origin for feed grains – continues to create price volatility around the globe. Egypt bought 180,000 tonnes of Russian wheat this week, around $8 more expensive than their last purchase, but Russian grains continue to price well below the next best origins and cargoes keep trading. It's been well documented that Russian grain production is down 17% year-on-year at 71 million tonnes, but some sources are forecasting export figures similar to the 2017/18 season. As a result, the market continues to monitor the situation closely, with speculation that exports may be capped or curbed at some point through the season. This week's rumours came from the Russian agriculture safety watchdog, which warned of a possible temporary suspension of 30 grain loading points in two Russian export regions. Only time will tell how this story plays out, but while the rumours linger, the market will be on its toes.


BARLEY

  • Quiet markets

It has been a quiet week for malting barley, with consumers sitting out of the market waiting for their brewing customers rather than taking a position. There is still plenty of uncertainty about nitrogen levels and what quality will and will not be accepted by domestic maltsters. It is hoped that this will become clearer over the next few weeks.

  • Start planning now for seed

Spring barley seed is likely to get tight. We would encourage farmers to get seed requirements covered sooner rather than later to avoid disappointment or less preferable varieties. For those who wish for a low-risk marketing approach for their spring barley, Frontier's malting barley pools are now open for crop 2019.

  • Feed barley

Feed barley continues to trade at small discounts to wheat in most areas of the UK and looks an attractive sell. Please discuss any unsold feed barley with your local farm trader.


OILSEED RAPE

  • Another positive week for domestic OSR values

The first week of October saw a steady increase in domestic OSR values. This was mainly due to worsening world weather conditions in the main canola/OSR producing areas, combined with good demand for oils on the continent. Canada remains cold and wet at a critical part of harvest, most of Europe and the Black Sea remain dry in the planting season and conditions in Australia are showing no improvement. Any large jumps in prices have, however, been slightly dampened by a strengthening pound against the euro after renewed optimism that a trade deal between the UK and EU is closer to completion. It is anyone's guess which way Brexit talks will go and therefore what effects there will be on domestic OSR values.

  • Strong crude oil rally beneficial to world oilseeds markets

This week saw a strong rally in crude oil values, which in turn provided some support to world oilseeds markets by lifting oilseed end products such as soybean oil and biodiesel.

The US/China trade dispute, although old news, is still easily the most sizeable issue for the US soybean market. China's import side of the tariffs is undoubtedly having a negative impact on the opinion of some farmers. It will be interesting to see the effects of this going forward and whether the new farm payments in the US can combat these views.

The market is now awaiting next week's USDA report for confirmation of a record yield and end stocks, which will evidently do little to support the soybean market. 


 PULSES

  • Market opportunities

Feed bean values continue to rise due to lack of available supply. More importantly, with the strong price rise in human consumption beans, there are now a growing number of market openings for lower grade beans. Over the past week we have seen opportunities for bright spring and winter beans, with bruchid levels in excess of 20% gain a premium over feed. Growers who still have beans left on farm should contact their Frontier farm trader to re-assess the quality and look for possible improved markets.


 FERTILISER

  • Nitrogen

It's been a very quiet week as both CF Fertilisers and Yara are waiting to release their new terms. All eyes continue to be on the global urea markets. Recent reports suggest that the next level of trading could well be above $350/tonne. Already we are seeing new values for the UK being quoted at £310-£315/tonne. It is very likely that ammonium nitrate values will also break through the £300/tonne mark when new prices are released – which is expected to be next week.

  • PKs

Both MOP and TSP continue to firm, leading many blenders to push the price of PK blends higher.

  • Availability

Pre-Christmas availability and haulage are beginning to look tight. Although the temptation may be to hold off until the spring, indications are that fertiliser markets will remain firm through to the end of Q1 next year. Therefore, the message is the same as most years – book early to avoid disappointment and further price rises.



View markets, set price alerts, manage contracts and take advantage of extended trading hours with
MyCropMarketing, Frontier's online grain marketing platform. 

Think like a racing driver when selling your grain
We had the wind in our sails at Tillage Live 2018

Related Posts

 

Comments

No comments made yet. Be the first to submit a comment
Already Registered? Login Here
Guest
Monday, 10 August 2020

Captcha Image

We use cookies to improve our website and your experience when using it. Cookies used for the essential operation of the site have already been set. To find out more about the cookies we use and how to delete them, see our Cookie Policy.

OK