- UK wheat prices bounce
- EU wheat exports need to step up
However, analyst Stratégie Grains estimates the EU-28 exportable surplus to be 24.8 million tonnes; 3.7 million tonnes up on last season. If you extend the current export pace, the EU will fall short of that estimate by 3 million tonnes. This highlights the need for the Union's leading exporters to become more competitive amidst strong competition from Russia and Ukraine.
- Warning signals from the Southern Hemisphere
Following very successful Northern Hemisphere harvests the world is seemingly awash with wheat, leaving the long holders searching for a feature that might change the market's fortunes. Both Australia and Argentina have issues that could impact on their potential wheat production.
Soil moisture has been falling in most of Argentina's wheat growing area, highlighted in a report from the Argentina Agriculture Ministry this week.
In Australia, water reserves in the east are below last year's low levels. With a dry forecast, trade estimates are now close to 19 million tonnes. The Australian Bureau of Agriculture and Resouce Economics and the United States Department of Agriculture are each at 21 million tonnes.
It is worth noting that a lack of soil moisture has also been reported in Ukraine and Romania as winter planting begins following a drier and warmer August than usual.
- English ports still busy loading barley
A significant number of ships will be loading feed barley in many ports again next week which is a good example of how competitive we have been over the harvest period. Further sales have slowed up somewhat this week due to the rise in the value of sterling, lack of further available port capacity before the end of October as wheat cargoes also fight for space at export terminals, and buyers reluctant to pay more in euros. Vessels for the loading of malting barley are also showing for spot loading. However, the exportable surplus doesn't seem to be any smaller and the UK will have to remain competitive for many months more. This week's events in Parliament could prove decisive in giving the UK some more opportunities to trade exports to the EU in the short term.
- Scotland makes progress with the spring barley harvest
There have been germination issues on fields where crops were fit to cut but then the rains came, however, this is limited to certain varieties and geographies. Yields and nitrogen levels are good but there are a few parcels that have problems with skinning and screenings. Maltsters and distillers remain on the sidelines while they assess the data from this year's harvest.
- Stable domestic prices
Given everything that is going on with politics and in agricultural commodities, our domestic rapeseed market has been remarkably stable with delivered crush values the same today as they were at the start of August. Over this time period, US soybean futures are back to where they started and Paris rapeseed futures have appreciated by a modest 1%. Sterling has been strong in recent days and since the start of last month has firmed by 2%, making rapeseed imports cheaper by around £7 per tonne.
- China shuns the US
As the bean harvest moves northwards bean yields are still continuing to impress, with yields widely reported in the 5-6.5t/ha range. It's becoming more apparent, however, that Bruchid beetle damage is more widespread than in previous years. In many cases we are seeing samples that have very few obvious signs of infestation but, as we cut open the beans, we are finding up to 25% have either larvae or mature adults – in some cases still alive – waiting to emerge.
- Feed values
With the turmoil in Westminster this week, it has been a difficult market to predict. However, the currency/tariff issue is only one factor in UK fertiliser pricing – another key indicator is the granular urea market as this underpins the nitrogen price globally. As we enter the fourth quarter of the year buying activity tends to pick up, especially in the major markets of Brazil, the USA, India and Europe. This leads to a firmer position from manufacturers (Algeria and Egypt mainly for UK markets). As a result, our view is that there is still potential for further price rises on the main nitrogen grades (ammonium nitrate, urea etc.) in the next two to three months. The extent will depend upon what happens to currency and that is in the hands of Parliament.
- Phosphate and potash
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