- World markets soften
World wheat markets have sunk lower during the week, which has prompted Egypt to tender for additional supplies seeking lower levels. Markets continue to wait for trade flow data following the protracted US government shutdown. EU wheat has mirrored the wider markets and fell to two month lows on Thursday but is now one of the cheapest origins for world buyers.
- Slow demand
Domestic markets remain quiet. Consumers are generally absent on both feed and milling markets, with the spot month heavily supplied and some end users seeking to roll contracts forward. New crop continues to weaken whilst field conditions remain good with no severe weather conditions impacting UK or EU crops so far this campaign.
- Old crop feed barley prices shrink
The continued lack of export interest finally brought out concerns in the long holders, who have sold more aggressively this week into limited demand. Values have slumped and driven the discount to wheat back to nearly £18 under wheat. Internationally, prices are lower too. For much of 2018, feed barley has been at a premium to milling wheat, which over the long term is not sustainable. It is now back to a discount to most world feed wheat prices, which is its normal position. Some stability should now be expected and those international buyers who were holding off buying more old crop could show some more interest now.
- Malting barley market awaits sowings
Old crop trade in the UK is very limited. Trade shorts and farm longs are not always compatible and it is taking time to put business together. New crop-wise, sowings are complete in Spain, around 25% in France and 5% in England. Until more is sown, expect little action by buyers or sellers. English brewing maltsters have purchased some spring barley supplies since Christmas that represented a £20 to 28/t premium over feed barley depending on location. The variety Planet looks to capture nearly 50% of the English brewing area, much of it gained from the higher N variety Propino.
- Little movement in price
Oilseeds markets have moved sideways across the week with no real direction either way. The benchmark Paris MATIF futures have traded in a very narrow range giving buyers and sellers little opportunity. Sterling continues to fluctuate as the ongoing uncertainty around Brexit prevails. Imports of rapeseed from Australia have been traded and are arriving in large volumes into the Northern European crushers. This is unlikely to spark a move to higher prices in the short term as crushers are covered.
- China active in soy beans
The Chinese have been actively buying US soybeans over the past couple of weeks with talk in the market that up to 5 million tonnes have traded. The renewed purchasing of US soybeans coming from China is badly needed as the supply side remains very heavy in the USA but the view is that the Chinese have moved because production numbers in South America are being trimmed due to weather issues in Argentina and Brazil.
- Demand continues for old crop beans
The old crop bean market remains very tight as farm supplies around the country dry up. There is still demand for both feed and human consumption beans, with premiums for the best beans now valued well over £70/tn. Any growers with bean balances unsold would be well advised to get them re-tested as there is still plenty of demand for variable quality beans.
- High premiums for new crop beans
Looking forward to new crop, it is likely that Egypt will be a keen buyer of early supplies and we expect early premiums to be higher than in previous years. The new Frontier bean contract enables growers to lock into a high feed base as well as achieving further premiums for protein or human consumption. Please contact your local Frontier Farm Trader for further details or click here.
- Nitrogen pricing a hot topic
As we say goodbye to January 2019 and February is well underway, Nitrogen pricing continues to be a hot topic. CF Nitram is currently trading at a premium to imported Ammonium Nitrate, primarily due to recent currency changes. This has resulted in importers relooking at Lithan/Pulan prices, which are now just a few pounds cheaper than Nitram. The question is whether CF will review February Nitram prices or wait to see whether currency flips around as we get closer to 29th March. Either way, if the weather improves and farmers start spreading nitrogen next week, spot demand for trucks will outweigh any pricing issues.
Urea enquiries continue with prices continuing to weaken on the world market. Stockholders of Urea in the UK are trying to reduce positions with one eye on 29th March. If the UK market continues to slide, some reports suggest UK granular urea stocks will be priced competitively enough to load back on a ship and export back to Europe.
The firmer pound has reduced the price of TSP/DAP/MOP a little but again, demand for spot use means it's essential to place orders as soon as possible to give logistics a chance to make a timely delivery. Interest in Polysulphate/PotashPlus/PK Plus continues to grow as farmers look to decouple Nitrogen and sulphur products/systems.
- Focus on Nitrogen Use Efficiency
Frontier's 3D thinking seminars continue; this week's events were in Lincolnshire and Yorkshire. Next week we travel to Scotland, Dorset and Hampshire, where our nutrition teams will be talking about Nitrogen Use Efficiency and how growers can move from 60% to 80%, significantly improving the bottom line. For more information or to attend a 3D seminar, speak to your local Frontier contact, or click here.
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