Frontrunner - 16th September 2022

A statement of condolence from Frontier

We are deeply saddened by the news of the death of Her Majesty the Queen. Our thoughts and sympathies are with the Royal Family.

We have adjusted our customer communications as a result of this news. During the national period of mourning we will publish essential seasonal advice and topical market updates. 

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WHEAT

• USDA triggers price rally

The United States Department of Agriculture (USDA) published its September updates to the World Agricultural Supply and Demands Estimates (WASDE) report on Monday afternoon, which helped wheat futures prices rally to a two-month high mid-week. However, lower corn production estimates currently provide the main price driver for wheat.

US corn yield estimates were slashed by almost three bushels per acre which, coupled with a lower projected harvested area, which is down one million acres to a total of 80.8 million acres, will see the total US corn production estimate lowered by 10.5 million tonnes. The EU corn crop estimate was also cut by 1.2 million tonnes to a total of 58.8 million tonnes, although this is notably above other respected estimates. Analyst group Stratégie Grains sees 2022/23 EU corn production down to 52.9 million tonnes following extended drought which is not helped by France which, at 11.6 million tonnes, will have its smallest crop for 32 years.

The USDA sees world corn production down just seven million tonnes, with the losses stated above offset by a surprising three million tonne increase for China - up to a total of 274 million tonnes – and an increase for Ukraine, which is up 1.5 million tonnes. A four million tonne cut in world consumption leaves end corn stocks just two million tonnes lower at a total of 304.53 million tonnes, although this is 7.5 million tonnes down on the year.

MARS, the EU crop monitor, endorsed the USDA Ukraine corn estimate and published its own estimate of 32 million tonnes. It commented that only 4% of the drilled area is in areas of potential hostility with Russian forces.

World wheat production was raised by four million tonnes on last month. Three million tonnes of this increase was from Russia, whose total wheat production estimate now stands at 91 million tonnes. Ukraine contributed the other one million tonnes to this global production estimate increase. Its total wheat production estimate now sits at 20.5 million tonnes.

Increases in world carry in and consumption are up 2.4 million tonnes, which leaves world stocks up 1.2 million tonnes. Wheat on its own has a minimal impact on markets, particularly as Russian output remains well below other respected estimates.

• EU export pace unsustainable

Brussels updated its EU wheat exports data with a jump on the week of 1.333 million tonnes to a new total of 7.539 million tonnes. France is the primary EU wheat exporter to date, with shipments just ahead of three million tonnes. The Romanian vessel account suggests the official number of 1.2 million tonnes is 600,000 tonnes light. Actual EU wheat shipments top 8.1 million tonnes and reinforce the fast pace we have seen during the first 10 weeks of the 2022/23 season. If this is maintained, it would take the season's total to 33.5 million tonnes, which is unsustainable to maintain an essential carry over stock. Stratégie Grains sees exports at 29 million tonnes.

However, Russian wheat exports are forging ahead with prices undercutting EU offers. September shipments are expected to climb to 4.4 million tonnes, up from 3.5 million tonnes in August. There is a record Russian crop and some export estimates for this season are as high as 46 million tonnes. With estimates for 10.2 million tonnes to be shipped by the end of September, this leaves almost 36 million tonnes to ship in nine months and highlights the potential level of competition ahead in export markets.

BARLEY

• Feed barley

It has been a quiet week for feed barley, and global grain complex macros continue to dominate the direction of the feed barley market. Fresh export demand remains very muted.

• Malting barley

The malting barley market has also been reasonably quiet this week, due to a large brewing event in Munich taking many participants away from the market. The domestic market looks to be well met, especially in the pre-Christmas positions and demand for January to March has started to be covered.

The UK's malting barley export campaign is underway. With a large exportable surplus, the pace of exports will need to be maintained throughout the season. UK malting barley is currently at a premium over Scandinavian barley. This is due to Danish malting barley being perceived to be too low in nitrogen and the UK's quality deemed more suitable for brewing demand.

With temperatures now dropping, it is important to make sure that malting barley that is in store is being cooled to preserve malting quality. Some barley was cut at close to record temperatures, and although most barley has been cut dry, it is important to remember that germination will also deteriorate if barley is not correctly cooled.

​OILSEED RAPE

• Surprising production numbers jolt markets

This Monday, the USDA released its monthly WASDE report and it's fair to say the trade wasn't expecting any shocks. The US soybean crop is near completion, however, the USDA came out with a US production number of 4.37 billion bushels which compares to average trade estimates of around 4.5 billion bushels. On the day, US bean futures rose 76 cents per tonne, the largest move in recent history. These estimated numbers have placed a large reliance on the high production numbers expected from South America, where the crop has not even been planted yet. Rapeseed, however, did not see the same upside as beans. Whilst MATIF futures closed higher on Monday, they preceded to close €16/t lower on the week as of Thursday night while global rapeseed crops boomed and have started to flow nicely through trade routes. A lack of fresh news around issues with the Black Sea export corridor gave no reason for traders to buy back into rapeseed.

 PULSES

• Bean markets lag behind wheat markets

As wheat values rose sharply this week, feed beans lagged with buyers not prepared to increase their positions due to little opportunity of fresh sales to end users. This picture is reflected in the UK, Europe and the Middle East and we expect this to continue for some time as buyers will only take spot cover as and when they need it.

Pea markets remain extremely quiet with little change in values over the past two weeks. It's becoming apparent that with a carryover of old crop stocks, as well as reasonable yields and quality from this year's crop, there is little chance of upside in values this side of the new year.

 FERTILISER

• Nitrates and urea

This week was a quiet week in the fertiliser market, encouraged further by the period of settled weather which offered perfect conditions for drilling in some areas. India has again been the main talking point of markets, demonstrating its demand in the form of a buying tender for urea. The original requirements were 1.2 million tonnes but, as the week progressed, the final volume came in at around 880,000 tonnes. This means India will have to come back to the market again very soon. The producers know this and will be relaxed around prices, as they all have decent order books due to the demand from Europe. Nitrate production remains constrained by the high gas prices in UK and Europe. There are no offers in the UK for ammonium nitrate other than a small amount of imported AN in the high £800s.

• Liquid

UAN suppliers remain out of the market with a limited tonnage available on a POA position. There are indications of new values for both straight nitrogen and nitrogen sulphur grades for autumn and spring delivery later this month, which offers growers the opportunity to secure additional tonnes where required. Growers who have secured a percentage of their tonnage for this season should continue to review requirements as cropping is confirmed and cereal drilling begins in some regions. Growers who have been unable to drill OSR due to the weather conditions would be advised to revisit their UAN grades and requirements based on actual drilled crops this coming autumn/spring. This will allow accurate contract execution as we go forward.

• Phosphate and potash

Demand is very slow with no urgency to apply until early crop emergence and even then the weather may also play a part. However, the markets are still very nervous about supply lines of MOP and TSP, with Russia a major player in both markets. Please speak to your Frontier contact for up-to-date pricing.

Get in touch

Please speak to your local Frontier contact or email us at This email address is being protected from spambots. You need JavaScript enabled to view it. for more information or advice related to any of the topics and services mentioned in this report.