Wheat futures markets have continued to fall as crop concerns ease and demand remains uncertain. Speculative managed funds trading the US Chicago Board of Trade (CBOT) wheat market were sellers again on Tuesday for the seventeenth time in the last 19 trading days. This has left the December CBOT position at its lowest since 15^th March 2024 and just 16 cents away from the lowest point so far this year.

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WHEAT

• Wheat continues to decline

Wheat futures markets have continued to fall as crop concerns ease and demand remains uncertain. Speculative managed funds trading the US Chicago Board of Trade (CBOT) wheat market were sellers again on Tuesday, for the seventeenth time in the last 19 trading days. This has left the December CBOT position at its lowest since 15^th March 2024 and just 16 cents away from the lowest point so far this year.

Euro weakness and sterling strength further impacted UK prices - although a halt in farmer sales alleviated some selling pressure in the domestic market. A technical correction is long overdue and prices have begun to show a modest recovery. A notable increase in consumer buying interest mid-week also helped lift futures wheat prices from their lows.

• Egypt secures wheat at lower prices

Earlier this week, Egypt bought 470,000 tonnes of wheat, with Russia providing aggressive sales competition. Russian exporters offered the cheapest FOB prices at $227.00/t. Including freight, Bulgaria was the cheapest seller at $244/t for end of August delivery, while Romania was the highest at $247.60/t for early September delivery. Russia sold a total of 180,000 tonnes, Bulgaria 50,000 tonnes and Romania 240,000 tonnes. Ukraine missed out due to higher freight costs caused by the war risk premium levied by ship owners. Sales values were $20-23/t below the previous tender on 11^th June.

• Mixed US crop conditions

The US weekly crop progress report showed a deterioration in US spring wheat, dropping four points to 71% rated 'good/excellent' - although this is still well ahead of last year's 50%. The fast pace of the US winter wheat harvest, which is now 40% complete, is almost double last year's pace of 21% and is adding to price pressure. Winter wheat crop condition improved by three points to 52% rated 'good/excellent' in comparison to 40% last year. The upcoming US quarterly stocks and acreage report which will be published on Friday could provide bullish support to trigger a price rally, although poor US export pace suggests a large stock position is likely.

BARLEY

• Old crop trade subdued ahead of harvest

This week, the old crop trade has been dominated by small spot tonnages, mainly in Shropshire, Cheshire and South Yorkshire. While some consumer demand is present, volumes are low. Slow farm selling has supported prices despite the low demand. A significant increase in demand is needed for prices to rally, which is unlikely this close to the new season.

• Continued demand for domestic new crop feed barley

The export market for UK barley remains uncompetitive, even with new crop barley trading at a large discount of around £30/t to wheat. A potentially smaller winter barley crop, affected by a wet and cool growing season, will likely remove some price pressure during the harvest period. However, the eventual size of the crop will determine the extent of any such pressure. 

Frontier's barley export campaign has finished off with 2 malting barley vessels at Tilbury Grain Terminal. Consisting of 8000 tonnes of the Planet and Laureate varieties, the MV Lady Helene is headed to Sweden and the MV Arklow Clan is destined for Spain.

​OILSEED RAPE

• Rapeseed prices plateau

Rapeseed prices have plateaued over the past week due to a distinct lack of physical trade. European farmers are not increasing sales at current levels and merchants are unwilling to engage with crusher customers. However, the upcoming harvest will necessitate market adjustments depending on the outcomes.

• Soybean market slump

Soybean values continue to slide as China remains absent from buying US beans. If this trend continues, it could significantly impact supply-side dynamics. The ongoing dispute between China and Taiwan is likely contributing to the lack of trade.

 PULSES

• Old crop bean values collapse

Old crop bean values are finally collapsing due to a lack of demand, with several loads of old crop beans still coming to the market. However, even at this lower value there is still another £25/t for the market to fall before it reaches new crop levels.

• Increased risk of bean rust fungal diseases

Crops everywhere are still responding to ideal growing conditions, but there is now a greater risk of bean rust fungal diseases due to the recent hot weather. This can reduce the active leaf area or sometimes cause early leaf loss, resulting in yield losses of up to 30% if not controlled.

• UK export values still at a premium

UK export values are still trading at a €15-20/t premium over new crop Baltic supplies. Given we would normally expect this to be nearer €5/t, something will have to move which will probably result in lower values for UK beans.

 FERTILISER

• AN/Urea

UK AN offers for October/November delivery remain unchanged and offer good value versus imported alternatives, which are currently only available for summer delivery at similar pricing levels to the later delivery for Nitram. In addition to this, we are seeing a reduction or cease in production of European AN. In the short-term less volume will be available and prices will be pushed higher in the long-term, until we see a change in production costs.

An increase in Egyptian urea production has taken a U-turn this week, as gas supply issues due to warmer temperatures continued and three main plants ceased production completely. Offers to the UK are absent for summer arrival, which is pushing prices higher and for a later delivery period, as with imported AN.

Having been absent from the news since March, India is now reporting a new tender for shipment in August, with offers due to close in early July. This will also support and maintain the upward trend in pricing.

Gas prices in the UK and across Europe remain unseasonably high, with the forecast for later months similarly high and upholding the cost of production.

• Liquid

The application window for protein enhancing products is now upon us - or fast approaching as crops reach GS 69-75 (end of flowering to milky ripe). Growers with milling wheat crops in the ground who are looking to capitalise on the current premiums offered have access to products in IBCs and bulk for prompt delivery. UAN terms offered for tank fill - in either the summer or autumn position - remain unchanged, but volumes are limited. Growers with storage capacity have access to a full range of nitrogen and nitrogen sulphur grades at competitive values, compared to current solid systems.

• Straights/PKs

The price of TSP is expected to rise again in the coming weeks due to global supply and demand. Whilst the timing and level of increase in price is currently unknown, it is certainly one to watch. It is expected that DAP prices will follow and start to firm. Growers are advised to start discussions around pricing and availability for OSR establishment as stocks of TSP and DAP in the UK are not plentiful.

MOP remains flat and any price increases that may happen are expected to be more gradual than seen in phosphates.

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