Late last Friday the United States Department of Agriculture (USDA) published its September World Agricultural Supply and Demand Estimates (WASDE) report; much in line with traders' expectations it produced neutral to bearish data. World wheat production is seen rising 3.7 million tonnes up to 780 million tonnes, with Australia up 1.5 million tonnes to 31.5 million tonnes and India up 1.52 million tonnes to 109.52 million tonnes.

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WHEAT

• USDA increases world wheat and corn stocks
  

Late last Friday the United States Department of Agriculture (USDA) published its September World Agricultural Supply and Demand Estimates (WASDE) report; much in line with traders' expectations it produced neutral to bearish data. World wheat production is seen rising 3.7 million tonnes up to 780 million tonnes, with Australia up 1.5 million tonnes to 31.5 million tonnes and India up 1.52 million tonnes to 109.52 million tonnes. These increases in production estimates are offset by a one million tonne reduction in the Canadian estimate, which is now 23 million tonnes and a reduction in the Argentinian estimate of 500,000 tonnes to a new total of 20 million tonnes. A notable change was that world consumption last season was down four million tonnes, which increases the carry over to this season by the same amount; carry over stocks now sit at 292.46 million tonnes. 2021/22 year end stocks were increased by four million tonnes to 283.22 million tonnes in the August report, but stocks are still seen falling by nine million tonnes on the year. Almost half of global stock - 141 million tonnes - is in China.

World corn stocks are seen rising by 13 million tonnes on the August estimates; they are now up to 1.198 billion tonnes. US production is 6.3 million tonnes higher at 380.93 million tonnes, with the USDA increasing estimates for both the planted area and yield. Chinese corn production is also seen increasing by five million tonnes to 273 million tonnes. Improved weather means Argentina's stocks are up two million tonnes to 53 million tonnes in total. However, Russian stocks are down one million tonnes to a total of 15.5 million tonnes. The USDA estimates show that China is holding 207 million tonnes of the 297-million-tonne world total.

Chicago Board of Trade (CBOT) corn futures sank to their lowest since mid-April prior to the report but have subsequently recovered some lost ground. Similarly, wheat futures fell to their lowest since late July.

• Wheat markets rally on lower wheat crops

Lower wheat crop estimates for Canada and France were the catalyst for a sharp rally mid-week for the world's wheat futures markets. Statistics Canada published its latest Canadian production estimate, making further cuts down to 21.7 million tonnes from the previous figure of 22.95 million tonnes. Last season Canada produced 35.2 million tonnes, which highlights the severity of crop damage following prolonged periods of heat and minimal rainfall. The French Ministry of Agriculture cut its French wheat crop estimate by 630,000 tonnes down to 36.06 million tonnes.

The cut in French wheat production is partly due to lower specific weights following prolonged periods of rain which disrupted the harvest. Between only 25% and 30% of the country's wheat meets the benchmark minimum for milling wheat and the export specification of 76 kgs. Last season, 98% of the French wheat crop met this standard. However, it is reported that shippers have negotiated with Chinese wheat importers a lower minimum specific weight on their sales made to China this season, down from a minimum of 77kgs/hl to 75kgs/hl. This expands the volume available for shipment, which is an important factor as over one million tonnes is already thought to have been sold to China.

• EU wheat export pace steps up a gear

Updated export figures for the EU-27 further added to the support for rising wheat prices mid-week. EU weekly shipments including adjustments jumped 1.135 million tonnes in the week to 5.794 million tonnes. EU shipments are now well ahead of last year's pace when just four million tonnes had been shipped in the same period. Romania is the leading EU exporter to date this season with 1.9 million tonnes already shipped from its 11.4-million-tonne record wheat crop. Overall, the EU exportable surplus this season is seen at almost 33 million tonnes, up five million tonnes on last season.

BARLEY

• Feed barley values firmer on the week

Global grains firmed on the week and UK feed barley values followed, although to a limited extent. Domestic discounts to wheat have widened slightly after narrowing to season lows last week (with futures markets weaker) but remain at around a £10/t discount, which will limit feed barley demand in the domestic feed ration. There is short to mid-term export interest in UK feed barley, although small discounts to wheat on the continent and volatile freight markets mean connecting on this trade has been difficult.

• Malting premiums still strong as harvest finishes

Malting barley premiums remain at strong levels with harvest concluding across all parts of the UK. Quality from the latest samples continue to support high pass rates, which gives the UK a large exportable surplus on paper. The UK has export interest but demand from abroad generally requires a minimum 1.5% grain nitrogen, whereas domestic buyers will take barley at below this level. October/December markets are limited but there are good opportunities and strong premiums, especially for January onwards. 

​OILSEED RAPE

• Prices jump higher

Following last Friday's lacklustre USDA report on global supply and demand in agricultural markets, this week has been lit up by the confirmation from Statistics Canada of the devastating impact on Canada's harvest, which was affected by the severe drought and high temperatures experienced there this summer. At the end of last week markets were quite stable, but this week has seen domestic rapeseed prices jump by almost £20/t. There have been other factors in play but there is no doubt that the crop data from Canada has been the main driver for the change.

• Canadian picture becoming clearer

Canada is the biggest exporter of rapeseed in the world and the problems with its crop this year have been well documented. Many crop estimates have centred around the 14 million tonne mark, which represents a substantial drop from the previous year's total of 19.5 million tonnes. However, this week's official report saw a further 13% drop in predicted yields compared to August figures, citing a crop of only 12.8 million tonnes, which is 34.4% down on last year. This is expected to reduce Canada's exportable surplus from 10.6 million tonnes in 2020/21, to under four million tonnes in 2021/22.

There has been much talk of a bumper Australian crop this year with predictions that it might hit five million tonnes. There is no doubt that this could provide welcome relief to a starved European market in early 2022. Then again, Australia's last crop was just over four million tonnes which means, overall, the extra availability might only amount to an additional one million tonnes. It's a help, no doubt, but nowhere near enough to plug the deficit left by Canada.

• China and Covid issues still prominent

Elsewhere, Chinese activity has been notable in soybean markets in recent days, helping to support the wider oilseeds complex. US bean futures have gained just over 1% since the start of the week, as China has been seen snapping up short-term Brazilian cargoes while much of US export capability remains compromised following the recent storm damage in the Gulf. Markets interpret this as a sign that China is short and running its buying to the wire. Reports of a record Brazilian bean crop, which is up 7.5 million tonnes from 2020/21, is helping to cool prices. There are concerns over the demand side of the market with uncertainty over the possible impact of Covid-related issues as we move into the winter months.

 PULSES

• Significant increase in UK bean crop this harvest

Bean markets have now completely disengaged from wheat values, as the size and quality of the UK bean crop becomes known. With a lot of spring beans still to harvest, it's too early to put a final number on the crop but compared to last year it looks as though the UK will have 20-25% more beans to market this year. As usual, most of the winter beans are not suitable for human consumption as they are too stained - although bruchid levels are a lot lower this year. We are beginning to see some better-quality spring beans that will certainly be acceptable for quality exports, but with higher base feed bean prices and logistical issues with container traffic, premiums will be much lower this year. 

 FERTILISER

• AN/urea

There have been further price increases in the rest of Europe for ammonium nitrates. CAN is up €12/t, UAN is up €15/t and 33.5AN is up €13/t. This is in response to the very high European gas prices and a rebound in the urea market. The exchange rate between sterling and the euro and the price-per-kilogram being seen for ammonium nitrate correlate, indicating that domestic supplies are likely to rise significantly when suppliers enter back into the market.

Gas prices have continued to rise since the most recent price-per-tonne increases, as previously stated, which is likely to stall domestic suppliers coming to the market. This could cause most importers to withdraw or hold terms on impacted products while they assess when and where levels should be.

There has been a marked increase in fertiliser enquiries post-harvest. However, growers should be reminded that given how reactive the ammonium nitrate market has been and continues to be, they would be well advised to keep in touch with their fertiliser advisor to discuss solutions and develop a basic plan in readiness for suppliers coming back into the market.

The urea market awaits a decision from the Indian Government on its latest tender. These small delays have pushed this volume into later shipment dates and could cause temporary shortages in Indian stocks. These factors are currently keeping global urea firm, with no major signs indicating that values will ease off.

• UAN

UAN has been competitive against the solid market sector for both pre- and post-Christmas deliveries. This has been backed up by large volumes of UK spring business already concluded. However, all UAN terms are now withdrawn.

• PKs

As expected, MOP has moved up again by £10/t and, based on the levels elsewhere in Europe, there is a further £20-30/t increase to come.

There have been small rises in phosphate values over the last week, which is most likely linked to the rising value of ammonia and an increase in UK purchases following harvest completion.

Any grower that has a requirement for phosphorous and/or potassium for crop 2022 should consider looking at fertiliser inputs sooner rather than later.

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