Frontrunner - 1st March 2019

WHEAT

Negative world markets

World markets are currently showing little signs of recovery whilst major exporters compete to win upcoming tenders. Coupled with this, we're also seeing non commercial funds willing to sell wheat lower given the promising outlook of wheat production for 2019.

• UK finding some support

UK markets found support this week following Wednesday's announcement that ENSUS will likely resume processing at their Teesside plant in March. The news immediately gave support to local cash markets, particularly at a time when farm selling hasn't been evident. Given this extra demand, it has again raised questions over the actual crop size, with uncertainty still surrounding the cropped area and the average national yield. Determining whether we have sufficient stocks will add to the ongoing volatility.

BARLEY

• Good conditions for sowing

It has been a busy week of sowing across the UK, with many farmers drilling in good conditions considerably earlier than in previous years. This progress looks set to continue into next week, weather prevailing. Sowing has also progressed well around Europe and we anticipate that the French crop is now virtually sown. To help the crops establish, rain will be welcomed by European growers. For now, there is sufficient soil moisture.

• Quiet market

The market has been reasonably quiet this week, with old crop malting barley continuing to drift lower on lack of demand and uncertainty about Brexit stopping any fresh export business. New crop EU values have also decreased but premiums over feed barley remain at attractive levels.

• Future volatility

With plenty of uncertainty in the next year, we can expect volatility in the barley market and pools will continue to help manage the risk of marketing crops. Frontier's feed and malting barley pools for 2019/20 crops remain open - please contact your farm trader for more information.

OILSEED RAPE

• Subdued old crop markets

Prices of UK rapeseed have declined again; the main driver being stronger sterling. Futures prices have stabilised over the week but the closure of Saipol's rape crushing plant in Rouen, France, due to strike action has caused spot values to drop. Rapeseed supply to this plant has been switched and has had to push into alternative markets. Some of this displaced French rapeseed is competitive enough to be travelling across the channel to the crush plant at Erith.

• New crop

Although values of both old and new crop rapeseed have fallen, there is reason to be optimistic about the future outlook. This week, the well respected analyst, OilWorld, produced their latest European supply outlook. They pegged the EU supply at 18.1 million tonnes and warned that this figure will fall further as pessimistic flags for production in South East Europe and Germany remain in place. With the key crop growing period still to come, the summer development of the crops in Europe will be keenly watched by all. The sowing campaign in Australia is about six-to-eight weeks away and, currently, dry conditions prevail and canola is not as an attractive proposition to Australian farmers at current market prices.

PULSES

• Old crop values could be pressured

The old crop market for both peas and beans is very quiet, with very little volume trading. Old crop beans are still being sought after but, as growers finish drilling and have some surplus seed available to sell, values may become pressured once a few more loads come to the market.

• Baltic sales could impact new crop values

New crop feed bean values have defied the recent falls in wheat, barley and rapeseed, as exporters who have sold cargoes look to take more cover to reduce their positions. However, with weaker European wheat futures markets, we may well see some Baltic bean sellers. Any sales activity in this area will certainly put UK new crop values under pressure.

FERTILISER

• Nitrogen

Imported AN (34.5%/33.5%) dropped a little more this week, mainly due to currency changes between sterling and the euro. However, good supplies in most regions have allowed for prompt deliveries and Nitram stocks are also plentiful.

Globally, the granular urea markets are flat and there were no major changes this week. Traditionally, stocks will now grow with producers as we move towards the second quarter of 2019. This could spark some more downward pressure and therefore be of interest into the UK market for July - Oct as long as the sterling/euro exchange rate is favourable.

Logistics are under pressure so we suggest anyone not covered for fertiliser grades should talk to their Frontier contact to discuss product choice and delivery timescales.

• NPK

Supplies of compound NPKs are good in most areas and, although a premium to blends, they are ready to move without delays in production.

• MOP/TSP

A rise in MOP and TSP prices has come into effect towards the end of this week due to high demands. This rise will move blended PKS/PKS and grassland NKS prices up so we advise that you discuss requirements with your Frontier contact at the earliest opportunity.

View markets, set price alerts, manage contracts and take advantage of extended trading hours with MyCropMarketing, Frontier's online grain marketing platform.