Poor EU wheat export demand, particularly for French wheat, sent Paris wheat futures to their lowest levels since the middle of March.
EU wheat shipments were up just 337,000 tonnes on the week to 3.553 million tonnes which compares to 4.527 million tonnes in the same period last year. Romania is the top EU shipper so far with close to 1.5 million tonnes, almost three times the French pace. Egypt has received the most wheat with imports of 505,000 tonnes, followed by Nigeria and Morocco.
You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by marketing assistant, Becca Russell.
LISTEN TO FRONTRUNNER
Frontrunner is also available as a podcast, so you can hear the latest from our traders while you're on the go. Listen below or subscribe to the report on Acast, Spotify, Apple Podcasts and Google Podcasts. The report this week is read by marketing assistant, Becca Russell
WHEAT
- Markets remain weak
Poor EU wheat export demand, particularly for French wheat, sent Paris wheat futures to their lowest levels since the middle of March.
EU wheat shipments were up just 337,000 tonnes on the week to 3.553 million tonnes which compares to 4.527 million tonnes in the same period last year. Romania is the top EU shipper so far with close to 1.5 million tonnes, almost three times the French pace. Egypt has received the most wheat with imports of 505,000 tonnes, followed by Nigeria and Morocco.
The UK is number five on the list, having taken 202,000 tonnes already - which includes German milling wheat. The low protein issues, coupled with the low planted area of UK bread making varieties for this harvest, is limiting availability for our domestic millers. German milling wheat imports look set to be the largest since 2012 as a result and could exceed one million tonnes.
- Ukraine exports push ahead
While the EU flounders, Ukraine exports power ahead. The Ukrainian Agricultural Ministry confirmed the wheat harvest was complete and put at 21.7 million tonnes which is up 100,000 tonnes on the year. Total grain shipments since 1st July are put at six million tonnes which includes 2.8 million tonnes of wheat and the total is up from 3.6 million tonnes the previous year.
The United States Department of Agriculture (USDA) sees Ukraine shipping 14 million tonnes of wheat this season which will likely be overachieved with the current pace. However, Russian wheat shipments are about 1.5 million tonnes behind last year's pace when almost ten million tonnes was shipped. Analysts increased Russian wheat production to 83 million tonnes compared to the Ministry which put the crop at 86 million tonnes. However, there are comments that this estimate could be reduced.
- Mixed results from US crop tour
This week, the US Pro Farmer Crop Tour is assessing corn crop potential and strong yield results are expected. However, the states visited so far are seeing mixed results and suggest the USDA record yield estimate is optimistic.
For Nebraska, they see average yields at 173.25bu/acre which is up on last year but is below the 2021 record and USDA estimate of 182.35 bu/acre. For Indiana, the average is 187.54 bu/acre, up 3.7% on last year compared with the USDA's 2% increase.
For South Dakota and Ohio, yield estimates for each state are seen below last year by a small margin, whilst the USDA has Ohio down 5% on the year but South Dakota 7% up on 2023.
The weekly crop progress report put US corn crop condition unchanged on the week at 67% rated 'good/excellent' which compares to 58% last year.
BARLEY
- Feed barley harvest pressure subsides
The winter barley harvest is now complete in England and as a result harvest supply pressure is subsiding. This has served to support feed barley prices this week, while feed wheat futures continue their downtrend.
These dynamics have reduced the barley discount to wheat from £27-28/t to around £25, depending on what part of the county you are in. This discount is still sufficient to expect ample demand from feed compounders and we have seen this play out in spot markets this week.
- Preliminary spring barley harvest results look strong
Spring barley harvest is well underway with early samples looking good with retention and the nitrogen readings are well within specifications.
This level of quality has put further pressure on malting premiums which are now in single figures in parts of the country where feed barley prices have remained firm. We expect premiums to remain low in the short term, at least while quality in Scotland and Scandinavia becomes more known.
With spot prices being lower compared to this time last year, it's important that malting barley is stored in a way that minimises risk of germination, potentially even deterioration. This gives you the option to price your spring barley later in the season, talking advantage of any carry present in the market.
OILSEED RAPE
- Rapeseed prices remain subdued
Over the last few weeks, rapeseed prices have lacked any upward trend because of two main concerning factors which are in the forefront of traders' minds: biodiesel demand due to wider economic circumstances and a soon to be harvested US soybean crop.
The rapeseed harvest is now essentially complete in Europe and there's now a reduction in harvest pressure. Crushers which have the option are now making the decision around whether there are better margins for them to crush soybeans rather than rapeseed pre-Christmas. This is because rapeseed remains a hefty premium over soyabean and is potentially more difficult to source.
In the short-term, values in the oilseeds markets seem to have hit a low and are now consolidating around current levels. We now need a strong global demand story or South American supply worry to give this market some strong upwards trajectory, although rapeseed is set to remain at a considerable premium over soybean values.
PULSES
- Beans
This week, the bean harvest continued to progress with wide yield variations but an overall improvement on last year's crop.
Feed bean values continue to trade at a premium of £40/t over London wheat futures. With prices maintaining similar levels, demand remains limited and UK feed compounders are continuing to use cheaper alternatives when possible, such as rapeseed meal.
Demand for high quality human consumption beans is still strong, with values at a £20/t premium over feed beans. This premium is expected to diminish soon when the Baltic harvest reaches the market in the next couple of weeks.
- Peas
Pea yields and quality remain encouraging - many peas have been harvested with minimal bleaching. Large blue peas are suitable for micronising and are valued at around £370 ex farm.
FERTILISER
- Urea/AN
Production costs for AN continue to be hampered by firm gas and ammonia prices. Spot gas prices are already at traditional winter levels and will likely firm again into quarter four.
Producers are slowing output down to cover order books but are cautious of building stock - supplies of AN look to remain low for the foreseeable future. We advise you have cover of up to 75% of your total requirements.
Urea markets have stalled whilst global markets await the result from the Indian tender which is due to close on 29th August. Producers in North Africa and Algeria are still suffering from sporadic power outages.
UK prices are lagging behind global replacement prices.
- Liquid
UAN values are not exempt from the various factors influencing the increasing costs of production and replacement values being experienced across the UK & European AN markets.
With this in mind, if you have tank capacity this autumn and know your requirements for the coming season based on planned cropping, you should look to cover a proportion of your total requirements based off the current terms available.
These prices remain unchanged since their release earlier this summer and UAN continues to offer very competitive values across a full portfolio of products when compared to solid systems.
- Straights
Phosphate markets continue to firm. Potash is stable today but as demand increases it's likely to firm slightly and follow the trend of other nutrients.
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.
For more information on how to store and market your grain, you can visit our website.
To be notified each time this report is published in the future, you can also subscribe at www.frontierag.co.uk/blog/subscribe to ensure you always have the latest market insights.
Enter your text here ...