Frontrunner - 5th August 2022

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WHEAT

• Ukraine Black Sea exports resume

One grain ship leaving a Ukrainian Black Sea port was sufficient for world wheat futures markets to come under notable selling pressure this week. US Chicago Board of Trade (CBOT) wheat fell to a six-month low. The ship, named The Razoni, sailed from the port of Odessa carrying over 26,000 tonnes of corn destined for Lebanon. It has been the first ship to set sail from Black Sea ports since the Russian invasion of Ukraine on 24^th February and comes following the recently signed deal between Ukraine, Russia, Turkey and the UN. The ship successfully completed an inspection mandated by the terms of the agreement before continuing its journey. A Turkish official said that up to three ships could now leave Ukrainian ports daily. This has given world markets increasing confidence that Ukrainian Black Sea grain shipments will gather pace and ease world supply tightness, which has resulted in lower world wheat futures prices.

• Misleading EU data

Observers have commented in recent weeks on the strong vessel line up at many of the EU's main wheat export facilities as the world's major wheat importers rush to secure new crop supplies. France has been busy and was expected to have completed record wheat shipments during July. However, official figures from Brussels this week presented an incomplete set of data which significantly underplayed the volumes of wheat sent from the block's exporting countries. To the 31^st July, 1.77 million tonnes were recorded as shipped - just 200,000 tonnes ahead of last year. However, private analysts conducting their own vessel count suggest at least an additional one million tonnes of wheat has been shipped during the first month of the 2022-23 season, which highlights the strength of demand from one of the few freely available wheat origins.

Algeria reportedly bought over 800,000 tonnes of wheat this week with optional origin terms. The sellers will hope to source from cheap Black Sea supplies but that will depend on how quickly Ukrainian shipments increase following their resumption this week.

BARLEY

• Little change on feed barley market

Feed compounders have shown some activity this week in pricing up winter rations in the ruminant sector but there is little activity elsewhere. This is unsurprising, considering the lack of grass growth in much of England. Prices have been in a £4/t range for the week, which is relatively stable compared to historic ranges. Barley continues to sit at around an £18-20/t discount to wheat.

There has been very little further export activity, but the UK is competitive in the spot positions should there be any demand from Europe. UK prices will become less competitive in the winter months due to our relatively high domestic values.

• Malting premiums over feed come under pressure

There has been buying activity by maltsters this week but at levels that have eroded as the supply of cut spring barley increases. Farm samples show average to below average nitrogen levels and low screenings.

There is still much to be combined as many fields are only just becoming ready to cut, meaning there will be more data next week. Hopefully, substantial progress will be made in this time as the weather forecast for next week remains dry.

Premiums vary from £40-60/t depending on month of movement and distance from a store or maltings.

​OILSEED RAPE

• Volatility increases further this week in oilseeds markets

Last week, the wider oilseeds markets ended in a strong position. This was due to good drying conditions for US soybeans and an announcement that there would be increased investment for US biofuel production.

This week began with a €38/t down day on November Matif rapeseed with the preceding trend for the week also downwards. At the time of writing, UK ex farm values for rapeseed are down around £32/t on the week. This slide in prices is in part due to weaker-than-expected production in China and slow property sales, which has flagged lower demand and consumption.

US government official Nancy Pelosi visited Taiwan this week, which caused heightened tensions between the US and China. This could result in lower Chinese demand for US soybeans, which would result in the market changing its typical trade flows.

To round off this bearish week, the news of the first vessel leaving Ukraine through the newly developed export corridor weighed in on wider markets as the trade anticipates more grain flowing out of the previously blocked area. The amount of grain movement needed to free Ukraine of its surplus is under scrutiny and the backlog remains a challenge for markets.

UK rapeseed prices are currently heavily correlated to movements in US soybean prices as the market looks for some guidance in these complicated times. In isolation, global rapeseed stocks are due to replenish this year with a record global production of 72.5 million tonnes. However, external factors look set to dictate this market for now. 

 PULSES

• Quality of bean harvest good

Bean harvest in the south is well underway with yields still coming in, ranging from 3.75-5.5t/ha, mostly on winter sown crops. We would expect lower yields on spring beans, especially on lighter land in East Anglia and central southern regions, although later harvested crops in the west and the Midlands are likely to fare better. Quality is good with minimal staining due to lack of late rainfall and surprisingly low levels of Bruchid damage. We would advise early sampling to verify quality as the initial premium for winter beans will soon evaporate as buyers look to the better samples of spring beans.

• Most peas suitable for human consumption

Pea yields have been more stable as crops were mostly drilled into good seedbeds and after strong establishment were able to withstand the hot, dry weather in July. Quality is also good with most green peas suitable for micronising or human consumption. With a large carry over of stock and minimal demand, values are expected to remain under pressure until well into the new year.

 FERTILISER

• Urea/AN

Granular urea that had temporarily shown a stabilised price in the UK has now bounced back up in price. This is mainly due to the volatility in the European gas price over the last week and increased buying interest in the UK.

There has also been a renewed interest in urea across Europe as buyers look to fulfil order book shorts, which has already started to impact on farm levels in Europe and here in the UK.

The increase in the gas price has caused some European manufacturers to curtail production for both granular urea and nitrates. The plants and factories that are still producing have subsequently seen a substantial increase to their prices. This has caused UK-produced AN and imported AN offers to the UK to continue to trade at a significant premium to urea and protected urea sources, which has resulted in most of the recent purchasing of nitrogen to be on urea and urea-based products. This is mainly due to the price-per-kilogram on urea products, which has been extremely good value and remains so for those not yet committed to buy their nitrogen requirements and who are looking to purchase soon.

• Liquid

For growers looking to secure product for application through the 22/23 season, UAN terms for all nitrogen and nitrogen sulphur grades remain in the marketplace, although volumes are limited for the spring delivery period. UAN terms are still available for the autumn position for those growers still to cover product for tank fill.

Any growers using liquid fertiliser (not including the OMEX N P grade) to establish oilseed rape in the coming weeks should include Limus Clear within this UAN application. With warm temperatures, exposed and dry soils and low crop cover, this application is at high risk of volatilisation and Limus Clear can minimise any risk of nitrogen losses.

• PKs

As harvest continues and is completed in some areas across the UK, the enquiries and demand on PKs is slow but increasing. Further price rises are expected on MOP so it may be worth thinking about purchasing potash now, especially for those customers who have taken a recent PK holiday and are removing straw, as it's looking like levels of potash in the soil will be very low. Buyers are also looking at phosphate sources for their oilseed rape to get growth off to a good start after the recent rain. Please speak to your Frontier contact for more information.

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.