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WHEAT
The markets have moved down since the beginning of November. The London International Financial Futures and Options Exchange (LIFFE) May '25 contract reached a high of £195/t on 1st November before slowly drifting off to a low of £191.50/t. The Marché à Terme International de France (MATIF) December '24 contract followed a similar track, opening November with a high of £221.50/t before drifting off to a low of €212.25/t.
There is a slightly larger trading range of €9/t for MATIF versus LIFFE's £3.50/t.
Southern Hemisphere nations, Argentina and Australia, have made good harvest progress so far and their wheat markets have followed the bearish trend of Europe and North America. Argentina's futures traded at seven-month lows and Australian futures hit seven-week lows.
These past few days have seen some big tenders come to the market. Russian traders appear to be sticking to the floor price set by the country's government which is giving others a better chance to win the business and not be undercut by cheap Russian offers.
General Authority for Supply Commodities (GASC) tendered for 290,000 tonnes of wheat - Bulgaria and Ukraine offered the cheapest wheat on a FOB basis in the region of $263/t. French offers were around $10/t more expensive at $273/t and Russian offers were $265/t.
Algeria bought 600,000 tonnes of wheat from six different sellers, including Ukrainian wheat. This reportedly traded at $264/t including cost, insurance and freight. Algeria excluded French origin wheat from this tender.
Overall, cheap wheat continues to trade in significant volumes. As mentioned, Argentina and Australia are making good progress and are topping up world stocks with no apparent issues. It's currently very hard to see where the next significant rally is coming from.
The weather in Europe and the Black Sea region is still relatively warm and dry. A few days ago, French plantings were at 41% complete with hopes this will rise significantly over the next two weeks during the forecasted good weather window.
The challenge will be gaining access to very wet land with some areas proving slow to dry out. It may take more than two weeks of kind weather for the soil to become weight bearing again. French drilling progress is a key watch for the next few weeks.
BARLEY
There hasn't been any new market drivers influencing feed barley price volatility. On the world scene, the US election has resulted in many traders being cautious who are awaiting the outcome of changes to economic policies, particularly related to trade tariffs and therefore implications for agricultural trade.
Demand pre-Christmas is subdued but remains into the new year as feed mills look to cover well into 2025. Previous active farm selling has slowed this last week - old crop is valued at a £30/t discount to wheat and new crop is at a £20/t discount.
The spring barley sown area will retreat from 2024 levels as growers are now catching up with wheat plantings. This could mean a crop area 10-15% lower than this year. Spring barley is one of the most financially rewarding spring cropping options, but if winter sowing conditions continue to improve we will likely see a greater switch to wheat plantings.
OILSEED RAPE
As the rally spanning from the middle of September takes a breather, delivered prices in the UK are typically £435 which is close to the season's highs.
Vegetable oil prices in Europe remain elevated as pre-Christmas domestic supplies of seeds are available to fulfil additional demand. The outlook for Australian and Canadian canola crops remains positive and this supply will start moving into Europe in the new year which will supplement domestic rapeseed supplies for crushers.
Palm oil prices also remain well supported due to a shortage of export supplies from Asia. Soybeans remain the cheaper oilseed and will likely remain at a discount for most of the season.
Planting conditions have improved for soybeans in Brazil and planting pace is now ahead of last year's rate. Any previous worries have been removed which is paving way for a record global soybean crop. Going forward, it'll be interesting to see to how the new Trump administration affects the demand for US soybeans, mainly through biofuel policy and tariffs with China.
Despite the lower planted area in the UK this year, the recently planted crop is developing well under the relatively warm and wet conditions we've been experiencing. On a European scale, there aren't currently any major concerns for crop conditions.
PULSES
Feed beans continue to look expensive in comparison to other protein sources. This means compounders are not interested in including beans in the summer. We've started to see the beginning of the Australian harvest, indicating that the window to export UK human consumption beans has narrowed - a slowing demand is expected after Christmas.
Feed peas are currently trading at a premium of £75+ to feed beans as there is little demand for peas to be included in the mill rations. Now is the time to be looking at marketing feed peas before these premiums fall.
FERTILISER
Egyptian urea values eased again due to the lack of demand from buyers, meanwhile the market awaits further news on the Indian tender. However, the tender hasn't appeared to have incited much market activity so far.
Gas values in Europe and the UK continue to see volatility but have eased slightly over the last week due to a revision in forecast temperatures in Europe. Ammonia values have increased and are at their highest levels since December '23 and supply is limited due to continued factory production cuts.
It's likely that values may not increase much further due to the Americas looking to have good supply of ammonia going forward which could give some stability to prices.
Many European countries are behind in terms of buying year on year and once demand returns, supply of nitrates will almost certainly tighten which means - due to the reduced nitrogen production - this capacity will be lost and the deficit will not be made up. Therefore, the market will have to look to other sources of nitrogen to fill the gap. That is, of course, if there are any other options available to the UK market which seems unlikely in any great quantities.
Many areas in the UK are now completing drilling and crops are starting to emerge through the ground. With winter crop plantings looking better than expected this year, coupled with last year's harvest results showing lower proteins, its clear optimum applications of nitrogen will be paramount in what is looking to be a tight market for AN availability.
We recommend thinking about buying your fertiliser requirements or at least a good percentage of it sooner rather than later, keeping in mind the prospect of limited product supply likely to be available to the UK market heading forwards into the spring period.
Where dry and stable weather conditions have allowed, winter cereal drilling has progressed across the UK through late October.
Those who've had the opportunity to put additional winter cereals in the ground and now have a further requirement for additional UAN and NPK products have access to a full portfolio of nitrogen and nitrogen sulphur grades for Spring 2025.
With the arrival and discharge of UAN vessels into East coast ports in recent weeks, deliveries into on farm storage have increased. If you have storage tank capacity for product to be delivered ahead of usage next spring, you still have the option to commit to volume for delivery this autumn/winter period.
Phosphates remain firm but stable due to demand from India and Asia. With limited suppliers, potash continues to remain flat here in the UK but there is demand from the Americas.
Polysulphate is a great way to add sulphur for those who have only bought straight nitrogen. Although sulphur remains deficient in many crops and use has been on the decline, the benefits of sulphur are substantial to every arable crop and shouldn't be underestimated.
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