Wheat

Another week passes without any fresh news coming out of the US/China trade talks. With the US weather forecast looking more favourable, US prices have reset contract lows. The market is struggling with lacklustre US demand, rising global crop estimates and stable US crop ratings, despite the severe storm that hit the majority of the growing areas recently. Snow and excessive rain will keep spring wheat sowing progress to a minimum, although more beneficial rains are seen for parts of the US plains this week.

European prices have eased on the week, despite EU exports now only being slightly behind last season, and Russian interior prices continuing to rise. The latest Egyptian tender was taken by Ukrainian and Romanian supplies - no French wheat was offered due to the recent quality issue. New crop values remain pressured by the expected strong rebound for 2019 wheat production, confirmed by recent estimates for Germany and Russia, at 24.4 million tonnes (up 21 percent y/y) and 83.4 million tonnes (up 17 percent y/y) respectively.

UK futures have bucked the trend, with both old and new crop values up on the week, with some support seen from a slightly weaker currency. However, cash prices have weakened slightly as the physical and future markets become increasingly divorced from each other, with the May futures position likely to become a more technically driven market. Cheaper EU supplies continue to trade into the UK for the late July/ early August positions. With maize imports likely to continue through until the arrival of the harvest, wheat demand will remain sluggish. Dryness is becoming a concern for the UK with much needed rainfall now projected for the beginning of May - all eyes will be watching the accuracy of this forecast.

In summary, with no US/China news, improving US and EU weather outlooks, and increasing global crop estimates, it remains tough to get bullish. Weather may be a factor but any US short-term sowing delays will be negated by beneficial rains, enhancing already much-improved soil moisture levels for the development of US spring crops. That is hardly evidence in a case for a substantial rally in prices!

Malting barley

Another quiet week for EU and UK malting barley. Prices increased at the end of last week due to one brewer coming to the market and the trade finding a lack of sellers due to the current dry weather in the main EU malting areas. Prices continue to be supported by weather issues and lack of sellers.

Rapeseed

CBOT Soybeans fell to a five-month low this week. Nothing new has emerged surrounding a trade agreement between the US and China, although face-to-face meetings have been scheduled for week commencing April 29th. Many believe an agreement could be signed late May/early June. China is still absent from the soybean market this week; any additional purchases are unlikely to help reduce the record old crop carryout. It’s difficult to interpret the statistics surrounding the severity of African swine fever and how it will impact demand going forward. Weather in the US is still the biggest concern, with excessively wet areas in parts of the Midwest and Delta. Corn planting is currently two percent complete, the slowest start since 1984, though with the forecast looking better past this week and the speed of modern machinery they can still catch up, but this could still lead to additional soybean acres being planted.

In China, trade relationships with Canada continue to be a complex topic. Canola vessels still await approval to be discharged, with no new business to report despite good crush margins. Meanwhile the lack of Chinese business has increased the Canadian old crop carryout to over three million tonnes (2.4 million tonnes in 2017/18). As a result canola futures continue to trade at recent lows, exporters are still busy certifying old crop warehouses for sustainability purposes in the hope of an EU outlet.

In Europe, the old crop market remains quiet. As mentioned last week some crushers are reported to now be covered for old crop seed, French supplies are still available to the UK at equivalent levels of UK domestic rapeseed, whilst Canadian seed also gets closer to trading into the European market. The European old crop carryout is getting bigger, May Matif rapeseed futures will expire at the end of the month but seem happy trading within their recent €5 range supported by firmer veg oil prices. Looking towards next season, weather is the main focus, continued dry conditions, lack of soil moisture and below average temperatures in the evenings could now effect yield potential.

Here in the UK, news of a delayed Brexit saw sterling fall from its recent highs. Whilst oilseed fundamentals are unchanged, the direction of sterling in the coming months will be a key driver for price direction.

Pulses

Old crop bean values have drifted lower this week and with a big inverse to new crop and demand limited to a few domestic shorts, it is likely values will continue to drift lower in the coming weeks.

New crop bean values are unchanged on the week and have remained relatively static for most of the year. At current levels beans continue look noncompetitive across a range of other mid-range proteins in the formulations and there has been very little domestic demand to date. After a flurry of early demand on the export market, bids in Europe appear to have dried up for the time being.

Plantings in the Baltic states commenced last week, and expectations are that plantings of peas and beans will be all-but finished by the end of April based on the current weather forecast. Plantings are occurring in relatively dry conditions and they will require some rainfall shortly after planting.New crop pea buybacks remain available.

Seed

Septoria resistance

With the ban on the multi-site Septoria active chlorothalonil (CTL) confirmed, growers and the agricultural supply industry are looking at varieties with high Septoria tritici resistance with renewed enthusiasm. If you look at the recommended list and rank varieties by Septoria resistance you end up with the following top 10:

1. KWS Extase (8.1)
2. LG Sundance (7.9)
3. KWS Firefly (7.0)
4. Graham (6.9)
5. KWS Siskin (6.7)
6. Dunston (6.7)
7. Crusoe (6.5)
8. KWS Zyatt (6.4)
9. Gleam (6.4)
10. Revelation (6.3)

While some of the above varieties have their own weaknesses in terms of other foliar diseases it highlights the point that we have a wide variation within the Recommended List with lowest scoring variety Elation down at 4.3. Looking at things slightly differently if you now combine the scores against the big three foliar diseases Septoria tritici, yellow rust and brown rust, you end up with a top 10 that looks like this:

1. KWS Firefly
2. KWS Extase
3. Revelation
4. LG Sundance
5. Elicit
6. LG Motown
7. KWS Trinity
8. Evolution
9. RGT Illustrious
10. Graham

The above list provides varieties with more overall disease security rather than looking at Septoria resistance in isolation. KWS Extase is sold out already, KWS Firefly won’t be far behind and has the benefit of a buyback offering security on the grain premium. Graham will continue to take a big market share as a solid feed variety and Revelation, Evolution, RGT Illustrious and KWS Trinity all have very limited seed production. For more information on the KWS Firefly buyback please call you ADM Agriculture farm trader.

Fertiliser

Granular urea

Global urea trade remains slow but stable as most traders sit on the fence. Egyptian producers are reporting weak demand and Algerian producers report similar, not helped by strikes in the country that has brought business to a standstill. Any trades that have taken place are similar to previous weeks at $260-265/t FOB Egypt for May Shipments. In the UK, stocks are limited as importers try to clear positions. Due to this, delivered farm prices are currently below replacement values, allowing growers to take advantage of lower levels if purchasing top-up urea tonnes. For any urea enquiries with immediate delivery, please contact your local ADM Agriculture farm trader or the fertiliser desk on 01427 421 237.

Ammonium nitrate

AN prices continue unchanged in the UK. CF product is available with swift delivery for those looking for last minute requirements. Imported AN stocks are depleting as traders remain nervous to take additional positions at this stage of the market with the thought of new season around the corner. However with a later reset possible this year, as demand into the grassland areas will likely run on well into June no numbers are being discussed at present.