Wheat 

Despite US export shipments still being reported 13% down year on year against a forecast 11% increase, the market has gained $5/t on the week.

Support is coming from reports that the US managed a share of this week’s Algerian tender. Although it missed out on Egypt business due to the freight disadvantage, the fact US wheat was the cheapest FOB price offered added to the trade optimism.

In addition, continued concerns over declining prospects in Argentina due to excessive rains and talk that US farmers may have planted a record low winter wheat acreage are helping  to underpin the US market.

European markets are unchanged on the week after initial strength, due to an erosion of the recent rise in US and Russian export prices.

After missing out on the previous tender, Russia managed to secure all of this week’s Egyptian tender, selling 415,000t of late February/early March shipment wheat.

With Russia offering four times the volume traded in the March shipment period, European traders are becoming more concerned that the potential of any substantial increase in EU export demand is receding.

In its monthly update, France’s farm ministry slightly lowered its projection of French soft wheat exports to non-EU countries by 100,000t, raising ending stocks by the same amount, to 2.8mln t.

The UK market continues its early new year lacklustre approach, with futures continuing to trade in a very narrow range. Eyes and ears are on the current Brexit debate.

David Sheppard, Gleadell’s managing director,said:

"The US market currently looks underpinned, although key USDA production, stocks and planting data will not be issued this Friday due to the partial shutdown of the US Government.

European markets are reeling due to the continued slow pace of exports and the likelihood that Russian exports look set to continue for some time while key importer cover is increasing.

In the UK, Brexit continues to rule. The outcome is likely to cause much reaction in the financial and economic sectors and will influence sterling. It is no wonder that both farmer selling and consumer buyer have slowed, with many waiting for the result before trying to determine what it all means.

OSR market

Trade discussion between the US and China continues to affect the US soybean market.

The US trade delegation have returned today from Beijing reporting “positive” news, although we haven’t seen anything concrete. That said, the rhetoric suggests pledges from China to buy significant amounts of US agricultural goods, and this has helped to support CBOT soybeans.

In addition to this trade news, ongoing weather concerns in Brazil continue to create a weather market. Soybean crop losses from heat and drought have more than offset the increased US stocks that USDA reported in its December report, and these two factors combined have pushed values of CBOT soybeans up circa $10 since Christmas eve.

In further news from the US, President Trump walked out of talks with the senate as they refused his funding request to build his wall along the Mexican border, extending the fiscal shutdown with the administration. This means that we will not get any reports on trade or any numbers from USDA until further notice.

After falling to a three-month low during the festive period, the Matif has followed the soy market higher. Talk of renewed demand from some Continental crushers as water levels improve in the inland waterways has helped. That, together with improving biodiesel margins, has seen some spot demand helping to underpin prices.

Going forward, our domestic market will be dominated by currency. The focus therefore remains on Brexit and the ongoing negotiations as we approach the “meaningful vote” next week.

The PM is widely expected to lose the vote, but what happens after this is far from clear. However, the only thing that most MPs seem to agree on is that a no-deal would be bad.

Fertiliser

Granular urea

After the surge in prices throughout the Christmas period, the international market seems to have stabilised.

The Indian tender announcement is still expected shortly, setting the benchmark for future short-term values in Europe and providing support to prices in the Middle East and China.

In the UK, significant demand is expected in the coming weeks. Prices are likely to firm as stocks deplete at portside stores.

Ammonium nitrate

This week CF Fertilisers released new spring terms £15/t below previous levels. With both plants now running, the company wants to compete for business in the Jan, Feb and March period.

There is still in excess of 30% of the UK nitrogen market to be covered and these new prices have helped to kickstart the spring market.

Currency will play a big part in the weeks ahead. Any serious drop in the value of the pound could put immediate pressure on pricing, so the vote in Parliament next week could well direct values from then onwards