David Sheppard, Gleadell’s managing director, comments on the Wheat market

Rising anxiety about the potential impact of the escalating trade dispute between the US and China keeps the markets in a nervous mood.

Although mainly linked to corn and soybeans, the downward market momentum has spilled over into wheat pits, despite global weather concerns still being in place and declining crop estimates, especially in eastern parts of the EU and the Black Sea region.

Continued dryness across much of the eastern EU is raising concerns over final production numbers. And in Russia, analysts now place the crop in the 67-73mln t range, a revision that, in turn, follows a recent downgrade in the Ukrainian forecast.

Most EU analysts expect EU wheat exports to reach around 21-21.5mln t. With only a matter of a few weeks left in this season’s marketing campaign, the 24mln t forecast held by the USDA is overstated.

In the UK, as it always seems at the end of the season, there appears to be a bit more wheat looking for homes as growers try to get sheds cleared ahead of harvest.

New crop is all about weather from here in, and although the recent break in the market has taken the shine off values, current prices still remain attractive to growers.

Gleadell comment

The ongoing trade dispute, weather and politics, will keep market nervy, although talk of lower global wheat production may provide some resistance to lower prices.

US wheat still looks expensive on world markets but, with the potential of lower Australian, EU and Black Sea export supplies, importers may be forced to go cap in hand to the US later next season.

Russian prices continue to provide the benchmark in the short-term, until more details can be obtained over final production and export availability.

Jonathan Lane, Gleadell’s trading director, comments on the OSR market

Despite reports of declining global crop conditions for rapeseed, the market has suffered in the wake of the hugely volatile soybean market we have seen in the past few days.

The ongoing trade negotiations between the USA and China look set to have far-reaching implications for agricultural trade flows between the countries.

Trump’s announcement to impose significant import tariffs on Chinese goods is likely to leave President Zi with no option but to retaliate, including the imposition of the 25% duty on imported US soybeans.

Immediately following the announcement, CBOT Soybean futures plunged 64c/bu to near nine-year lows on the front month, before recovering to close 20c down, in what can only be described as a wild trading session.

The European rapeseed market couldn’t ignore these steep declines in soy, but was partially insulated by the weak euro and ongoing concerns about northern EU and Australian crops.

Domestic prices in the UK are also down on the week, following the global trends, but farmer selling remains limited.

Calum Findlay, comments on the Fertiliser markets

Nitrogen markets continue their move higher as both urea and ammonium nitrate markets firmed further this week.

Earlier in the week, Yara Europe announced a €14/t rise in 33.5% N values, to €263/t bulk delivered for September. That equates to an on-farm figure of £246/t for UK 34.5%.

Following European markets, CF pulled its August and September terms yesterday, posting new October values this morning, with both nitrogen and nitrogen/sulphurs up by £10/t.

Granular urea markets have seen another significant price increase this week, as sales yesterday out of Egypt were concluded $25/t up on last week at $283/t FOB for July.

The bullish forecast for the market will continue as traders await the announcement of a fresh Indian tender, expected within the next 10 days. With the continued lack of Chinese exports weighing heavily on the market, and other producers already sold out for June/July, this is likely to bolster prices further.

Along with nitrogen, sulphur continues to firm, pushing up the price of NS grades. Piamon S, a granular compound material (33N 30 SO₃ from German producer SKW Piesteritz looks an extremely good buy in today’s market and is available from Gleadell for Oct-Nov delivery.