Wheat Market

Another quiet week for the US market, with values about $1-2 lower.

The latest USDA report did little to excite the trade last week. US wheat stocks were forecast higher, while winter wheat plantings were put at their lowest level ever recorded, but both were within trade expectations.

US wheat continues to hang onto the shirt tail of any impending US/China trade deal, buoyed by recent comments by President Trump that he might let the 1 March deadline ‘slide for a little while’.

Likewise, European wheat has shown little price action, trading about €1.50/t down on the week. Wheat exports to non-EU destinations picked up slightly, mainly on weekly revisions supplied by Brussels, but are still seen down 22% year on year y at 10.1mln t.

Russia’s agriculture ministry confirmed there was no need for export restrictions at a routine meeting with exporters, with total yearly shipments still projected at 42mln t.

However, with the forecast showing exports of circa 37mln t to the end of February, the rise in domestic prices seems to have already done the job, as Russian wheat is no longer competitive on global markets.

Ukraine’s wheat exports have reached 12mln t, 75% of the agreed volume, leading to its grain association again asking exporters to submit data on shipping plans for the rest of the season.

UK prices are marginally higher on the week, although Brexit continues to dominate. Official data released this week showed domestic wheat usage slowing in Q2 (Oct-Dec 2018) as maize usage increased.

Wheat imports were reported at 1.17mln t to the end of December. That suggests further reductions in domestic usage, or increased imports, may be required if the lower-than-expected wheat area reported in last week’s Defra BPS data is correct.

David Sheppard, Gleadell’s managing director,commented:

Another week of political spiel and little reaction in prices. The US/China trade talks, EU/Black Sea export demand/availability and Brexit will continue to dominate.

However, with new crop prospects remaining positive for a sharp rebound in Russian and EU wheat production, the likelihood for any sustained price rally would need a major weather problem.

That said, talk of colder weather entering the US southern plains, where there is no snow cover, may increase the threat of winterkill.

OSR market

The Matif rapeseed futures market has drifted lower this week as a slowdown in crush demand and the impending arrival of Australian boats triggered some selling activity.

This has provided UK crushers with opportunities to source competitive imports, which has affected domestic prices.

Currency continues to have a significant effect on UK farm-gate values, but the competition from EU imports is having a negative effect. And, as we move towards the start of spring, the necessity for biodiesel manufacturers to use rapeseed oil will wane.

With this in mind, growers with old crop rapeseed should consider exiting their positions on any dips in currency.

Fertiliser Market

Granular urea

Internationally, more sales are being reported this week. Purchases from Egypt and the Baltic confirm that values in both these origins have slipped again.

A 25,000t vessel of granular urea has been sold by a manufacturer for second-half February collection at a further $10/t below the last sales made.

In Europe, retailers and distributors have already sourced a large quantity of urea and, like the UK, many would like to see stock on the ground cleared before re-entering the market.

Applications have started in most areas on winter wheats and barleys, and  also on flea beetle-damaged oilseed rape crops.

This has encouraged a few buyers back into the market and, with the current weather outlook ideal for urea application, interest is expected to continue to build.

Urea fertilisers in the future?

Details in the recently published Clean Air Strategy state the government’s intention to reduce ammonia emissions by 8% in 2020 and by up to 16% in 2030.

With 88% of ammonia emissions in the UK coming from agriculture, the spotlight is on farming, and in particular the use of straight urea, which is an area that has been identified as being one such source of ammonia emissions when spread on arable crops.

Germany has already announced a ban on the use of straight urea from 2020. The UK will now consult on a similar policy in 2019, with a view to introducing legislation in the shortest possible timeframe.

The use of both urease and nitrification inhibitors in the UK will increase. Through its exclusive partnership with SKW Piesteritz in Germany, the largest producers of urea in Europe, Gleadell is already selling SKW Alzon® neo-N in the UK market.

This contains both a urease and nitrification inhibitor, so is ideal for use in both wet and dry conditions, and the slow release means it can be applied early using a larger dose reducing the number of applications.

In Autumn 2019 Gleadell will launch a new product, SKW Piagran Pro, to the UK market. This contains a urease inhibitor only so will be ideal for all situations as it can be used all the way through the fertiliser application period, especially during periods of dry warm weather.

Reducing the risk of ammonia emissions almost completely, Piagran Pro will be marketed as being the “urea for problem conditions”, and like the Alzon® neo-N product, it has the benefit of having the inhibitor added during the granulation process, not just “sprayed on” at bagging point like other products available.

Gleadell has 1,000t of this product currently on trial in the UK. For further information and product updates, growers should contact their  local Gleadell farm trader.