WHEAT market

US prices are up on the week for deferred positions on talk of an improved export outlook.

A further sale of two cargoes to Egypt, together with reports that the US may have secured some of the recent Algeria tender, has lent support to the markets.

However, current shipping is still reported as being down 19% year-on-year, against USDA’s forecast 14% yearly increase.

Additional support has also surfaced due to late harvesting of US corn/soybean crops, delaying the final 5% of winter wheat planting. This is now threatened by rain and snow and the forecast of much colder temperatures.

EU prices are marginally lower on the week as the forecast is more favourable, with the likelihood of rainfall in the driest parts of central EU.

News that Argentina has a 30,000t vessel due for Algeria, together with recent sale/talk of US wheat to Egypt and Algeria, does little to bolster French non-EU exports.

Although the expected slow-down in the pace of Russian exports is more a case of when, rather than if, how that will affect EU competitiveness is still to be determined.

UK prices are unchanged on the week. News continues to be driven by Brexit. The signing-off by the EU of the UK withdrawal document leaves just over two weeks of frantic lobbying before the Common’s vote on the 11^th December.

Until then, currency will have its fluctuations, which will drive market prices more than current UK fundamentals.

The seasonal slowdown seems to have commenced, with both selling and consumer buying very limited, leaving the market looking for external assistance to generate some activity.

David Sheppard, Gleadell’s managing director comments:

"Market trend remains sidewards, although signs of support for US markets are slowly finding their way through into improved pricing levels. However, a major rally would be the last thing the US wants, as it needs to create export opportunities and actual shipments.

"Short-term, this weekend’s G20 summit and the US/China trade talks may provide some fireworks to the markets. In the UK, it remains all about Brexit and the upcoming vote on the 11^th December. On the same day, the USDA releases its next set of US/global supply and demand projections, which could make for a busy day.

OSR market

Volatility on the Chicago soybean market has increased ahead of this week’s G20 summit in Buenos Aires.

The last few days have seen prices rise about 30c/bu, as fund shorts partially liquidate positions against upside risk that could result from a potential easing of US/China trade rhetoric.

Further support was found from a weaker dollar after a speech from Federal Reserve chair Jerome Powell indicated a softening of the tone on US interest rate rises. MATIF rapeseed continues to follow the US market.

UK prices have continued to be ruled by the ongoing Brexit debate, its perceived impact on the UK economy, and the resulting value of sterling. The pound has lost most of last week’s gains, following the Bank of England’s warning of a 25% risk to the currency if an exit from the EU were disorderly.

FERTILISER market

Granular Urea

After the record-breaking purchase by India last week, the market has stabilised and traded yesterday at $315/t FOB Egypt.

That puts UK replacement values today at close to £300/t on-farm in bags. The UK market continues to follow Europe – flat today but remaining some 10-15% behind usual end-of-November levels.

Wheat plantings appear to be up and, although the fertiliser market is quiet, the general feeling is there is still a good tonnage to surface at some point during December to February.

India is busy calculating how much further tonnage it needs to purchase in December to replenish stocks, which had been allowed to slip. It is rumoured up to 500,000t is required, which will only help to tighten supply.

Ammonium Nitrate

This week CF Fertilisers withdrew its January offer in the UK across the full product range and replaced it with a new February offer.

Although prices remain unchanged, the fact that February terms have been issued means we would advise securing outstanding requirements for spring applications.