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

Another solid week of US plantings has seen prices on the Chicago Board of Trade ease, although rains due to sweep through the Midwest this week may slow down activity.

A handful of states, predominantly in the northern plains and northern corn belt, are still projecting sowings well behind last year. The planting window for optimum yield potential is closing rapidly, so farmers may switch crops to allow greater latitude over planting.

Weather conditions are deemed near ideal for crop development across much of the corn belt, although dry weather in both the southern and northern plains remains a concern for winter and spring wheat crops.

Canada has turned drier, but rain is seen in the forecast for Australia. The recent heat seen in the eastern parts of the EU and Black Sea has diminished with the return of needed rain and cooler temperatures.

Paris wheat followed global weakness, trading lower on the week. The scale of the fall was limited by the decline in the euro against the US dollar to a 2018 low

Talk of a smaller German wheat area and crop forecast had little impact on cash premiums. EU wheat exports are still projected to reach around 21mln t at best, still 3mln t below the current USDA projection, albeit that the French farm office again trimmed French soft wheat ending stocks to 2.5mln t, citing higher intra and non-EU exports for the decline.

UK old-crop market continues to show decent support, especially into the more deficit areas of the country, although new-crop values have slipped £2/t on the week as economic data regarding wage growth and higher employment strengthened sterling.

Gleadell comment

In some areas the weather outlook has improved, in others concerns remain. Spring sowing is still in progress in the Northern Hemisphere, and sowings in the Southern Hemisphere are due to commence soon.

As is the norm between seasons, markets currently seem to lack direction, although weather over the next few weeks should provide a clearer outlook.

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

UK old-crop supply and demand remains heavy and crushers are adding to it as they continue to import.

In theory, old-crop values should eventually collapse but, with no inverse to new crop prices, farmers are increasingly likely to hold on and over-season stocks.

New crop is all about weather and there are enough concerns in Australia and Eastern Europe to support the market. Northern Europe is also seeing some issues. One German co-op is reported suggesting a cut in production from 4.5mln t down to 4.1mln t.

Calum Findlay, Gleadell’s fertiliser manager, comments on the markets

Granular urea

Internationally, the market is weak as we enter a period of low demand. Supply of urea is forecast to exceed demand in the late June/July period.

Although prices are falling, we are still some $30/t above the Egyptian FOB market this time last year. The question is, will we see the lows of last year?

Higher energy costs, higher freight costs and a volatile exchange rate have made many traders this year adopt a more cautious attitude.

On-farm grain prices remain at historical highs, so in these uncertain times it may be right for growers to buy a proportion of their urea requirements soon for next season.

Ammonium nitrate

Europe’s largest fertiliser producer, Yara, announced this week a new-season starting price of €230/t bulk delivered for 33.5% AN in France. That is €10/t higher than the current season’s starting price.

In the UK CF is still busy servicing grassland areas, but is expected to announce new-season prices in the coming weeks.

Imported AN values have already been discounted, although incoming tonnage remains minimal.

Liquid

The weaker euro has increased UAN prices in Europe for the forward market.  However, US levels have slipped back with urea values.