Wheat Market

USDA did little to encourage the market bulls in this week’s report, increasing both US and global wheat stocks.

However, the report has been quickly brushed aside as the market continues to trade weather, concentrating on what we may have, or may not have.

US weather is a complete mix, too cold with heavy snow in the north, cold with excessive moisture in the Midwest and Delta and still too dry in the Southern Plains, all negative to spring planting progress and crop development.

Paris wheat continues to show little reaction to the volatility across the pond, with the market trading slightly lower on the week.

EU exports continue to lag, now seen down 26% year on year and unlikely to see any substantial improvement, as the recent slide in the rouble may accelerate the demand for Russian exports.

The French farm office again cut its outlook for 2017-18 soft wheat ending stocks to 2.7mln t, down from 3.2mln t last month. Another jump in domestic usage, together with a further rise in intra-EU exports outweighing the sixth consecutive monthly fall in non-EU exports, was cited for the decline.

London wheat is trading up about £1/t on the week, despite a firmer currency. Market dynamics remain little changed as cash buyers underpin the market in the face of the limited volume on offer, either from the trade or from farm.

The current weather pattern suggests continued delays with spring drilling and for applying treatments to winter crops. If the current weather continues, and then turns excessively warm, shallow-rooted crops could be at greater risk of stress, lowering yield potential.

Gleadell comment

In summary, another USDA report came and went without a whimper, despite most of the numbers being above expectations.

The market’s focus is on new crop and its current weather implications, whether you are in the US, Black Sea, the EU or the UK.

Markets will remain driven by weather, the pace of spring plantings, and the perceived development of winter crops. And, given the current unease in the Middle East and the ongoing US-China spat, outside influences could also quickly lend a supportive hand.

OSR Market

Another USDA report, but still the market has no clarity.

The Argentine crop is down 20mln t, the weather in the US remain wet and cold through the US Midwest, suggesting a move to corn rather than beans, and the US farmer still has to understand what the 25% export on US beans into China means for domestic US price development.

The soy market has significant upside potential, if we see disrupted plantings or a detrimental weather US event that further affects global production.

The old-crop rapeseed market does not have the same potentially buoyant outlook as soy. The switching of European processing plants from rapeseed to soy, combined with a fall in demand from the biodiesel sector as Argentine imports continue to flood the European market, has negatively affected the Matif rapeseed futures this week.

UK prices have also drifted. Ex-farm values are now struggling to hold on to £290/t.

The outlook for new crop rapeseed will be influenced by the fluctuations in the soy market but, given the burdensome carryout stocks that are expected at the end of this season, it would need a weather or production event in the US to support global oilseed prices in the medium term.

Fertiliser Markets

A glimmer of spring has allowed many growers to get on with first applications over the past fortnight.

This has bought some life to the market as growers start to look for top-ups and spring NPK grades.

Lower-than-expected demand during the Feb/Mar period has kept prices unchanged for most products. The market is now running significantly behind this time last year.

At present deliveries can be made relatively quickly, with CF working on an average lead time of five working days for full loads.

Urea stocks are also running low. However, Gleadell can still offer product for prompt delivery in bulk or bags.