Wheat market

The US market is down about $3/t as forecasts indicate rain in the southern plains’ extended model.

In the southern plains the winter wheat crop is emerging from dormancy and requires moisture. But much of the region is gripped by drought and yield prospects are diminishing, raising concerns over greater acreage abandonment and reduced output.

In Kansas, the Governor has declared a drought emergency order in 28 counties, which allows access of water from lakes, and issued a drought warning for the remainder of the state.

EU MATIF prices are up about €2/t on the week, despite a firmer euro and weaker Chicago trade.

Support came from Algeria’s surprisingly low 150,000t purchase, which is likely to be of French origin, and the lack of any recent reduction in Russia’s export values.

FranceAgriMer, the French farm office, cut its monthly forecast of French non-EU exports to 8.5mln t, from 9mln t previously. However, due to a sharply higher on-farm feeding figure, ending stocks were reduced to 3.17mln t from 3.25mln t previously.

This revision resolved the increasingly-asked question of where is the wheat? Are farmers just not selling or was it never there in the first place?

UK LIFFE is slightly higher. This is again a reflection of the current market dynamics and comes despite a slightly firmer pound.

As we move towards the final quarter of the marketing season, it appears that consumers’ coverage is less than envisaged, mainly because of perceived lower demand and what, on paper, still looks an over-supplied balance sheet.

January official data showed year-to-date (July-January) wheat imports just shy of 1mln t, up 3% year on year and more than three times the level of exports. This firmly emphasises the UK’s position as a net importer.

While the balance sheet may say one thing, the physical market is saying another. As in the EU report, the wheat may be out there, but when will it appear?

Currently, the scale of UK buying exceeds unwilling cash sellers. However, long-holders must be aware that they are sitting on very expensive feed wheat, with cheaper new crop a matter of months away, not only here, but also elsewhere in the world.

OSR market

The soy market remains very volatile as South American weather continues to be the key focus.

Harvest is making good progress in Brazil, and yields are suggesting a better-than-expected crop, with forecasts now suggesting a new record production of 114.5mln t.

Argentina has suffered with drought and heat, but rains are forecast, and this, combined with more optimistic report from Brazil, has been enough to take the recent shine off the CBOT soybean futures market.

The negativity from the soy complex has filtered into the European rapeseed prices and the MATIF is down circa €2 on the week.

The old crop supply-and-demand balance sheet for the EU still looks top heavy and, without a weather problem or some outside influence, it remains difficult to see any significant upside on the old crop market.

Fertiliser market

NPK/PK and straights

This week saw increases to both phosphate and potash prices, reflecting firming global markets.

Strong international demand throughout Q1 has continued to raise phosphate levels, and this is filtering through to the UK as suppliers move on to new stocks.

Potash stores across Europe have been depleted and their restocking ahead of anticipated spring demand has supported the firm prices. In turn, this has pushed blend values up, reflecting the cost of raw materials.

Currently, CF has held prices unchanged, including its range of NPK compounds. Growers should consider taking advantage of current terms.

As poor weather continues to hamper both spring drilling and first top dressings, on-farm demand for further fertiliser requirements continues to be pushed back.

Coupled with slow demand from the grassland sector, concern continues to grow surrounding both the delivery and availability of product to service this spring market.