Wheat market

The US market is down £2-3/t on the week as the US continues to struggle with its export pace and the lack of meaningful data due to the partial government shut-down.

US exports were reported still being down 11% year on year, against a forecast annual increase of 11%.

Colder temperatures are forecast for most of the main wheat growing areas during the rest of January, although significant snowfall in the eastern parts should insulate crops. The southern and central plains have little snow cover and may be exposed, although moisture levels remain adequate.

European prices have eased €2/t on the week, despite a weaker dollar exchange rate. Soft wheat exports to non-EU countries remain sluggish at 8.67mln t this marketing year, down 26% year on year.

However, with soft wheat imports up 164% and maize imports up 148%, it appears that the EU is not short of feed grains, although analysts may have to start readjusting internal supply and demand estimates.

Although Russia’s agriculture minister has denied any discussion on limiting exports, the market is already doing the job. The rise in the country’s domestic wheat prices should see January wheat exports fall substantially to around 1.5mln t.

If the trend continues for the rest of the season, that would suggest a seasonal export total of around 33mln t, well short of the current official forecast.

The UK has been dominated by Brexit. Against expectations, sterling firmed after the prime minister’s deal was rejected, as the city viewed the outcome as positive to sterling due to the likelihood of a softer Brexit.

David Sheppard, Gleadell’s managing director,said:

"Global prices continue to try to reallocate export demand although, with the potential of US, EU and Russian exports being lower than projected, genuine concerns are being raised over how much global demand there is.

"EU traders are waiting to see if the recent slowdown in Russian exports will be sustained and whether demand is switched back into the bloc. The UK remains focused on Brexit and its ramifications upon the UK’s financial, economic and currency markets and, in turn, grain prices."

 OSR market

After the positive news that had initially come from the US president on the developments on the US/China trade discussions, the market was disappointed by comments from Senator Sen Grassley that there had been little real additional progress.

The US has made some soybean sales since the postponement of the increased tariff structure, but the US remains way behind historical export numbers.

In Europe, the Matif rapeseed market has firmed over the last week, finding support from the weaker euro and some fresh buying demand. However, this uptick in the Matif has not been reflected in UK farm-gate prices.

The fundamentals of the rapeseed market remain supportive in isolation, but the ongoing US/China trade discussions and Brexit negotiations continue to provide considerable volatility to the oilseeds markets.

Fertiliser

Granular urea

The urea market has remained relatively unchanged, despite a potentially very volatile week.

India’s tender was announced yesterday with current offers supporting the European urea market price. Bulk and bagged Egyptian urea is still available for delivery in January, February and March.

DEFRA announced amendments to the Clean Air Strategy, which has removed specific dates to reduce emissions from urea-based fertilisers to the ‘shortest possible time’, and that government will be ‘consulting on this policy in 2019’.

With other issues in Parliament to be decided in the first quarter of the year, expectations of this legislation hitting the immediate market are minimal.

For future applications of urea, ALZON® neo-N by SKW Piesteritz, a UK exclusive product to Gleadell, has urease inhibitors and is available for purchase.

Ammonium nitrate

CF’s terms remain unchanged at £15/t below previous levels as it continues to compete for business.

Current values have created an increase in demand for Nitram at the farm gate and currently blue bag and imported ammonium nitrate are trading at parity.

However, January terms are likely to be withdrawn soon, so purchasing outstanding AN tonnages should be considered.