Wheat market

US prices are down on the week, as the market continues to struggle with the sluggish pace of US sales and exports. However, with US markets closed for Thanksgiving Day on Thursday and news out that Egypt has bought two cargoes of US wheat in its tender, we may expect firmer US prices when they reopen.

The slow pace of this year’s soybean harvest is seen delaying the final 10% of winter wheat acreage to be planted in the Southern Plains, although this week’s rise in crop ratings is offering resistance.

Concern over final southern hemisphere wheat crops still provides a level of support, albeit the trade is still awaiting signs of additional demand coming into the US export book.

European prices are also down on the week, mainly reacting to euro/dollar currency movements. Soft wheat exports to non-EU countries remain slow, running 27% down year on year, but news of a 50,000mt wheat vessel soon to load in Rouen for China has perked markets up a bit. 

Talk is also increasing regarding Russia’s domestic usage, as it appears export quality grain is becoming harder to source. However in the Egypt tender there were plenty of offers of Russian and Eastern European wheat available.

UK prices are slightly higher on the week, despite slightly better sterling values. Seasonal logistics are starting to kick in as consumers start to issue fixings, with the physical market seemingly short of December wheat.

However, Brexit-influenced currency movements remain the main driver for wheat prices, as the political declaration outlining how trade, security and other issues will work has been ‘agreed in principle’ and is expected to be signed off at this weekend’s EU summit.

David Sheppard, Gleadell’s managing director,said:

Markets continue to move sideways, and there appears little to change the current trend in the short-term. Long-term fundamentals factors still provide a level of  support.

OSR market

The US soy complex remains mixed, seesawing on US-China trade uncertainty. A rise in bean oil values on record biofuel demand has provided some support.

Harvest in the US is almost complete, albeit slightly behind last year’s pace due to adverse winter weather in the Central Plains/Midwest.

The UK rapeseed market is slightly down on the week, although declines have been limited by a weaker pound resulting from the ongoing Brexit turmoil.

Low water problems in Europe persist, undermining demand. Looking ahead, the market will continue to be ruled by developments in Brexit talks and the effect that this has on currency

Turning to new crop, news of significant area and production losses in all of Europe’s major producing areas continues, although some could argue this news was already priced into the market.

Fertiliser market

Urea

It has been confirmed that India's Department of Fertilizers has purchased one of the largest tonnages ever under the recent tender held on 14 November.

Additional confirmation of sales on Thursday has boosted the final tonnage to 1.821 mln t.

This news immediately stabilised the market, which had drifted $15-20 lower over the past two weeks. Buyers elsewhere are now concerned that spot availability east of Suez has been swept up by India.

Urea producers were happy to sell for December at $20t below the previous tender in October. This cleared stock and should help them avoid any price slump, as per a year ago.

Attention will now switch to the west to see how markets react. However, many producers are now cleaned out for December, so are under no pressure.

Plenty of demand is expected to surface in the UK in January, so values look to be supported now through Q1 and any sign of a downturn looks highly unlikely until we are well into Q2.

Ammonium Nitrate

The market remains quiet. Imports continue to trade at £20/t below UK product, although this is for product taken in November and December. CF is only offering January delivery as it finalises its scheduled maintenance programme.