Wednesday, 23 May 2018

2018 Edition of the GrainCo Seed Special Publication

Welcome to the 2018 edition of the GrainCo Seed Special Publication.

Within its pages you will hear about GrainCo's care to ensure that our seed quality continues to exceed industry standards and remains proudly black grass free. In addition find out about the dates for your local GrainCo variety demonstration sites, which range this year from North Yorkshire to Fife in Scotland. 

You can find the latest variety information on all of the leading wheat, barley and oilseed rape varieties, including Clearfield, seed treatments and fertiliser timings. 

To down load your copy click here. Enjoy the read.

Tuesday, 22 May 2018

Market Report 18th May 2018



Markets bounce this week following the recent sell-off. Easing of US/China trade tensions combined with resumed new crop supply concerns, act as catalysts.
  • ·         US/China announce intention to put trade tariffs on hold – news supportive to US corn/soybeans markets with increased imports of both to China reportedly being discussed.
  • ·         US funds estimated net short 17.1k wheat, long 228.8k (corn) 71.5k (soybeans).
  • ·         SAFRAS estimate Brazil’s total corn crop for 2018 at 79mmt, down from 88.9mmt last year (USDA’s May estimate 87mmt).
  • ·         Euro continues to weaken versus the dollar, supporting matif wheat (now at 7 month lows). Sterling firms on employment/wage growth data released.
  • ·         US weekly export sales of 985k (corn) 195k (wheat) - further illustrating the lack of demand for US wheat at current levels.


WEATHER/CROP DEVELOPMENT
  • ·         US HRW forecast return to drier conditions after showers last week. Forward forecasts at present suggest below normal rainfall for much of the Southern Plains.
  • ·         US Corn planting believed to be circa 75% complete, marginally behind the average for this time of year. Forecast suggested scattered light showers in parts.
  • ·         Canadian Prairie’s remain largely dry, though Western areas may receive some rainfall this week.
  • ·         Southern Ukraine/Russia remain dry but are forecast for some rains. Russian spring wheat plantings continue to progress slowly, though better conditions forecast for the next 2 weeks should boost progress.
  • ·         Australia continues to appear largely dry in the extended forecast (some rains expected for coastal areas). ABARES suggest producers are delaying plantings, hoping for better soil conditions.
  • ·         EU crop conditions largely unthreatening after better rains last week. Forward forecasts also imply more normal conditions for this time of year.
  • ·         France AgriMer suggest corn planting progress at 86% complete


BOTTOM LINE:
  • ·         Markets consolidate following on from the circa 50c sell-off in CBOT wheat of the last few weeks, with weather/politics supporting the rally. Weather continues to principally dictate direction and in spite of improved weather outlooks in some areas of concern, issues in some parts of Aus/Can/FSU/US remain unresolved.
  • ·         That said, old crop Global wheat stocks are burdensome and US funds have significantly reduced shorts in wheat, also building a significant long in corn - removing some underlying technical support.
  • ·         Expect volatile trade to persist, as the weather outlook continues to occupy much of focus. Geo-political/currency influence will also remain closely monitored, particularly until there is more clarity around what the US/China situation will ultimately mean for Ag S&D’s.


Tuesday, 15 May 2018

Market Report 11th May 2018


Markets fall this week as neutral USDA data and improving weather
outlooks for US/EU/FSU help drive the sell-off.
USDA:
  • US 2018/19 all wheat production placed at 49.56mmt, up 2.2mmt from the April report
    (above trade est. of 48.2mmt). HRW production estimated 17.6mmt – down 14% y/o/y.
  • 2018/19 World wheat ending stocks (subtracting China and India, who typically do not
    participate in wheat trading) estimated at 115.7mmt – over a 6 year low.
  • USDA lower 2018/19 Global corn carryover by 36mmt (largely due to historic reductions
    from China).
  • 2018 Brazillian corn output reduced by 5mmt to 87mmt (trade est. 88.5mmt).
  • US funds estimated net short 41.8k wheat, long 219k (corn), 94.6k (soybeans).
  • Stats Canada report March 31st wheat stocks at 16.4mmt (500tmt lower than trade
    expectations).
  • Sterling weakens somewhat as the BOE decide to hold interest rates - supporting
    London wheat.
  • US/China trade talks recommence this week. Trade will be conscious of potential spill
    over from external markets. Soybean/corn markets likely to be the most sensitive to
    developments.
WEATHER/CROP DEVELOPMENT
  • US Corn Belt planting progress estimated at circa 57% complete versus 63% average for this time of year.
  • US Corn Belt weather shows showers for the next 2 weeks, though models on thurs/fri did
    indicate the heaviest rains would fall further south than originally predicted.
  • US HRW areas forecast for better rains this week.
  • Drier forecast for Argentina should boost harvest progress.
  • Brazil’s Southern Safrinha corn area is due for beneficial rains next week – though questions
    remain as to whether they will come too late to materially improve crops.
  • Ukraine corn planting 83% complete versus 90% this time last year. 6/7 weeks of dry weather have been stressing winter crops, but forecast indicate better moisture next week.
  • Russia and Eastern Europe more generally should also benefit from these rains next week,
    following on from 2 months of drier than normal weather.
  • Alberta reports spring wheat seeding progress at 8.7% versus 30% average for this time of year. Australian conditions continue to look dry, with little respite in the forecasts.
BOTTOM LINE:
  • USDA data featured briefly before market attention quickly returned to weather and crop conditions.
  • US Corn Belt planting weather appears more favourable than first forecast, whilst rains for US HRW areas, as well EU and FSU this week are expected to boost crop conditions. Presence of the sizeable US fund long in corn may have contributed to selling late in the week.
  • UK wise, sterling weakness and a tighter wheat carryover into next season continue to provide support. Winter wheat conditions will remain closely monitored as such.
  • In short, weather continues to be the primary focus, with emphasis on the US/EU/FSU in particular. Traders will also be conscious of potential geo-political/currency developments with US/China trade talks scheduled this week.

Tuesday, 8 May 2018

Market Report 7th May 2018


  • Markets rally sharply on the week as risk premium is built for challenging crop conditions in parts of US, SA and Black Sea.
  • ·         US weekly exports reported at 1.9mmt for corn, well above market expectations. Wheat underwhelmed with just 328k reported (450k/week required to meet current USDA targets).
  • ·         US funds estimated net short 52.8k (wheat), long 210.9k (corn) 124.3k (soybeans).
  • ·         Saudi Arabia buys 545tmt wheat – believed to be German/Baltic origin. Iraq also announces a tender for 50tmt wheat from US/AUS/Can origin.
  • ·         Ag Rural cut 17/18 Safrinha Brazilian corn production by 4.5% to 57.2mmt. Total corn output placed at 87.6mmt (USDA 92mmt).
  • ·         Stats Canada suggest Canadian farmers intend to plant 25.3m/a total wheat area 2018 (up 12.8% on this season).
  • ·         Sterling will be closely monitored this week - BOE interest rate meeting scheduled for Thursday 10th .
  • ·         AHDB data shows UK barley usage in animal feed production of 934tmt, up 20.9% on this time last year.

WEATHER/CROP DEVELOPMENT
  • ·         US Corn Belt planting progress increased to 39% complete (above most trade estimates). 44% the 5 year average.
  • ·         Forecasts for the week suggest light rains are to be followed by heavier towards Friday, potentially hindering field work. Prevent plant dates are 2/3 weeks away, so there still appears a good opportunity for the crop to be planted.
  • ·         Kansas Wheat Tour estimated average yields at 37b/a versus 48b/a last year and a 5 year average of 41b/a.
  • ·         US winter wheat plantings improved by 1% to 34% g/e
  • ·         US spring wheat planting progress increased from 10% to 30% last week (51% average for this time of year). Forecasts for the Northern Plains suggest some rains over the next 2 weeks, though not of enough severity to hinder plantings.
  • ·         Argentine Corn harvest delays continue, with wet weather expected for much of this week. Extended forecast do suggest drier conditions are upcoming however.
  • ·         Ukraine corn planting progress reported at 63% complete versus 53% this time last year.
  • ·         Southern Russia/Ukraine continue to look hot/dry for the next 2 weeks, with little change evident in the extended outlooks for May.

BOTTOM LINE:
  • ·         Market strength continues as ongoing weather issues in US/SA/FSU provide enough doubt around 2018 supply to justify additional risk premium.
  • ·         USDA data due for release on Thursday will be the next fundamental target for the trade. Risk of consolidation pre-report is a possibility given the extent of the recent rally, also bearing in mind the sizeable longs in corn/soybeans.
  • ·         That aside, US/FSU weather will likely continue to be the key drivers day-to-day, with the ongoing US/China trade situation also likely to be monitored for developments.


Friday, 27 April 2018

Market Review April 2018





Finally, a more settled spell of weather over the last two weeks has seen a huge amount of activity in our region with farmers desperate to catch up with drilling, fertiliser application and spraying.  Most spring cereal and bean crops on light and medium bodied land have now been drilled, with only the trickier, heavy land remaining. I am often asked how late spring barley can be drilled; the answer completely depends on individual conditions at the time, all I will say is that many customers I deal with harvested successful spring barley crops in 2016 that weren’t drilled until May.


The last month has also seen an advance in old crop prices. May’18 feed wheat is currently trading between £154-£156/t, with those willing to hold on until July/early August likely to make £160/t. This is down largely to the re-opening of the Vivergo plant in Hull, furthering the demand for feed wheat in a region already in deficit. Moreover, dwindling on-farm stocks and the sense that harvest is certainly not approaching quickly is not incentivising many people to sell.


New-crop is remaining fairly level with values trading at £144-£146/t and £149-£151/t for harvest and November respectively. Most regular forward-sellers have likely taken cover at, or near, these values and until either markets move upwards or crops markedly improve, it is unlikely that many people will be enticed to sell much new crop at these current levels. Few growers in the region would at this point imagine they are heading towards a bumper harvest, especially with the condition spring crops have been drilled in (or not drilled!). If at least one of Ensus or Vivergo is running throughout the back-end, demand for feed wheat in the North will remain strong, and so unless the pound strengthens significantly, values will remain relatively firm.


Old crop feed barley has continued its meteoric  rise, now virtually at parity with feed wheat depending on location, and only £7-£8/t less than full spec milling wheat! Whether the demand for barley will reduce as farmers turn stock out remains to be seen over the next few weeks, however with very little left on farm, prices are unlikely to nose-dive. New crop barley also looks more attractive, with forward prices £10-£12/t below wheat, but again you would imagine a lot of next year’s trade will hinge on how well spring barley crops perform.


Oilseed Rape (OSR) continues to be the dog of this marketing year; old crop values remain at £284-£286/t (depending on location) and are seemingly range-bound to a maximum of around £290/t. It seems at this point as though OSR has run its race, with large imports in the winter meeting the demand from the UK crush. One can never rule out a late rally but it certainly feels unlikely at the moment. New crop values are equally uninspiring; £286/t for November, with harvest £10/t less, is hardly likely to induce much forward-selling at this point.


Fertiliser markets are gearing up for the new season trade to begin, with prices for AN and Urea expected in the next month. That said, there are still reasonable old-season offers available for those with purchasing still to do. Imported AN is some £23/t cheaper than UK product at the moment, with May delivery at £219/t and NPK products, such as 20.10.10, still available at £245/t.



Tuesday, 24 April 2018

Market Report 20th April 2018


Markets largely lower on the week, as US weather dominates the focus.
  • US funds estimated net short 63.3k wheat, long 147.9k (corn) 143.5k (soybeans).
  • Strong US weekly corn export sales reported at 1.092mmt, with 240k new crop wheat sales and 67k old crop cancellations reported (further reemphasising the lack of US competitiveness).
  • China continues to auction off state reserves of corn, with another 5.6mmt sold this week. Now 11.8mmt in total for the last few weeks, with a further 7mmt due to be auctioned this coming week.
  • Tunisia buys 3 old crop, 2 new crop wheat cargoes this week. French/Black Sea origin. Iraq buys 100k wheat, Australian origin.
  • Strategie Grains place EU soft wheat crop at 141mmt for 2018 (141.7mmt this season). Old crop exports reduced to 20.3mmt from 21.2mmt (24.2mmt last year).
  • Sterling weakness supportive to London wheat last week, as attention returns to Brexit negotiations and a BOE rate hike in May is cast into doubt.
  • French old crop wheat cash premiums ease, despite ongoing rail strikes, as demand begins to slow.
WEATHER/CROP DEVELOPMENT
  • US HRW crop forecast for some rain over the next 10 days. Dryness continues to be a significant issue, hence, rainfall levels will be monitored closely.
  • US winter wheat rated 31% g/e (up 1% on the week) - though poor/very poor increased by 2% to 37%.
  • Improved US Corn Belt forecast suggest good progress should be achieved this week. Estimated to be circa 5% planted to date (13% average for this time of year).
  • Safrinha corn area in Brazil remains dry, with forecasts indicating little rainfall
  • French winter wheat reported at 77% good/excellent Warm temps and limited moisture have been boosting spring progress for many parts of the EU.
  • FSU conditions remain good, with forecast unthreatening for the next few weeks.
  • Canadian Prairies and US Northern Plains remain snow covered following recent storms, delaying plantings. It’s not believed to be critically late at this stage however.
BOTTOM LINE:
  • Weather continues to principally shape direction, as US HRW dryness and Corn Belt Planting delays occupy much of the trade focus. Improved weather outlook for both instigated the sell-off last week. Perception remains that if US HRW remains the only crop issue this season, markets will struggle to justify current levels.
  • That said, markets will trade the story and if Southern Plains dryness persists and Corn-Belt planting delays are exacerbated, then expect markets to remain underpinned.
  • In short, weather led volatility should be the theme of the next few weeks, with all eyes on US conditions in particular. Geo-politics/currency will continue to be monitored closely however.

Wednesday, 18 April 2018

Market Report 13th April 2018

Markets close mixed, with USDA data largely in line with expectations. Post report, US HRW rain prospects and Corn-Belt planting weather resumed much of the focus.
  • USDA increase 2017/18 World wheat production by 0.96mmt to 759.75mmt (a new record). World wheat stocks increased by 2.33mmt to 271.22mmt (trade est. 268mmt).
  • USDA reduce Argentine corn production by 3mmt to 33mmt, with Brazilian output reduced by 2.5mmt to 92.5mmt (largely in line with trade - though some private estimates still suggest more downgrades may be required).
  • US funds estimated net short 75.2k wheat, long 199k (corn) and 143k (soybeans).
  • Russian 12.5% protein wheat prices firm to $214 FOB, due largely to Rouble weakness (up $5/t on the week).
  • IKAR increase Russian wheat export estimate to 39.5mmt for the season (USDA 38.5mmt).
  • France AgriMer cut wheat ending stocks by 500tmt to 2.7mmt (higher usage and intraEU exports cited).
  • Sterling firms on the week against Euro, supported, in part, by increased confidence in a BOE interest rate hike in May.
WEATHER/CROP DEVELOPMENT:
  • Above normal rainfall expected to hit the majority of the HRW in the second half of this week, potentially boosting crops.
  • US wheat ratings lower on the week, now 30% good/excellent, 35% poor/very poor (32% g/e and 30% p/vp previously).
  • US corn planting progress continues to be slow with trade estimates around 5% complete. Forecasts for the next 2 weeks suggest the cold, wet weather is set to continue, likely further delaying plantings. Circa 35% would be planted by 1st May in a normal year.
  • Northern Plains continue to suffer from cold conditions with heavy snowfall in areas.
  • Ukrainian/Russian spring plantings behind normal, though a drier week last week and limited rainfall expected this week should help improve planting progress.
  • Canadian Prairies forecast for cold/wet conditions over the next few weeks, likely hindering planting progress.
  • Cold, wet conditions persist across much of the UK, increasing yield and quality risks for both winter and spring crops as field work is further delayed. Increasingly important that hotter, drier forecasts for the second half of this week materialise.
BOTTOM LINE:
  • Routine USDA data released on Tuesday does little to change the broader outlook, as markets quickly returned to trading weather (predominantly US). Forecasts for widespread rains across the HRW-Belt continues to add pressure to wheat markets, whilst plentiful Global stocks of old crop wheat/corn continue to hang over the trade.
  • Sentiment remains that another major production issue in one of the Worlds key growing areas will be needed to justify a sustained rally from this point. Expect US/SA weather to largely shape direction day-to-day, though with ongoing geo-political issues in Syria/US/China – risk remains that external markets weigh into commodities, if any of these situations were to escalate.