Over the last couple of months, concerns around dry weather in the UK (particularly the south and east) have begun to dominate the minds of both farmers and traders. After a dry winter, March and April have provided little relief. As crops began to move through the growth stages, fears of a lack of rainfall began to take over, which have subsequently been reflected in new crop markets. By the middle of May, November wheat had peaked at £143 ex farm with September trading at £140. With growers reticent to sell due to the uncertainty of yields, consumers with little bought, pushed the market up in an effort to take some cover.
Thankfully, by the latter half of May, most regions of the UK had received useful amounts of rainfall and new crop markets eased back to £140 for November as a consequence. However, whilst the consumers still look to fulfil their new crop requirements and the weather ensures farmers are hesitant to sell, it is hard to see new crop values fall much below these levels for now.
Old crop wheat values remain fixed at around £150 ex farm. It seems unlikely that there will be much variation in these values now but with few holders of old crop wheat left. A small rise can’t be ruled out as we move closer to harvest and old crop becomes scarcer.
Oilseed rape remains relatively stubborn; old crop values have fallen to £325 June, and with the new crop approaching on the horizon, this doesn’t look set to change as available OSR is currently valued at £296/t ex farm and is unlikely to draw many sellers. Given the fickle nature of the OSR market and unpredictability of OSR yields, values would have to take at least a £20/t rise to induce many farmers to sell.
CF released their new season fertiliser in mid-May, producing a rapid uptake of orders. With the price-ratio between of wheat and AN at an historic low, September terms quickly sold out causing a £7-8/t price rise the next day. New season Urea prices have provided a competitive nature to the market with values between £205 - £210/t as a ball park figure. On a £/unit-of-N basis this worked out at around £0.45 for urea against £0.52 for UK AN. Importers never really got going, struggling to secure offers overseas which did not come as a surprise.
The rest of the market has remained fairly flat; NPK’s with higher N have understandably dropped back but there has not been much of an uptake on the order front with most enquires focusing on the Nitrogen market. Despite urea and AN moving £5-10/t higher from the recent lows, they still represent good value for anyone in a position to take delivery.