Northern Ireland market report

Wheat

Wheat

Global markets felt corrections following the spike after poor US crop conditions were announced, but global tightness and the war in Ukraine provide a floor to support. Long term, Russian exports could pressure new crop values.

Maize

Recent large Chinese purchases provide extra demand on already tight supplies. The slow start to US planting, and downward revisions to production for 2022/23 continue to provide fundamental support to the market.

Barley

The ongoing tight supply and demand situation for barley will result in barley prices continuing to track wheat values closely.

Global markets

Global grain markets softened last week. This followed sharp rises last Monday, on the back of USDA crop condition news for poor wheat condition and a slow start to maize planting. However, the fundamental support from the Ukrainian war and tight supplies provided a floor to market corrections. Old crop (May-22) Chicago wheat prices ended the week at $391.46/t, a $11.39/t fall from the previous Thursday’s close. New crop (Dec-22) followed suit, decreasing $8.81/t on the week, to close Friday at $393.03/t.New crop maize also followed these corrections, with the Chicago Dec-22 contract back $4.23/t on the week, closing Friday at $285.24/t. Prices slid in the latter half of the week, after news of rain delaying plantings leant support on Monday and Tuesday.

Adding to concerns for global tightness of maize, the International Grains Council (IGC) forecast a fall in global maize production for 2022/23 last Thursday. The organisation estimated a drop of 13.0Mt, to 1,197.0Mt, reflecting smaller crops from both Ukraine and the USA.

UkrAgroConsult also reported last week that only 80% of last years spring cropping area would be sown, due to the conflict. They state that c.14.2Mha is expected to be planted, down from last year’s 16.9Mha. This announcement came on the Tuesday from the Ukrainian Prime Minister. This follows the Ukrainian government stating last month that the goal in 2022 is to harvest at least 70% of last year’s volumes. However, 10% of the sown area may remain unused, due to the hostilities.

Russian wheat exports are starting to slowly move into global markets again. SovEcon estimated that Russia still has 3.0Mt to export within the quota to 30 June (May-June). They report that next year, there could be an increase in exports due to high carryover stocks, to 41.0Mt. This is compared to 33.9Mt this season. SovEcon state that Russia has largely managed to resolve logistical problems and sanction affected payment transfers, with wheat being exported from the Russian side of the Black Sea and sporadically from the Azov Sea.

UK focus

The new crop discount for UK feed wheat continues to diminish. Old crop (May-22) prices ended the week at a contract high of £322.00/t, up £2.20/t on the week. However, gains were slightly reversed for new crop, the Nov-22 contract softened slightly by £3.65/t on the week, closing Friday at £287.60/t.

The UK crop continues to develop well, and next week sees the publication of the next AHDB crop condition report. This will cover the period to the end of April.

Trading for UK old crop remains very thin on the ground, with only two old crop bread wheat prices being able to be reported in last week’s AHDB delivered survey. Megan also explained last Thursday how this volatile and illiquid market has limited the volume of prices AHDB can report.

Physical prices for new crop were more available and followed global markets down during the week. Delivered feed wheat for harvest (East Anglia, Aug-22) was back £10.00/t on the week, quoted at £280.50/t on Thursday.

Rapeseed

Supply and demand remains tight this season, supporting prices. Longer term, Ukrainian sunflower plantings, weather in the Canadian prairies and vegetable oil export restrictions will be key watchpoints for price direction.

Soyabeans

A tight oilseed supply picture supports prices currently. Longer term, planting of a large US area has begun. This will become a focus of global supply moving forward.

Global markets

Please note: USDA soyabeans planting progression was quoted at 2% complete in last week’s market report, when in fact it was 1% complete.

Chicago soyabeans new-crop futures (Nov-22) remained supported last week (Thurs to Fri). There were stronger gains on Wednesday and Thursday, but overall, the contract settled $1.38/t up, closing on Friday at $553.03/t. US markets seemed to be relatively ‘risk off’ before the weekend, with some profit taking as weather for May looks drier and cooler for US row crop planting (Refinitiv).

Vegetable oil markets saw strong price support last week. This was because on Friday, Indonesia announced a ban on palm oil exports from Thursday (28 April). This export ban will include both palm raw materials and cooking oil, in a bid to dampen domestic prices.

This has caused a large reaction in the market, as Indonesian palm exports on average accounted for 55% of world exports over the past 5 years (2016/17 – 2020/21). The Malaysian palm oil (Jul-22) contract closed on Friday up 4% (Thurs to Fri), to 6,625MYR/t ($1,469.00/t).

Considering the squeeze to Ukrainian sunflower supply too, this paints a bullish picture of tight oilseed supply both for the remainder of this season and heading towards next season.

Argentina’s soyabean harvest was 30.8% complete as at 20 April according to the Buenos Aires Grain Exchange. This is ahead of this time last season (at 18.5%) but behind the five-year average (2016 to 2021) of 42.4%.

Rapeseed focus

Paris rapeseed futures (May-22) gained €77.25/t (Thurs to Fri) last week, to close at €1,081.25/t on Friday. New-crop futures (Nov-22) gained €24.25/t (Thurs to Fri), to close at €851.50/t.

On the new-crop contract, most of these gains were made on Friday following Indonesia’s palm oil export ban.

Please note that AHDB were unable to publish delivered rapeseed prices last week, due to insufficient quotes to calculate the published average.

The ‘Principal field crop areas report’ for Canadian plantings is due this week (26 April).