Northern Ireland Weekly Market Report
15 March 2021
15 March 2021
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Fundamentals are relatively unchanged on the week. The markets look towards northern hemisphere crop conditions coming out of winter, as well as the start of the weekly US crop progress reports from 05 April.
With Brazilian maize plantings well behind average, progress and yields will be key in the coming months. Fresh demand has been limited in recent weeks.
Barley prices remain supported due to strong inclusions in animal feed rations. New crop feed barley is at a smaller discount to wheat than we have seen this year, but remains attractive.
Chicago wheat futures (May-21) lost $5.33/t Friday-to-Friday. This was led by more snowfall across key growing areas in the US, which will increase soil moisture. Rains forecast in the dry areas of the US plains also helped ease production concerns.
Maize prices lost ground as well last week, with the May-21 contract falling by $2.56/t over the same period. This was as traders wait for indications on US spring planting trends and fresh purchasing from China.
The ongoing impact of the La Niña in Brazil is continuing to hamper the planting of the Safrinha (second) maize crop. Plantings are now the slowest in the last decade, which means decent weather in the coming months will be necessary to achieve good yields. Despite this, on Thursday Conab increased their Safrinha production estimate by 2.7Mt, to 82.8Mt. The rise was due to forecast increases in the Safrinha crop area and small increases in yield.
In contrast, the Buenos Aires Grains Exchange cut Argentina’s maize crop by a further 1.0Mt on Thursday, to 46.0Mt.
The Pampas region, a key producing area, has been extremely dry throughout the second half of 2020. A recent heatwave and a lack of rain have worsened the situation.
French spring drilling is progressing rapidly thanks to favourable weather.
By 8 March, 90% of the expected spring barley area had been drilled.
This is well ahead of last year’s 33%.
However, much like the UK, the spring area is expected to drop year–on–year, with a move back to winter grains. The spring barley area is expected to reduce by up to 40% and maize by 18%.
Both old (May-21) and new crop (Nov-21) futures contracts fell by £1.50/t Friday-to-Friday. Closing at £204.00/t and £170.00/t respectively. The discount from May to November remains at £34.00/t.
UK delivered feed wheat for East Anglia (May-21) lost £1.50/t week–on–week, quoted at £209.50/t. Feed barley (May-21) was quoted at £169.50/t, a discount of £40.00/t to wheat. This discount will continue to support barley’s use in animal feed.
UK delivered bread wheat for the North West (May-21) was down £1.00/t on the week, at £236.00/t, a £32.00/t premium over May-21 futures. For November delivery, North West bread wheat was quoted at £205.00/t, a £35.50/t premium over Nov-21 futures.
The latest Daily and Weekly futures settlement prices reports are now available on our website.
Rapeseed prices are supported by tight global vegetable oil supplies. Rapeseed looks set to remain at a premium to soyabeans next season, supported by tight new crop expectations in the EU.
Demand from China offers underlying support to prices. But the future direction depends on the size and condition of South American crops and the US planted area.
Chicago soyabean futures dropped back last week. Arguably the main driver was drier weather in Brazil, which enabled the pace of the soyabean harvest to pick up. Soyameal prices also fell last week, as meal availability increases. More oilseeds are being crushed to take advantage of high vegetable oil prices. There are also concerns about disease outbreaks in the Chinese pig herd.
The Brazilian harvest is 46% complete according to Safras and Mercado, up from 34% last week. Progress is still behind the average of 55% complete at this time of year. But, the increase does mean more Brazilian soyabeans are available to export. This will ease the pressure on dwindling US supplies; this pressured US prices last week.
However, there’s still some uncertainty over the size of the South American harvest. The USDA and Conab increased their forecasts for the Brazilian crop last week to 134.0Mt and 135.1Mt respectively. Both of these would be a new record.
Meanwhile, the USDA and Buenos Aries Grain Exchange cut their forecasts for Argentina by 0.5Mt (now 47.5Mt) and 2.0Mt (now 44.0Mt) respectively, due to recent dry weather. Rain is forecast for this week but it’s expected to be too late for most crops (Refinitiv).
Global vegetable oil supplies also remain tight. Malaysian palm oil export stocks fell last month, after big shipments and lower output (Malaysian Palm Oil Board). This tightness is supporting vegetable oil prices and so prices for sunflower seed and rapeseed, which have higher oil contents than soyabeans.
Rapeseed prices continued to rise last week because of tight global vegetable oil supplies, this season. But, there are more and more pointers that this tightness will affect next season too, which is pushing up prices. On Friday, new crop rapeseed (delivered Erith, Nov-21) was reported at £395.50/t, up £14.00/t from 5 March.
Trade association Cocereal cut its forecast for the 2021 crop in the EU-27 by 0.1Mt to 16.6Mt. This is now only 0.5Mt above last year’s small crop.
Some French rapeseed crops will be replaced with other crops, FranceAgriMer said on Friday. These crops suffered from cold spells and pest attacks. The area lost is not estimated yet but the French rapeseed area was already expected to be the smallest since 1997.
Rapeseed can play a vital role in rotations but growers face challenges growing it. In a new article, Mark Topliff from AHDB’s farm economics team looks at how to make financial sense of growing rapeseed.
The latest Daily and Weekly futures settlement prices reports are now available on our website