Commodities Update (4th August )

Over the past month the pound has strengthened by about a cent against both the dollar and the euro.  There has been a lot of volatility over the last month, which saw some reasonable falls around the 20th July, due to what at the time were raising Covid cases in the UK and fears of another lockdown in future.  Since then, case numbers have fallen, and the pound has strengthened again.

Over the last month oil price has eased slightly, though yet to see in the forecourts, with a fall of around $5/barrel, so to a price currently around $73/barrel.  Has oil reached its peak or has it just temporarily slowed on its race to reach $100/barrel again as somewhere predicting?  Gas prices haven’t eased though, and this is affecting AN price which is continuing to firm.

The GDT results have continued to fall, with the eighth successive fall yesterday of -1.0%, following -2.9% in mid-July. Despite this the overall GDT index is still at its best prices since 2014.

Milk Powder
With global prices high, prices have held this.

In the past month cereals have just eased up slightly in the market, while proteins have eased slightly.

I’ve heard of some good harvests on the rape, but now we just need the current changeable weather to pass for the cereal harvest to start in earnest.  The current concern regarding wheat is crops may struggle to make milling quality and therefore we may see and increase in feed wheat availability.

As previously mentioned, gas prices are still high, which is influencing AN price, and global supply and demand is the major influence on urea price.

While there are some currently offering urea prices in the UK market, I don’t believe any supplier actually has any urea currently in stock.  Currently prices are around the £415-420/t mark, but the belief/hope in the market is prices will ease back in Q4, and this will be the time to buy.

Again, though if suddenly there is a surge in demand, then expect prices to rise again.

AN price is being driven by gas price, with gas reserves also currently low in the UK, with CF increasing price a further £10/t last week.  Imported AN is still available and currently has around a £20/t discount compared to Nitram.

If prices do decrease, then don’t expect them to fall to the levels we saw at the start of this season.

As mentioned last month we also have access to some well-priced European produced 27N 12SO3, as an alternative to the CF product, and this is currently showing a £25/t discount without compromising quality.

DAP prices are still high with values still around the £550-560 mark, but we are also now seeing an increase in MOP prices with current market prices below the replacement price of £400/t.

Some of this increase is because political sanctions have been imposed on the world’s largest potash producer.

As mentioned last month, despite current pricing I would seriously be thinking about your fertiliser options for next spring and at least make sure you have cover for certainly your first and maybe your second application, even if its not what you’d normally use, i.e. imported 27N 12SO3 might be the best value product to have in stock so you have something and if you can get urea later use this instead and keep the 27N 12SO3 for later next season.

My reasoning?  There is a LOT of fertiliser to be brought as people sit hoping and waiting for prices to decrease, and it might but not by much, so everyone will want it in the spring so this will increase pressure on supply.  Then secondly as you may be seeing in the press companies may have the lorries, but they don’t have the drivers and you are starting to see companies offer handshakes for drivers to join them.

The increase in demand, the lack of drivers will lead to product not arriving when required so my advice has to be to hedge your bets and ensure you have your initial requirements ordered before, maybe even on farm before the new year because otherwise you may be disappointed.

For up-to-date commodity prices contact Andrew Jones on 07717 44288 or email