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Martin Doherty

Senior Analyst - Data & Analysis

AHDB Pork Market Intelligence


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Feed Commentary

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Read our commentary on latest developments in the global cereals and oilseed markets.

Please note that from now on this commentary will only be updated monthly. To follow developments in cereals and oilseed markets in the meantime, please see the markets section of the website of AHDB Cereals & Oilseeds.

February 2017 update


Since 25 January, old crop UK feed wheat futures (May-17) have decreased by 1%, closing at £147/ton Thursday 23 February. Over the same timeframe, new crop UK feed wheat futures (Nov-17) gained 1%, closing at £137/t on 23 February.

Over the past two seasons, UK feed wheat prices have experienced a fairly unusual positive price carry, making old crop wheat more valuable in forward markets. This incentivised producers to carry their old crop into the next season to achieve a better price. However, this season, the relationship between old and new crop prices has returned to a more typical relationship. As such, old crop (May-17) futures are currently at a premium of £10/t to new crop (Nov-17) values.


The price relationship at present suggests a disincentive for growers to keep this year’s crop in store and rather to sell on the spot market. This season we have seen a tighter domestic wheat supply and demand situation, combined with a similar scenario in Europe, as well as currency volatility providing support to old crop wheat prices in the UK. However, the way markets are lining up at the moment suggests that the new crop market is running on the assumption that the supply and demand situation in the UK will return back to a normal balance, in the absence of evidence to the contrary. 

Driven by the rise in domestic feed wheat prices, the gap between imported maize prices and wheat prices has narrowed considerably since the start of the season (July 16).


As at 1 July, UK feed wheat (delivered, East Anglia) was at a discount of £33.50/t to imported maize (any origin, CIF optional ports). Nevertheless, as the season has progressed the gap between the two has narrowed, driven by rising domestic feed wheat prices. As at 27 January, the gap between the two price series had narrowed to just £3/t. While over the past couple of seasons, maize hasn’t really been a huge player in terms of a feed ingredient in non-specific diets, the relative price of imported maize to UK feed wheat may well impact usage decisions.


Since 25 January, May-17 Chicago soyabean futures prices have fallen by 4%, to close at £376/t on Thursday 23 February. Following a similar trend, UK feed ingredient prices also decreased. Between 20 January and 17 February soyameal prices (spot, Brazilian 48%, ex-store, Liverpool) fell by 2% to £346/t on 20 January. Likewise, UK delivered rapeseed prices (spot, Erith) fell by 2% over the same time frame to £365.50/t on 17 February.


The fall in global oilseed futures prices has been partly driven by the pressure of record South American soyabean output, as harvest has started in Brazil.  In its latest monthly report, Conab increased its estimate for Brazilian soyabean output by 1.8Mt on the month. At 105.6Mt, the latest estimate is 11% higher than last season’s crop, which was effected by hot and dry conditions.

Furthermore, Australia produced 4.14Mt of Canola (OSR) from the recent harvest, according to the Australian Government. This is up 41% year on year and slightly higher than the previous record set in 2012/13. With nearly three-quarters of Australian Canola exported (previous 5 season average), the larger crop is likely to provide greater volumes for world markets.

Indeed, on Wednesday 15 February a large boat loaded with Australian Canola arrived in Liverpool. The last time the UK imported a sizeable amount of rapeseed from Australia was back in March 2002, when we imported 62Kt.


Millie Askew, Analyst, 024 7647 8968