Feed market update - 26 November 2014
Grain markets continued their rally through the past week. At Tuesday’s close, May-15 UK feed wheat futures had reached £135.40/t, the highest settlement price since mid-July.
Grain markets continued their rally through the past week. At Tuesday’s close, May-15 UK feed wheat futures had reached £135.40/t, the highest settlement price since mid-July. For the May-15 futures, moving above the £130/t price level is important as it represents the plateau of the market through much of August, before the depression in September. The reluctance of farmers to sell across the world, early new crop weather fears and re-alignment of speculative traders, have all contributed to the recent rally. However, global grain supplies remain fundamentally strong this season and must not be ignored as they represent a risk to the price rally. Demand for EU wheat has continued to progress ahead of last year’s pace over the past six weeks. However, with export commitments for barley, maize and oats lagging behind last year, not all grains are showing the same export strength as wheat.
Rapemeal (Ex-mill Erith, November delivery) also reached its highest price level since mid-July, increasing £3 from a week earlier to reach £173/t on Friday. Drier than usual weather conditions in South America have been stalling Brazilian soyabean planting progress, and remain a key focus for the market. It is expected that this will delay harvesting due to the short growing season, which could tighten supplies in early 2015.
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