Feed market update - 22 July 2015
Read our latest summary of developments on global markets for cereals and oilseeds.
It has been a fairly bearish week for global grain prices, mainly due to the rapidly advancing US winter crop harvest and ample global supplies. Nov-15 UK feed wheat futures closed at £123.50/t on Tuesday, down £2.75 on the week. The recent decline in UK feed wheat futures has more than undone the rally that was seen at the beginning of the month. Although some weather issues do remain across the globe, markets now appear to be more relaxed towards them. The EU maize crop remains in focus, with Strategie Grains highlighting that weather conditions are becoming really unfavourable for the crop across France, Italy and Hungary. With the prospect of reduced feed grain supplies in the EU this season, EU maize prices have risen relative to wheat, which should support feed wheat demand.
Oilseed prices also trended lower during the last week, likely in response to easing weather risks in North America. Coupled with strong global supplies of soyabeans, the strength of the pound continues to weigh on UK prices. On Friday, UK rapeseed (Nov-15 delivery, Erith) was £273/t, £7 lower than a week earlier. Brazilian soyameal (48%, ex-Store, Liverpool, Jul-15 delivery) was down by £2 at £304/t. Chinese soyabean imports were the second highest on record in June, spurred by low South American prices. If China is stocking up on cheap South American soyabeans, we may see a decline in its demand for the US crop later this year. So far, new crop US sales to China are the lowest since 2007 and if this trend persists, soyabean (and other oilseed) prices could decline further, especially as another large harvest is expected.
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