Feed market update - 20 May 2015
Read our latest summary of developments on global markets for cereals and oilseeds.
UK feed wheat futures found some upward momentum in the past week, with the Nov-15 contract firming £3 on the week to £122.25/t as at Tuesday’s (19 May) close. This disguises larger movements in the week, with the contract reaching £124/t at Monday’s close, from £117.55 on 13 May. The catalyst for these gains was the progression of heavy rain across the US Plains, indicating ‘El-Niño like’ conditions. The confirmation of an El-Niño event raises fears over Australian cereal production for 2015/16. While these fears are likely to drive gains in the wheat market, the main threat is in the barley market, given Australia’s importance for global production and the already tight forecast for global barley supplies. The EU is likely to face some renewed export competition from Russia in the final weeks of the season after the country lifted its wheat export duty with immediate effect.
UK rapemeal prices (34%, ex-mill Erith, spot delivery) were £190/t on Friday, down £3 week on the week. Soyameal (Brazilian, 48%, ex-store Liverpool, spot delivery) was £304/t, down £12. This reflected falls in Chicago soyabean and Paris rapeseed futures (in sterling terms) into Friday, which have since gained some strength again. El-Niño is certainly a watch point for the oilseeds market but poses more threat to the vegetable oil market rather than for protein meal supplies. Nonetheless, it is certainly a risk factor to keep an eye on.
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