Feed Market Update - December 2016
Read our commentary on latest developments in the global cereals and oilseed markets.
UK feed wheat futures (nearby) fell by 2% between 22 November and 16 December on further confirmation of large global availability of wheat. The strengthening of the US dollar in the wake of the US election had a substantial impact on UK grain prices and competitiveness. The latest USDA World Agriculture Supply and Demand Estimates (WASDE) forecast record output for both global wheat and maize. The latest forecast for global wheat production is largely driven by record output in Australia.
The latest animal feed statistics released by Defra highlight the increased usage of wheat in animal feed rations between July and October, compared to the same time last year. Furthermore the usage of barley has fallen over the same period. The drop in barley usage comes despite feed barley prices discounting at a significant level to feed wheat prices.
Protein prices have dropped further during the same period, with soyameal (spot, Brazilian 48%, Ex-store Liverpool) falling by almost 3% to £319/t on 9 December. Movements in soya markets have been largely driven by the increased global supply of soyabeans, with the USDA’s WASDE report highlighting a 7% increase in world ending stocks, compared to last year. Revised yield estimates for Canada and India accounted for a large proportion of the increase from the November forecast. Further weight was placed on soyabean prices by the optimism surrounding the Brazilian crop, following news of an earlier start to their anticipated record harvest, reducing the risk of any late weather issues hitting the crop.
To read about recent developments in the feed market in more detail, click here.
James Webster, Trainee Analyst
james.Webster@ahdb.org.uk, 024 7647 8844