Feed Market Update – May 2016
Over the month to 24 May, UK feed wheat futures (Nov-16) fell just under £2/t, with a slight rally occurring in the middle of May.
Similarly, Chicago wheat futures fell over the month but Chicago maize futures rose. Sterling recorded its largest weekly rise since July 2015 in week ended 20 May. It also rose against the US dollar, although less so, weighing on both grain and oilseed prices in the UK.
Combined UK wheat and barley exports in March were at their highest monthly level since September 2000. Barley exports were especially strong at over 300Kt for the first time since December 1998, while for wheat it was the strongest month since November 2011.The strong UK barley campaign has supported domestic prices. Since the beginning of March, the discount of UK feed barley ex-farm prices to feed wheat has dropped to below £5/t. Anecdotally, when barley’s discount closes on this level, barley inclusions in animal feed will be kept at a minimum, due to its lower nutritional value compared with wheat.
Weather events have been the main talking point for soyabeans this month. Flooding in Argentina has caused approximately 5Mt of damage to the soyabean crop. Soyameal prices have increased since the beginning of April, in response to the South American crop losses and lower export supplies of soyabeans and soyameal. Between 8 April and 24 May, Dec-16 Chicago soyameal futures rose by 28% to just under $400/t. With higher prices making soyameal expensive to use in feed rations, there could be opportunities for exporters and producers of different oilmeals and feed grains to fill the gap. Rapeseed meal prices have been lower than some other oilmeals in the European market in recent weeks.
To read more about developments in the markets affecting animal feed over the last month, click here.
Isobel Robinson, Analyst
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