Feed market update – January 2017
Read our commentary on latest developments in the global cereals and oilseed markets.
Since the middle of December (16 December), UK feed wheat futures (nearby) have gained 9%, closing at £148/t on Wednesday 25 January. As it stands to date (25 Jan), January is on track to be the sixth consecutive month that UK nearby feed wheat futures have gained on the year. The monthly average nearby UK feed wheat price for January is currently at £145/t, 32% higher than the same month a year ago. Furthermore, 2016 was the first calendar year that this price series has recorded an annual average gain since 2012, despite a fourth consecutive year of record global grain output. This is also in contrast to US markets, which saw another year of declines in 2016.
There is no denying that currency volatility, especially in the midst of Brexit, has helped to support UK prices. However, it is not just currency volatility that has been influencing UK feed wheat markets this year. A tighter supply and demand situation domestically has also had its part to play.
Since 16 December, nearby Chicago soyabean futures prices have increased by 2%, to close at $388/t on Wednesday 25 January. Despite the overall increase on the month, the price series has fallen by $7/t from the peak seen on 18 January ($395/t). In sterling terms, the increase on the month was just 1%, mainly due to currency movements. Due to a combination of currency volatility and upward movements in global markets, UK feed ingredient prices have also climbed. Between 16 December and 20 January soyameal prices (spot, Brazilian 48%, ex-store, Liverpool) increased by 9% to £354/t on 20 January. The rise in global oilseed futures prices have been driven by a combination of factors, including weather issues for soyabeans. Heavy rains across parts of Argentina’s key soyabean growing regions has led to further concerns over its crop this season.
To read about recent developments in the feed market in more detail, click here.
Millie Askew, Analyst
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