Feed market update – March 2017
Read our commentary on latest developments in the global cereals and oilseed markets.
Since 24 February, UK feed wheat futures (May-17) have risen 2% to close at around £149/t on Tuesday 21 March. Over the same timeframe, new crop futures (Nov-17) also risen, by 2.5%, to close at almost £140/t. The discount from old crop to new crop prices is now around £9/t, the largest since early March when the gap reached around £10/t.
At the beginning of March, Defra released the second official UK supply and demand estimates. The wheat balance sheet has been heavily influenced this season by increased demand from bioethanol companies for industrial uses and the poultry sector for animal feed. This has led to the wheat balance for 2016/17 to be forecast at the lowest level since 2013/14.
Since 24 February, Chicago soyabean futures (May-17) have fallen by 2%, as the South American record harvest looms closer. Between 24 February and 10 March soyameal prices (spot, Brazilian 48%, ex-store, Liverpool) increased by 1%, to £333/t on 10 March. UK delivered rapeseed prices (spot, Erith) have also increased between 24 February and 17 March, by 1%, to £359.50/t on 17 March.
The discount of new crop rapeseed prices (Nov-17, Paris futures) to old crop (May-17) has widened further. The discount now stands at around £30/t and is the largest in the season so far. The large discount at present is essentially the market factoring in some bearish information that could influence new crop prices.
To read about recent developments in the feed market in more detail, click here.
Isobel Robinson, Analyst
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