Grain markets bullish, but mixed picture for oilseeds
Grain markets have been largely bullish over the course of the past month (26 January-22 February).
UK feed wheat futures (May-18) remained stable, closing at £139.25/t on 22 February. This was an increase of just £0.75/t on the previous month. Furthermore, the closing prices for the contract had a range of only £2.75/t over the period.
The latest USDA World Agricultural Supply and Demand Estimates (WASDE) report on 8 February revised 2017/18 world wheat production up by 1.24Mt from January. However, due to an increased projection for total use, up by 3.09Mt, world ending stocks are forecast lower, but still up on 2016/17 levels. According to the USDA, the proportion of US winter wheat crops categorised as poor or very poor has increased in several growing states. The continued dry weather has slowed the rate of maize planting in Argentina, and could affect yields.
Between July and December 2017, the UK imported 1.06 Mt of maize. This is the highest level since 2013/14, according to data from HMRC. This influx of maize into the UK may limit the amount UK feed wheat prices can rise.
Oilseed markets continued to be mixed this month. UK delivered rapeseed prices (Erith, Spot) have risen by £6.00/t, from 26 January to £301.50 on 16 February.
Spot UK soyameal prices (Hi Pro-Any origin, Ex-store East Coast) closed at £340.00/t on 16 February, up £43.00/t from 12 January. This is a result of increasing concerns over the drought affecting South American crops. UK rapemeal prices (34%, ex-mill Erith) were £188.00/t on 16 Feb, up £22/t from 12 January.
Concerns over the Argentine soyabean crop due to hot and dry weather have continued this month. Cuts to the Argentine crop size would be supportive to the oilseed markets, as the country is the worlds’ largest soyameal exporter and the third largest soyabean exporter. The extent of this will be influenced by what happens in Brazil, where a record crop is currently expected (USDA).
To read more about developments on the feed market, click here.
Felicity Rusk, Trainee Analyst
Felicity.Rusk@ahdb.org.uk, 024 7647 8818