Feed Market Update- January 2018
Grain markets have been largely bearish over the course of the past month (28 December – 25 January).
With little to sustain any market gains, UK feed wheat futures (May-18) fell by £2.85/t, from 28 December, to settle at £138.65/t on 25 January. This was the lowest contract price since 28 December 2016.
Global grain markets have also been largely supressed over the past month. There has been pressure on US maize prices, driven by the glut of global maize supplies. However, with the weakening dollar, it will be interesting to see if Chicago maize futures (May-18) fall below the £100.00/t level.
One of the main fundamental drivers of movements in grain markets over the past month was the release of the latest USDA World Agriculture Supply and Demand Estimates (WASDE). World wheat production in 2017/18 was forecast up for the sixth consecutive month. Meanwhile, global maize stocks were forecast a few million tonnes higher than in the December report, which also pressured prices.
Meanwhile, oilseed prices have been mixed. In mid-January, soyabean prices came under pressure following the release of the USDA quarterly stocks report. US soyabean stocks were estimated at a record 85.9Mt as at 1 December 2017, up 9% on the year.
Towards the end of the month, Chicago soyabean futures received support from concerns over South American crops. However, it is worth bearing in mind that global soyabean production in 2017/18 is forecast as the second highest on record and global stocks are also at record levels. So there is a cushion to mitigate any shortfall in Argentine soyabean production.
To read about recent developments in the feed market in more detail, click here.
James Webster, Analyst
james.Webster@ahdb.org.uk, 024 7647 8844