Feed grain report 11 March – 12 April
UK delivered feed wheat prices rose slightly across the month as sterling levelled out on its February gains. UK barley prices reached a market floor as Brexit uncertainty contributed to a reduced demand.
Much of March’s grain market movement was dictated by Brexit developments. Uncertainty surrounding the situation led to domestic export trade volumes lessening. As a result, barley has experienced reduced domestic and export demand, leading to a build-up of stocks. Whilst purchasers have continued to opt for maize for feed demand.
Fears of a no-deal scenario towards the end of the month led to a slight weakening of the pound which offered some support to the domestic market. New-crop wheat futures (Nov-19) experienced a slight upward trend following old-crop (May-19).
The discount into new-crop widened over the month to £17.65/t (12 Apr). 95% of the UK winter wheat crop was rated as “Good/Excellent” according to the latest ADAS crop report
Expectations that EU exports will meet forecasts grew increasingly likely over the month, leading to a firming of EU wheat prices. Although large supplies of US wheat still to be exported provided a ceiling to market gains.
UK delivered rapeseed prices rose over the month following a firming of nearby rapeseed futures observed on the continent. Market gains were mainly driven by an increase in purchasing demand for rapeseed after markets had moved lower in the month before. A move by China to impose restrictions on Canadian rapeseed imports contributed slightly.
A reduced EU rapeseed forecast has the area planted at 18% lower than 2018/19. With the planted area at its lowest since 2006/07, a potential tightness in EU supply could be observed.
Season to date EU import figures show soyabean imports up 11% on last year. Around 77% of those imports were of US origin, highlighting US intentions to move large supplies after fallout from the US-China trade war.
Global soyabean supplies are expected to rise with reduced feed demand caused by the African Swine Fever outbreak throughout the Chinese pig herd. Production figures for Chinese pork are forecast a 30% reduction for 2019 from last year, according to Reuters.
Sterling fluctuated over the month with Brexit developments weighing heavily on movements. The Dollar saw rises with positive US GDP figures released. However, continuation of the US-China trade war has capped increases to an extent. The euro-dollar exchange rose slightly over the period.
Alex Cook, Analyst
Alex.Cook@ahdb.org.uk, 0247 693 5746