Read our commentary on latest developments in the global cereals and oilseed markets.
Please note that from now on this commentary will only be updated monthly. To follow developments in cereals and oilseed markets in the meantime, please see the markets section of the website of AHDB Cereals & Oilseeds.
May 2019 update
Reference period: 15 April - 17 May
The UK delivered feed wheat price (spot) saw a drop of between £12.50/t and £16.50/t from 11 April to 16 May. UK feed barley delivered into East Anglia also saw a drop in value falling by £11.00/t.
Maize usage, by animal feed compounds, season to date (July-March), is at an all-time high of 438.6Kt, 88.9% (206Kt) up from last season (2017/18). Compound feed usage is up this season following the drought of last summer, maize has certainly replaced barley use in feed rations, with barley usage down 15.5% year on year (July-March). The lack of domestic demand has added weight to the domestic feed grain market.
High rainfall in the US is causing major corn planting concerns, shaping the market for new-crop grain prices at the end of the month. New-crop futures were generally following a downward trend until the USDA progress report came out on Monday 13 May. This showed corn planting progress 36 percentage points behind the five-year average sparking a rise in prices. From Monday (13 May) to Friday (17 May), Chicago, London and Paris new-crop wheat futures jumped, with London feed wheat futures increasing £6.25/t.
Longer term, it is likely that European prices will remain pressured with prospects for maize and wheat in the EU and Black Sea are still very good.
UK rapeseed prices delivered into Erith has remained fairly stable with just a £0.50/t rise since 18 April. Delivered prices have followed the trend seen in the European rapeseed nearby futures markets. At the end of April, delivered oilseed prices saw a rise to the highest point since the beginning of February, following a hike in Paris rapeseed futures.
EU prospects for oilseed rape production did weigh on the market a little throughout the month. At the end of April, the EU Commission forecast EU rapeseed production to be the lowest since 2008 at 19.2Mt.
Large US stocks and good progress for the South American harvests have pressured the soyabean market. Gains for new crop, seen week commencing 13 May, were primarily in response to the USDA progress report pegging soyabean planting notably behind the five-year average.
US soyabean imports into the UK are significantly up year on year, as the US is trying to shift excess stock that was probably destined for China. Soyameal usage, season to date (July-March) saw a slight increase from 2017/18. Rapemeal usage saw more of an increase for animal feed, season to date, at over 499Kt. Imports of rapemeal have also increased significantly which will fulfil requirements.
Sterling weakened towards the end of the reported month with the value against the euro dropping to the lowest it has been since mid-February. The value of sterling against the US dollar also dropped to the lowest point since early January.
The euro-dollar exchange rate also saw some fluctuation throughout the reported month, reaching a low for this year in April. Although recovering slightly from this, it had remained down across the month.