Monthly Feed Market Commentary

Published 27 June 18


Grain table

  • Grain market movements over the past month have been dictated by shifts in global weather patterns and international politics. Concerns over dry weather in parts of Europe, Australia, Russia and Ukraine resulted in new crop UK feed wheat futures reaching £161.70/t on 12 June. However, crop conditions improved in the American Midwest and some much needed rainfall arrived in Australia in the following week. These factors, combined with renewed trade tensions between the US and China resulted in the price of Nov-18 UK feed wheat falling back to £154.75/t, on 19 June.
  •  A further escalation of trade tensions between the US and China also helped to put a cap on wheat market gains.
  • The Russian grain crop has been pegged at “up to 100Mt” by the Russian Agriculture Ministry. The latest forecast is significantly below the 135Mt estimate for last year’s crop and has been largely driven by late spring planting in the Urals and Siberia. Weather conditions have also been less favourable than last year for winter crops. It’s also worth noting that while other Russian forecasters also predict the 2018 crop will be smaller than 2017, their projections are some 15-20Mt higher than the Ministry forecast.


Protein table

  • On 15 June, the US confirmed the products that would be subject to tariffs, this was followed by a similar announcement by China. Under the proposal US soyabeans will be subject to a 25% import tariff from 6 July. As a result, US soyabean futures (nearby) fell to a more than two year low on 21 June of $323.50/t. The Mexican government have also threatened to impose import tariffs on US soyabeans ( Mexico is the second largest export destination for US soyabeans.
  • Showers in the US plains in recent weeks are reported to have benefited soyabean crops. Indeed crop conditions (as at 24 June) are some of the best reported by the USDA for this stage in the season. However, reports suggest that some fields in South Dakota, Minnesota and Iowa are waterlogged and some crops could suffer if further rain materialises in the coming week (Reuters).
  • European rapeseed yield estimates have been revised down by an estimate 7% year-on-year by the European Commission, the second consecutive month of declines in yield estimates. Warm and dry conditions across Europe during May to mid-June affected the flowering stage.
  • The Rosario Grain Exchange cut its estimate for 2017/18 Argentinian soyabean production by 2Mt to 35Mt. This was due to heavy rains during harvest, which caused widespread sprouting and fungal disease and led to heavy losses across the Pampas region. The wet conditions at harvest, combined with drought earlier in the year, means the crop is now 22.4Mt smaller than 2016/17.