Weekly Feed Market Commentary
Published 30 September 15
UK Nov-15 wheat futures closed at £115.50/t on Tuesday (29 September), £4.10/t up week on week. Furthermore Chicago Dec-15 wheat futures increased on the week by $3.03/t on Tuesday (29 September), closing at $185.08/t. Chicago maize futures prices (Dec-15) also followed the upward trend, closing at $153.15/t on Tuesday, $3.35/t up week on week.
UK feed wheat futures (Nov-15) gained £3.85/t on Wednesday (23 September), the largest one day gain since early July. Both the Dec-15 Chicago and Paris milling wheat futures showed similar increases, of $4.41/t and €3.25/t respectively. The increase in price stemmed from worries over winter planting in the Black Sea region, where dry weather is causing concern.
The International Grains Council (IGC), increased its global wheat production forecast by 7Mt to 727Mt in its month report published on Thursday (24 September). While wheat is expected to acquire more feed demand (from maize), it’s not enough to stop global stock estimates also being increased to a record 211Mt.
On Monday (28 September) the final UK balance sheet for 2014/15 season was published. Wheat used for animal feed was up 11%, while barley usage reduced by 5% compared to 2013/14 season. The usage of maize and oats for animal feed also decreased in 2014/15 compared to the previous season. End of season closing stocks for all cereals increased by 28% compared to 2013/14.
As at 22 September, the UK harvest was 95% complete, according to the latest ADAS report. Winter wheat (97% complete) and oat (95% complete) harvesting is nearing completion, with the majority of the remaining crops in Scotland. Spring barley and spring wheat harvest is now 80% complete with harvest nearing completion in England and Wales.
Chicago soyabean futures prices (Nov-15) closed on Tuesday (29 September) at $153.15/t, $3.35/t up on the week. Nov-15 Paris rapeseed futures prices also increased on the week by €3.75/t on Tuesday, closing at €367.25/t.
However, UK rapemeal (34%, ex-mill, Erith) prices fell for the sixth week running on the week to Friday (25 September), down by £1/t on the week to £159/t. It was a similar story for Brazilian soyameal (48% ex-store, Liverpool), falling by £2/t to £281/t on Friday compared to the previous week. Nevertheless, Hi-pro (ex-store, East Coast) soyameal prices increased on Friday by £1/t compared to the previous week, closing at £265/t.
Weekly US soyabean harvest progress figures came in above analysts’ expectations on Monday evening (28 September) with 21% of soyabean area harvested against an average expectation of 18%. Some wet weather was expected to delay harvesting, but the soyabean pace remains ahead of the 5-year average.
Rapeseed sowings in the EU for 2016, who are the biggest grower of this commodity are unlikely to beat last year’s levels, according to the International Grains Council (IGC). Further, the dryness in Ukraine has not just affected the sowing of grains but of rapeseed too. The IGC warned that dry conditions in Ukraine could reduce the intended sowing area of rapeseed by a third as the planting pace is the slowest since 2007.