Weekly Feed Market Commentary

Published 29 July 15

Grains

Improved weather conditions across the US Corn Belt led to bearish forces for both US maize and wheat futures prices last week, Dec-15 Chicago wheat futures closed at $191.14/t on Tuesday (18 July), down $4.78/t week on week. Dec-15 Chicago maize futures closed at $151.77/t, also down $12.60/t on the week. The downward momentum was similarly felt for Nov-15 UK feed wheat futures, which closed at £122/t, down £1.50/t in comparison to the previous week.

In Europe, there remains a question mark hanging over EU maize production potential as a result of less than ideal weather. In the latest MARS report, the EU Commission reduced their forecast of average 2015/16 maize yields to 6.71t/ha from 7.22t/ha in June.

Early results from the European winter and spring barley harvests have begun to come through and have been better than expected, with RMI Analytics reporting increased confidence in the EU barley crop. However, very hot and dry weather during June and July has shown some crop stress for spring barley across parts of Spain, Czech Republic Germany, and to some extent France. In the UK, widespread rain has slowed winter barley harvest progress.

Grain exports from Russia during the first half of July were almost 60% lower than last year, according to The Russian Federal Customs Service. However, despite the sluggish start, Russian wheat remains the origin of choice for the recent Egyptian tenders.

Protein meal

Nov-15 Chicago soyabean futures closed at $347.10/t on Tuesday (28 July) down $22.04/t week on week. It was also a bearish week for Paris rapeseed, which closed at €375/t, down €16.25/t since the previous Tuesday. Soyameal (Brazilian, 48%, ex-Store Liverpool) was £298/t on Friday (24 July), down £6/t on the week.

Global rapeseed production is going to be lower this year, but currently so are the prices. In Europe, the market is trying to get a grasp of the size of the crop with harvest progressing. France looks set to be the EU’s leading producer ahead of Germany, but forecast production of around 5.2Mt is down 8% on the big 2014 crop, according to Reuters.

In Germany, early regions are well progressed with the rapeseed harvest, but a German farmers cooperatives association has further reduced its crop estimate to 4.9Mt – down over 20% on the large 2014 crop. A similar percentage drop is expected in Poland.

In North America, Canadian canola (rapeseed) expectations have been further reduced by 0.6Mt to 14.3Mt (15.6Mt in 2014), with stocks expected to fall by half to 0.5Mt this season. These forecasts come from Agriculture and Agri-Food Canada, but have been expected given the difficult growing conditions.

In the US, better weather conditions and poor export sales mean soyabeans are adding more downward price pressure to the oilseed market.

Brazil has begun exporting soyabeans from a new port in the North East of the country according to Reuters. This is part of a new trend for the soyabean producing giant, aimed at taking pressure off the congested ports further south, cutting costs and accessing new shipping routes.