Weekly Feed Market Commentary

Published 2 July 15

Grains

UK feed wheat futures (Nov-15) closed at £132.00/t on Tuesday (30 June), up £7.60/t on the week and the highest settlement price since the end of March 2015. The upward trend in price was also reflected in international grain prices. Chicago wheat futures (Dec-15) closed $30.49/t higher on the week yesterday (30 June) at $228.52/t, and Chicago maize (Dec-15) closed at $169.88/t, $19.78/t above last Tuesday’s settlement price.

The USDA released its quarterly Grain Stocks report yesterday (30 June) which provided data on US stock levels as at 1 June. US wheat stocks were 28% higher, year on year, and the highest since 2011. Maize stocks, at 112.9Mt, were up 15% on the year and at the highest level seen at the start of June since at least the start of this century. Nevertheless, maize stocks were almost 3Mt below the average trade estimate according to a Reuters’ poll carried out ahead of the official data release.

The USDA’s Acreage report, which provides estimates of the US planted area in 2015, was also published yesterday (30 June). This report provided no real surprises for the market, with the US wheat planted area in 2015 estimated 1.3% lower, year on year, and the maize area estimated 1.9% below last year’s acreage.

In their latest forecasts, the International Grains Council (IGC) have downgraded their forecast for global wheat production by 4Mt to 711Mt compared with their last monthly estimate. Global maize production was revised 2Mt higher to 963Mt.

Germany’s grain harvest is estimated to be 11% below that of last year but remains just above the previous five-year average. Dry weather conditions in the country have impacted the wheat crop which is expected to be 8% lower, year on year, at 25.12Mt according to the DBV German farmers’ association. The winter barley crop is estimated 10% lower year on year, while maize production is expected to fall by 7%. Furthermore, the EU Commission has lowered its forecasts for both EU wheat and barley production by around 1.4-1.5Mt compared with the previous estimates made last month. However, maize production forecasts have been revised up slightly by 0.3Mt to 68.1Mt.

The latest ADAS arable crop report revealed that the recent dry weather has caused soil moisture deficits in some areas of and that domestic winter wheat and barley development is behind that seen in recent years. Nevertheless, the overall prospects for harvest 2015 are looking good and the crunch point for wheat yields will be the weather in July and August.

Protein meal

Chicago soyabean futures (Nov-15) closed at $381.09/t yesterday (30 June), compared with $352.98/t last week. Yesterday’s settlement price was the highest since December last year. Paris rapeseed futures (Nov-15) gained €15.75/t over the week to close at €401.50/t on 30 June. This is the highest settlement price since July 2013. Soyameal prices (Brazilian, ex-store Liverpool, June delivery) were unchanged from the previous week at £292/t on Friday 26 June. Rapemeal (34%, ex-mill, Erith, August delivery) was £173/t on 26 June, up £5/t on the week.

US soyabean stocks, as at 1 June 2015, were 54% higher year on year and the highest for this point in time since 2012. The 2015 US soyabean planted area is estimated to increase by 1.7% from last year’s record according to the USDA’s Acreage report. However, there is a risk that actual area planted may be lower; the survey on which the Acreage report is based is carried out at the start of June and since then wet weather has delayed soyabean plantings. So, it may not be possible to plant all of the intended area.

The DBV German farmers’ association expects the country’s winter rapeseed crop to decline by 20.5% to just under 5Mt in 2015 compared with last year. Dryness and higher insect damage has not helped the oilseed, although a much lower area was planted to rapeseed this year anyway and is the main factor behind the lower production forecast.

The IGC expects world rapeseed/canola output to fall by 6% year-on-year as a result of reduced sowings and weather impacts in Australia, Canada and the EU. Meanwhile, in Russia, early harvest results for winter rapeseed have shown low yields. By 25 June, farmers had harvested 6.1Kt of rapeseed, with yields averaging 1.01t/ha. This compares with average yields of 1.61t/ha collected for 12.2Kt at the same point in time last year. (UkrAgroConsult).