Raw Material Market Update

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Politics is having an impact on raw material costs at the moment. The problems of President Trump have weakened the dollar so that the pound rose to $1.30 last week, the first time since last September. If sustained this will help reduce the costs of imports.

Meanwhile, in Brazil, the president has been involved in bribery claims leading to an 8% drop in the value of the Brazilian Real. Soya traded in Chicago dropped $8/t in response; the question now is, will US soya meal futures fall below $300/t?

Soya ex Liverpool for the rest of the summer and next winter is at its lowest price so far and looks good value, as do distillers grains from the biofuels industry. In contrast, rape meal looks expensive. Relatively little is being crushed at the moment and new crop will need to drop in price for the autumn to be competitive. If you are looking to buy DUP, AminoMax protected soya represents the best value per unit of Digestible Undegradable Protein.

Sugar beet looks like a luxury buy at the moment; both soya hulls and palm kernel provide much better value for money. Palm fat products such as Butterfat Extra and Megalac are starting to fall in price so just buy what you need for now.

Old crop wheat and barley continue to trade at around £160 and high £130s/t delivered. New crop wheat is currently only £10/t cheaper than old crop which limits the scope for price drops later in the summer. A good harvest would help bring forward prices down so the recent rain across the UK and W Europe has been very welcome after a very dry April.