Raw Material Market Update

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A year ago, the EU Referendum result caused UK exchange rates to fall by more than 10% so it was perhaps a surprise that the hung Parliament result of the General Election ‘only’ saw a further drop of 3-4% and that seems to be recovering as Brexit negotiations get underway. Still, even that modest drop puts £7-10 on the price of soya meal.

Lack of rain is an issue in some wheat growing parts of the USA and dryness in Australia is cutting their export surplus. Heat and low rainfall in Spain and Portugal could mean they are looking to import more wheat next winter – traditional markets for UK wheat exports. The UK, fortunately, has had some rain now but wheat prices have still hardened by around £4-£5/t. Whether this is sustainable when, despite the issues outlined above, world wheat stocks are predicted to rise for the 5th consecutive year remains to be seen. Strong demand for wheat in the north from the biofuels industry is a contributing factor inside our trading area.

World soya prices have been steady recently. Rape meal remains expensive compared to distillers grains and sunflower; prices should fall when the new oilseed crop is processed but until then other proteins are better value for money.

The GB sugar beet harvest is predicted to be better this year and prices for beet pulp are reducing; however, soya hulls and palm kernel still look better buys at the moment. Palm fat prices are falling as increased supplies become available but they should reduce further and it could be worth waiting if considering buying fat products in any quantity.

Overall, it looks like little change in feed prices over the next few months.