The rally in wheat and soya prices in July has proved short-lived, and global prices have subsided again during August.
Despite the initial concerns about the collapse of the Black Sea corridor in July, accompanied by the attack on the Danube port facilities, wheat prices have since stabilised and eased back.
Sufficient wheat is coming out of the region to suppress international price levels. That said, developments in the war remain a volatile factor in price trends.
Meanwhile, although the latest estimates from the USDA have reduced the global wheat production forecast by three million tonnes to 793m, this remains ahead of last year’s harvest.
For now, the global outlook is considered to be just about balanced, and lacking any clear direction.
One factor likely to cap upward movements in wheat is the anticipated large US maise harvest, which is still expected to strengthen global stocks despite immediate worries over hot and dry weather.
With UK feed wheat standing at £276/t, this is the the lowest August price for three years. Currently, UK wheat prices are above world prices so are unlikely to venture higher.
Soya has also dropped back over the past month, with the US crop now progressing well; and there is still that large South American crop due to arrive early next year.
Hence, soyameal is nearly back to where it was in June, which was then itself the lowest price since the end of 2021.
With both the main poultry feed ingredients heading downwards, our basic layers ration has similarly fallen back, down by £13/t to £276/t.
PRICE DRIVERS
(UP) WHEAT – (Short term) Potential volatility due to Black Sea developments and dry weather problems
(NEUTRAL) WHEAT –A finely balanced supply outlook, with no clear direction at present
SOYA – (Short term) Dry weather conditions for the US crop are still supporting the market.
(DOWN) SOYA – Longer-term, supplies look well covered.
