Ration costs look set to remain firm in the coming weeks as the balance of sentiment in the raw materials trade has tipped towards bullish.
UK feed wheat gained another £11 a tonne by the start of August, while soyameal held steady, lifting our guide price for a basic layers’ ration by around £8/t.
It is now back up at £280/t, a level last seen in May.
With feed wheat peaking at £207/t ex-farm, this is its highest point for nearly nine years.
Driving the latest price increase are weather worries about harvests in the US, Canada, Russia and across Northern Europe generally.
“The US remains too dry. Europe is still too wet,” summed up Humphrey Feeds.
Russia, Germany and France are among the leading European producers hampered by wet weather.
If anything, weather problems are likely to undermine quality and shift the supply balance in Europe towards feed wheat.
But by the start of August, this had not been reflected in prices.
In the case of soya, the arrival of rain in the US has improved crop prospects and eased upward pressure on the market.
However, it is still unclear whether it will be sufficient for the critical flowering period in all of the growing states.
There were also signs that Chinese purchases could be slower this year, allowing prices to slip, until China came back with some firm orders at the start of this month.
The general view is that the overall level of demand for soya from China will be the crucial factor governing market sentiment either way during the coming months.
GRAIN MARKET DRIVERS
↑ WHEAT – Dry conditions in North America.
↑ WHEAT – Wet conditions in Northern Europe.
↑ SOYA – (Short term) Strong orders from China
↓ SOYA – Arrival of rain improves crop outlook in US midwest
↓ SOYA – Fears that shipments to China could be slower overall in the coming marketing year