THERE was some welcome relief for poultry producers as feed costs fell backwards during August.
In a reversal of expectations a month ago, feed wheat prices have dropped, but soya has staged a rally.
Despite predictions of continuing firm prices, UK feed wheat has tumbled by about £22/tonne during the past month, to £184.20/t ex-farm, according to AHDB’s UK average spot ex-farm price.
A rise in soya costs of £10/t only partly offset this increase, and our Basic Layers’ Ration has fallen to its lowest level for nearly a year (see chart).
Nevertheless, feed costs are unlikely to fall further.
Price expectations among traders for both wheat and soya are still set to bullish.
Through the coming season, stock levels for wheat are the primary concern, with some significant exporters such as Canada likely to have less grain available for sale.
The market is generally waiting for more detailed information about the northern hemisphere harvest, both on quantity and quality.
In the near term, hurricane Ida has damaged export infrastructure on the US east coast.
This has temporarily reduced exports and improved the stock’s outlook, allowing prices to ease.
As with wheat, US soya exports were disrupted by the damage from Ida, but this was outweighed by the prospect of solid export demand, especially from China.
Additionally, farmers in Brazil are sitting on their crops in the hope of higher prices.
Grain Market Drivers
↑ WHEAT – Uncertainty over global stock levels in the coming season
↑ SOYA – Strong demand globally
↑ SOYA – Stockpiling by growers in Brazil and reduced exportable surplus in Argentina.
↓ WHEAT/ SOYA – In the near term, disruption from hurricane Ida.