UK feed wheat prices climbed to a new high last month, despite earlier predictions of a calmer trade in the coming months.
At £214.70/tonne the ex-farm UK average, according to the AHDB, has topped £210/t for the third time on record, and the first time since 2012.
Although some profit-taking in the market is expected in the immediate term, the general outlook for wheat prices is now rated as bullish well into next year.
Global demand for wheat remains firm against tight supplies.
“Prices are now looking like they could push towards £236 on the May futures, a particularly frightening thought,” suggests Humphrey Feeds.
Some respite for users of compounds comes from the bearish trend in soyameal prices, with the UK price down from £393 to £368 over the past month.
Soyameal was also down £42 in November compared with the same month last year, marking the first year-on-year fall in 18 months.
Soya prices are being pressured from all sides.
In the US, the harvest is going well without rain, while the planting for the next Brazilian crop is going equally well.
The two sources combined should result in a significant uplift to global supplies compared with last season.
At the same time, the import requirements by China are looking subdued and were down by more than 40% last month.
These movements still leave spot ration costs sharply up for the third successive month, by £11/ t to £286, with the rise in wheat costs prevailing.
This ration price is still markedly below the high levels in the first quarter of the year, though.
Grain Market Drivers
↑ WHEAT – Supply-demand balance now looks tight for the coming season
↓ SOYA – Combined supplies from the US and Brazil look plentiful for the coming season
↓ SOYA – Chinese demand well down on last year