THE recent downturn in feed prices has come to an abrupt end with the untimely collapse of the Black Sea agreement.
This has pushed feed costs back up again although, as yet, it has been a small increase in the overall context of the last 12 months.
At the end of July, our Basic Layers’ Ration rose by £18 a tonne compared with June.
However, this was still £10/t lower than in May, and £54/t down on a year ago.
For now, further increases can be expected. Our ration cost is based on UK average ex-farm wheat prices, which were last compiled a week ago, and since then, there have been further rises in global wheat prices.
Feed wheat futures
At the start of this month, the UK November futures price for feed wheat stood at £195/t, and had risen to £207/t by the beginning of this week.
It then rose another £9/t to £216/t on the news that grain stores on the river Danube had been attacked.
The Danube has lately become an important export route for Ukrainian grain, with exports by that route rising by more than 300% in the past year.
Despite these factors, and although traders are taking a bullish view on wheat prices in the short term, the supply outlook for the global grain market is still considered ample, especially for maize.
Even so, the wheat situation appears more closely balanced, and any harvest setbacks could tighten things further.
Wheat is not the only factor driving up prices. Soya has jumped back up in the past month after several months of falling prices.
UK HiPro rose to £464/t last week, an increase of £32/t on the month.
This was mainly due to rising concern over dry weather in the US, with half the crop affected by drought, and rainfall in the coming weeks will be a key factor.
Soya was also caught up in the general fallout within the oilseeds market from the Black Sea problems.
Longer term, the markets are still taking a more bearish view on soya prices, helped by the prospect of another sizeable Brazilian harvest on the horizon.