THE recent sharp decline in ration costs looks for now to have run its course.
By the start of this month, both wheat and soya prices had turned upwards again in response to less encouraging news about supply prospects.
This ended a three-month decline in the two commodities, bringing them back below the prevailing levels before the war in Ukraine sent them spiralling.
Since March, these decreases have lowered spot ration costs by around £74/tonne.
Over the past month, concerns have surfaced surrounding prospects for wheat and soya supplies, and traders have ceased taking a bearish view on prices.
As a result, our Basic Layers Ration has crept upwards again after reaching a two-and-a-half-year low in June, rising £7/t to £178/t.
Feed wheat has made a net gain of £8/t in recent weeks, taking it to £180.50/t.
This upturn was a reaction to combined worries about the Black Sea corridor and dry conditions in the US and Europe.
Some rainfall has eased the situation in the US, but dryness has persisted in northern Europe, where the EU lowered its harvest estimate at the end of June.
Perhaps more significantly, Russia has signalled it was unwilling to ratify the Black Sea arrangement, which has played a significant role in suppressing global prices.
The agreement expires again in the middle of this month, although negotiations are still underway.
Nevertheless, the supply and demand balance is still considered adequate, albeit rather closely balanced.
Wheat prices are still well below the same month two years ago when wheat stood at £196/t.
Soya has edged up by just £3/t over the past month, with the focus shifting to the upcoming US crop.
Dry conditions have similarly impacted the soya crop in the US.
Despite the arrival of some rain, more is needed.
Also, the US acreage is below the initial estimates, while stocks are down 18% compared with a year ago.