The respite for producers from higher feed costs has proved short-lived after just one month of falling prices.
Ration costs started heading upwards again during the past month, with wheat and soya meal both higher.
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Current trends are bullish on prices for both wheat and soya, despite earlier predictions of high global supplies.
Our Basic Layers’ Ration has risen by £13 a tonne since April and is now £52/t higher than the same month last year (see chart).
As in recent months, the global wheat price is being driven by the strong maize market, where the latest concerns centre on the Brazilian maize harvest and the impact prolonged dry weather is having in the country.
On top of this, China is placing large advance orders for maize imports as it recovers from the effects of its swine flu outbreak.
Much the same picture now applies to soya. Dry conditions in both Argentina and Brazil lead to worries about future supplies, while in the US, the strong maize market favours plantings of that crop at the expense of the soya acreage.
China demand
And again, demand from China for soya looks likely to remain high, with imports in April up by 11% year-on-year.
“It seems that we are heading towards a second tight carryout (end of season stocks) year for most agricultural commodities, which means that we are unlikely to see huge downward swings in prices until that situation is rectified,” summed up Humphrey Feeds.
