Spot ration costs have shown their biggest monthly fall in 2021 to date after wheat and soya tumbled in cost during March.
The average price of feed wheat has finally topped out and has now joined soya in its downward slide.
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It means that a typical rations formulation cost, for example, our basic layers’ ration (see chart), has fallen a further £20/tonne over the past month and is down by £34/t on its January peak.
Sentiment has finally turned in the wheat market, somewhat later than anticipated several months ago, with prospects of sizeable harvests from around the world beginning to weaken support for prices at these levels.
UK feed wheat prices have now fallen for four successive weeks, by a cumulative total of £16/tonne. They now stand at their lowest level since last November.
According to AHDB, the primary support for wheat prices internationally is likely to be the continued bullish tone to the maize market.
Meanwhile, soyameal has continued its more dramatic fall, losing another £34/t over the past month.
Soya
It means the overall drop in UK soya prices has totalled £92/t since the start of the year.
This leaves the average price at the same level as last September.
However, traders predict a return to a stronger trend on soya prices, despite world stocks being higher than expected.
Pushing the other way has been a tight US stocks situation, a buoyant global trade, and the potential for weather to affect current crop progress adversely.
GRAIN MARKET DRIVERS
↑ WHEAT – Latest USDA report contradicts IGC report (below) and predicts 4th lowest US plantings on record
↑ SOYA – Tight supply balance in the US
↑ SOYA – Strong demand internationally
↓ WHEAT – Good weather in Europe
↓ WHEAT – Latest IGC report raises world output by 16 mt.
↓ SOYA – Global stocks higher than forecast
