AN escalation of the Ukraine conflict, the continuing uncertainty in the Strait of Hormuz, and drought conditions across Europe have come together to drive up feed costs in recent weeks.

Spot ration costs have jumped by around £13 a tonne this month, as wheat and soya prices reacted to the conflux of adverse factors.

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Although the fundamentals are still signalling that the global grain and oilseeds markets will both be amply supplied in the season ahead, short-term shocks have sent ingredient prices bouncing around.

Prices are still significantly higher than in early July, but the longer term outlook is keeping a lid on values.

Currently, UK feed wheat is averaging £192 a tonne. This is £15 higher than a month ago, and £25 higher than a year ago. Meanwhile the November UK futures price has been pushing against £198 / tonne since late July, a level which is considered to be an effective ceiling unless there are further changes in the global picture.

Black Sea disruption

The primary influence on wheat prices has been a stepping up of attacks on Ukraine’s exports through Black Sea ports. This is expected to dent its exports of grain by at least 10% this season, according to its agriculture ministry. Wheat accounts for about a third of Ukraine’s total expected grain exports of 40 million tonnes, with maize making up most of the balance.

At the same time, wheat production in Europe has been hit by the hot and dry weather. The wheat crop has been damaged by heatwaves at the grain-filling stage in many countries, including the three top producers, France, Germany and Poland.

As a result, EU wheat production in 2026/27 is expected to drop to 134 million tonnes from 145 mt in 2025/26, according to the latest USDA forecast.

Average soya prices

UK average soya prices have also risen again, now showing a net gain of £10 / tonne since the start of the summer, to £156/ tonne. Global soya prices have been mainly shadowing the movement of crude oil prices, which in turn have reflected the stops-and-starts of the Iran negotiations.

At the end of July, when the missile strikes briefly resumed, US soya prices reached a new high for this year of $12.48 a bushel, but have now dropped back to $11.74. In June they had dropped to a low of $11.09 / bushel.