FEED costs are still riding an up-and-down rollercoaster, with no sign that traders are becoming confident about the outlook for global raw material prices.
During the last month, it was the turn of wheat to dip down and soya to drift upwards, which is the opposite of sentiment a month ago.
This persistent volatility is having little effect on the overall level of feed costs.
Our Basic Layers’ Ration dropped by £9/t to £358/t last month but continues to float above the £350/t mark for a third month (see chart).
This feed cost is still £50/t higher than at the start of this year and £75/t above the average for 2021.
Despite the ongoing concern over wheat supplies from the Black Sea region, more recently it is soya that has been driving ration costs to their latest highs.
Soya hit a new high of £528/t during October and has now remained above £500/t for the fourth month in succession.
Feed wheat, meanwhile, has continued above £250/t, but is down around £56/t since the three months following the start of the Ukraine conflict.
Looking forward, the current mood centres on how the fast-evolving conflict will ultimately impact the Black Sea corridor, which is keeping wheat prices firm.
Longer term, there are bullish and bearish issues for wheat. Worries are starting to surface about the coming crop in Argentina following cold conditions and drought, where the national exchange has cut production estimates by nearly 10% to a seven-year low.
This would support prices, but it is countered by widespread concern about how a global recession will affect demand.
Soya has been strong again in the past few weeks as a knock-on effect of the uncertainty about Ukrainian sunflower oil availability.
However, the emerging prospect of a South American crop more than 20% bigger than last year is expected to rein in prices over the longer term.