SPOT feed costs have now slipped back to their lowest point since the invasion of Ukraine a year ago, but still remain well above where they were before it began.
At the start of this month, the cost of our Basic Layers’ Ration was down to £340/tonne.
This is £64/t lower than the peak price last May, but still £40/t up on the same week a year ago.
Although wheat has been the ingredient most directly affected by the conflict, the current UK average price for feed wheat, at £223/t, is almost back to where it was a year ago, and actually lower than at the end of 2021. Crucially, it is down by £100/t on last May’s peak.
However, it is the sharp year-on-year rise in the cost of soya that is now keeping feed costs high.
In fact, soya meal edged up yet again in the last month to a new high of £560/t. This time a year ago, it was £110/t lower.
The outlook for wheat price movements looks neutral until some new factor emerges.
In particular, the outcome of any upcoming offensives in eastern Ukraine remains uncertain; meanwhile, Russian wheat exports keep a lid on international prices.
In the case of soya, the most likely price direction is downward in the longer term.
The drought in Argentina has been the recent factor driving prices higher, along with delays to the large Brazilian harvest due to rain.
Once these difficulties are over, the soya market is thought to be less well supported, but with Chinese demand still a “wild card” in the pack.
GRAIN MARKET DRIVERS
WHEAT – Changes to the Black Sea situation will be a key factor in future price movements, along with any emerging news on international crop development.
SOYA – Shifts in Chinese demand are hard to predict.
SOYA – Heavy Brazilian crop likely to put the market under pressure.