Monthly Feed Market Commentary

Published 28 February 18


Grain markets have been largely bullish over the course of the past month (26 January-22 February). UK feed wheat futures (May-18) remained stable, closing at £139.25/t on 22 February. This was an increase of just £0.75/t on the previous month. Furthermore, the closing prices for the contract had a range of only £2.75/t over the period. As at 22 February, Chicago wheat futures (May-18) rose by £5.68/t on the month earlier, closing at £122.75. Chicago maize (May-18) prices also increased, by £5.26 on the previous period, to close at £106.18.

Feed Report 1

The latest USDA World Agricultural Supply and Demand Estimates (WASDE) report on 8 February revised 2017/18 world wheat production up by 1.24Mt from January. This was mainly driven by increased production figures for Ukraine (up 481Kt) and Argentina (up 500Kt). However, due to an increased projection for total use, up by 3.09Mt, world ending stocks are forecast lower, but still up on 2016/17 levels.

According to the USDA, the proportion of US winter wheat crops categorised as poor or very poor has increased in several growing states. In Kansas, the largest US wheat planting state, crops rated poor or very poor doubled to 44% from December to January. Meanwhile in Oklahoma, 79% of crops were rated as poor or very poor in January 2018, compared with 17% for the same period last year.

In the February WASDE, Indonesia is now forecast to surpass Egypt as the world’s largest importer of wheat.

Between July and December 2017, the UK imported 1.06 Mt of maize. This is the highest level since 2013/14, according to data from HMRC. This influx of maize into the UK may limit the amount UK feed wheat prices can rise.

The continued dry weather has slowed the rate of maize planting in Argentina. According to the Buenos Aires Grain exchange (BAGE), the intended planted area for 2017/18 is estimated at 5.4Mha. However, only 5.0Mha has been planted as of 24 January, due to the continued drought. With the Argentinian maize projected to be at 35Mt, the highest on record (USDA), the dry conditions could affect both the planted area and yields, resulting in output coming in lower.


Oilseed markets continued to be mixed this month. Paris rapeseed (May-18) prices showed a small recovery, closing at £312.29/t on 22 February, up £10.98/t from 26 January. Meanwhile, over the same period, Chicago soyabean (May-18) also saw an increase, up £18.59/t on the month, to close at £275.83/t. UK delivered rapeseed prices (Erith, Spot) have risen by £6.00/t, from 26 January to £301.50 on 16 February.

Feed Report 2

Spot UK soyameal prices (Hi Pro-Any origin, Ex-store East Coast) closed at £340.00/t on 16 February, up £43.00/t from 12 January. This is a result of increasing concerns over the drought affecting South American crops. UK rapemeal prices (34%, ex-mill Erith) were £188.00/t on 16 Feb, up £22/t from 12 January.

In the latest WASDE, the USDA reduced the 2017/18 forecast for US soyabean exports for the third consecutive month. US soyabean exports this season are now pegged at 57.15Mt (down 1.64Mt from the previous forecast and 3.4% lower year on year). Meanwhile, Brazilian soyabean exports have been revised up by 2Mt from last month’s WASDE, to a record 69Mt. The devaluation of the Brazilian real and a lower US soyabean protein content this year has helped Brazil capture some of the US market share.

Concerns over the Argentine soyabean crop due to hot and dry weather have continued this month. As a result, the yield potential of the crop is said to be at risk, and 56% of the crops is rated to be in poor/very poor condition. The BAGE currently forecasts the crop at 47mt, 15% smaller than last year. Further cuts to the Argentine crop size would be supportive to the oilseed markets, as the country is the worlds’ largest soyameal exporter and the third largest soyabean exporter. The extent of this will be influenced by what happens in Brazil, where a record crop is currently expected (USDA).

The Brazilian soyabean harvest is lagging behind last year’s pace following persistent rainfall (AgRural). If the lag continues, delays in bringing the 2017/18 Brazilian crop to market could boost US soyabean export sales, and so potentially support Chicago soyabean prices.