The short winter has taken the edge off feed demand and with a plentiful supply of feed grains around the world the indications are that feed prices should ease in the coming weeks.
Maize stocks in the USA are reported at high levels and the indications on farmer plantings are that the acreage will continue to rise. Brazil, Canada and the Black Sea region are all reporting a similar picture and it is likely that maize will continue to be the lowest priced cereal for the foreseeable future.
Wheat, while easing back from the prices of a few months ago is still trading at a £30 per tonne premium to maize. Russia continues to export in spite of a strong demand and good prices at home. In Europe Autumn plantings have been strong and crops have wintered well, causing speculation that the EU soft wheat crop could be on target for 140 million tonnes – a big increase on the drought affected harvest of 127 million tonnes in 2018. This is producing lower price expectations for new crop material and may be tempting some buyers to cover some of their requirements for next winter. Barley has suffered most in the recent price realignments as reduced demand from the livestock sector and the switch to even greater maize usage has combined to produce a significant impact on consumption.
The protein story is also one of strong supply with big stocks of Soya Beans looking for a market. The USA continues to suffer from the trade dispute with China and is building up a big tonnage of unsold soya. This is impacting particularly in the North Western states, which would supply to the Pacific coast for shipment to China, with farmers in the Dakotas switching from Soybeans to corn in large numbers.
Even if this dispute can be settled soon the Chinese demand is significantly reduced in the last year or so, and with both Brazil and Argentina reporting increased crops there are big global stocks of Soya beans. The potential for African Swine Fever to impact the Chinese pig herd is another element of uncertainty in the Chinese demand calculation.
An element of the protein supply chain which is holding a firmer tone are the corn by-products – maize distillers are still expensive relative to last year as logistical issues play a major part in the price calculation. Flooding in the Mississippi is hampering the movement of the barges which move this material down the Gulf of Mexico for Trans-Atlantic shipment.