22 May 2018
Global grain markets remained firm across the board last week (11 May – 18 May), with new crop markets closing higher on Friday 18 May.
Refreshed concerns over the dryness in the US soft red winter wheat area, Russia and Australia were key to the upward movement of prices last week.
DAERA’s latest animal feed statistics were released on 22 May. The first quarter (Q1) of 2018 saw raw material usage in the production of compound and other processed animal feedstuffs increase to 713Kt, increasing by 8% from Q1 2017. Wheat and barley used in Q1 2018 to produce compound and other processed animal feed increased to 147Kt and 43Kt, an increase on Q1 2017 of 2% and 9% respectively.
Forecasts of continued dryness in the US pushed US wheat futures higher. On Friday (18 May) data from the US National Oceanic and Atmospheric Administration suggested that rainfall is unlikely over the next two weeks. This is likely to continue to increase concerns for the already stressed crop. However, in the Northern Plains rainfall is forecast which is expected to cause further delays to spring planting progress.
According to the Australian Bureau of Meteorology drought in Australia is expected to persist over the coming week. The lack of moisture will likely continue to cause issues with wheat and barley planting in the nation and add stress to the emerging crops. Lack of moisture has continued to cause concerns in parts of Russia, helping to support global prices.
Oilseeds markets moved in different directions last week. New crop rapeseed prices edged up on crop concerns in Europe. Meanwhile, Chicago soyabean futures fell on the week (11-18 May), although news that trade tensions are easing between China and the US may support US soyabean prices in the weeks to come.
The US and China agreed to suspend the implementation of tariffs which were due to come into force later this month. It was announced on 20 May that the list of tariffs increases, which included US soyabeans, has temporarily been put on hold while a deal is negotiated between the two nations. The trade dispute has been weighing heavy on US markets over the past few months and a reduction in tensions is likely to help mitigate concerns regarding US exports to China.