- Location
- Stoneleigh
Through the tail end of last year, signs were showing that strong wheat prices were eroding the premium of beans over wheat. Prices published by Defra show that, in December, the premium of feed beans over feed wheat had dropped to £25.06/t, from £41.03/t a year earlier. This was the lowest since harvest ‘18.
This is not hugely surprising, given the large availability of beans this season relative to the tight wheat market. Although, there may be some support for feed beans from elevated values in other protein markets. In fact, year-to-December inclusions of feed beans in animal feed rations were up 22% on 2019/20, at 40Kt.
Anecdotal reports from the PGRO suggest that prices had firmed further in January and continued to look strong in early February. However, future price support will be heavily dependent on demand from feed compounders.
The human consumption (HC) market started the year under pressure, with export demand for UK crop almost entirely gone thanks to a bumper harvest in Australia. HC bean production in the South Pacific hit record levels this season, with production up 57.7%, at 516Kt (Abares). Trade between Australia and Egypt has reportedly been strong so far. This could add some support back into the HC market, as Australian exporters look to fulfil shipments, particularly with coronavirus led challenges in the container freight market.
However, a report by Saskatchewan Pulse Growers suggests that Egypt has purchased 220Kt of HC beans for import pre-April, more than in a normal year. This could cap future demand. Further forward, in the HC market coronavirus remains a concern, with a lot of HC bean consumption happening out of home in key export destinations.
The lack of HC trade is making it difficult to price new crop HC beans. Feed beans premiums are reportedly ahead of the 5-year average of the Defra figures for November (£25/t).
https://ahdb.org.uk/news/human-cons...-by-strong-aussie-supplies-grain-market-daily
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This is not hugely surprising, given the large availability of beans this season relative to the tight wheat market. Although, there may be some support for feed beans from elevated values in other protein markets. In fact, year-to-December inclusions of feed beans in animal feed rations were up 22% on 2019/20, at 40Kt.
Anecdotal reports from the PGRO suggest that prices had firmed further in January and continued to look strong in early February. However, future price support will be heavily dependent on demand from feed compounders.
The human consumption (HC) market started the year under pressure, with export demand for UK crop almost entirely gone thanks to a bumper harvest in Australia. HC bean production in the South Pacific hit record levels this season, with production up 57.7%, at 516Kt (Abares). Trade between Australia and Egypt has reportedly been strong so far. This could add some support back into the HC market, as Australian exporters look to fulfil shipments, particularly with coronavirus led challenges in the container freight market.
However, a report by Saskatchewan Pulse Growers suggests that Egypt has purchased 220Kt of HC beans for import pre-April, more than in a normal year. This could cap future demand. Further forward, in the HC market coronavirus remains a concern, with a lot of HC bean consumption happening out of home in key export destinations.
The lack of HC trade is making it difficult to price new crop HC beans. Feed beans premiums are reportedly ahead of the 5-year average of the Defra figures for November (£25/t).
https://ahdb.org.uk/news/human-cons...-by-strong-aussie-supplies-grain-market-daily
Join the 3.4K people who subscribe to our Grain Market Daily publication here - https://ahdb.org.uk/keeping-in-touch