Today’s episode of KW FeedCast is brought to you by Chris Davidson and James Barker, discussing the volatility in the markets at the moment and the slightly more positive outlook right now.
Wheat has been the biggest mover in the last few weeks, from its May peak at mid £360’s, it has now declined by around £100 per Tonne. This is partly due to the fairly positive news of Russian withdrawal from snake Island, meaning the markets do think an export corridor could be possible. On top of this Russia has lowered its export tax by around $60perT enabling it to compete in the markets again. All of this means now is a good time to think about forward cover, if the Russian:Ukraine export corridor does not open these prices could change very rapidly for the worse.
Rapemeal is a similar story, again reflecting the potential exports from Ukraine but also the loosening of palm oil exports from Indonesia and the demand from the EU for bio-diesel. UK availability is looking good and price is at a sensible level to take cover. It is also a good time to utilise NovaPro in your diets as sustainability comes back on the processors agendas, at £100 below the soya price it is a good way to save on the protein cost and lower your carbon footprint. It is worth considering that risk is equally high in the oil markets with food security high on everyone’s agendas, only one and half months ago Indonesia had banned exports and that could return, especially if we don’t see the Ukrainian exports coming.
Wheat distillers are not looking as attractive as the Rapemeal due to high import costs, Vivergo still struggling with start up and Ensus prices remaining strong.
Likewise Soya is still well supported with world stocks tight and demand strong. The USDA report lowering the US crop by 2 million tonnes has helped to support this price, however we did see a sell off last Friday due to sellers operating a risk-off mentality, we would expect these prices to remain strong over the coming months as we watch the weather closely in the soya growing regions.
Finally it is worth noting the gas price at the moment. This has rocketed up from 20p a therm to 400p a therm due to the planned shut down of the Russian gas pipeline Nordstream1. This gas price can affect feed additives and specialist products such as Urea and Caustic. You must continue to think about the background costs as well as the commodity markets themselves.
Now is the time to look at getting the risk off your table, we believe this is a low point in the market and the risk of an upturn is high. If this happens prices will rise very sharply.
Continue reading...
Wheat has been the biggest mover in the last few weeks, from its May peak at mid £360’s, it has now declined by around £100 per Tonne. This is partly due to the fairly positive news of Russian withdrawal from snake Island, meaning the markets do think an export corridor could be possible. On top of this Russia has lowered its export tax by around $60perT enabling it to compete in the markets again. All of this means now is a good time to think about forward cover, if the Russian:Ukraine export corridor does not open these prices could change very rapidly for the worse.
Rapemeal is a similar story, again reflecting the potential exports from Ukraine but also the loosening of palm oil exports from Indonesia and the demand from the EU for bio-diesel. UK availability is looking good and price is at a sensible level to take cover. It is also a good time to utilise NovaPro in your diets as sustainability comes back on the processors agendas, at £100 below the soya price it is a good way to save on the protein cost and lower your carbon footprint. It is worth considering that risk is equally high in the oil markets with food security high on everyone’s agendas, only one and half months ago Indonesia had banned exports and that could return, especially if we don’t see the Ukrainian exports coming.
Wheat distillers are not looking as attractive as the Rapemeal due to high import costs, Vivergo still struggling with start up and Ensus prices remaining strong.
Likewise Soya is still well supported with world stocks tight and demand strong. The USDA report lowering the US crop by 2 million tonnes has helped to support this price, however we did see a sell off last Friday due to sellers operating a risk-off mentality, we would expect these prices to remain strong over the coming months as we watch the weather closely in the soya growing regions.
Finally it is worth noting the gas price at the moment. This has rocketed up from 20p a therm to 400p a therm due to the planned shut down of the Russian gas pipeline Nordstream1. This gas price can affect feed additives and specialist products such as Urea and Caustic. You must continue to think about the background costs as well as the commodity markets themselves.
Now is the time to look at getting the risk off your table, we believe this is a low point in the market and the risk of an upturn is high. If this happens prices will rise very sharply.
Continue reading...