Feed Materials Commentary
By Roger Dean
According to the Agricultural and Horticultural Development Board (AHDB), Brazilian soymeal values ex-store Liverpool during the first week of October eased from around £339 a tonne three months earlier to £324. Hi-Pro soybean meal eased from £326 to £303 a tonne over the same period. Rapemeal values ex-mill Erith showed little change between the three months in question although reaching £233 in mid-August. AHDB reports that pelleted wheat feed ex-mill in the Midlands
and southern England appreciated sharply in the three months ending in early October, in marked contrast to proteinaceous feed materials. Typical quotations at the beginning of July were around £145; by early October, quotes had moved into the £180 - £190 range although there were signs of values softening from mid-September as the harvest progressed. Maize gluten feed was reported at just under £200 in mid- July; after moving ahead in late September, the first October quotations eased back below the £200 mark. As regards prices, the International Grains Council (IGC) reported,
in its latest, September issue, that its wheat and maize sub-indices had both fallen compared to a month earlier, respectively by 1.6 per cent and 4.1 per cent while soybeans had risen by 0.9 per cent. On a year- on-year basis, however, the sub-indices for wheat and barley were up by 9.5 per cent and 6.7 per cent while soybeans were down by 2.6 per cent. However, it needs to be borne in mind that the ‘Days Consumption Equivalent’ ratio, which measures estimated end-of-season inventories against estimated consumption, tightened for both wheat and maize compared to the previous season. IGC’s September assessment projected global grain production in
2018-19 at 9 million tonnes higher than the previous month’s assessment, which was at 2,072 million tonnes. Nearly all the adjustment is accounted for by maize and includes increases for the US (up 6.1 million tonnes), the EU (up 2.7 million tonnes) and Ukraine (up 1.2 million tonnes). The global wheat crop is assessed as marginally larger compared to IGC’s August estimate, with a 1.5 million tonne increase for Russia partly offset by a 1.4 million tonne reduction for Australia. While lifted by 6 million tonnes compared to IGC’s August projection, the predicted end-of-season carryover of 544 million tonnes would be down by 63.8 million tonnes compared with the previous season, with maize inventories down by 38.5 million tonnes and wheat down by 17.1 million tonnes. With fieldwork well underway in the northern hemisphere, IGC’s
early assessment for wheat planting prospects for the 2019-20 crop is for the first gain in the area planted to wheat in four seasons, encouraged by ‘the potential for better returns’; however, IGC note that ‘in contrast, lower prices and difficult weather conditions could contribute to a reduction in winter rapeseed sowings in the EU.’ In its projection published 12 September, the Foreign Agricultural
Service of the US Department of Agriculture projected global wheat production for 2018-19 at 733 million tonnes, 3.37 million tonnes or 0.5 per cent more than in its August assessment. This reflected a combination of winners and losers; notably, as regards the latter, Australian production was 2 million tonnes or 9.1 per cent lower than in USDA’s previous projection while production in Canada, at 31.5 million tonnes, was down by a million tonnes or a comparatively modest 3.1 per cent. The Australian area harvested to wheat was expected to total 11 million hectares, down a million hectares from USDA’s July projection and down 1.25 million hectares from last year – a 10 per cent fall. Expected yield was estimated at 1.82 tonnes per hectare, essentially the same as the previous season. USDA estimated Canada’s 2018-19 wheat production at 31.5 million
tonnes, down 3 per cent from August but up 5 per cent from last year. Harvested area was estimated at 9.8 million hectares, up 1 per cent from last month and up 9 per cent from last year. Yield was estimated at 3.21 tonnes per hectare, down 4 per cent from last month and down 4 per cent from last year. Winners were Russia, with wheat production for 2018-19 estimated
at 71.0 million tonnes, up 3.0 million tonnes on August but down 14.0 million tonnes from last year’s record crop. As regards India, it seems likely that the increase in the projected output of wheat, from 97 million tonnes in August to 99.7 million tonnes in USDA’s September projection, reflected in part the recent decision of the Indian Cabinet to approve the increase in the minimum support price of wheat by Rs 105 per quintal, equivalent to Rs 1050 per tonne. Rising wheat yields also figured. A further update to USDA’s PSD projection for grains and soybeans became available on 12 October. This reduced world wheat production by 2.08 million tonnes or 1.4
per cent to 730.92 million tonnes. The major changes consisted of a substantial reduction in the Australian wheat crop, down by 1.5 million tonnes or 7.5 per cent and Russia, down by a million tonnes or 1.4 per cent. The area harvested to wheat in Australia is currently expected to total 11.0 million hectares, unchanged from last month but down 1.25 million hectares or 10 per cent from last year. However, yield is forecast at 1.68 tonnes per hectare, a substantial 18 per cent below the 5-year average. As regards world maize production, USDA’s latest, October
projection reduced global maize production by 694,000 tonnes, equivalent to a 0.1 per cent fall on the previous, September estimate. The most significant decreases were in Russia, down by a million tonnes, and in the US, down by 1.24 million tonnes; the net effect of these two reductions was to more-than-counteract increases in Canada, the EU and a raft of smaller producers. The decreases in Russian and US output are ascribed to, respectively, lower yields based on reported harvest results to date and reduced yield forecasts. Overall, and for both wheat and maize, the likely relationship
between end-of-season inventories and consumption shows some potential for triggering an increase in prices as the 2018-19 season develops. Conversely, the situation as regards soybeans would seem to have some potential for price falls, especially if the US/China trade imbroglio continues to develop.
FEED COMPOUNDER NOVEMBER/DECEMBER 2018 PAGE 9
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68
