Global feed market focus has turned to South America, although UK markets continue to be more affected by Brexit than world trends.
Changes in sterling’s value were having a ‘huge influence’ on the price of imported feeds, so there was considerable potential for price volatility over the next few months, according to KW Feeds straights trading manager Claire Bradley.
Reduced harvest estimates have added some pressure to prices in Argentina, but it has had limited impact so far.
She said: “The Buenos Aires Grain Exchange has cut its estimate for the Argentine soybean crop from 55-56 million tonnes to 53m tonnes and, while the weather is currently looking okay, any significant rains could see markets react.”
Agricultural consultant INTL FC Stone has also downgraded its Brazilian harvest estimate by 4m tonnes.
“However, with some commentators suggesting this is too much of a reduction and with larger than normal year-end soybean carry-out stocks in the US due to the trade war with China, it seems unlikely prices will rise far for any length of time,” added Ms Bradley.
Protein feed markets gained about £10/t shortly after Christmas, in line with market trends and supported by the optimism surrounding trade talks between the US and China.
Yet the greatest risk to UK prices continued to be sterling’s weakness.
Ms Bradley advised anyone needing proteins for the rest of winter to look at taking ‘at least some cover’ on imported feeds to guard against the risk of sterling falling further.
“Summer contracts are also very reasonably priced at the moment, so taking a good level of cover now is definitely worth considering,” she said.
Soybean meal was currently at about £300-£310/t for May to October delivery while UK-produced heat-treated rapeseed expeller stood at £260-£270/t.
“For rumen degradable protein, the high protein liquid feeds continue to provide good value thanks to the additional energy they also supply.”
She added, for energy feeds, soya hulls at £155-£165/t for summer delivery were ‘currently good value’.