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21-03-2016

Straights market – currency plays a part

Once again ‘Brexit’ has been the main focus for Sterling during the past week. We have, therefore, seen Sterling weaken further again against both the Euro and US Dollar due to uncertainty. “Expect a choppy ride from now onwards as news breaks on a daily basis,” says ForFarmers’ Colin Shepherd. 

UK soya values are marginally higher week on week, with the exchange rate making the difference. 

South American weather is good, with sunshine drying up the recent rains and allowing the combines in Brazil to start rolling again.

The upcoming Argentinian harvest only requires another couple of rain events to bolster yields further, with the main risk coming from too much rain delaying their harvest in March. Vessel waiting time is still an issue in South America but it is not too much outside of what we would expect at this time of year. As such, the underlying feeling remains that buyers should largely continue buying on a spot basis for most products. 

Rapemeal, for instance, has reduced around £15/tonne during the past month, due to pressure coming from large EU stocks. What goes up must come down. The wheat futures rally that we saw recently has disappeared and values have now eased to eightyear lows.

On the maize front, values have remained under pressure but we have seen summer positions firm slightly on the back of the currency moves.

Looking at energy feeds, it is still worth considering alternatives such as bread and biscuit meals. They represent good value for money, particularly when you take the cost of processing cereals on farm into account.

For more infomration contact ForFarmers DML on 0870 050 0306.