Today is: Thursday 17 May 2012 21:40:24
Feed Mill
Unfortunately markets have started to become colourful again- even Sterling, which is defying logic by strengthening against other currencies, despite confirmation of a double dip in UK economic growth.
Most commodities have risen over the last month. Old crop wheat supplies are tightening, and prices are rising. UK shippers continue to export...
Soya, with the support of the funds, has continued to be the driver in the agricultural complex for this Quarter, and May futures meal has currently paused at $390/short ton, which equates to £370 delivered to the mill for Non-GM and £330 for AO soya. South American soya yields continue to contract; in March the USDA predicted 68.5mt for Brazil...
In February, soya beans were the major driver in the agricultural complex, rising almost 15% to the highest level since September. This was mainly due to ever-shrinking South American soya yield forecasts, and an increase in Chinese interest. US soya exports are well behind last year, and may be entering catch-up mode. Increasing soya prices suppor...
On 3rd Jan May wheat futures were £158.50, and over the next few weeks we had every scare story in the book including: South American weather; Russian embargo; frozen winterkill; grounded soya ships; Argentinean export curbs; Australian floods and Mexican drought. Bulls need feeding, and they have been stuffed to the gunwales; so wheat prices have ...
Just before Christmas, May futures were about £147; before New Year were £154 and on the first working day of the New Year (3rd Jan) hit £158.50, which was exceeded prior to the release of the UDSA report on 12th Jan at £158.70. Before Christmas the fundamentals suggested to traders that prices should fall; then sentiment suddenly changed due ...
For the last two weeks, May futures wheat has traded at £145.50 plus or minus £1.00. Similarly maize and soya have mainly traded sideways over the same period. It is almost as if everyone is holding their breath – waiting for Eurozone news and Fridays USDA report. Apparently the funds that hold equities are in the same position, frightened to sell ...
UK November wheat futures have remained flat all week hovering around £147 until Friday, when `something’ happened: the price lifted £5 on the opening, then drifted back to less than £2 by the end of trading. DEFRA believes the UK will produce 15.36mt of wheat (14.88mt last year, of which 26% will be milling quality). Strategie Grains believe...
The Friday closes for November wheat futures for the past 5 weeks have been £173.05, £168.50, £161.75, £156.50, £150.65 and today £146.75. Since the first week of September, US soya bean meal has fallen from $382/short ton to $303, but as £1 has fallen from $1.62 to $1.54 over the same period, the prices of GM soya have fallen from £294 to £267. Th...
One of the regular challenges of living in the real world is being able to determine the difference between reality and perception. An example of this challenge can be witnessed in the simple issue of how much wheat does the UK have this year against the perception that much of it was killed in the drought? But it can become much more complicated ...
Wheat prices have fallen significantly since the April high of £222 and spot price (4th Jul) is about £175 delivered to the mill. Most feedmillers covered their July and early August wheat purchases some time ago, as UK wheat and EU maize stocks are quite low. The recent fall in prices was unexpected as UK wheat prices have for years been followi...
Wheat prices have been weakening since the end of April (a high of £222) and spot prices (3rd June) are about £200 delivered to the mill. The feeling is that old crop wheat prices will remain steady in Europe, as wheat and maize stocks are quite low. In terms of new crop, it is anyone’s guess as there are so many factors at play. The shor...
Wheat prices continue to be volatile, in both old and new crop positions. In the past month, May futures hit a high of £222 near the end of April, and a low of £197 in the first week of May. The situation in old crop futures is strange as May futures are about £9 more expensive than July (11th May). There is about 118,000 tonnes of Open Interest on...
From a high of £214 in mid-February, prices started to disintegrate and for two to three weeks wheat sellers became as rare as hens teeth. Wheat briefly hit a low of £169.50 in mid-March (farmers did not sell, and just 4 lots of futures traded) then three days later rebounded to £200/t. Everyone was caught wrong-footed, as we write (8th April), M...
On the 15th February, May wheat futures hit £214. Exactly a month later, May wheat futures hit a low of £169.50. A fall of almost £45/t! Ever since the last price spike of 2007/8, we have said that the funds inflated our markets by about £40/t; here then is the proof. The fundamentals of supply and demand have been unchanged over that time; the wor...
In the past month May wheat futures hit £214, about £14 higher than last month’s average. In January the USDA reported uncomfortably low maize ending stocks, and it is generally acknowledged that maize prices will have to rise to ration demand. This means that wheat and soya prices will also have to rise, mainly to compete in profitability ...
For much of the past month, the May wheat futures remained relatively steady hovering around £200/t, until they edged downwards in the last 10 days. The recent USDA report may well be the main driver for the next six months, as maize ending stocks have been reduced to 745mb from their previous estimate of 832mb, which in turn was lower than the ave...
Last month the rollercoaster that is May wheat futures hit a contract high of £179, then dipped to £166.50, lifted again to a high of £185.50 and now reside at £194.80 (16th Dec), although all indications show an upward trend. Such extreme volatility is incredibly frustrating; the days where wheat prices went up £1 in a month seem a very distant m...
Last month November wheat prices were trading in a range between £169 and £150 and as we write (28th Oct) they have just hit £170/tonne. As we start November, the May futures are the key position, and they have hit a contract high of £179. The emotions of fear and greed drive markets, and at the moment it feels like the feed compounders are in on...
November wheat prices have now hit the £169 level three times, for the first time in August, then again in September, and most recently on the 8th of October. After the first two peaks, prices declined momentarily to touch £150 before taking off upwards again. I never expected to be saying that £150/t was a ’buy’, but that seems to be...
Last month we left Nov wheat futures at £150 having peaked at £169. Currently (17 Sep), Nov wheat is trading at £163. The trade believes that prices will remain around these levels or higher, mainly because the funds hold long positions, and it is thought that they will support and defend their positions (whatever the cost) until the New Year. I...
At the time of last month’s report November wheat futures had raced up to £132, and the bad news got worse, futures hit £169 before falling back to £143 (18th August). Absolutely crazy! The Russians have implemented a wheat export ban and it has caught a few Middle Eastern buyers out, as contracts that specify Russian origin allows suppliers...
Last month November futures wheat was comfortably in the £100-105 zone. Then we had bad news from Canada, Russia and Hungary and prices started to rise, leveling out at £119. But this week there has been more bad news from Russia, the FSU, Ukraine, Kazakhstan, Germany, Benelux, the UK, Poland, Bulgaria and France. On Wednesday 14th Nov futures hit ...
Two months ago we saw wheat prices lift from £100, and predicted a short-term rally which materialised a week ago. November wheat is again about £100 having hit £110. In my mind the ’normal price’ for wheat is £70/tonne; but the last time it was that price was in March 2006. If we ignore the 2007/8 price spike, wheat has averaged somewh...
Buying raw materials a decade ago was a more straightforward process than today. Wheat went up £1/month, and buyers fought for every 25p, to ensure they could secure a margin. Currency was always in the background, supply and demand figures were hotly contested, and the occasional strike, outbreak of war or oil crisis created short term spikes. ...
Soya has been the main focus for the past two weeks; in last month's column we mentioned the impending problem of a lack of Soya in the UK. Over a fortnight ago we received the first phone call from one of our soya suppliers saying "we may have a little situation". Today that has changed to "what I meant say was, we have run out!" The `we'...
The `Funds' have reduced their positions of commodities since the beginning of the year, and that includes wheat. As a result, wheat has now fallen about £20/tonne since the start of the year, (a further £8/tonne since our last report) which has wrong-footed almost everyone. As we write (15 March) May futures wheat is bouncing along the bottom...
The credit crunch rollerball moves on, leaving the banks behind, and now playing skittles with the indebted sovereign states. Iceland, Ireland, Dubai and Greece have been in the headlines, but the big 'prize' is the USA – the world's biggest borrower. The skittles are wobbling, and no-one really knows what would happen if there was a ...
A New Year, a new decade. So the teenies follow the noughties? One would hope that our politicians might have learned a thing or two from this last decade – mainly that energy and food supplies cannot be taken for granted; and that there is no such thing as a free lunch! DEFRA appears to have set the scene at the Farming Conference with the lau...
January futures wheat has been trading at £107 +/-£1 for 24 days up to the second week in December, when it weakened by £2. What the future holds is anyone's guess. In supply and demand terms, prices are too high and should in theory weaken. The trade is urging arable farmers to sell new crop wheat to lock into these higher prices. However, w...
Wheat is in plentiful supply and yet prices continue to follow Chicago and currency; we fail to see any logic in this market. Like most other feed compounders we have bought some wheat forward and continue to top up month by month, rather than commit significant volumes forward. It is estimated that the UK will have exported 850,000 tonne by th...
In the harvest years 2008 and 2009, the world has enjoyed two really good wheat harvests, about 680 and 670mt respectively. Previously global harvests had been in the 550-620mt bracket. What this means is that the world now has a surplus of wheat, as supply is greater than demand by 45mt (2008) and probably another 15mt this year. So prices have...
During the early days of the credit crunch, November wheat futures fell from £156 on the 26th June 2008 to £107 on the 10th October 2008, a fall of £49/tonne. This year the same futures have fallen from £134 on the 2nd June 2009 to £92 at the time of writing, 11th September 2009, a fall of £42/tonne. The similarities are startling. In both s...
In the post-credit crunch world, it is virtually impossible to predict price movement in commodities. The last six months have proved that funds can change their positions overnight, so that commodities can be flavour of the month one minute, and dumped the next. The money men, whose attention spans and average length of holding can vary signif...
Last month our best guess was that soya at $12/bushel had yet to hit its peak and wheat looked overdone. Soya did peak at $12.67 a week later, and July wheat at £123 and has since fallen to £96. The prediction sounds good until you factor in that nobody could have anticipated this scale of a fall, I certainly did not. There appear to be five f...
A couple of months ago, we were worried about both soya and wheat. Last month we said soya was looking dangerous, this month that prediction came true. At the time of writing soyabeans closed at above $12/bushel (36.7 bushels = 1 tonne) for the first time since October – that was when the markets were falling in the credit crunch sell-off after the...
Last month we reported that raw material markets felt strange - this month we feel that raw material markets are positively dangerous. Pressure is building beneath soya: the Chinese have been buying more soya than they need, which is tightening supplies from both North & South America. The Americans have sold more soya this year, because Argen...
The raw material markets feel strange at the moment. Some of the financial gurus have made statements that we have already seen the bottom in terms of stocks and shares; The FTSE 100 is 12% off the bottom, and the US Standard & Poor500 index has rallied, and both Barclays Capital and General Electric suggest that the worst is over. In the aftermath...
Oh for the old days, when the price of wheat rose steadily by £1 a month until harvest, when it fell £10-20, depending upon the size of the grain mountain. Soya prices were at their lowest in November (new crop from the US) and April (new crop from S America). The main protagonists were currency, weather and supply & demand. This explanation is p...
Strangely Sterling vs Euro is in the same position (£1= €1.11), despite having been 5% lower at one point. Against the dollar, the US is still in a state of post new president euphoria, with Sterling slipping 6 cents to £1=$1.42. In recent months we have been battling with freight rates as well as currency. Freight rates, due to lack of demand...
Soya, with the support of the funds, has continued to be the driver in the agricultural complex for this Quarter, and May futures meal has currently paused at $390/short ton, which equates to £370 delivered to the mill for Non-GM and £330 for AO soya. South American soya yields continue to contract; in March the USDA predicted 68.5mt for Brazil...
In February, soya beans were the major driver in the agricultural complex, rising almost 15% to the highest level since September. This was mainly due to ever-shrinking South American soya yield forecasts, and an increase in Chinese interest. US soya exports are well behind last year, and may be entering catch-up mode. Increasing soya prices suppor...
On 3rd Jan May wheat futures were £158.50, and over the next few weeks we had every scare story in the book including: South American weather; Russian embargo; frozen winterkill; grounded soya ships; Argentinean export curbs; Australian floods and Mexican drought. Bulls need feeding, and they have been stuffed to the gunwales; so wheat prices have ...
Just before Christmas, May futures were about £147; before New Year were £154 and on the first working day of the New Year (3rd Jan) hit £158.50, which was exceeded prior to the release of the UDSA report on 12th Jan at £158.70. Before Christmas the fundamentals suggested to traders that prices should fall; then sentiment suddenly changed due ...
For the last two weeks, May futures wheat has traded at £145.50 plus or minus £1.00. Similarly maize and soya have mainly traded sideways over the same period. It is almost as if everyone is holding their breath – waiting for Eurozone news and Fridays USDA report. Apparently the funds that hold equities are in the same position, frightened to sell ...
UK November wheat futures have remained flat all week hovering around £147 until Friday, when `something’ happened: the price lifted £5 on the opening, then drifted back to less than £2 by the end of trading. DEFRA believes the UK will produce 15.36mt of wheat (14.88mt last year, of which 26% will be milling quality). Strategie Grains believe...
The Friday closes for November wheat futures for the past 5 weeks have been £173.05, £168.50, £161.75, £156.50, £150.65 and today £146.75. Since the first week of September, US soya bean meal has fallen from $382/short ton to $303, but as £1 has fallen from $1.62 to $1.54 over the same period, the prices of GM soya have fallen from £294 to £267. Th...
One of the regular challenges of living in the real world is being able to determine the difference between reality and perception. An example of this challenge can be witnessed in the simple issue of how much wheat does the UK have this year against the perception that much of it was killed in the drought? But it can become much more complicated ...
Wheat prices have fallen significantly since the April high of £222 and spot price (4th Jul) is about £175 delivered to the mill. Most feedmillers covered their July and early August wheat purchases some time ago, as UK wheat and EU maize stocks are quite low. The recent fall in prices was unexpected as UK wheat prices have for years been followi...
Wheat prices have been weakening since the end of April (a high of £222) and spot prices (3rd June) are about £200 delivered to the mill. The feeling is that old crop wheat prices will remain steady in Europe, as wheat and maize stocks are quite low. In terms of new crop, it is anyone’s guess as there are so many factors at play. The shor...
Wheat prices continue to be volatile, in both old and new crop positions. In the past month, May futures hit a high of £222 near the end of April, and a low of £197 in the first week of May. The situation in old crop futures is strange as May futures are about £9 more expensive than July (11th May). There is about 118,000 tonnes of Open Interest on...
From a high of £214 in mid-February, prices started to disintegrate and for two to three weeks wheat sellers became as rare as hens teeth. Wheat briefly hit a low of £169.50 in mid-March (farmers did not sell, and just 4 lots of futures traded) then three days later rebounded to £200/t. Everyone was caught wrong-footed, as we write (8th April), M...
On the 15th February, May wheat futures hit £214. Exactly a month later, May wheat futures hit a low of £169.50. A fall of almost £45/t! Ever since the last price spike of 2007/8, we have said that the funds inflated our markets by about £40/t; here then is the proof. The fundamentals of supply and demand have been unchanged over that time; the wor...
In the past month May wheat futures hit £214, about £14 higher than last month’s average. In January the USDA reported uncomfortably low maize ending stocks, and it is generally acknowledged that maize prices will have to rise to ration demand. This means that wheat and soya prices will also have to rise, mainly to compete in profitability ...
For much of the past month, the May wheat futures remained relatively steady hovering around £200/t, until they edged downwards in the last 10 days. The recent USDA report may well be the main driver for the next six months, as maize ending stocks have been reduced to 745mb from their previous estimate of 832mb, which in turn was lower than the ave...
Last month the rollercoaster that is May wheat futures hit a contract high of £179, then dipped to £166.50, lifted again to a high of £185.50 and now reside at £194.80 (16th Dec), although all indications show an upward trend. Such extreme volatility is incredibly frustrating; the days where wheat prices went up £1 in a month seem a very distant m...
Last month November wheat prices were trading in a range between £169 and £150 and as we write (28th Oct) they have just hit £170/tonne. As we start November, the May futures are the key position, and they have hit a contract high of £179. The emotions of fear and greed drive markets, and at the moment it feels like the feed compounders are in on...
November wheat prices have now hit the £169 level three times, for the first time in August, then again in September, and most recently on the 8th of October. After the first two peaks, prices declined momentarily to touch £150 before taking off upwards again. I never expected to be saying that £150/t was a ’buy’, but that seems to be...
Last month we left Nov wheat futures at £150 having peaked at £169. Currently (17 Sep), Nov wheat is trading at £163. The trade believes that prices will remain around these levels or higher, mainly because the funds hold long positions, and it is thought that they will support and defend their positions (whatever the cost) until the New Year. I...
At the time of last month’s report November wheat futures had raced up to £132, and the bad news got worse, futures hit £169 before falling back to £143 (18th August). Absolutely crazy! The Russians have implemented a wheat export ban and it has caught a few Middle Eastern buyers out, as contracts that specify Russian origin allows suppliers...
Last month November futures wheat was comfortably in the £100-105 zone. Then we had bad news from Canada, Russia and Hungary and prices started to rise, leveling out at £119. But this week there has been more bad news from Russia, the FSU, Ukraine, Kazakhstan, Germany, Benelux, the UK, Poland, Bulgaria and France. On Wednesday 14th Nov futures hit ...
Two months ago we saw wheat prices lift from £100, and predicted a short-term rally which materialised a week ago. November wheat is again about £100 having hit £110. In my mind the ’normal price’ for wheat is £70/tonne; but the last time it was that price was in March 2006. If we ignore the 2007/8 price spike, wheat has averaged somewh...
Buying raw materials a decade ago was a more straightforward process than today. Wheat went up £1/month, and buyers fought for every 25p, to ensure they could secure a margin. Currency was always in the background, supply and demand figures were hotly contested, and the occasional strike, outbreak of war or oil crisis created short term spikes. ...
Soya has been the main focus for the past two weeks; in last month's column we mentioned the impending problem of a lack of Soya in the UK. Over a fortnight ago we received the first phone call from one of our soya suppliers saying "we may have a little situation". Today that has changed to "what I meant say was, we have run out!" The `we'...
The `Funds' have reduced their positions of commodities since the beginning of the year, and that includes wheat. As a result, wheat has now fallen about £20/tonne since the start of the year, (a further £8/tonne since our last report) which has wrong-footed almost everyone. As we write (15 March) May futures wheat is bouncing along the bottom...
The credit crunch rollerball moves on, leaving the banks behind, and now playing skittles with the indebted sovereign states. Iceland, Ireland, Dubai and Greece have been in the headlines, but the big 'prize' is the USA – the world's biggest borrower. The skittles are wobbling, and no-one really knows what would happen if there was a ...
A New Year, a new decade. So the teenies follow the noughties? One would hope that our politicians might have learned a thing or two from this last decade – mainly that energy and food supplies cannot be taken for granted; and that there is no such thing as a free lunch! DEFRA appears to have set the scene at the Farming Conference with the lau...
January futures wheat has been trading at £107 +/-£1 for 24 days up to the second week in December, when it weakened by £2. What the future holds is anyone's guess. In supply and demand terms, prices are too high and should in theory weaken. The trade is urging arable farmers to sell new crop wheat to lock into these higher prices. However, w...
Wheat is in plentiful supply and yet prices continue to follow Chicago and currency; we fail to see any logic in this market. Like most other feed compounders we have bought some wheat forward and continue to top up month by month, rather than commit significant volumes forward. It is estimated that the UK will have exported 850,000 tonne by th...
In the harvest years 2008 and 2009, the world has enjoyed two really good wheat harvests, about 680 and 670mt respectively. Previously global harvests had been in the 550-620mt bracket. What this means is that the world now has a surplus of wheat, as supply is greater than demand by 45mt (2008) and probably another 15mt this year. So prices have...
During the early days of the credit crunch, November wheat futures fell from £156 on the 26th June 2008 to £107 on the 10th October 2008, a fall of £49/tonne. This year the same futures have fallen from £134 on the 2nd June 2009 to £92 at the time of writing, 11th September 2009, a fall of £42/tonne. The similarities are startling. In both s...
In the post-credit crunch world, it is virtually impossible to predict price movement in commodities. The last six months have proved that funds can change their positions overnight, so that commodities can be flavour of the month one minute, and dumped the next. The money men, whose attention spans and average length of holding can vary signif...
Last month our best guess was that soya at $12/bushel had yet to hit its peak and wheat looked overdone. Soya did peak at $12.67 a week later, and July wheat at £123 and has since fallen to £96. The prediction sounds good until you factor in that nobody could have anticipated this scale of a fall, I certainly did not. There appear to be five f...
A couple of months ago, we were worried about both soya and wheat. Last month we said soya was looking dangerous, this month that prediction came true. At the time of writing soyabeans closed at above $12/bushel (36.7 bushels = 1 tonne) for the first time since October – that was when the markets were falling in the credit crunch sell-off after the...
Last month we reported that raw material markets felt strange - this month we feel that raw material markets are positively dangerous. Pressure is building beneath soya: the Chinese have been buying more soya than they need, which is tightening supplies from both North & South America. The Americans have sold more soya this year, because Argen...
The raw material markets feel strange at the moment. Some of the financial gurus have made statements that we have already seen the bottom in terms of stocks and shares; The FTSE 100 is 12% off the bottom, and the US Standard & Poor500 index has rallied, and both Barclays Capital and General Electric suggest that the worst is over. In the aftermath...
Oh for the old days, when the price of wheat rose steadily by £1 a month until harvest, when it fell £10-20, depending upon the size of the grain mountain. Soya prices were at their lowest in November (new crop from the US) and April (new crop from S America). The main protagonists were currency, weather and supply & demand. This explanation is p...
Strangely Sterling vs Euro is in the same position (£1= €1.11), despite having been 5% lower at one point. Against the dollar, the US is still in a state of post new president euphoria, with Sterling slipping 6 cents to £1=$1.42. In recent months we have been battling with freight rates as well as currency. Freight rates, due to lack of demand...
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