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A strong cultivable commodity market is expected to continue

Crop prices have been boosted by high global demand, tight supply of many commodities, and weather concerns about South American crops.

The November 2021 feed wheat futures contract in London was £ 8 / ton in 6 weeks and £ 171 / ton delivered as follows: Farmers Weekly The contract for May 2021 was £ 205 / ton, but I went to the press on Wednesday (March 10).

The strength of the UK market in particular is demonstrated by the narrowing of price spreads between wheat futures for milling in Paris and wheat futures for feed in the UK. The December 2021 Paris flour milling contract and the November London feed wheat contract are about the same.

The tight supply is most clearly demonstrated by the recent old crop rapeseed prices well above £ 400 / ton off-farm. This week, they added an additional £ 7.80 / t to an average of £ 430.3 / t.

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UK rapeseed 2021 acreage was the lowest in years, followed by new crop prices, which ranged from £ 355 to £ 370 / ton off-farm in the middle of the week. Carrying seeds until February now adds £ 10 / t to the value.

China’s importance in the agricultural boom was emphasized by AHDB analyst Anthony Spite. “Currently, China buys a fair amount of grain and oilseed, well above the five-year range and the five-year average,” he said.

“This demand is expected to continue into the next marketing year,” he said, along with cultural changes in China. Transition from traditional small-scale pig production based on waste supply to large-scale units. And the further growth of the national poultry sector.

Russia’s intervention to limit export taxes has been underway in the wheat market since mid-February. As an incentive to discourage Russian producers from bringing stocks of old crops into the new season, from early June this will be officially changed from the current fixed rate of $ 50 / t (£ 36 / t) to a variable tax. It is set to migrate.

In the UK, cheaper barley surpluses are replacing wheat wherever possible.

Soybean oil prices have risen for the first time in eight years, with the May 2021 Paris International Futures Market futures contract trading at the highest May contract since September 2012.

Owenkrig, trading manager at United Oilseed, said at a recent AHDB outlook event that a slight increase in rapeseed and canola supply this season would outweigh the increase in demand and reduce inventories at the end of the season. It was.

According to Krig, downward pressure on the OSR market is likely due to lower demand for biodiesel and lower consumer purchasing power during the ongoing blockade.

EU and UK biodiesel policies will remain unchanged until 2022, with global and EU biodiesel production expected to increase slightly this year.

The current 5% cap on the proportion of crop-based biofuels will drop to a maximum of 3% by 2026 and 2% by 2032, but OSR is more chemically suited than palm oil or soybean oil. Therefore, there is a possibility of gaining a proportionally high share. Mr. Krig said.

Grain and oilseed market guidelines

  • Argentina’s heat and dryness are a problem for soybean crops, but Brazil’s other two-week rain forecast will further delay the corn planting season, which is already well behind schedule.
  • Rising oil prices have also helped stabilize commodity values, but as the economy recovers from Covid-19, markets are becoming nervous in the face of difficult predictive demand levels.
  • Soybean prices for the March 2021 contract rose about 17% from early December
  • Contact with rapeseed increased by about 15% over the same period, and corn futures in Chicago March 2021 increased by 11%.
  • Global soybean inventories are projected to decline slightly at the end of the season, with increased production outpacing increased consumption.
  • US Department of Agriculture Supply and Demand Report at the end of March is likely to provide the next market movement
  • High interest by investment funds or speculators in the produce market helps to intensify price fluctuations in all scraps of news

A strong cultivable commodity market is expected to continue

https:///business/markets-and-trends/crop-prices/strong-arable-commodity-markets-look-set-to-continue A strong cultivable commodity market is expected to continue

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