Cheaper grain and imports bring drop in straights prices
By Tim Relf
IF you are buying straights this winter, the chances are you will be writing a smaller cheque than last year.
Lower grain values and cheaper imports due to sterlings strength have contributed to the fall in prices. Demand has also been slower as farmers buy spot, rather than forward, says Trident Feeds Martin Whiting. Lower livestock numbers in the wake of the BSE cull and pressure on incomes have prompted this "hand-to-mouth" buying.
"The late, mild autumn has also been a factor, although the onset of colder weather is likely to prompt a flurry of activity in the market."
Cereals of feed grade are plentiful, too, after quality problems and tough export conditions, says Mr Whiting.
But bucking the trend is fishmeal, values of which have climbed as the El Nino weather phenomenom takes its toll on world catches. The International Fisheries and Oil Manufacturers Association reckons production in South America could be 35% down on a year earlier between Oct 1997 and Mar 1998.
Ian Tremain of Mole Valley Farmers has seen fishmeal rise in value by more than £40/t to about £500/t. But maize gluten continues to represent good value, down about £26/t on a year ago, adds Mr Tremain.
Dave Foster of KW puts the drop in most straights at about 25%, with lower UK cereal prices setting a competitive benchmark. Plentiful forage crops earlier in the season have also contributed to the reluctance to take early cover. "But some farmers are saying it is not feeding as well as the analysis suggests it should," warns Mr Foster.
Meanwhile, the soya market, with its violent swings, remains hard to call. "I have never known it so volatile," says Dalgetys Peter List.
Spot soya was quoted at about £215/t delivered early this week. *
On the wagon… Straights prices have dropped to more sober levels.