Feedwatch:Opportunities ahead, but stocks still tight

The anticipated arrival of a record South American soyabean harvest – predicted to be 30m tonnes higher this season – still dominates the summer markets for protein meals. Most buyers are holding off booking next winter’s contracts in the expectation of further price reductions.

While better deals are likely once new crop soyabean meal arrives in mid-May, there are significant short-term supply issues at present in the UK. As a result, spot prices are still high at about £270-290/t, with availability unpredictable, compared to just £235-240/t for June-October delivery.

Despite the price, current best advice is to cover all March needs now, and look hard at April and early May requirements – the price may not be the lowest it’s going to be, but booking now may be the only way to guarantee a reasonable price in the current tight supply situation.

The bumper soyabean crop is also having an impact on rapemeal prices, which have already dropped £15-20/t from recent highs of £190/t. Rapemeal stock levels and availability are also beginning to rebuild, and the upcoming European harvest is predicted to be another good one, at about 20.3m tonnes (compared to 20.7m tonnes last year and a previous five-year average closer to 19m tonnes).

There is some risk of a price rise if sterling weakens or if soyabean meal exports from Argentina are yet again restricted by port blockades, so keep a close eye on prices and book perhaps 25-50% of requirements to the end of October. Current contract prices of £118-122/t are a good insurance against the risk of the market rising – yes, prices may fall another £8-10/t, but the potential upside could be greater.

Prices for energy feeds remain flat, with the latest global cereal harvest estimate 15m tonnes down on last year (657m tonnes versus 672m tonnes) but still likely to increase world stocks by 15-20m tonnes. Wheat futures for May are now about £95/t, with the weather and currency fluctuations likely to be the biggest influences over the coming months.

Aim to cover perhaps 25% of energy needs for April-June while keeping an eye open for alternatives that are better value than traditional wheat or barley. Processed bread, SweetStarch and maize meal are all good starch sources that are now available for the summer and worth a close look. For digestible fibre-based energy, sugar beet feed and soya hulls remain the best buys.

• Information supplied by KW Alternative Feeds, supplier of a range of feeds for UK farmers.For further information visit www.kwalternativefeeds.co.uk.

Prices correct at the time of writing, all prices quoted are for 29t tipped bulk loads delivered on-farm within 50 miles of origin. Prices subject to change.