Volatile markets push diesel down and wheat up

Plunging oil markets brought a further drop in red diesel prices this week, taking the Farmers Weekly spot average to 36.97p/litre, compared with 40.2p/litre the previous week.

This is for a 5,000-litre drop early next week, and is collected from a range of farm fuel suppliers across the UK every Wednesday morning.

Regional quotes ranged from 34.76p/litre in the east of England to 39.9p/litre in the North West.

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Price pressure

While volatility will continue on currency, production, storage and pandemic news, analysts expect prices to remain under pressure for at least the next two months from the huge drop in demand caused by the Covid-19 lockdown.

Wheat rises

A drop in the value of sterling helped push ex-farm spot wheat prices up to an average of £151/t, up by about £3/t midweek compared with a week earlier, although some regions saw no change and others were up by as much as £6/t.

This put prices for May in a range from £146/t to £155/t depending on region. Drought fears for the new crop have stoked some of the rise – the London November 2020 feed wheat futures contract stood at £168/t midweek, also up £3/t on a week earlier.

Feed barley prices lag feed wheat values by £24.50/t on average, at £126.50/t for May. Early new-crop feed barley values, at £113- £120/t ex-farm for July in limited regions, reflect the expectation of a huge crop.

Soya meal prices fall further

Soya meal prices have fallen again this week, with quotes for mid- to late summer at about £308/t, back almost to their pre-pandemic levels.

Maize prices are under strong downward pressure, which is encouraging US growers to favour soya plantings as an alternative.  

While home-grown wheat prices have risen this week, there will be plenty of competition from imported maize to keep a lid on prices for those buying feed ingredients.

Maize demand has slumped in the US, where much of the crop is used in ethanol fuel production. Road fuel use in the US has fallen dramatically as a result of the lockdown. However, the flip side of this is a big drop in the availability of maize distillers’ dried grains for feeding.