Straight feed prices have come under pressure just as some livestock and milk producers are having to start supplementing poor grass growth with bought-in material.
With demand from the US ethanol market having slumped because of the coronavirus lockdown, maize is competing strongly with wheat.
Maize gluten spot prices from a range of suppliers fell by up to £15/t in the week to Wednesday (10 June), to put it on farm at £192-£195/t for full loads delivered in June.
July to October prices from some fell even further to start at £179/t delivered and November to April at £187-£190/t delivered.
Whole maize is in a range from £182/t to £188/t delivered for June and July.
“Maize is very good value and in particular when compared with forward wheat prices,” said Karen Soul, senior straights trader at Mole Valley Farmers. “A lot of people are dropping wheat and buying maize.”
The market is very currency-driven at present, she said, with some commodities particularly cheap in US dollar terms.
Midweek, soya was priced at about £300/t delivered for the keenest quotes for full loads of bulk-tipped HiPro meal for June and July.
Looking further ahead, prices put on £2-£5/t for August to October and are in the £307-£310/t range for November through to April.
Larger users, in particular, should take some cover at these levels, suggested Ms Soul, to take some risk out of the job.
There has been market talk of soya shipments from Brazil being restricted because of the devastating effects of Covid-19 on that country, but most UK suppliers appear confident of little, if any, disruption.
China appears to be sourcing some US beans as part of its trade deal with the US, and how this trade develops will shape prices elsewhere.
At Straights Direct, trader Simon de Jongh said the market was difficult to call. “It’s been drifting down and we’re getting a lot of inquiries, but not many people are buying forward, as there is a consensus that there is more downside in the market, even on the maize products,” he said.
Soya hulls, alongside lower soya meal prices, have also fallen this week and look good value against sugar beet in particular.
However, sugar beet itself is being offered at much lower prices than last year, trading in a wide range starting at £180/t for full loads delivered through to the mid-£190s/t delivered July to October. The price drops by a few pounds a tonne when new-crop product is available from November.
The wide price range generally reflects that imported material is up to £10/t cheaper than home-produced pellets.
As demand for old-crop meal reduces, so rapeseed prices have also come under pressure, at just under £200/t delivered for full loads through to the end of January, when quotes add about £7-£10/t onto current prices.
The growing gap between feed wheat and barley prices, currently more than £30/t will lead to more barley being fed on farm.
Feed ingredients market factors
- Availability of all main straights is good, with prices steady or under pressure
- US soya plantings are high and rising as growers there switch to soya in preference to maize, as a result of pressure on maize prices.
- Maize products competing heavily with wheat and supply is plentiful
- Wheat – barley price gap is widening as wheat prospects reduce – latest harvest predictions put UK crop at just 9.5m tonnes compared with 16.5m tonnes in 2019 while barley is set for a record crop