KW Feedcast - 21 June 2022

Your latest commodity update is brought to you by Chris Davidson and James Barker. This episode starts by discussing the rape market. Rape has had a big drop off from the over £400 highs we have seen and is now available in the low £300's in some places. When buying rape we tend to advise to look at around 60-62% of the soya price, we are back to this sort of level, which seemed unachievable a few weeks ago. Sadly, there is a caveat to this, following the announcement of Cargill’s decision to shut their crush in Hull. This has resulted in Northern prices not seeing the lows of the South. Positively with Vivergo reopening there will be alternative mid-proteins on the market.

As we advised last time the rape and cereals price will be affected by the possible Russian/UN deal around the Odessa port and no one knows which way this deal will go. Now is the time to think about cover as whatever happens will happen quickly so you do need to manage your risk.

Soya is now looking less favourable due to increasing hot, dry conditions causing some rallies. The currency is also a factor here as the loss of a cent can mean an increase of £5 in the price. From a food oil perspective soya has also taken a hit with rape going well and Indonesia ready to export palm oil again, this has meant meal price needs to remain firm to support the crush margin. Over the next few months soya pricing will be based on what the weather does, this is a risky place to be and can leave you exposed. Positively, home grown options such as NovaPro and rape expeller are a brilliant cost effective replacement here.

Our main takeaway this week is if your book is looking empty, you need to evaluate your risk and maybe now is the time to act.