KW FeedCast - 23 January 2023

Chris Davidson is back with us for the second Feedcast of 2023, as usual he is discussing the main raw material markets and any opportunities he sees arising.

Soya remains the biggest mover this week with the price volatility remaining due to the dryness in Argentina and the questions that remain over the Chinese demand for the crop. With rain this weekend we have seen prices stabilise but markets remain bullish, with heavy losses expected from the crop and the lowest good to excellent rating ever at just 3%. Interestingly it is worth bearing in mind that it was the same last year and the only difference this year is that Brazil is predicting a bumper crop, making the overall supply side much better than last year, but at present, this is not reflected in the price. We have also seen reports from China over the last week which temper hope of higher demand, there was a lower growth than expected for 2022 and for the first time since 1960 the Chinese population fell. So while there is risk in the Soya market the majority of it is speculation. It is worth pointing out that nearby remains very tight with over £60T difference between now and the May-Oct pricing due to lack of supply. This is therefore unlikely to change.

Mid-proteins continue to be tight on the nearby with issues with the Vivergo plant affecting availability of wheat distillers and rape crush lower than usual. However there is a big discount on the may-oct pricing especially in the rape, which is making products like NovaPro very favourable from a DUP point of view.

The cereals markets continue to drift lower and wheat is now below pre-war levels. This is due to lack of news in the market and could change quickly if the war escalates as predicted. Maize is worth watching as the dryness in Argentina coupled with heavy rain in Brazil affecting 2nd planting could push prices higher, although supply in Europe remains stable at present.

Finally Sugar Beat has taken a beating from the earlier heavy frost and the already smaller crop has been left even smaller. This will mean very little availability and therefore high prices. With soya hulls also potentially affected by the Argentinian dryness you should think about your fibre cover.

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