KW FeedCast - 5 December 2022

This week’s FeedCast is brought to you by Chris Davidson, and sees him discussing the fall in the wheat futures as well as well as the shift in direction on the soya markets following some surprise announcements from the US last week.

The soya plantings are beginning to finish in Brazil - 90% complete, and have been going really well with a 150MT+ crop expected. Argentina, however, is the opposite story, with weather holding up plantings which are only 30% complete, well below the 5 year average and is a real area of concern as demand for soya remains high. This has been followed by the shock announcement from the US that they will be reducing the mandates on renewable fuels. The market has seen the oil prices fall and meal prices rise to counterbalance the margin spread for crushers. Prices are moving up quite quickly now.

Fortunately mid proteins have not followed the soya price higher, and Rapemeal looks good value going forward, with Vivergo distillers trying to compete as well. Although in the nearby rape prices remain high due to lack of supply. It is worth looking at your protein needs now to ensure you are not caught without. On the flip side Vivergo distillers have good availability so look good, as does NovaPro. This product has seen increased demand as a soya replacer due to the lack of availability, high price and sustainability implications of using soya.

Cereals are now a very different story with the markets in relative free fall since the confirmation of the black sea corridor continuing. It is worth noting while the nearby supply looks good, the supply issues could we be just be being pushed to new crop. The wheat crop in Argentina is only 23% complete, half the 5 year average and only 8% of it is rated good or excellent and has the potential to lead a rebound as actual yields begin to come out. Using this dip to start a percentage of forward looks sensible in the face of a lot of risk still to come. 

As always it is about managing your risk, whilst these prices look expensive compared to the last 10 years, they are very good when compared to the last year. With volatility in the markets predicted to remain for some time to come it is worth thinking about your cover now.

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