KW Feedcast Episode 22 - 14 December 2021

Our latest episode of Feedcast addresses the external factors that are affecting the markets at present as well as a quick look at the USDA numbers released this week. 

There are three potential factors that could impact the markets at the moment. Firstly, Omicron, while the initial impact of the new strain of corona virus has eased, the thought of new lockdowns could easily cause more uncertainty. Secondly, the military developments in Russia and the Ukraine are being watched closely by the wheat markets, while the potential sanctions on the Nord Stream pipeline have resulted in continued increased gas prices. Finally, US and China relationships are continuing to worsen with the US diplomats being told to not attend the China Olympics. This is having an impact on the soya market as China stops buying US soya, instead favouring Brazil. These external factors mean the markets have moved away from supply and demand economics and require watching very carefully as the volatility across the board remains high.

On top of these external factors the soya market continues to be influenced by the weather. It is predicted that La Nina will affect Argentina through critical growing time and into harvest, this could bring high volatility depending on how the crop performs. The USDA have just increased the Argentinian crop by 5.5m more than the Buenos Aires Exchange, so it will be interesting to see how this plays out if the Buenos Aires Exchange number continues to fall.

The mid Proteins market continues to be strained as the lack of availability of rape seed continues to push prices skywards. While the Vivergo reopening could add a new dimension to these markets, the release of prices for the product in the spring has not affected the markets so far.

Wheat prices are being driven by the USDA release which has seen increases in world production and major exporters numbers. It seems that the slightest news is having an effect of between £4-7 a day. While this makes it hard to know when to take cover, you need to take advantage of any dips you can.

The fibre market has been very quiet this year and supply continues to be very tight with soya hulls struggling to leave Argentina. We are now seeing some opportunities for next summer, this might be worth considering especially with sugar beet prices as high as they are.

As always we recommend you watch these markets very carefully at the moment as the swings could result in opportunity. The most important thing is to ensure you are covered when you need it. 

Feedcast will return in the new year and we would like to take this opportunity to say thank you for listening to us and we wish you a very Merry Christmas and a Happy New Year.