We are in a period where the market could easily go either way. Currently we have limited supply and very high demand so spot prices are high. In the fortnight to 22nd April hipro soya rose nearly £90 as supplies tightened dramatically; oilseed rape meal was up £30 in the same period. Protein prices do ease further forward as S American supplies begin arriving and then as the 2013 N Hemisphere harvests arrive.
So what of the biofuels distilleries? Ensus has shut and now exhausted its stocks whilst Vivergo have only very limited production – very frustrating when the ruminant feed community are desperate for protein supplies.
The good news is cereal prices seem to be easing slowly. That’s despite UK crops not looking great – the drop seems to have more to do with external factors such as reduced demand from China and investment funds moving out of agriculture and into shares. The danger is that a weather event somewhere in the world prompts funds to start buying into agricultural commodities again.
High digestible fibre markets are not encouraging either, with little relief until soya hulls become more widely available in June.
So, a spot buyer for May would be paying a sizeable premium for feed products. Things should start to settle back in mid-summer and fall when we get into new crop cereals and rapeseed. However watch that weather closely because it will determine next winter’s feed market.