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Feed & Nutrition

Feed supplies market forecast to remain “extremely volatile”

Colin LeyBy Colin LeySeptember 1, 20162 Mins Read
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The market governing raw materials supplies for use in animal feeds is expected to remain “extremely volatile” during the next few months, according to the European feed company, ForFarmers.

“Soya meal value, leading proteins, rose from near £240/t in early March to a peak of close to £390/t by mid-June, but is currently back to around £330/t,” said company spokesman, Phil Watkins.

“The main reasons for this are a poor Argentinian harvest, due to heavy rainfall; talk of increased Chinese demand, and the impact of managed money funds, which were short.”

Explaining that the funds had believed the market would ease on large global stocks and had started to buy contracts, in a serious way, thinking that dry weather in the US would further reduce supplies, Mr Watkins added that the US crop is now looking great.

“The dry weather hasn’t materialised yet with one trader commenting that it’s been the ‘wettest drought in history’,” he said. “Until the US harvest is complete, however, concerns will remain as current supply and demand is evenly balanced.”

Looking at energy feeds, meanwhile, global grain stocks are high and large harvests are being reported to both the east and west. However, early dry spells in northern Europe, followed by substantial rains later in the season, have reduced yields.

“Overall, we feel that UK ‘energies’ are due to rise, although this should be capped by large global stocks, but proteins still have potential to ease assuming that the US end up with a substantial soya crop,” said Mr Watkins. “The market, however, is expected to remain extremely volatile during the next few months.”

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Colin Ley

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