Currencies
Currency continued to move lower this week hitting a new low of $1.22 with some analysists now questioning if we could reach parity with the $!
The UK is the world’s 5th biggest economy and it is becoming more apparent with inflation and the pay back on Brexit and Covid schemes due to hit this year, that we will not be able to avoid a recession.
UK households are now experiencing the second worse year on record for disposable income, with data starting back in 1964.
Wheat
Wheat markets hit new highs this week across the world, firstly on the back of the bullish USDA report, further supported then by the news of an export ban by India.
The report tightened global S&D figures for 22/23 by reducing carryout for this season and projected global production for next season to 775 MlnT.
Although that figure would still put us in the higher end of the averages, we need to continuously increase what we are producing year on year to effectively stand still so any reduction on stand on figure, is as good as moving backwards. Ukraine reduced their production estimates for this season from 33 MlnT down to 21.5 MlnT, still an incredible figure considering their circumstances but nether the less, it is still a hole which needs to be filled which the world has been counting on India to do, until they dramatically pulled back on that promise.
As we approach the back end of the week though, the total export ban is now looking like it could well be more flexible and as such, we have seen a correction in one day of £14 per tonne on physical markets which gives an idea of how volatile these markets are.
Looking closer to home, we have seen the much needed rain this week although Defra have reported 45% more wheat left in sheds than normal for this point in the season, indicating farmers are concerned over yields next season and looking to keep some in hand to offset that.
It would appear that maize could be featuring more in rations this winter as it is currently trading at a discount to wheat for that period, even in the south of the country. This could however just stop wheat from its current rally and bring it back in line with where it needs to be in order to compete.
Soya
Soya markets rallied of their lows following the report which was more to do with technical buying as it looked ‘cheap’ compared to other ag markers.
Brazilian exports are down 4% on this season so far and China were due to hold their 22nd auction of their national reserves this week to move on 18 Mln Bushels of soya. The focus now though is very much on US plantings.
Organic
We are beginning to see offers for both grains and protein for new crop (October/November onwards time), and although the price is extremely high, the material is available which means we will see some consistency in our diets.
As we have said before, we understand that this is an extremely concerning time for our customers and we would encourage you to speak to your Sales Representatives to ensure you are getting the maximum performance out of your flocks or if you wish to speak about the raw material markets in more detail, our Procurement and Formulations Manager, Kay Johnson is also available.
Regards,
Kay Johnson & Martin Humphrey
