Straights Market Update

In what has already been a challenging and frustrating year in markets, the short-term picture remains quite bleak.

Issues with the supply chain have been well reported and along with high energy prices, both are helping to keep raw material prices elevated across the board and increasing the sensitivity of markets to any news, both positive and negative.

We have seen increases of £15/T in the last week alone for Soya and recent reporting of a tightened global wheat stocks have made the market extremely challenging in the short term.

However, looking ahead to the summer of 2022 the picture looks much brighter for protein markets particularly. Soya looks to be trading around the £325 mark (ex-port) for May/October 2022 (a £50 discount from current prices). The same theme is also being seen in Rapemeal markets where prices for August/October are around £230, a £40 discount from current spot prices.

Unfortunately, the same sentiment cannot be said for cereal markets, with barley currently £200/T at the spot price, rising to £210 for the summer of 2022. Wheat pricing remains high at £205 for November rising to £211 in May next year. Despite these prices, UK feed wheat remains the cheapest in Northern Europe due to freight challenges limiting the export potential. Barley prices have been supported due to its high pass rate for malting barley, the elevated barley prices are making wheat a better buy due to its nutritional superiority.

Our recommendation would be to cover proteins for the summer of 2022, particularly soya which looks an extremely attractive buy. Cereal markets look extremely volatile at present and considering the current premiums for contracted prices, we would avoid taking any future cover at present.

For further help or to discuss markets further, please get in touch with us!

Sam Kelly 07777 696080 sam@kellyfarmconsulting.com

Charlie Davies 07904 601104 charlie@kellyfarmconsulting.com

Pete Kelly 07970 942668 pete@kellyfarmconsulting.com

Office 01454 614624