Soya has rallied up from £280/t mark to £320/t (31.05.19). This is predominantly due to the US-China trade wars and the record soya plantations last year. Surprisingly prices continue to build especially considering Maize plantings being slowed by poor weather (snow & heavy rain). US farmers typically move from growing Maize to Soya with similar issues, and you would expect this to then put further pressure on the Soya meal price.
92% of US maize is grown by 18 states, and this time last year, 78% of their maize plantings were in the ground. This year only 49% is planted (63% of that figure). Planting late extends the risk of combing and increases the cost factors making Soya more attractive.
Global stocks of Soya beans are high, and the Brazilian’s are filling China’s Soya demand, leaving the US with a glut. Many farmers nationally have held off buying winter protein’s expecting soya to fall further but it has been noticeable that many farmers have taken cover for the winter sparking a chain reaction of other purchases. Markets love instability and speculation! My thought is that Soya will fall back but perhaps not to the £280 lows we have just seen but the short-term global stock does suggest there will be a Soya surplus. The other thing to watch out for is Brazil failing to fill China’s demand. Therefore, watch the markets carefully but do not overreact thinking that you have missed the boat!
One thing is certain Maize is likely to be more expensive whatever happens to Soya.
For help with your feed purchasing decisions, please contact Wesley at email@example.com or your local FCG Office.