Global Feed Markets: January- Febrauary 2014

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                 January | February 2014
Global Feed Markets: January- Febrauary 2014


  Grain & Feed Milling Technology is published six times a year by Perendale Publishers Ltd of the United Kingdom.
  All data is published in good faith, based on information received, and while every care is taken to prevent inaccuracies,
  the publishers accept no liability for any errors or omissions or for the consequences of action taken on the basis of
  information published.
  ©Copyright 2014 Perendale Publishers Ltd. All rights reserved. No part of this publication may be reproduced in any form
  or by any means without prior permission of the copyright owner. Printed by Perendale Publishers Ltd. ISSN: 1466-3872




                          www.gfmt.co.uk
 48 | COMMODITIES                                                                        Grain &Feed millinG technoloGy




      GFMT’s market analyst
 John Buckley reviews world
trading conditions which are
   impacting the full range of     Massive crop still driving
   commodities used in food
    and feed production. His
  observations will influence
                                   wheat prices down
       your decision-making.




                                 A
                                             SIGNIFICANTLY bigger than expected global wheat crop continues to drive
While soya drives the overall                wheat prices down – the bellwether Chicago futures contract recently trading
                                             levels not seen since mid-2010. European wheat prices haven’t fallen quite as
    oilmeal price trend, there               quickly or as far, largely because EU wheat is being drawn into world export
                                 markets in record volumes. However, prices here have at least shed about 8.5% basis the
      is plenty of good news     Paris milling futures market where nearby deliveries dropped back to their October 2013
                                 lows and new crop November to its harvest lows. The weakest European sector this
   among alternative oilseed     month was UK feed wheat, prices of which fell on the London futures market to their
                                 cheapest since late 2011. At this stage, EU futures tell us that milling wheat will be about
   crops too. Estimates of the   4.5% cheaper still by late 2014 whereas the US markets ‘forecast’ prices recovering by
                                 about 6% by then. Based on the supply, demand and stocks outlook, many observers think
    2013/14 global rapeseed      the EU scenario more accurate.

 and sunflowerseed harvests        European and US markets have also been closely watching events on the world export
                                 market for wheat – forecast to enjoy a record volume of trade this season. Global export
 have been raised again and      prices haven’t fully reflected the plunge in Chicago futures yet, mainly because of a pull
                                 back in the cheap and hectic early-season pace of selling by the ‘Black Sea’ countries,
   are now each up by about      Russia, Ukraine and Rumania. Prices offered by these three, especially Russia and Ukraine,
                                 have drifted higher from late 2013 onward as their exportable quality supplies have been
  7m tonnes on the year – for    run down – though there is cer tainly no lack of competition among other expor ters as
                                 we go to press, suggesting physical wheat prices may also have fur ther to fall yet.
   rapeseed that adds about        One key factor that dominates sentiment is the sheer size of this season’s world wheat
                                 crop. Back in the summer, most analysts were expecting a harvest somewhere in the
  11% and for sunflowerseed      region of 680m tonnes. By the time of our last issue that had jumped to 706m and since
                                 then, another 6m has been added, making this easily the biggest global wheat crop ever.
   20% to last year’s supply.      The main factor in this latest increase has been another up-rating of the Canadian crop,
                                 by 4.3m to 37.5m tonnes. Increments have also been made to Australian and Chinese
 Supplies of palm kernels are

        also up by about 4%.
 49 | January - February 2014                                                                                                    Grain   &Feed millinG technoloGy




crops (1m tonnes each)) and Russia (600,000) far outweighing the
only blot on the landscape, the dismal performance by Argentina.
Not so long ago, this country was a stalwar t member of what
used to be called (before the former Soviet countries erupted
onto the scene) the ‘Big Five’ expor ters, producing at least 15m
tonnes, sometimes more. But this year, in response to government          and Russia’s record 2013 crops. As we went to press, the EU had
controlling expor t trade and lower returns, farmers cut acreage          already granted 6.2m tonnes of licences to impor t corn in the
sharply, reducing the crop to 10m tonnes or less – its smallest           season to date, largely from these two, even more than at this
on modern record.                                                         time last year. That contrasts with the USDA’s assessment that EU
   Argentina’s consequent absence from expor t trade hasn’t               corn impor ts from all sources will drop 20% this season. So long
been missed as much as it might in earlier years due to there             as this abundance of cheap imported corn persists, EU feedwheat
being no lack of alternative wheat expor ters eager to supply             prices should be held in check. Ukraine has so far expor ted over
the world market. India, for example, which used to produce               11m tonnes of corn in total and is predicted to sell about 18m by
about 80m tonnes a year, mainly for home consumption, has                 the end of the season – so there is some way to go yet - while
suddenly star ted turning out record crops of 90m tonnes and              Russia is forecast to expor t about 2.5m.
more and has built up a surfeit of stocks, far exceeding its storage
capacity. To reduce this surplus, it has embarked on an expor t
programme but this is going slowly so far due to world wheat
prices dropping below levels at which it can trade profitably
against its relatively high domestic procurement price. However,
India’s next crop (harvested around April) may be even bigger
than last year’s with some government ministers talking of as
much as 100m tonnes. So the imperative to expor t more, even
at a loss in terms of government subsidy, is increasing.
   India’s wheat is not top quality and some buyers like the world’s
largest impor ter Egypt demand higher specs. But many others
are less fussy and will take it if the price is right. Recently trading
around $270 /tonne and repor tedly prepared to take that as
                                                                                                                     VIV Europe 2014
low as $260, India could set the bar low for other expor ters                                                          World Expo for Animal Husbandry & Processing
selling into markets more interested in bargains than quality. That
includes many of the countries that attract most competition in
                                                                                                                        May 20-22, 2014 | Utrecht, the Netherlands
the Middle-east/Nor th Africa (MENA) region. It also applies to
Asian corn impor ters.
   Recently, the US has been the cheapest offer on world wheat
expor t market, selling soft milling to Egypt as low as $265/tonne
fob terms (before freight). That compares with sales to Egypt by
the EU (France) around $279 fob. Even with its more expensive
transatlantic freight, US soft wheat now comes out at similar levels
to the EU in these destination markets. (It’s interesting to note
that this time last year, the Chicago markets predicted soft wheat                                                                                       REGISTER NOW
futures would have risen by now to over $300/tonne versus the                                                                                          for FREE entrance at
3½-year low of $202 that actually traded in Chicago in January).                              Special themes                                               www.viv.net
   Recent international import tenders have shown that the Black
sea countries are not finished yet with their 2013/14 expor t
campaigns. This year’s large Canadian and Australian wheat crops                                                               Come to Utrecht in 2014
also have to be fully marketed into expor t channels. Along with
the drooping US price this requires European wheat exporters to                                                                and connect to all players
keep prices competitive and, in turn, demands that EU domestic                                                                 in today’s complete animal
wheat prices stay down.                                                                                                        protein production chain.
   Another key factor that will help that process – especially the
cost of feed wheat – is the increasing competition within the EU
market from cheap imported corn, the bulk coming from Ukraine
                                                                               VNU13-0107 adv ViV Europe 210x297 b.indd 1                                              21-10-13 09:49
 50 | COMMODITIES                                                                                       Grain &Feed millinG technoloGy

   Cheap impor ted corn – plus this season’s 5m tonnes increase          tonnes). This suppor ted recent trade and quasi-official Chinese
in domestic barley production - would be making an even bigger           estimates that the country’s import demand – this season’s forecast
impact on EU feed prices if not for the pell-mell pace of EU wheat       biggest growth area – would not reach the earlier expected 7-10m
exports. So far this season, 17.5m tonnes of soft wheat have been        tonnes (USDA has now reduced that to 5m).
licensed to non-EU countries – over 50% more than at this time last         It also sharpened the focus on China’s continual rejection of
year. That compares with the USDA forecast which has EU total            impor ted corn cargoes from the USA containing an unapproved
wheat expor ts rising by only 15% this season, albeit to a record        GM variety. China was the second largest growth factor (after
26m tonnes. That implies another 8.5m can be sold or – and if            Mexico) in this season’s forecast higher US corn expor t trade,
the cheap corn keeps coming in – even more than that. The EU             having bought 4.9m of US total sales of 29.5m. Discounts have
is forecast to use about 120m tonnes of wheat total this season          been required to diver t these unwanted cargoes have been
out of a 143m tonne crop and about 42% of that is forecast in            diver ted to other Asian customers, weighing on US physical and
the feed sector.                                                         futures prices. Even so, US maize expor ts are still expected to
   Finally to wheat crop prospects for 2014 which might be summed        expand from 18.3m to 37m tonnes as Mexico doubles impor ts
up as ‘more of the same.’ A deep freeze in the USA seems to              and other buyers take more at this year’s cheaper prices.
have caused minimal damage to winter wheat crops that were                  Elsewhere on the supply scene, the newly planted Argentine
sown on a larger area last autumn than in 2012 and may yield             crop has had some stress from hot dry weather, trimming some
better after a moister winter. European and CIS crops have had           forecasts by about 1m tonnes from earlier ideas of a similar crop to
an unusually mild winter, putting Europe’s in much better shape          last year’s bumper 26m. Brazil, on the other hand, has had mostly
than last year and allowing CIS fields to catch up with late planting.   perfect weather, making the USDA’s prediction of 70m tonnes
Although there were some potential dryness issues in Europe,
Russia and Ukraine, where planted area is lower this year, there
has now been some good rain/snown and most crops there are
reported in good shape with potential to yield better than last year.
West Europe has also had some issues with too much rain while
southeast Europe could do with more moisture. But the general
situation encourages many analysts to expect a 2014 wheat crop
at least as large, if not larger than last year’s. Among the remaining
big exporters, Canada is a grey area as it sows the bulk of its crop
in the spring. Farmers there are repor tedly disappointed with
low prices resulting from the record 2013 crop and lower world
markets so wheat area there is expected to contract - while yields
might struggle to approach last year’s unusually high level (26%
up on 2012!). Either way Canada will have much larger star ting
stocks for 2014/15. Taking into account these possibilities, and
the expected jump in Indian output, at this early stage, it looks
possible that global wheat output will again be large – though
maybe nearer 680/690m than 710m tonnes. Also, even after this
season’s forecast 20/22m tonnes rise in world consumption, global
starting stocks should be higher. Along with the competition from
a huge, far cheaper maize supply (the discount to wheat in Chicago
futures is about 25% this month), the forward fundamentals
for wheat offer no obvious justification for price rises and even
potential for further declines. That scenario was echoed by some
of the forecasts from banks and hedge funds this month – most
indicate bets on wheat prices rising simply aren’t wor th investing
in this year - which makes good news for consumers.

Plenty of maize too ...
   After their 40% drop in calendar 2013, maize prices have held
remarkably steady recently, the Chicago futures market more or
less back where it was as the previous issue of Milling went to press
after trading a tight range both sides. It’s interesting to note that
at this time last year, CBOT maize offered an $80/tonne discount
to wheat on the exchange. Currently, it’s around $180 cheaper            look too cautious. A lot depends on the second or ‘Safrinhas’ crop
and the gap is indicated even wider later this year - despite the        which was sown on unusually large area last year and had bumper
far looser stock/use ratio for wheat (for the end 2013/14, that          yields. That is expected to contract somewhat this year but that
equation is 26% or 13½ weeks’ supply versus maize around 17%             hasn’t stopped some analysts predicting a 74-76m tonne total crop
or just under 9 weeks).                                                  (versus last year’s record 81m). Even if Brazil’s 2013/14 expor ts
   Since our last review, the USDA has issued its final US maize crop    dropped, say 5m tonnes with a smaller harvest to the currently
estimate for 2013 at just under 354m tonnes – about 1.6m under its       forecast 21m, that would still be massive by comparison with all
November forecast versus trade expectations of something 1m-3m           years prior to last season’s record 26m (whe Brazil’s expor ts
tonnes higher. This change is not of lasting statistical significance    were usually only 8-12m).
in the context of a crop still 80m tonnes bigger than last year’s in        Along with the huge CIS maize crops mentioned above, this is
a season when demand is expected to increase by a far smaller            unprecedented competition for US exporters – and at discounted
34m tonnes. Although the consumption estimate is up almost               prices too. As a result, recent estimates suggest the US will only
4m tonnes from November, it will still leave 2013/14 carryover           supply a third of world maize import demand in 2013/14 compared
stocks at a very ample 41.4m tonnes (versus last year’s 20.9m).          with 57% five years ago.
   No less impor tant was the USDA’s 6m tonne increase to its               In total, world maize output is now seen at 967m tonnes
crop estimate for second largest maize producer China (now 216m          compared with last year’s 863m and the previous record (2011/12)
 51 | January - February 2014                                                                                Grain   &Feed millinG technoloGy

886m tonnes. Consumption, on the other hand is seen rising
by 77m tonnes, mostly taking place in the US, China, Brazil and
Mexico. As in the US market, that means world stocks rising – by
28m tonnes to 160m, providing a more comforting cushion against
possible 2014 crop problems.
   In the Nor then Hemisphere, maize has yet to be sown but
there are some early pointers to farmers’ intentions. The USA was
initially forecast by many analysts to reduce acreage in response to
the steep price drop and a desire to plant more soyabeans because
of their relatively better prices. However, recently, some sources
hav drawn attention to the amount of land that went unsown
because of bad weather last spring – over 8m acres. Along with by almost a third to a record 72m tonnes. On the top of that, the
land released from conservation, some observers estimate well US is also expected this spring to sow its largest soya acreage ever
over 9m acres of extra crop land will be available – enough to in a response to the relatively better return that farmers can get
sharply expand soyabean areas without denting the maize share. from beans versus maize – the main rival for land in the Midwest
Coupled with another year of trend yields, that could again leave hear t of the US Corn Belt. So, barring some weather upset to
the US in hefty supply for 2014/15, even without those extra the Lat-Am harvests or US sowing/summer crop development,
carryover stocks.                                                      the world is likely to be awash with soyabeans come the autumn.
   A similar equation could be presented in the CIS countries too as      The full weight of these ’macro’ figures has yet to fully make
land that went unplanted to winter wheat because of wet weather its mark in lower soya meal prices, due to several factors. One
is sown this spring to maize. The way CIS maize exports are going is the speed at which last year’s US soya crop is disappearing,
may give farmers confidence to          VICTAMisland:Layout 1 30/8/13 14:22 Page 1
maintain or boost area even
though prices are down.
   Futures markets suggest
a modest premium on end-
2014 maize prices but it would
not be a total surprise if the
reverse situation occurred
although, as usual one must
remember that a world of
weather possibilities lie ahead
to alter prospects for planting,
growing and harvest seasons in
the Americas, Europe and the
                                           8 – 10 April 2014 . Bangkok International Trade & Exhibition Centre (BITEC), Bangkok, Thailand
CIS.

… and a record
oilmeal supply too
                                         Asia’s largest exhibition
                                         and conferences for
                                         animal feed, aquafeed
   Es timates of wor ld oil-
bearing crops seem to keep
incr ea sing too with each
passing month, promising
ample supplies and cheaper
                                         and petfood production
for ward prices for oilmeals.
The key factor remains this
season’s expected massive
Latin American soyabean crop
which has just begun harvest.
The popular range for Brazil’s
output is now 90/91m tonnes
versus last year’s 82m while
Argentina’s is expected to
increase from just over 49m to
about 55m. Just two years ago,
these two produced 66.5m                 VICTAM Asia 2014 is the largest trade show within South and South East Asia for displaying the latest
                                         equipment and technology used in the production of animal feeds, aquafeeds and dry petfoods.
and 40.1m tonnes respectively.
Along with smaller producers             New for 2014                                          Supported by
like Paraguay, that means the            Now including the first                               The Thailand Convention
region as a whole is producing           ASEAN Feed Summit                                     and Exhibition Bureau
about 43/45m tonnes more                 Specialist conferences                                Co-located with
beans than in 2011/12, equal to          The exhibition will be supported                      FIAAP Asia 2014 and
                                         by its own specialist conferences:                    GRAPAS Asia 2014
about 35m tonnes more soya               The FIAAP Conference 2014                             www.fiaap.com / www.grapas.eu
meal. Over that time, global             Petfood Forum Asia 2014                               Contact details
demand for the end product               Aquafeed Horizons Asia 2014                           For visitor, exhibition stand space and
is projected to increase by just         The Thai Feed Conference 2014                         conference information please visit:
9m tonnes, resulting in global           Biomass Pelleting Asia 2014                           www.victam.com
soyabean surplus stocks rising
 52 | COMMODITIES                                                                                              &Feed millinG technoloGy
                                                                                                           Grain



especially in shipments to the world’s top soya impor ter China.
This has happened for several reasons. One is that China wants
to see the Latin American crops heading for the harvest home
run and, as insurance against a weather upset, has probably
double-booked a lot of its US soyabean impor t purchases.
Another incentive to buy US is China’s fear that Brazil may see
a repeat of the shipping disruption it suffered last year when
record soya, sugar and maize crops fought for loading and vessel
space, resulting in delayed expor ts. Brazil has pledged por t
logistic improvements but with even bigger crops this year,
customers need to be convinced. A third factor is the weakness
of Argentina’s economy, resulting in a collapsing currency and
rampant inflation, prompting its farmers to hoard a huge chunk
of last year’s big crop – some estimate between 8m and 11m            supplies to keep its crushers and meal consumers going and their
tonnes. That par ticularly affects foreign buyers of soya meal        input prices under control. But in the meantime, there remains
of which Argentina is the largest expor ter. So the US gets the       a theoretical gap to be filled and that is tending to keep soya
expor t business in both beans and products, hoisting its crush       prices higher than the longer term supply fundamentals suggest
and threatening very low pipeline stocks well before its season       they should be. That said, forward futures markets show the way
ends in August.                                                       the wind is likely to blow. Even the 18% price drop they currently
   The US can meet this challenge if Brazil gets its shipping sorted  por tray may well prove conservative if all these fresh supplies
out and China cancels a lot of its US soyabean purchases – or         arrive as planned.
  GRAPASisland:Layout          30/8/13 14:29 Page 1
the US itself could impor t1cheap and plentiful Latin American          While soya drives the overall oilmeal price trend, there is
                                                                                                             p l e n t y of g o o d n e w s
                                                                                                             among alternative oilseed
                                                                                                             crops too. Estimates of the
                                                                                                             2013 /14 global rapeseed
                                                                                                             and sunflowerseed harvests
                                                                                                             have been raised again and
                                                                                                             are now each up by about
                                                                                                             7m tonnes on the year – for
                                                                                                             rapeseed that adds about
                                                                                                             11% and for sunflowerseed
                                                                                                             20 % to last year’s supply.
                                                                                                             Supplies of palm kernels
    8 – 10 April 2014 . Bangkok International Trade & Exhibition Centre (BITEC), Bangkok, Thailand           are also up by about 4% .
                                                                                                             Including the other oilmeal

    Asia’s premier rice &                                                                                    sou r ces – g r ou nd nu t s ,
                                                                                                             cottonseed, copra etc, this

    flour milling and grain
                                                                                                             puts total world oilseed
                                                                                                             supply 31m tonnes higher

    processing exhibition
                                                                                                             this year than last and almost
                                                                                                             60m over that of 2011/12.


    and conference                                                                                                 KEY FACTORS
                                                                                                                   AHEAD
                                                                                                                   WHEAT
                                                                                                                   •In the shor t ter m, key
                                                                                                                   supply factors will include
                                                                                                                   how US, European and CIS
                                                                                                                   crops emerge from what has
                                                                                                                   so far been a gentler winter
                                                                                                                   than last year’s. Moisture has
                                                                                                                   been plentiful (sometimes
                                                                                                                   too much of a good thing)
    GRAPAS Asia 2014 is the only dedicated trade show and conference organised specifically for rice &             in West Europe, better than
    flour milling, grain storage, preservation & processing, noodle, breakfast cereal and extruded snack           in recent years in the US
    production within the dynamic and growing regions of South & South East Asia.
                                                                                                                   and after recent rain and
    New for 2014                                          Supported by                                             snow, satisfactor y in the
    Now including the first                               The Thailand Convention                                  ‘Black Sea’ region. Traders
    ASEAN Rice Summit                                     and Exhibition Bureau
                                                                                                                   are expecting higher yields
    Specialist conference                                 Co-located with                                          and bigger overall crops
    The exhibition will be supported                      VICTAM Asia 2014
    by its own specialist conference:                     www.victam.com                                           across all three regions if the
    The GRAPAS Conference 2014                                                                                     weather stays cooperative.
                                                          Contact details
                                                          For visitor, exhibition stand                            Canada may sow a lot less
                                                          space and conference                                     wheat for its mainly spring
                                                          information please visit:                                planted crop and see yields
                                                          www.grapas.eu
                                                                                                                   decline from las t year’s
                                                                                                                   stellar levels but still have
 53 | January - February 2014                                                                                  Grain   &Feed millinG technoloGy

  an above average crop – and carryover stocks.                     is now expected to rise by 7.6% this season, despite earlier
• Wheat costs have been driven down by this season’s huge           government environmental agency proposals to curb bio-fuel
  world crop and by strong expor t competition – even though        blending. Yet US stocks will still rebound to what some see as
  impor t demand is running at record levels too, especially from   burdensome levels.
  the Middle East where political tensions may be encouraging • Will China remain a key maize importer, helping to soak up some
  some stocking up of food basics.                                  of the world surplus? Recent analyses have reduced forecasts
• There is some mild unease about the pace of European              for 2013/14 impor ts on the basis that China’s own crop was
  expor t sales – running far in excess of the target pace. Yet     under-rated (not for the first time).
  the upward pressure on wheat prices that might normally
  imply is contained by equally massive impor ts of cheap maize OILMEALS/PROTEINS
  from the CIS region, mainly Ukraine. The US is also selling • Latin American soya crops seem to be in sight of achieving their
  wheat expor ts faster than needed but will star t its own         planned 2014 records. Along with a planned record US crop,
  har vest in four months’ time. Canada, Australia and India        that should keep oilmeal costs down across the board in the
  have plenty of current crop wheat left to expor t. Argentina,     year ahead.
  Russia, Ukraine and Kazakhstan are all still in the game too, • China will remain the main influence on demand.
  albeit offering smaller quantities now. So the implied ‘buyers’ • Big EU and CIS rapeseed & sunflowerseed and Canadian canola
  market’ continues. Along with sustained competition for feed      crops are also helping to inflate 2013/14 oilmeal supplies. Current
  wheat from record maize supplies, that should help hold down      crop pointers for these are mixed. Weather favours Europe and
  European wheat costs, assuming no crop weather problems           CIS crops while Canada will sow and, probably yield less canola.
  going for ward.                                                   But stocks of both oilseeds have been rebuilt somewhat this
• Food, bio-fuel and other outlets will also help add about 3.5%    season to help cushion against any decline in new production
                                                                    (which may Page 1
                                    FIAAPisland:Layout 1 30/8/13 14:26 not necessarily take place).
  or 24m tonnes to world total wheat consumption in 2013/14
  but the large crop will still
  allowing some moderate
  stock growth - to more than
  adequate levels in terms of
  global consumption.

COARSE GRAINS
• Last year’s US maize crop
  rebound continues to hold
  down global feed gr ain
  prices along with record
  Latin American and CIS
  export supplies. Along with         8 – 10 April 2014 . Bangkok International Trade & Exhibition Centre (BITEC), Bangkok, Thailand
  bigger barley output it will
  leave the world with much
  larger carryover stocks for
  the new coarse grain season
                                      Asia’s foremost exhibition and
  star ting September 1.
• US planting might contract
                                      conferences for the ingredients
  t his s pr ing a s f a r m e r s    and additives used in the
                                      production of animal feeds,
  dis a ppointe d w i t h low
  pr ices tur n to more
  remuner ative crops like
  soyabeans. But with more            aquafeeds and petfoods
  overall acres available this
  year, some analysts think
  there may be room enough
  to increase bean crops
  without cut ting back on
  maize.
• Ukraine and Russia have
  unplanted winter wheat
  land that will go to spring
  planted crops – oilseeds and
  maize. They are expected
                                      FIAAP Asia 2014 is the only dedicated trade show and conference organised specifically for feed ingredients,
  to remain key players in            additives and formulation within the dynamic and growing region of South and South East Asia.
  the global maize expor t
  market with huge influence          New for 2014                                            Supported by
  on European feed values.            Now including the first                                 The Thailand Convention
                                      ASEAN Feed Summit                                       and Exhibition Bureau
• Ideas that US feed use of
  maize will rise in the year         Specialist conferences                                  Co-located with
                                      The exhibition will be supported                        VICTAM Asia 2014
  ahead were reinforced               by its own specialist conferences.                      www.victam.com
  by higher than expected             They will include:
  consumption and lower               The FIAAP Conference 2014                               Contact details
                                                                                              For visitor, exhibition stand
  than expected stocks for            Petfood Forum Asia 2014                                 space and conference
  the first quarter of 2013/14.       Aquafeed Horizons Asia 2014                             information please visit:
                                      The Thai Feed Conference 2014                           www.fiaap.com
  US ethanol demand for
  maize (40% of consumption)
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                                                                                                                 January - February 2014




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posted:2/18/2014
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Description: A SIGNIFICANTLY bigger than expected global wheat crop continues to drive wheat prices down – the bellwether Chicago futures contract recently trading levels not seen since mid-2010. European wheat prices haven’t fallen quite as quickly or as far, largely because EU wheat is being drawn into world export markets in record volumes. However, prices here have at least shed about 8.5% basis the Paris milling futures market where nearby deliveries dropped back to their October 2013 lows and new crop November to its harvest lows. The weakest European sector this month was UK feed wheat, prices of which fell on the London futures market to their cheapest since late 2011. At this stage, EU futures tell us that milling wheat will be about 4.5% cheaper still by late 2014 whereas the US markets ‘forecast’ prices recovering by about 6% by then. Based on the supply, demand and stocks outlook, many observers think the EU scenario more accurate.
Grain & Feed Milling Technology Grain & Feed Milling Technology Publisher of magazines for the feed & food industries www.gfmt.co.uk
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