THE strained relationship between the US and China is having a fundamental impact on world grain markets, delegates at the Agriculture and Horticulture Development Board's (AHDB) Outlook Conference were told this week.
US Department of Agriculture's Seth Meyer said in the keynote presentation that the US would break with the norm of supplying China for six months of the season and was looking to export to elsewhere in the world year round.
Charles Clack of Rabobank added that the 25 per cent tariff imposed on US imports left China in a dilemma about where to source enough soybeans to meet demand - a potential impossibility.
At a global level, drought in key growing regions has been partly responsible for a tightening of the wheat market, with the market also sensitised by the potential for Russian export controls.
And while rapeseed supplies remain tight, with China forecast to import an additional 11 per cent in 2018/19, record soybean production in the US means prices have not seen a significant rally.
At UK level, the AHDB balance sheet shows wheat production is down five per cent at 14.1m tonnes and barley down eight per cent at 6.6mt. The oilseed rape crop is down five per cent to two million tonnes, despite an expansion in the planted area.
However, there is lots of uncertainty at regional level with the Vivergo closure already impacting local prices and logistics, and the planned Rank Hovis plant closures likely to do the same.
Animal feed demand is expected to rise following the summer drought and lack of forage. Adding to this, the last three months of the season will be post-Brexit and it remains unclear what the trading environment might be.
Market round-up
Messrs Craig Wilson Ltd sold 208 store heifers at Ayr on Thursday to a top of £1,330 per head and 235.4p per kg to average £828.75 or 195.8p, while 328 store bullocks peaked at £1,510 and 234.8p to level at £934.23 or 204.8p. Forty-nine store, B&W bullocks sold to £790 and 145.8p to average £590.11 or 126.6p.
Harrison & Hetherington Ltd sold 110 store heifers in St Boswells on Thursday to a top of 232.4p and an average of 190p, while 170 store bullocks peaked at £1,190 and 227.2p to level at 193.1p.
C&D Auction Marts Ltd sold 2,668 prime lambs in Longtown on Thursday to a top of £127 per head and 204p per kg to average 162p.
The firm also had 3,660 cast sheep forward when heavy ewes sold to £155 for Texels and averaged £59.01, while light/export-type ewes peaked at £74 for Cheviots and levelled at £31.14. Rams sold to £136 for a Texel.
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