Commodities Report – (Tuesday 13th June)

For the first time in 2023, we saw the Pound breach the 1.16 ceiling against the euro.  On the 1st of June 2023 we saw a new a 2023 high reached for GBPEUR of 1.1667. The Pound saw similar rises against several currencies, most notably the Australian and New Zealand Dollar, respectively climbing to both 2- and 3-year highs.

One of the drivers of the Pounds value this month is whether the Bank of England will decide to hike the interest rate by 0.25% or by 0.5% and although 0.25% is the most likely, the chances of a 0.5% hike has gradually increased. This has helped strengthen the Pound although the financial markets are mostly expecting to see the 0.25% hike which will be the 13th consecutive interest rate hike from the Bank of England.

Uk inflation has dropped below 9% for the first time this year, however analysists were expecting a reduction to 8.2% which suggests the Bank of England have more work to do. 

Brent Crude has been volatile over the past month, peaking at $78.23/barrel during the last week of May before dropping to a low of $71.84 yesterday. 

The GDT has overall witnessed two small consecutive falls. Cheddar +7.4%, Butter +0.5%, Whole Milk Powder -3.0%, Butter Milk Powder -2.4%.  

Milk Powder
Pricing has remained stable for June, however the short and longer term view across markets suggests prices could start to move back up, with some suppliers intimating rises for July.  This is off the back of the GDT +7% for SMP in New Zealand and it seems this will have its impact on EU prices, whilst we also see higher SMP food and feed prices in EU.  If you are looking for Calf Milk Replacer for the autumn, it may be worth ordering before any proposed price rises. 

Fertiliser
The fertiliser market has remained stable over the past month, with little movement.

• CF entered the market on the 24^th May and promptly withdrew terms again on the 26^th May, before releasing winter delivery terms +£30/tonne.
• Urea is still looking good value compared to AN per unit of Nitrogen.

Feed 
Market tone is malaise, but we know this can violently change. The USDA’s latest World Agricultural Supply and Demand Estimates (WASDE) was released on Friday, which was in line with trade predictions. We are in a weather market awaiting harvests and following currency fluctuations on world economies to lead market direction at the moment.

If you would like prices for Fuel, Feed, Fertiliser or Milk Replacer please call Louise on 07943 684215.