Commodities Update (3rd September)
Over the last month the pound has weakened overall by about half a cent, recovering from a two cent drop earlier in the month, against the dollar and has fallen about half a cent against the euro, after initially strengthening.
After a fall by $5/barrel in mid-August (Afghanistan?) oil prices have recovered to be similar to this time last month, with prices around $73-74/barrel. Gas prices continue to firm.
There has only been one GDT result since my last report and after four months of continuous falls we saw a +0.3% increase. Are prices beginning to stabilise? With the next auction next week then we will see what happens then. At the last auction of the products offered it was only the whole milk powder that saw a fall.
With global prices high, prices have held this month.
In the past month cereals have just eased slightly in the market, while proteins have increased slightly, articularly rape prices. There is still some settling out to do from harvest with mixed stories regarding the quality of wheats available and what this will mean going forward.
As previously mentioned, gas prices are still high, which is influencing AN price, and global supply and demand is the major influence on urea price. CF are withdrawing their prices again today, which are now approximately £80/t higher than their opening price.
Urea prices are now being offered in the market for end of year delivery. Currently prices are around the £415/t mark, but the hoped for easing in Q4 seems to be disappearing.
As mentioned last month we also have access to some well-priced European produced 27N 12SO3, as an alternative to the CF product, and in all honesty, this is probably the best value product currently in the marketplace and will store well over winter.
DAP prices are still high with values still around the £560/t, and replacement prices even higher, but we are also now seeing an increase in MOP prices with prices currently around the £400/t.
Some of this increase is because political sanctions have been imposed on the world’s largest potash producer.
Be sure to think about your spring requirements NOW. I think fertiliser for the spring is going to be a complete headache for all involved. We are hearing about the problem of lorry drivers more and more, as I mentioned last month, in the press and the salaries some companies are now offering people to do this. I’m also now hearing about delays in ship availability to bring the product to the UK.
People are waiting for prices to decrease, and it is increasingly looking like this is not going to happen, ensure you have your first round or two covered and on farm.
The delays in shipping, the increase in demand in the spring (as people wait) and the lack of drivers will lead to product not arriving when required so my advice has to be if you don’t like the current prices then hedge your bets and ensure you have your initial requirements ordered before, maybe even on farm, before the new year because otherwise you may be disappointed.
If you’d like to discuss your feed & fertiliser requirements, then please call FAR registered Dairy Nutritionist & CowSignals® Master Andrew Jones on 07717 44288 or email firstname.lastname@example.org
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