Commodities Update - 7th February

As I write this (07/02) the pound has risen about a cent and a half against the dollar, compared to a month ago, and fallen about a cent and a half against the euro. Recent rises have been on the back of this month’s interest rate rise of 0.25% to 0.5%.  This is expected to be the first of several over 2022, with many critics saying it is too little too late on the back of rising inflation costs.  The overall trend for both currencies is upwards, compared to two years ago when Brexit happened.

Oil has continued to firm with prices now $93/barrel, a rise of over $12/barrel in the last month.  These are the highest prices for oil in 7 years.

Gas prices are continuing to fluctuate around the 200p/therm, and futures are still indicating that these prices are expected to stay until at least next summer.

In the last month the GDT results have seen rises of +4.6% & +4.1%.  The overall GDT rate is at its highest since February 2014, so for eight years, and had previously maintained these levels for around a year prior to this.  Much of the drive-in prices is put down to softening production in most of the world’s major exporters, with no turnaround expected in the short term due to increasing costs. Locally I keep hearing the figure of 40p/litre by the end of spring mentioned.

Milk Powder
Due to the increasing cost of raw materials all milk powders saw a price rise this last month, with 50% skim powders seeing a price increase of £125/t.  I personally do not expect this rise to be the last as the GDT continues to rise and wonder how long it will be before a premium powder hits £3,000/t when a year ago it was around £2,000/t.

Feed
Cereals are fluctuating day to day, but overall are at a very similar level to last month.  Short term proteins are about even compared to last month, but longer term have firmed slightly.

Fertiliser
CF withdrew prices towards the end of January, and there were questions if they would make an offer in February for March delivery.  They have, after further agreements were made regarding CO2 production, which saw prices only increase slightly.  Off the back of this imported AN had to drop their prices nearly £50/t to remain competitive.

CF are now also offering loads from their usual minimum 9t, which may offer some smaller users an opportunity to buy, however I expect these will be given a lesser priority compared to full loads so will you get it when you really need it?

Urea has started to soften over the last month, but I still only have one supplier offering full loads only.

DAP & MOP prices continuing to firm on the back of political movements & tensions.

If you are considering DAP for sowing with your maize this spring then please consider our maize starter fertiliser, MaxiMaize Plus, as this is a more cost-effective option this spring compared to current firming prices of DAP.  Also, small loads will not be available of DAP this spring with suppliers now having minimum delivery requirements because of the expected logistical challenge this spring is likely to bring.

If you have yet to order your fertiliser and want a timely delivery for this spring, then you need to order ASAP.

Remember that 50% of your grass growth for the year is between now and the end of May.  To ensure you are setting yourself up for the spring and NEXT winter you need to maximise your grass growth now, so if you want to cut back on your fertiliser usage this year do it after 1^st cut, not before or you will be chasing your tail all through this growing season and next winter.  Plan to make more of your slurry instead of Aftercut etc.

If you’d like to discuss your milk powder, feed & fertiliser requirements, then please call FAR registered Dairy Nutritionist & CowSignals® Master Andrew Jones on 07717 44288 or email andrew@dblbuyinggroup.co.uk