Commodities Update (8th August)

The GDT has seen an overall fall for the fourth consecutive period of -5.0%. Notably, (butter milk powder -9.2%, whole milk powder (-6.1%), butter (-6.1%) and skim milk powder (-5.3%).

Brent Crude saw heavy falls during the first week of August, however the price has fluctuated over the past week, today (08/08) brent crude is trading at 94ppl. down from 107ppl a month ago.

Milk Powder
Skim milk powder prices fell -5.2% at the recent GDT auction, however this will have little impact on the price of milk powder. We have seen increases of £50/tonne across a number of our milk powders this month.  If you are looking to purchase milk powder, price rises generally happen at the start of a new month so make sure you get orders in by the end of the month.

Fertiliser
There has been a sharp rise in the gas price in the UK and Europe.  The Russian owned Gazprom had declared force majeure on supplies to several European buyers and has closed its main pipeline for maintenance!  With further threats from Russia to cut further supplies, we are likely to see further hikes in gas prices into quarter four.

Natural gas accounts for approximately 80% of the production cost of European nitrogen fertiliser. This has led to £100/t jump in Ammonium Nitrate prices in recent weeks.

Granular Urea and Limus®* protected Urea is an excellent alternative to ammonium nitrate offering a significant cost saving of £/kg of N.

* Limus®, a urease inhibitor developed and patented by BASF, has been developed using the latest research and technology. It is one of the most effective urease inhibitor worldwide both in terms of its active ingredient efficacy and formulation stability. What sets Limus® apart is the combination of its two active ingredients, which complement and strengthen each other synergistically. A patented new formulation enables efficient application and offers more flexibility with regard to storage, mixing with urea-based fertilizers and fertilizer application. Proven to reduce nitrogen loss by as much as 98 percent.

Whilst Nitrogen Sulphurs are in short supply in the UK, we can offer ammonium nitrate based 27N +12SO3 compound & ASN 26N +37SO3 compounds at a discount to current replacement values (subject to availability).  Urea based Sulphur blends are available, protected and unprotected with Polysulphate or ammonium sulphate.

Potash & Phosphate markets remain firm. More growers are utilising the range of PotashpluS 37K+8CaO+3MgO+23SO3 & Polysulphate 14K+17CaO+6MgO+48SO3 as a proven agronomic multi-nutrient fertiliser over the traditional grades.

Feed
The cereals market continues to be volatile with the wheat price for September peaking at £272/t and a low of £261/t over the last week.  Prices for September 2023 remain relatively stable at £242/t for September. Barley is following a similar pattern with a swing of £8/t between the peak and trough last week, sitting at £250/t now.

The key issues driving volatility are:

• The war in the Ukraine is continuing to impact on exports.  As I write three ships should have left port, but there are a further 13 stuck in port and have been there since the start of the war.
• The hot weather is also impacting on maize grain yields with the EU crop shrinking by 5 million tonnes month on month.

On the protein side oilseed rape prices have jumped significantly over the last week by £22/t.  This is partly due to the weather but also a large fire in a German rape crushing plant.  The Soya market has dipped slightly over the last week on the back of improved exports sales from the US 9% compared to the average.  This may be short lived though as China is reporting concerns over its own crop yields, which will lead to an increase in its demand for imported Soya.

This volatility is out of our control and further emphasises the benefit of using a Cost Book system to buy cake so that we can purchase individual commodities when we see an opportunity, rather than relying on agreeing a price on a fixed day.

For up to date prices please contact Louise on 07943 684215 or e-mail louise@dblbuyinggroup.co.uk