Commodities Update May 2021
Over the last month the pound has strengthened against both the dollar and the euro. It’s regained the lost 1.5cents from last month against the euro, while showing significant volatility, but strengthened 5 cents against the dollar!
Oil prices have continued to firm, and we’ve seen this at the pumps, with Brent Crude nearly $70/barrel.
While the UK again saw a shrinking in the economy during the first quarter of 2021 there is now a belief that we could see the strongest recovery in the economy since the Second World War, especially with the easing of lockdown. A bit different than Australia which is now threatening to close its borders until at least the end of 2022 and imprisonment for any citizen returning before this time!
The GDT has seen two minor falls in the last month, -0.1% & -0.7%, which have been seen as simple corrections after the huge (+15%) at one of the auctions last month. World prices are still at their highest level since 2014.
Milk Powder. With prices continuing to firm, and SMP prices at its highest for the last five years there has been an increase in milk powder prices this month.
Feed. All feed prices have continued to increase this last month, with some of the increases due to the dry weather here in the UK, with the recent rain there is hope that this might ease some prices and a recent conversation with a local agronomist highlighted that all the cereal crops are looking good now after this rain, but he wonders if straw might be in short supply after a stunted spring growth period. His example was a winter barley crop that was coming into ear at only a foot tall!
Fertiliser. Fertiliser prices are simply continuing to firm due to worldwide demand.
Nitram increased by £10/t this month but the cynic in me wonders if this is simply to make the opening new season price look better? Early conversations regarding silly season are that the feeling is there will not be significant savings to be made when prices are announced and it will be a slow burn process this time, rather than the usual madness to get the best price as quickly as possible because it can only last a matter of hours.
However, like usual I will be keeping a book of people’s requirements to ensure we can move, if we need to.
On an aside I still have a little bit of aftercut fertiliser available if people have still yet to commit.