FEED MARKET CONSUMPTION IS NOW STEADILY WINDING INTO STOCKS AND THERE CONTINUES TO BE SIGNIFICANT INTEREST IN FEED BEAN EXPORTS …
"The market slowed dramatically towards the turn of the year and was quite slow to pick up in January," comments Roger Vickers, Chief Executive of PGRO. "That said, feed market consumption is now steadily winding into stocks and there continues to be significant interest in feed bean exports.
"The influence of the poor quality 2017 harvest will remain a constant until the new crop arrives. This underlines the message that quality needs to be a driver for all growers in the coming year to achieve the best prices.
"AHDB's November 'early bird' forecast for UK crops indicates that pulses are expected to reduce in area by 6%, representing an area drop from 232,000 ha to 219,000 ha. DEFRA shows that the lowest UK pulse area since 1984 was in 120,000 in 2012, the highest was 275,000ha in 2001.
"Anecdotally, winter bean sowings are up, but enthusiasm for peas may be wavering after two years of weather-driven quality problems. However, we are still six weeks from the main sowing season for peas.
"The Canadian Outlook for principal field crops reports pea supply is estimated to fall by 12% with lower production. But as exports have fallen, stocks are expected to rise and continue to pressure prices. The average price is expected to fall from 2016-17, mostly due to sharply lower prices for yellow peas following the imposition of a 50% duty on Indian dry pea imports.
"USDA estimate dry pea production at 0.6 Mt, down nearly 50% from 2016-17 due to lower seeded area, high abandonment and below average yields.
"Australian bean bean crop quality appears good but with quantities much reduced from the records of 2016."
Franek Smith, President of BEPA, reports that the market for Feed Beans is driven by demand into the East Anglian ports with merchants looking to cover in existing commitments, the feed market has picked up since the turn of the year, with prices firming slightly by £1 - £2.
Dwindling Baltic availability has also had positive influence and, aided by the lower value of the GBP, these feed exports have helped make good around 50% of the decrease in human consumption exports.
Domestically, there is an increase in compounder demand with beans cheapening against other mid-range proteins, relative values being the most favourable they have been in the last six months. This demand traditionally declines as spring grazing comes on tap in the months ahead.
Feed beans continue relatively stable trading at around £145/t ex and some traders are now starting to book new crop against November wheat futures.
Human Consumption Bean exports are reportedly up to 50% down year on year with opportunities primarily restricted by the available quality.
Human consumption exports to Sudan have now ceased with the import restriction coming into place until June. This an annual measure taken to protect the value of their domestic production.
Some containerised exports to Egypt continue, but demand is thin with the Egyptian buyers now favouring Australian supplies.
A rally in prices before new crop is not expected. UK trade 2017 crop values peaked at around £185/t ex.
Combining Peas are an unexcited market generally caused by the lack of available good quality produce despite strong demand. The value differential between top quality and feed is wide at up to £100/t ex.
Few good quality samples remain of Marrowfat peas, hence good quality samples out of crop 2018 will be in demand. The key theme here through the growing season will be attention to detail to ensure the quality is secured. Top quality samples would trade in excess of £250/t ex whilst bleached samples are very hard to place, a 10-20% bleach taking around a £30 discount. Samples poorer than this are likely to head for the feed market and will trade at a discount to feed beans. The trade is anticipating a reduced planting in 2018. Whilst contract prices are improving, the current differential between marrowfat and good quality large blue prices has narrowed. And with large blue yields generally being greater, farmers looking to stay with peas may be seeing it more beneficial to grow blues.
Contracts for 2018 crop exist with offers up to £275/t ex available.
Demand for Large blue pea produce with good colour and soaking characteristics remains strong, with values over £235 /t ex for export. It is expected this will continue for the foreseeable future.
Pale /bleached samples are difficult to place, and those that have found homes are reaching values of up to £175 ex. Buybacks for large blues for new crop remain available on a min/max £200/£230 ex farm basis, with a maximum 10% bleached. The smaller domestic market for Yellow peas continues to show signs of growth but the earlier-mentioned import tariffs imposed by India may see international pressure on the price as large exporters seek potentially easier markets.
Current values for UK production of around £175/t + ex are largely notional as there is no perceived availability and all requirements are covered.
Contracts for 2018 crop exist with min max values £170- 200 / t ex.