Feed prices in Europe hit record levels amid strong futures volatility

According to S&P Global Energy, prices for soybean meal and corn in Europe have reached record levels amid a sharp rise in futures and rising premiums for physical deliveries.

 

According to estimates by Platts, part of S&P Global Energy, for the period August 27 - September 2, the price of soybean meal increased by €18/t to €400/t or $464.88/t FOB - Netherlands and €403/t EXW Spain, and for corn - by €4/t to €248/t EXW Spain.

 

Prices are supported by market volatility and uncertainty about the future direction of futures, which makes forecasting difficult for traders. But despite the sharp increase in futures prices and premiums, demand for feed remains quite low.

 

Traders expect concerns about the implementation of the EU Logging Regulation (EUDR) and related compliance bonuses to rise again at the end of the year.

 

The European Feed Manufacturers Federation (FEFAC) reported in a report dated September 2 that the introduction of the EU Regulation on the regulation of the soybean market could increase the cost of soybean procurement by more than €1 billion in 2027. Therefore, the association calls for measures to simplify procedures to ensure the safety of feed supplies in the EU.

 

Brokers note that during the US soybean harvest, American soybean meal is the most competitive on the EU market due to its low price. How long this situation lasts will depend on developments in Brazil.

 

Rising corn prices are forcing feed manufacturers to change recipes and look for alternative substitutes.

 

In Spain, due to reduced sowing areas and the May heat, the barley harvest will be reduced to 6.5 million tons.

 

Problems with logistics of supplies from Ukraine are leading to a rise in futures across Europe.