Due to Record Wheat Harvests Worldwide, Prices Continue to Fall

Labor Day in America was celebrated on Monday this year, and the Chicago Mercantile Exchange was closed, with Americans enjoying a three-day break. Corn prices changed minimally over the past week, although export prices from the US Gulf slightly decreased. Soybeans and soybean meal “slid” down by 7 USD/t, while the most significant drop was felt in the old soybean crop. However, the market situation turned around quickly, and soybean meal prices “jumped” by 11 USD/t in two days, now hovering around 348€/t on the spot.

It remains very unusual that prices for the entire year of 2017 are only a few euros lower than spot prices. It is an unwritten rule that it is much more profitable and beneficial to purchase quantities for a more distant delivery period as early as possible. Price differences have been known to be enormous, even 50€/t lower than spot prices. Because of this, everyone has started engaging in futures trading without considering the risks it entails.

Whether prices of 280€/t will repeat again is still unknown. Everyone is waiting for the USDA report to be published on September 12, which will determine the direction of grain movement on the Chicago Mercantile Exchange. At the same time, reports indicate record wheat harvests worldwide, except in France, hence prices continue to fall here as well.

In Peru, there is talk of just under 9,000 t of unsold fishmeal and a new season that has just begun. A price drop from previous levels is expected, ranging from 150-200 USD/mt. This is a significant price drop.

According to MSI Ceres, about 23% of the expected 2 million mt has already been sold, and new exports are anticipated. With the new lower prices, Peruvian fishmeal is very competitive in the global market, and new large deals are expected to be concluded in the coming days.

The IFFO monthly report has been released with data showing a reduction in fishmeal production by 32.3% compared to 2015. Iceland and Peru show the largest production decreases. The total production of the largest global producers amounts to 1.1 million mt. At the same time, fish oil production is down by 19.2% compared to 2015.