ADM December PKE Update
December 19, 2017
So 2017 is closing out with a flurry of activity across the country. ADM have vessels in Timaru, Bluff and Tauranga over the break so the team will be busy. The good news is this will ensure healthy levels of stock going into the peak demand months of February and March. On that note, it is advised that if you don’t have contracts in place for your summer demand that you take coverage sooner rather than later.
The origin markets have been relatively subdued with the higher prices generally hindering demand in the destination markets. However anticipated demand during the NZ summer and northern hemisphere winter should continue to provide price support. With the Chinese New Year in early 2018, it is expected the market will continue to trade in the current range. However, given the lead times to book, ship and dispatch cargoes into NZ, price spikes cannot discounted over the summer.
NZ demand is increasing daily as the country dries out. This is normal for this time of year although the dry this year seems to be more pronounced thus far into December. Demand for alternate feeds is up across the board. This includes blends composing of various commodities.
The Corn Gluten Pellets are continuing to be popular as are DDGS. These products help reduce the reliance on PKE which assists with reducing FEI. Given the size of the deductions for FEI it is anticipated the science behind how to control the milk composition will advance rapidly. We suspect clients will try and focus on holding milk production up first and push FEI limits and then experiment more with alternate feeds later in the season to try and bring the score down.