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Are we in a weather market?

April 20, 2017

NZ Supply & Demand

Grey clouds and no sunshine in some places. Too much moisture or not enough in others. It seems no matter where you are the conditions have been far from ideal for good quality pasture growth.

As a result PKE out-turns have remained strong when typically one would expect to see a drop off. The NZ PKE supply side in store is ample but the vessel pipeline is thin when looking industry wide. With consumption winter lows within sight this is not a great concern.

PKE continues to have strong demand around $200/mt for next season, with nearby above this level. The NZD is staying within close proximity of 70 cents and only in the last few days has shown signs of softening as USD strengthens on repatriated funds. The optimism on the 2017/18 dairy season has lifted in the past couple weeks which has encouraged price investigation for feed inputs.

On the ADM front we continue to invest in storage and equipment to increase our capacity so it is an exciting time for the company over the next 12-24 months.

Origin Supply & Demand

Origin supply is increasing but slower than would typically be expected. Accordingly, the origin remains well supported as importers continue to buy to cover forward sales.

Importers can never get to excited going into winter as storage has a limited capacity even if prices soften. Indications at this time are the market is unlikely to move one way or the other by more than $5 over the coming weeks.

Other Markets

The USDA stocks report was classified neutral to bearish. In other words there is ample global grain supply therefore we are unlikely to see a market rally anytime soon. This is likely to lead to price stability all be it at lower levels. NZ domestic grain prices should soften as we move further into maize harvest.

Blends

A number of farmers continue to use Zinc in feed and will likely continue this application for a few more weeks. Increasing inquiry for pre-calving minerals for those looking to get ahead of next season. This market continues to expand in NZ and for ADM with Technical Sales Manager Gerard Fellowes on board.

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