Falling feed wheat prices challenge corn demand in animal feed market
A significant reduction in feed wheat prices is intensifying competition with corn sourced from Ukraine and other regions in the animal feed market, market sources said this week, with feed mills likely to adjust the ratios on their input grains as a result.
In August, the average feed wheat price was offered at $223 per metric ton, on a CIF Spain basis, down from $243/t in the same month of last year. In contrast, corn is currently offered at a lower rate of $220/t CIF Spain.
On a free-on-truck basis, corn is being offered to buyers at Eur210/t ($233/t), while feed wheat is priced slightly higher at Eur212/mt. Previously, the typical price difference between feed wheat and corn was around Eur10.
Platts, part of S&P Global Commodity Insights, assessed Ukrainian corn FOB POC at $196/mt on Sept. 3
Corn is the most widely used feed grain globally, with production of 1.2 billion t in 2023-24, of which 764.9 MMt was used as animal feed, according to the US Department of Agriculture. That compares with wheat production — which generally has a higher protein content than corn — of 789.6 MMt and feed usage of 158.9 MMt. A larger proportion of the EU’s wheat consumption is fed to animals, but this share will likely be even bigger in 2024-25, traders said.
In Ukraine, traders have expressed growing concerns regarding the weakened corn market, especially with the new harvest season underway. One trader said that “feed wheat and corn are trading at almost even prices,” suggesting that the slow market activity for corn is largely due to the rising competition from feed wheat.
Earlier in the new season, a high supply of corn in the global market had already depressed prices, with the new competition from feed wheat posing an additional threat to corn pricing in the region.
In destination markets, buyers confirmed this trend of replacing corn with wheat in the feed industry.
Market participants from Spain estimated that the overall replacement would result in about 2% less corn and 2% more wheat being used from October to December. A procurement trader at one Spanish feed mill remarked that imported wheat has become more competitive than corn, with inland demand already utilizing significant quantities of wheat and barley.
“Coastline demand will max out wheat at these levels,” he added
As the market continues to evolve, the interplay between feed wheat and corn prices will be crucial in shaping the future of the animal feed industry in the EU and beyond.
For almost 30 years of expertise in the agri markets, UkrAgroConsult has accumulated an extensive database, which became the basis of the platform AgriSupp.
It is a multi-functional online platform with market intelligence for grains and oilseeds that enables to get access to daily operational information on the Black Sea & Danube markets, analytical reports, historical data.
You are welcome to get a 7-day free demo access!!!
Got additional questions?
We will be happy to assist!
Write to us
Our manager will contact you soon