Digital Re-print - September | October 2014

Global Feed Markets: September - October 2014

www.gfmt.co.uk

Grain & Feed Milling Technology is published six times a year by Perendale Publishers Ltd of the United Kingdom.All data is published in good faith, based on information received, and while every care is taken to prevent inaccuracies, the publishers accept no liability for any errors or omissions or for the consequences of action taken on the basis of information published. ©Copyright 2014 Perendale Publishers Ltd. All rights reserved. No part of this publication may be reproduced in any form or by any means without prior permission of the copyright owner. Printed by Perendale Publishers Ltd. ISSN: 1466-3872

A new dawn for...

In 2015, welcome to...

GFMT’s market analyst John Buckley reviews world

trading conditions which are impacting the full range of commodities used in food and feed production. His

observations will inf luence your decision-making.

Overall, world output

is expected to reach a

comfortable 70/71m tonnes,

keeping rapeseed meal

supplies near to last season’s

levels. World sunflowerseed

production will be down by

about 5% or 2m tonnes this

season due to smaller crops

in Russia and Ukraine and

a slightly smaller harvest in

Europe. However, using some

of the stocks carried in from

last season will help maintain

crushings and meal output

close to last year’s levels.

Where will all the wheat (& maize & soya) go?

The old adage that ‘big crops get bigger’ has certainly been borne out this year. Not everybody has had ideal weather – we think particularly of Canada and the northern US states, France, parts of Northern and Eastern Europe, Ukraine, parts of Russia where there has been too much and eastern Australia, too little rain. But

amid pretty much ideal conditions in most other areas, that hasn’t stopped the global crop estimates climbing far beyond anything anyone dreamed possible back in the early summer.

Just since our last review, according to the latest USDA assessment, the world wheat crop estimate has soared by a further 15m tonnes to a new all-time peak of 720m, largely due to big increases for Russia (+6m), Ukraine and the European Union (+3m each). Among other significant exporters, crop estimates have been boosted for Kazakhstan and the USA. Even China (the largest single country producer and consumer of wheat) has seen its forecast raised by 2m to 126m tonnes.

So world wheat production, rather than dropping significantly from last year’s record (714m tonnes) has actually exceeded it. The USDA will have some further fine tuning to do to these numbers. Australia’s crop estimate of 25.5m tonnes is probably about 1.5m too high versus official forecasts while Canada’s may also have to come down from the current 28m. On the other hand, USDA’s 151m tonnes for the EU now looks about 3m too low while Russia’s harvest yields are implying something higher than USDA’s 59m – perhaps as much as 61m or 62m tonnes. Overall, then, final world output could well turn out even higher than 720m.

The USDA has softened the blow on prices from this rising supply by balancing it against higher consumption. In global terms this is now seen 10m higher than in July and about 7m over last year’s. The latest increases come mainly in countries whose crops have risen most significantly - the EU, CIS and China – as well as a number of moderate/smaller sized users expected to consume more as supplies rise and prices drop. Maybe USDA’s 710m is a bit optimistic for global consumption, however, given (a) the competition coming for feed outlets from a massive maize crop and (b) the still wide premium wheat is charging over maize. Even if that proves close, world wheat stocks will jump by 10m tonnes to the top end of the range of recent years.

GRAIN&FEED MILLING TECHNOLOGY54 | COMMODITIES

GFMT’s market analyst John Buckley reviews world

trading conditions which are impacting the full range of commodities used in food and feed production. His

observations will inf luence your decision-making.

Overall, world output

is expected to reach a

comfortable 70/71m tonnes,

keeping rapeseed meal

supplies near to last season’s

levels. World sunflowerseed

production will be down by

about 5% or 2m tonnes this

season due to smaller crops

in Russia and Ukraine and

a slightly smaller harvest in

Europe. However, using some

of the stocks carried in from

last season will help maintain

crushings and meal output

close to last year’s levels.

Where will all the wheat (& maize & soya) go?

The old adage that ‘big crops get bigger’ has certainly been borne out this year. Not everybody has had ideal weather – we think particularly of Canada and the northern US states, France, parts of Northern and Eastern Europe, Ukraine, parts of Russia where there has been too much and eastern Australia, too little rain. But

amid pretty much ideal conditions in most other areas, that hasn’t stopped the global crop estimates climbing far beyond anything anyone dreamed possible back in the early summer.

Just since our last review, according to the latest USDA assessment, the world wheat crop estimate has soared by a further 15m tonnes to a new all-time peak of 720m, largely due to big increases for Russia (+6m), Ukraine and the European Union (+3m each). Among other significant exporters, crop estimates have been boosted for Kazakhstan and the USA. Even China (the largest single country producer and consumer of wheat) has seen its forecast raised by 2m to 126m tonnes.

So world wheat production, rather than dropping significantly from last year’s record (714m tonnes) has actually exceeded it. The USDA will have some further fine tuning to do to these numbers. Australia’s crop estimate of 25.5m tonnes is probably about 1.5m too high versus official forecasts while Canada’s may also have to come down from the current 28m. On the other hand, USDA’s 151m tonnes for the EU now looks about 3m too low while Russia’s harvest yields are implying something higher than USDA’s 59m – perhaps as much as 61m or 62m tonnes. Overall, then, final world output could well turn out even higher than 720m.

The USDA has softened the blow on prices from this rising supply by balancing it against higher consumption. In global terms this is now seen 10m higher than in July and about 7m over last year’s. The latest increases come mainly in countries whose crops have risen most significantly - the EU, CIS and China – as well as a number of moderate/smaller sized users expected to consume more as supplies rise and prices drop. Maybe USDA’s 710m is a bit optimistic for global consumption, however, given (a) the competition coming for feed outlets from a massive maize crop and (b) the still wide premium wheat is charging over maize. Even if that proves close, world wheat stocks will jump by 10m tonnes to the top end of the range of recent years.

GRAIN&FEED MILLING TECHNOLOGY54 | COMMODITIES

Taking all this on board, along with the huge increase in foreign competition and its own inability to compete enough on world wheat export markets, the bellwether US futures market in Chicago has seen yet another collapse in prices since our last review. As September drew to a close, the nearby month was trading down to $4.68/bu ($172/tonne) compared with about $195 two months ago and about $250 this time last year.

Another issue driving wheat prices is the quality factor. Much of this year’s European, Ukrainian, probably North American wheat too, is of rain-damaged sub-par quality that will have to be cleared closer to feed prices. We have already seen the dramatic impact of this on the European (Paris-based) milling wheat futures market with its heavy bias towards French wheat. This ‘hedging’ or ‘price-insurance’ tool has had to lower its quality specs (in the event of a seller making a

physical delivery to a futures store) to accommodate the unusually low-grade French harvest. The new milling requirements - Hagberg falling numbers from 220 but with tolerances and price discounts down to 170, and minimum proteins of 10.5% - were on the low side of some traders’ expectations and, amid ongoing concerns about how much grain might meet even these requirements, this action has not stopped French milling wheat prices toward feed-wheat value.

As we go to press, the nearby month has fallen to a four-year low of under E150/tonne compared with E170.50 at the end of July. A year ago, the near contract was quoted at over E193 with forwards (including the current spot position) at similar levels – quite drop. Feed wheat is closer to E140 and many observers think that is where it will end up – unless that floor moves lower too, which is not ruled out

While the surplus of feed wheat is tugging at the market’s ankles,

September - October 2014 | 55GRAIN&FEED MILLING TECHNOLOGY

Precision Sensorsfor inline production Analog & Digital RF-Solutions

•• Suitable for solid, granular and powdered materials

•• High speed measurement

•• Non-nuclear technology

www.work-microwave.de

Premium Quality FoodsSensor

the flip side of reduced high quality supplies is leading to some wide premiums for the latter. US hard red winter breadwheat for example, is quoting $272/277 (fob export port) depending on proteins ranging from 12.5% to 14.2% while Dark Northern Spring wheat for 14%-plus protein is almost $90/tonne more expensive.

But competition for export markets is keeping ordinary milling wheats closer to the $230 level amid a multi-cornered fight between various European, Russian, North-American and, before long, Australian offers. Despite their quality problems, the French appear determined to clear as much grain for export as possible, possibly fearing further quality deterioration in store of moist-harvested grain and have been offering some astonishingly cheap deals to important importers like Egypt (which lowered its own quality specs on moisture last month to keep France in the competition).

Within Europe, the Germans at least appear to have some good quality wheat to sell to Third Countries or ship around Europe where it’s needed. They will probably capitalise on the French quality problem to grab some of its traditional milling wheat custom in countries like Algeria (which has refused to take low quality French wheat even if blended up with better quality imported wheat). Quality is also good for the Northern member states, parts of the eastern EU and, not least the UK which is enjoying its best crop for many years in terms of Hagbergs and proteins and is actually exporting some milling quality to France.

Pressure is also being put on wheat prices by forecasts that world import demand will drop this season by over 7m tonnes from last year’s record level as China requires less (with its bigger crop) and several smaller buyers trim their needs. The forecast 155m tonnes global total could, however, turn out a little on the low side as Iran and some of Mid-east/North African countries achieve smaller than expected crops.

Where will the wheat price drop end? It remains a popular guessing game. Current levels are still some way off the lows seen over the past eight years of extreme market volatility which included not only record highs (13/bu or $478/tonne) but the low $4’s/bu.

The forward CBOT futures market points to modest recovery

for grains into 2015 but it is hard to see what will drive prices up in the near future especially if production does turn out higher and/or consumption lower than expected. Futures are often a

poor forward indicator. Back in the spring, CBOT September suggested wheat would be in the low $7’s/bu. Even the increases we noted above to world crop estimates in the interim don’t seem enough to justify prices falling that far short of forecast – unless they had been way too expensive to start with (or indeed had over-reacted to supply shortfalls over the past decade of

GRAIN&FEED MILLING TECHNOLOGY56 | COMMODITIES

In her speech, the minister commended the IRRI for its dynamic work and important role in changing the lives of ex-combatant women who are now fighting a different battle - food insecurity in Burundi.

“They can now eat more rice. They are smiling. This is an inspiration for the govern-ment,” the minister added.

Traditionally served and eaten once or twice a year during festivities, rice is being promoted to become a year-round fare for Burundians. Rice is one of the government’s priority crops, seen to contribute greatly to food security in the country.

Minister Kayitesi said that the govern-ment strongly supports building further on the collaboration between IRRI and Burundi, improving the region’s rice production, and supporting the fight against poverty and hunger. In anticipation of a stronger col-

laboration, new laboratories will be built and new scientists trained in agronomy, social sci-ence, plant pathology, and cor-porate services to strengthen rice research and production in the region.

About IRRIFor over five decades, the

IRRI has been the home of the most brilliant minds in the field of rice research and agriculture. Scientists in the thousands from all across the globe had been trained at the IRRI, and later on

became leaders and policy makers in their fields and home countries. IRRI offers inten-sive training in rice research with the goal of empowering scientists, farmers, and other rice workers and ensuring that they have the proper knowledge and crop management strategies that they can share with their respective communities.

IRRI's goals contribute to the United Nations Millennium Development Goals to eradicate extreme poverty and hunger and ensure environmental sustainability. They are also aligned with the objectives of the Global Rice Science Partnership (the CGIAR Research Program on Rice) that help deliver internationally coordinated research effec-tively and efficiently with our partners.• Ensure that rice production is stable and

sustainable, does minimal harm to the

environment, and can cope with climate change.

• Improve the nutrition and health of poor rice consumers and rice farmers.

• Provide equitable access to information and knowledge on rice and help develop the next generation of rice scientists.

• Provide rice scientists and rice producers with the genetic information and materials they need to breed better rice varieties, develop technologies to support optimal farming practices, and enhance rice production.

• Increasing food securityRice is the most important human food,

eaten by more than half of the world’s popu-lation everyday. In Asia, where 90 percent of rice is consumed, ensuring there is enough affordable rice for everyone, or rice security, is equivalent to food security. In Africa and Latin America, rice is becoming a more important staple too. Much of IRRI’s work is around helping increase rice production to ensure food security - particularly for those people most at risk of not getting enough food.

Food security is also recognised as being more than just providing people with enough calories to live on, but ensuring people have enough nutrients for optimal health too. IRRI is working on developing healthier rice varieties to help those who mostly depend on rice can get more nutrients into their diet to reduce malnutrition.

http://irri.org

Imag

e us

ed w

ith k

ind

perm

issio

n fro

m ©

Inte

rnat

iona

l

Rice

Res

earc

h In

stitu

te

40 | September - October 2014 GRAIN&FEED MILLING TECHNOLOGY

Take Your Grain Higher

E-SERIES GRAIN STORAGE SILOS

NOW

MORE MODEL

S!

BROCK GRAIN SYSTEMSA Global Division of CTB, Inc.Phone: +1 574.658.4191Internet: www.BrockGrain.comE-mail: Brock@BrockGrain.com EXCEEDING EXPECTATIONS™

Contact us to learn

more.

+14 • Get up to 14% more storage capacity using taller EVEREST® Silos in the same facility footprint.

• More capacity helps you save on per bushel storage costs.

EVEREST® E-Series Silos: offering durability and savings from Brock with silos that exceed your expectations!

4.6 to 47.5 mRange of EVEREST® Silo diameters available from Brock.

CTB ADVERTISINGAd No. BR-2243-201410

Brock Grain SystemsMilling & Grain

F

the flip side of reduced high quality supplies is leading to some wide premiums for the latter. US hard red winter breadwheat for example, is quoting $272/277 (fob export port) depending on proteins ranging from 12.5% to 14.2% while Dark Northern Spring wheat for 14%-plus protein is almost $90/tonne more expensive.

But competition for export markets is keeping ordinary milling wheats closer to the $230 level amid a multi-cornered fight between various European, Russian, North-American and, before long, Australian offers. Despite their quality problems, the French appear determined to clear as much grain for export as possible, possibly fearing further quality deterioration in store of moist-harvested grain and have been offering some astonishingly cheap deals to important importers like Egypt (which lowered its own quality specs on moisture last month to keep France in the competition).

Within Europe, the Germans at least appear to have some good quality wheat to sell to Third Countries or ship around Europe where it’s needed. They will probably capitalise on the French quality problem to grab some of its traditional milling wheat custom in countries like Algeria (which has refused to take low quality French wheat even if blended up with better quality imported wheat). Quality is also good for the Northern member states, parts of the eastern EU and, not least the UK which is enjoying its best crop for many years in terms of Hagbergs and proteins and is actually exporting some milling quality to France.

Pressure is also being put on wheat prices by forecasts that world import demand will drop this season by over 7m tonnes from last year’s record level as China requires less (with its bigger crop) and several smaller buyers trim their needs. The forecast 155m tonnes global total could, however, turn out a little on the low side as Iran and some of Mid-east/North African countries achieve smaller than expected crops.

Where will the wheat price drop end? It remains a popular guessing game. Current levels are still some way off the lows seen over the past eight years of extreme market volatility which included not only record highs (13/bu or $478/tonne) but the low $4’s/bu.

The forward CBOT futures market points to modest recovery

for grains into 2015 but it is hard to see what will drive prices up in the near future especially if production does turn out higher and/or consumption lower than expected. Futures are often a

poor forward indicator. Back in the spring, CBOT September suggested wheat would be in the low $7’s/bu. Even the increases we noted above to world crop estimates in the interim don’t seem enough to justify prices falling that far short of forecast – unless they had been way too expensive to start with (or indeed had over-reacted to supply shortfalls over the past decade of

GRAIN&FEED MILLING TECHNOLOGY56 | COMMODITIES

speculator-boosted volatility). The extent – and speed – with which markets can come back down is rarely believed during bull feeding frenzies, especially by the newer participants from the investment community.

Now, of course, there is the opposite danger of things getting overdone on the downside. In the past month or so there has been much talk of producers facing loss-making returns – particularly on maize in Latin America. Costs of production, inputs and land and, in many countries labour too, have all soared since the last time wheat was at $4/bu or less. Will that spell cutbacks in grain sown areas/inputs and a lower crop going forward? It’s unclear at this stage that this will happen as soon as 2015. Certainly Russia, the world’s fastest growing wheat supplier, appears to be putting more rather than less winter wheat into the ground this autumn. US sowing is also ahead as farmers make the most of the best autumn moisture conditions for some years.

We have to remember too that yields have been on a long-term upward curve that, while it may slow, isn’t over yet. 20 years ago, farmers around the world sowed as much wheat as they did for the 2014 crop but yields have risen almost 30% since then.

KEY FACTORS AHEAD - WHEAT • Tensions between Russia and Ukraine appeared to ease in the

last few weeks but the underlying problem hasn’t gone away. The trade was right in expecting ‘business as usual’ over the summer – record wheat exports from both countries. However, there remain concerns about the impact of their collapsed currencies – and western sanctions on Russian credit – affecting sowing plans and/or input use – so a potential impact on both area and yields next summer.

• World stocks continue to grow more than expected this season as consumption falls faster than production – that provides a useful buffer to any 2015 crop issues.

• World wheat trade is declining from last season’s record high and there will be plenty of rivals for custom – keeping downward pressure on world wheat prices – though quality premiums will stay high just as feed values probably have further to fall

• Autumn sowing is wel underway in the Northern Hemisphere. Sown acreage updates from the USDA, the IGC, FAO and others will be keenly followed.

• Wheat feeding levels – so wheat value – will remain under further pressure from huge maize supplies, especially within the EU but also in ‘swing’ import markets like South Korea.

MUCH MORE MAIZE

While growth in wheat yields has slowed, maize productivity continues to increase, especially in less developed and emergent economies where better seed, input use and improvements in

www.hydronix.comenquiries@hydronix.com

Hydronix sensors include:

• Digital technology with precise linear output• Wide moisture measurement range• Suitable for chutes, silos, mixers or conveyors• Choice of measurement modes• Not affected by dust or colour• Different installation options• Temperature stable

Hydro-Mix VII

The Hydro-Probe XT has been specifi cally designed to measure moisture in organic materials, typically being installed in or underneath silos or in the material on a conveyor.

The Hydro-Mix VII is a fl ush mounted sensor that is ideally suited to installation in mixers, augers or the inlet / outlet of grain dryers.

Both sensors offer a choice of digital measurement modes enabling the producer to select the best option for the material being measured.

Hydro-Probe XT

Hydronix digital, microwave moisture sensors are designed and manufactured in the UK and provide accurate and cost effective moisture measurement and control in feed meals and pellets, grain, cereal and pulses.

Hydronix Moisture Sensors

Save You Money

GFMT half page vertical 90 x 270 plus 3mm bleed not left.indd 1 13/01/2014 10:00:18

September - October 2014 | 57GRAIN&FEED MILLING TECHNOLOGY

speculator-boosted volatility). The extent – and speed – with which markets can come back down is rarely believed during bull feeding frenzies, especially by the newer participants from the investment community.

Now, of course, there is the opposite danger of things getting overdone on the downside. In the past month or so there has been much talk of producers facing loss-making returns – particularly on maize in Latin America. Costs of production, inputs and land and, in many countries labour too, have all soared since the last time wheat was at $4/bu or less. Will that spell cutbacks in grain sown areas/inputs and a lower crop going forward? It’s unclear at this stage that this will happen as soon as 2015. Certainly Russia, the world’s fastest growing wheat supplier, appears to be putting more rather than less winter wheat into the ground this autumn. US sowing is also ahead as farmers make the most of the best autumn moisture conditions for some years.

We have to remember too that yields have been on a long-term upward curve that, while it may slow, isn’t over yet. 20 years ago, farmers around the world sowed as much wheat as they did for the 2014 crop but yields have risen almost 30% since then.

KEY FACTORS AHEAD - WHEAT • Tensions between Russia and Ukraine appeared to ease in the

last few weeks but the underlying problem hasn’t gone away. The trade was right in expecting ‘business as usual’ over the summer – record wheat exports from both countries. However, there remain concerns about the impact of their collapsed currencies – and western sanctions on Russian credit – affecting sowing plans and/or input use – so a potential impact on both area and yields next summer.

• World stocks continue to grow more than expected this season as consumption falls faster than production – that provides a useful buffer to any 2015 crop issues.

• World wheat trade is declining from last season’s record high and there will be plenty of rivals for custom – keeping downward pressure on world wheat prices – though quality premiums will stay high just as feed values probably have further to fall

• Autumn sowing is wel underway in the Northern Hemisphere. Sown acreage updates from the USDA, the IGC, FAO and others will be keenly followed.

• Wheat feeding levels – so wheat value – will remain under further pressure from huge maize supplies, especially within the EU but also in ‘swing’ import markets like South Korea.

MUCH MORE MAIZE

While growth in wheat yields has slowed, maize productivity continues to increase, especially in less developed and emergent economies where better seed, input use and improvements in

www.hydronix.comenquiries@hydronix.com

Hydronix sensors include:

• Digital technology with precise linear output• Wide moisture measurement range• Suitable for chutes, silos, mixers or conveyors• Choice of measurement modes• Not affected by dust or colour• Different installation options• Temperature stable

Hydro-Mix VII

The Hydro-Probe XT has been specifi cally designed to measure moisture in organic materials, typically being installed in or underneath silos or in the material on a conveyor.

The Hydro-Mix VII is a fl ush mounted sensor that is ideally suited to installation in mixers, augers or the inlet / outlet of grain dryers.

Both sensors offer a choice of digital measurement modes enabling the producer to select the best option for the material being measured.

Hydro-Probe XT

Hydronix digital, microwave moisture sensors are designed and manufactured in the UK and provide accurate and cost effective moisture measurement and control in feed meals and pellets, grain, cereal and pulses.

Hydronix Moisture Sensors

Save You Money

GFMT half page vertical 90 x 270 plus 3mm bleed not left.indd 1 13/01/2014 10:00:18

September - October 2014 | 57GRAIN&FEED MILLING TECHNOLOGY

general technology/husbandry are making most impact. In the past two decades, world average yields have increased by about 40% to a record average 5.6 tonnes/ha with a 12% gain in the last six years alone.

Yields have been the buzzword all through August in the US Corn Belt where farmers have regularly been reporting some phenomenal results from a near ideal summer of plentiful moisture, mild temperatures and, so far, trouble-free harvest. 300+ bushels an acre may not be the norm but has certainly been commonly achieved in the f irst harvesting southern states. It does suggest the USDA is too light on its current 171.7bu national average prediction.

Even if we take off a some harvested acres to reflect the USDA’s recent count of prevented plantings (due to earlier wet weather), it is quite possible the crop will well exceed the USDA’s 365.7m tonne forecast (versus last year’s 353.7m). There are plenty of 370m plus estimates floating in the market and some much higher.

This has been the key factor driving down US corn futures, which in September traded as low as 326.5/bu (about $128.50) – its cheapest since June 2010.

In global terms, the maize output forecast for 2014/15 has risen by about 6.5m tonnes as a 12.7m rise for the US was offset by cuts of 5m for China, 3m for Argentina, 1.5m for the CIS and some smaller country reductions. However, the EU estimate has risen by a hefty 2.8m over that same period.

World consumption of maize has been raised by 4.4m tonnes to reflect a response to higher supplies and lower prices, mainly in the USA where USDA now sees more of the grain used in all major outlets – feed, ethanol – even exports.

Even so, global maize stocks are now seen reaching 190m tonnes or about 20% of world consumption and the US component jumping 5m tonnes since July to a burdensome 51m tonnes (about 17% of use compared with less than half that ratio just two years earlier.

Like wheat, maize is expected to see its global import total drop back during 2014/15, by about 10m tonnes. Although Ukraine will probably have less to export from this year’s smaller crop (down 4m tonnes at the last count) there will be more from Brazil and Argentina, both carrying in larger stocks from their last harvests. The EU is meanwhile expected to import about 6m tonnes less maize as it turns to its own larger crop, not to mention uses more of its weather-damaged wheat harvest for animal feed.

With the CIS countries about to harvest – and already talking some very cheap fob export offers, maize prices are under downward pressure from multiple directions – including the huge US and record EU crops, loads of feed wheat , less import demand worldwide. If the US crop is as big as some analysts think, the CIS countries want to sell ‘off-the-combine’ to finance their autumn wheat sowings and Latin Americans keep clearing old and new crop grain at current competitive prices, CBOT maize may have further to fall yet. Prior to the 2007/08 boom, the normal range was $2-$3/bu or about $80-$120/tonne!

COARSE GRAINS - KEY ISSUES AHEAD

• Maize supplies keep growing, led by a possibly still under-rated US crop and ample supplies from Latin America, CIS & Europe

• Brisk export competition should keep prices under downward pressure

• Competition from huge feed wheat supplies will maize maintain steep discounts but the implied boost to livestock feeders margins might stimulate greater meat production than expected.

• How much maize will the EU import? • China continues to release some of its huge maize stockpile, capping

its import needs.

PROTEINS IN ABUNDANCE

Oilmeal costs continue to decline under the influence of record soya meal supplies although the weak euro has robbed European customers of some of the benefit in terms of the largely imported raw material. The biggest single factor remains the larger than expected American soyabean crop. Since our last review, the

weather has been almost ideal for most US regions, leading the USDA to raise its national crop estimate from 99m to 106.5m tonnes. Even that may under-rate the final figure as USDA is using a yield of 46.6bu /acre whereas many in the trade have been expecting up to, even over 50 bu (which could equate to 114m tonnes. In early October, with about 3% of a slightly late-running crop cut, the f irst harvests have been yielding from 50 to 80 bushels. That may decline as the combines move North while the f inal harvest area (USDA has at 84.1m acres) may have to be trimmed back to reflect f ields that weren’t sown due to diff icult planting weather. Whether or not the crop turns out bigger, no-one is in any doubt that this harvest spells abundant supply and huge stock buildup. At 106.5m it would be 17m up on last year’s, equivalent to 13.6m tonnes of extra soya meal. At this stage, more of this increase is expected to go into stocks than into larger US crush or exports because the latter outlets will not grow fast enough. The supply picture is even looser on a global scale. With Brazil and Argentina expected to plant even bigger acreages than last year’s record ones, their crops (arriving next spring) are expectedto grow signif icantly too. According to USDA, in world terms, that points to soyabean production for the recently started 20014/15 season 28m tonnes larger than last year’s and a staggering 71m more than in 2011/12. In meal terms that equals over 22m and almost 57m tonnes respectively. Again, the fact that crush and meal output will not gain that much is a function of demand, not supply. It means world soyabean stocks will jump from 67m to over 90m tonnes – their biggest annual increase ever.Accounting for 55/60% of world oilseed and as much as 68% of meal production, soya always determines the direction of the broader market in protein meals. Since the magnitude of the current US/global crop outlook began to emerge, the nearby price of soyabeans on the bellwether Chicago futures market has dropped 25%. Since the early summer peaks, the price has fallen by over 40%. Over the past two months, Chicago soya meal futures have also dropped by over 30%.

A quick snapshot of the other major oilseed sources shows rapeseed production turning out better than expected in Europe where the crop could be about 2m tonnes bigger than last year’s. Largest supplier Canada has had weather problems from the outset - largely cool damp conditions delaying development but may yet turn in a respectable crop of between 14m and 15m tonnes – and has large stocks carried over from last year. The former Soviet countries also have big crops for the second year running, especially Russia, which has raised production. Overall, world output is expected to reach a comfortable 70/71m tonnes, keeping rapeseed meal supplies near to last season’s levels. World sunflowerseed production will be down by about 5% or 2m tonnes this season due to smaller crops in Russia and Ukraine and a slightly smaller harvest in Europe. However, using some of the stocks carried in from last season will help maintain crushings and meal output close to last year’s levels. Including cottonseed, groundnuts, palm kernel cake etc, overal world oilmeal supplies are forecast at a record 291m tonnes to eaily match foreseen growth of about 10m tonnes in meal demand, heavily focused on China, Europe, the USA, Latin America and India. Clearly, with oilseed stocks growin g at an unprecedented pace, there is ample room to expand crush and meal production if the market needs it – an equation that points oilmeal costs f irmly ‘South.’

OILMEALS/PROTEINS – KEY FACTORS AHEAD

• Even bigger than expected US and LatAm soyabean crop surpluses continue to signal cheaper global oilmeal costs

• Next year’s soya crops could be even larger as the major exporting countries shift some maize land to oilseed production for better returns

• Lower oilmeal costs might spur greater than expected demand in countries developing their livestock production systems – China, India, Indonesia - as well as market leaders like the USA where high meat prices are also adding to profitability.

• Soya seems likely to increase its already huge share of the protein market. As the high-protein, reliable quality source, its cheaper price will demand a response across the sector.

GRAIN&FEED MILLING TECHNOLOGY58 | COMMODITIES September - October 2014 | 11GRAIN&FEED MILLING TECHNOLOGY

M llingInternational

Directory

twenty two2013/14

internationalmilling.com

The premier resource for the global milling industry

ONLINE | PRINT | MOBILE

EXCELLENCE IN YEAST –EXCELLENT IN FEED

REAL BREWERS‘

YEAST

Made in Germany • Made in G

ermany • Made in Germany • M

ade in G

erm

any

• M

ade

in G

ermany •

Biolex® MB40

Leiber GmbH

Hafenstraße 24

49565 Bramsche

Germany

Tel. +49 (0)5461 9303-0

Fax +49 (0)5461 9303-29

www.leibergmbh.de

info@leibergmbh.de

acts prebiotic

for immunity & resistance

optimizes digestion processes

Hall 14 Stand F2811. –14. November

Produktanzeige Biolex 90 x 270 Grain & Feed_EuroTier.indd 1 11.07.14 11:58

N

September - October 2014 | 11GRAIN&FEED MILLING TECHNOLOGY

M llingInternational

Directory

twenty two2013/14

internationalmilling.com

The premier resource for the global milling industry

ONLINE | PRINT | MOBILE

EXCELLENCE IN YEAST –EXCELLENT IN FEED

REAL BREWERS‘

YEAST

Made in Germany • Made in G

ermany • Made in Germany • M

ade in G

erm

any

• M

ade

in G

ermany •

Biolex® MB40

Leiber GmbH

Hafenstraße 24

49565 Bramsche

Germany

Tel. +49 (0)5461 9303-0

Fax +49 (0)5461 9303-29

www.leibergmbh.de

info@leibergmbh.de

acts prebiotic

for immunity & resistance

optimizes digestion processes

Hall 14 Stand F2811. –14. November

Produktanzeige Biolex 90 x 270 Grain & Feed_EuroTier.indd 1 11.07.14 11:58

N

In the previous issue of GFMT, I explained that the Mills Archive, based in Reading in the UK, is expanding its scope to collect and care for

documents and images recording the history and contemporary situation of roller flour milling. We are looking for material without a permanent home and raising funds to house such items securely and to make them freely available to the public.

During the 19th century Britain's expanding industrial cities rapidly increased the demand for flour to bake bread. Steam-driven, high-speed metal rollers that produced flour much faster and in greater quantities than

the traditional method rapidly superseded the tried and tested method of using millstones to grind flour.

There are only a few reminders left in the UK now of this important phase in milling. During the late 1890s and early 1900s quite a few country mills made the

transition to either replace all millstones with a complete roller plant, or to go halfway and keep one or two pairs of millstones alongside

roller mills. The transition to either partial or full removal of millstones for the installation of a roller plant was not a cheap business, but some millers found it worthwhile to do so to keep up with the changing times.

We still have some of the large milling firms in business, but there are also survivors of the time when small country and town mills were trying to keep up with the competition of the larger mills. Caudwell’s mill (mentioned by Rob Shorland-Ball, one of our supporters, in the last issue), which is still working, gives us a glimpse into how a small country mill took up the challenge of going fully over to the roller system. On the Isle of Wight four watermills turned over to roller milling, Upper Calbourne being the last of the four to con-vert to rollers. These former small port mills were supplementing their island trade to the mainland. Today, you can still see the roller mills installed by Henry Simon at Calbourne Mill. Although these are still workable, the mill is now using millstones to produce its flour.

Windmills were not to be left out and those at Newington Ramsgate, Watlington Norfolk, Press Brothers, Green Cap mill at

Yarmouth and Tring Flour Mills were some which continued working alongside a newer, larger roller mill building. A Mr R Randerson of York had his tall seven-storey windmill fitted out with a complete Henry Simon roller plant.

The Mills Archive contains material on roller flour milling from around the world, although the modern industry is poorly represented. In Hungary, the home of the porcelain rollers, there is a fine museum on the history of milling. If you know of any roller men who would be happy to talk to us about their experiences or donate any roller mill material, we would love to make contact and thus add to our new project.

Cookson at mills@millsarchive.org

Our Roller Flour Milling Archiveby Mildred Cookson

Mills Archive Trust, Reading, UK

www.summit2014.org

REGISTER TODAY! 20% Early Bird Discount Ends 31 July

For registration and more information, go to www.summit2014.org/registration

September - October 2014 | 9GRAIN&FEED MILLING TECHNOLOGY N September - October 2014 | 11GRAIN&FEED MILLING TECHNOLOGY

M llingInternational

Directory

twenty two2013/14

internationalmilling.com

The premier resource for the global milling industry

ONLINE | PRINT | MOBILE

EXCELLENCE IN YEAST –EXCELLENT IN FEED

REAL BREWERS‘

YEAST

Made in Germany • Made in G

ermany • Made in Germany • M

ade in G

erm

any

• M

ade

in G

ermany •

Biolex® MB40

Leiber GmbH

Hafenstraße 24

49565 Bramsche

Germany

Tel. +49 (0)5461 9303-0

Fax +49 (0)5461 9303-29

www.leibergmbh.de

info@leibergmbh.de

acts prebiotic

for immunity & resistance

optimizes digestion processes

Hall 14 Stand F2811. –14. November

Produktanzeige Biolex 90 x 270 Grain & Feed_EuroTier.indd 1 11.07.14 11:58

N

www.gfmt.co.uk

LINKS• See the full issue• Visit the GFMT website

• Contact the GFMT Team

• Subscribe to GFMTINCORPORATING PORTS, DISTRIBUTION AND FORMULATION

Sept

embe

r - O

ctob

er 2

014

first published in 1891

In this issue:

• STORAGE Silo design & construction

• Weighbridges crucial factors and considerations

• Irish Flour Milling and the German connection

• Bagging systems chosing the right

one for your needs

• Burundi’s women of war turn to rice

• A new dawn for GFMT Our history and our future!

This digital Re-print is part of the September | October 2014 edition of Grain & Feed Milling Technology magazine. Content from the magazine is available to view free-of-charge, both as a full online magazine on our website, and as an archive of individual features on the docstoc website. Please click here to view our other publications on www.docstoc.com.

To purchase a paper copy of the magazine, or to subscribe to the paper edi-tion please contact our Circulation and Subscriptions Manager on the link adove.

INFORMATION FOR ADVERTISERS - CLICK HERE

Article reprintsAll Grain & Feed Milling Tecchnology feature articles can be re-printed as a 4 or 8 page booklets (these have been used as point of sale materials, promotional materials for shows and exhibitions etc).

If you are interested in getting this article re-printed please contact the GFMT team for more informa-tion on - Tel: +44 1242 267707 - Email: jamest@gfmt.co.uk or visit www.gfmt.co.uk/reprints