The conditions of crops throughout Europe seem to vary. In Poland, a non-governmental organization called the Grain and Feed Association, shared an overview on the harvests of staple crops. According to the statistics, the country’s grain exports in the entire 2021/22 season amounted to more than 7 862 000 tons compared to 9 088 000 tons in the previous season. There are numerous indications that the depleted supply of grain on the domestic market may persist until the arrival of the corn harvest. The new maize crop should somewhat „unhinge” the market and influence the appearance of more offers for grain sales.
The condition of the French corn crop deteriorated last week to its lowest level in more than 10 years. That’s according to data from the FranceAgriMer agricultural agency, suggesting that recent rains have provided limited help to fields damaged by heat waves and drought. Harvests of potatoes, onions, sugar beets, apples, and hops are also expected to be 10-50% lower in the United Kingdom.
Hot and dry weather in Europe is the latest challenge facing farmers this year. Market analysts warn that smaller harvests could lead to higher food prices in the coming months. Supply shocks could in addition to this keep fertilizer prices high into H1 of 2023 and put pressure on farmers in upcoming months. All these factors lead to even greater food inflation – less fertilizer means smaller crops. The energy crisis in Europe and the shutdown of most of the fertilizer manufacturing capacity is going to have a significant impact on the food and feed industries.
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Corn Gluten Meal
Sellers are receiving increasing numbers of inquiries for maize gluten. Interestingly, both producers and buyers of the commodity present a wide range of prices for Q4 and Q1. Distributors in the Balkans are now forced to buy Central European production to cover needs for Greek Aqua Farms. Many companies have already contracted their demand in the mid-summer, nevertheless they will need to replenish their stocks. Until now, the differences between prices are as high as 200 euros. What will aqua feed fish producers agree upon? Time will tell.
It seems that every market participant is aiming for a low, and in terms of market volatility – quite impossible to achieve, price. As always, customers remain and follow the market decisions when they receive offers to choose the best price and quality. We can see a visible trend in the rising number of inquiries in feed grade product. The demand sentiments are also reflected in the case of Native Potato Starch, both food and technical grade. 20% less Potato production means 20% less Potato Starch production. This is a huge loss of production, which also affects the production of modified starches made from potatoes.
Vital Wheat Gluten
Similar behavior regards Vital Wheat Gluten, as demand began to grow even stronger with the end of August. Most of the end customers have bought Vital Wheat Gluten food grade product for prompt into the Q4 and Q1 2023. As for now, 80% of Europe origin Vital Wheat Gluten is imported into the U.S. and is primarily used in baking, pet food and the growing aquaculture industries.
Amber Wave Company expects to increase wheat purchases by July 2023. Amber Wave is retrofitting Prairie Horizon Agri-Energy’s existing corn-based ethanol plant to produce ethanol from the water and starch left over from the gluten process. The company expects to produce about 52 million gallons of ethanol annually from wheat. It will use the latest technology in wheat milling and protein extraction, which the company says will leave a much smaller carbon footprint than today’s conventional ethanol plants.
Native Wheat starch, paper producers are purchasing less Wheat Starch due to high energy costs, and they are switching more often to other products. They are now in search of Native Potato Starch instead, because it gives a better white color in the final product.
Hydrolyzed Wheat Gluten
Price for Hydrolyzed Wheat Gluten has scored a slight decline throughout last week. Although the supply for this product can be described as stable, the quantities are often insufficient and the deadlines are extended in some way. In regards to the next quarters, there’s still no huge movement in terms of contracts.
The market currently shows steady but visible trends in the Dextrose market. We’ve noticed quite large demand for food grade product, and a stability regarding feed grade. Market agents were eagerly awaiting the beginning of September. Due to the huge demand for starch, there are possible deficiencies of Dextrose. Some suggest that it could be a good time to contract as the risk of shortages arise. In comparison to last year, the offers are limited, as big producers don’t seem to offer big volumes.
Soy flour NON – GMO
Soy market is quite uncertain right now. Satisfactory yields in east Ukraine are expected, but the unstable geopolitical situation could stand in a way between producers and buyers. Raising prices of gas are not indifferent for soy prices. The market participants are waiting for the information from farmers about crop conditions.