September 6, 2007

EU feed market active over high grain prices

Business in Europe's animal feed ingredients market was active on Wednesday (September 5) in the Chicago Board of Trade (CBOT) as feed makers sought alternatives to record high wheat prices, traders said.

European Union wheat rose again to test record levels over fears of tight global supplies increased.

All-time high wheat prices mean animal feed makers bought a wide range of alternatives on Wednesday.

One trader said purchasing was made across the product range but most activity was concentrated tapioca where buying was active in the remaining months of 2007 and the first half of 2008. Tapioca remains as a base ingredient in animal feeds as wheat replacement. Also active in the market was soymeal. Active soymeal purchasing was made of afloat supplies on vessels approaching Europe from Argentina and for October/December delivery.

Brisk purchasing of palm kernel expellers and citrus pulp pellets was also reported.

Some protein buyers were holding off as consumers remain hopeful Chicago could be subjected to a round of profit-taking after its recent gains, according to a trader.

Chicago soymeal futures were lower in early trade on Wednesday on profit-taking and spill-over weakness from Chicago wheat following a strong rise on Tuesday.