The Morning Vibe

Posted by Nogger - a legend in his own mind at 09:04 | Categorized as

12/04/12 -- The overnight grains are steady with beans up 4-8 cents and corn & wheat up 1-3 cents. The pound is a bit stronger at 1.5930 against the dollar and 1.2140 versus the euro.

FranceAgriMer maintained it's French soft wheat production estimate for last year at 33.9 MMT yesterday. However they cut their 2011/12 ending stocks estimate from 2.4 MMT to just under 2.1 MMT.

Strategie Grains have today cut their EU-27 2012/13 soft wheat crop production forecast by a chunky 4.3 MMT to 126.8 MMT citing frost and drought damage. They say that 2.5 million hectares, or 6%, of the planted area of winter grains will need to be resown. They've also cut their barley production estimate by 1.1 MMT from last month to 52.4 MMT and knocked 0.6 MMT off their durum wheat forecast to 7.8 MMT.

As a consequence of this EU-27 corn production is raised 0.9 MMT from last month to 65.4 MMT. EU-27 2012/13 soft wheat exports are seen 3 MMT lower than in March at 13.5 MMT.

Whilst some of those cuts might sound fairly dramatic on paper they are only actually bringing their wheat estimates into line with Coceral's numbers released at the end of March. Their barley figure is however somewhat lower than Coceral's figure of 54.0 MMT, whilst their corn number is around 3.4 MMT higher than Coceral's March estimate. The reduced soft wheat export figure should also be noted.

What interests me are the implications for EU-27 rapeseed production. Coceral and Strategie Grains now both agree that Europe's wheat crop is likely to come in at 126.8 MMT this year, which is 2% lower than in 2011.

Yet Coceral currently have European rapeseed production rising 1% in 2012 despite a 6% reduction in plantings by virtue of a higher average yield.

Insatiable China will import 5.6 MMT of soybeans in April, according to their Ministry of Commerce. That's 16% up on March's imports and 44% higher than in April 2011.

There's some talk of the Chinese government "encouraging" farmers to plant less soybeans and concentrate their efforts on corn production instead. Soybean planting would normally begin this month.

I think I will stay a bit friendly to oilseeds/proteins relative to the grains for now.