The Morning Vibe

Posted by Nogger - a legend in his own mind at 09:51 | Categorized as

18/04/12 -- It doesn't look much like this picture round here this morning. Predictably, no sooner do the Environment Agency announce that the drought could last until Christmas than the heavens open and it starts lashing it down.

Did we say "until Christmas?" no, I think you'll find we meant "until the end of the week." Doesn't make such a great headline that though does it? Environment Agency say drought could last until Friday and after that it's going to piss down non stop for the rest of the year.

There's plenty of talk of all sorts of things going wrong with the rape crop this year. Black rot, grey rot, foot rot. VD is about the only thing I haven't heard that it's got yet, but it is going on a stag do to Blackpool at the weekend so it will probably have that too by Monday.

The words "disaster" and "alarming" are being used by the normally level headed Oil World who are now forecasting a European crop at a five year low of 18.58 MMT this year - and that isn't the lowest estimate in the ring, Copa Cogenca go 18.26 MMT.

EU-27 rapeseed consumption is currently running at around 22-23 MMT/year - and the closest we've come to producing that volume was the bumper crop of 2009. In fact we haven't produced more rapeseed than we've consumed in Europe since 2004/05.

It's concerning from an oilseed perspective then that South American soybean production estimates also keep falling on a seemingly weekly basis. Oil World also cut their Brazilian and Argy forecasts yesterday, pegging the latter at 44 MMT but adding that 42-43 MMT could eventually be on the cards. Brazil was cut to 65 MMT.

The USDA were forecasting 52 MMT and 75 MMT respectively back in December when the soybean market bottomed, so in round figures something in the region of 20 MMT has been lopped off production between the two so far in 2012, that's almost 16%. No wonder prices have shot up by almost 30% since mid-December.

South American farmers are already well sold on their 2012 crop and the US crop hasn't even gone into the ground yet. Chinese demand isn't showing any signs of letting up, and we haven't even had the almost inevitable US summer weather scare. Lordy, Lordy.