The Early Vibe

03/05/12 -- Firstly it's interesting to note new crop Jul 12 Chicago wheat setting fresh 2012 lows and taking out the lows of 2011 last night.

Against that, European wheat looks expensive. Our own new crop Nov 12 London wheat is currently GBP17.75/tonne, or 13%, above it's low of 2011. Nov 12 Paris wheat is EUR31.00/tonne, or 18%, above its 2011 low.

Day two of the Kansas wheat tour didn't encounter the record yield potential of day one as the survey moved to the drier south. They did however end up with an average yield of 43.7 bushels an acre across a survey of 286 fields, versus 33.4 bushels an acre on day two last year.

The UN's Food and Agriculture Organisation say that world wheat production in the coming season will come in at 675 MMT, 3.6% down on last year and broadly in line with other estimates from the likes of the IGC who said 676 MMT late last month.

There's been a bit of lively debate whipped up on Twitter concerning the recent widely announced 2ppl milk price decline coinciding with a widespread feed price hike. An across the board GBP10/tonne price increase on finished product for May delivery seems to be about the trade average, which probably represents an rise of around 5% for most.

Considering that Chicago soymeal prices are up by 55% since the mid-December lows that's a very modest increase indeed.

Robert Wiseman highlight the collapse in the price of bulk cream in defending their milk price decrease. A quick check on the DairyCo website does indeed confirm that cream prices fell 22% last month alone and are down 44% year on year.

The market is the market, it would seem. As ever, I suspect that these thing will correct themselves one way or another in the fullness of time. When that will be is anybody's guess though, I somehow suspect that the next milk price move won't be too far behind this one, and that it will alas be in a similar direction.

My personal knowledge as to why (or should that be whey?) the arse has fallen out of the bulk cream market is limited. Is it oversupply? Is it the nasty supermarkets saying that Mrs Housewife and her lightweight purse can only afford to pay X for her daily intake of cream? Maybe after 10 years of marriage and a couple of kids her taste for all things creamy has been somewhat diminished?

Butter prices are also on the wane, with DairyCo saying that discussion "as to whether intervention is now needed to cure apparent over-supply in the market" are taking place with prices down by almost a third year-on-year.

None of this seems to bode too well for feed demand from the dairy sector across the summer it has to be said.