UK LIFFE wheat May-13 futures contracts were worth £191.25/t at close on Tuesday 14 May, unchanged on the week. July-13 CBOT maize futures rose by $4.92/t, to $256.89/t and July-13 Chicago wheat futures were $261.13/t as at Tuesday’s close.
Friday’s World Agricultural Supply and Demand Estimate report gave the first USDA estimate of 2013/14 supply and demand for grains and oilseeds. Forecasts made now are tentative, most relying on trend yields and prospective areas rather than any firm information regarding the crop condition. As a result the report did not move prices beyond a small amount of short term volatility, and prices are largely unchanged in both old crop and new crop futures positions from a week ago.
The WASDE report forecast record wheat and maize production, as farmers respond to high prices by planting larger areas. US maize production is forecast to rebound from 273.8Mt in 2012/13 to 359.2Mt in 2013/14. World production is forecast to be 965.9Mt, from 857.1Mt this season. Feed use is forecast 7% higher, at 717.7Mt. Wheat production is also forecast higher, from 655.6Mt to 701.1Mt as yields in the Former Soviet Union return to more usual levels. All these forecasts are subject to weather events, and changes in planting intentions as Southern Hemisphere crops will not be sown for another 6 months.
US maize plantings remain behind average, as at Sunday 12 May 28% of the crop had been sown, considerably behind the 85% sown at the same point last year, and 65% sown on average at that point.
DEFRA March usage data showed the largest monthly feed production figure on record back to July 1992, as cold weather kept stock inside longer than usual. 1.12Mt of feed was produced, of which 151,000t were classified as pig feed. This is the second highest monthly level this season, and season to date pig feed production was 1.3Mt, 125,000t (11%) more than at the same point in 2011/12.
The CBOT (May-13) soyameal price also closed higher on the week last Friday at $489.8/t, up $29.3/t on the previous week. The CBOT May-13 contract, which expired on Tuesday, continued to rise this week and settled at $508.2/t (Tuesday’s close).Hi-Pro soyameal (ex-store East Coast) as at last Friday was £372/t, for July movement up £13/t on the previous week.
The old crop CBOT soyameal price has been underpinned by the tight soyabean supply situation with report that buyers are not willing to pay the higher prices due to the expectation that markets might soon be pressurised by the easing situation at Brazilian ports.
Initial global soyabean production for the 2013/14 season from the USDA is projected at a record 285.5Mt, up 16.4Mt on 2012/13. Global demand is forecast to increase by 11.4Mt to a record 270.2Mt; this suggests a surplus of 15.3Mt. Global 2013/14 soyabean ending stocks are thus seen 12.5Mt higher than 2012/13 at 75Mt. The more comfortable stock situation suggests prices may be pressurised but these are very early forecasts which are subject to ‘normal’ weather conditions.
China is forecast to import 69Mt of soyabeans in 2013/14, 10Mt more than the previous season. Given the scale of the increase, other analysts have cautioned that this may be optimistic. For more information on the 2013/14 soyabean outlook see the latest edition of Prospects on the HGCA website.