Nogger's Blog

05/04/12 -- It's the last day of trading ahead of the long weekend, with soybeans and rapeseed continuing to rise. May 12 Paris rapeseed closed at EUR500.00/tonne last night, the first close starting with the magical "5" for a front month since the last day of January 2011.

May 12 soybeans are 7 1/4 cents firmer overnight at USD14.26 3/4, closing in on the 2011 high of USD14.51 set in early February of last year.

With oilseed prices this high the market will surely turn round at some point and bite itself on the arse, but when? If the USDA's 73.9 million acres figure is correct, or even if it turns out to be the 75 million that the market was expecting, given that soybean losses in South America that are already irreversible there's a long old wait for South American growers to have another shot at milking the soybean cow.

That hasn't stopped Informa Economics having a long range stab at production prospects for next season though. It's very early days yet, but they forecast that Brazil's 2012/13 harvest will come in at 78.5 MMT and that Argentina's will achieve 60.0 MMT.

In the case of Brazil that's and 18% increase on this season's still being harvested crop and for Argentina it's up by a third on what they haven't even started on yet, or 27 MMT of extra production between the two of them.

If rapeseed prices also continue to rise it will not go unnoticed by European growers when planting time comes along again.

The only problem is that the fruits of that particular harvest are so long away. Meanwhile we are stuck with the hand that Mother Nature has dealt us for 2012.