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Humphrey Feeds Weekly Commodity Report - 6th June

Last weekend, Putin announced that the Russian export ban would end on July 1st, and new crop wheat prices fell about ’10 over the week. A child of the cold war, and ex-spy, he may understand how to intimidate people but he does not understand (capitalist) markets. In a damage limitation exercise the Russian Grain Union announced that Russia could still impose grain export limits to conserve stocks if milling wheat prices exceed $250/t. The trade believes that most Russian wheat is of feed quality, and that they may have current stocks of about 20mt (so ’10/t x 20mt = ?).



In the US some 13ma have yet to be planted, including 3ma in Ohio alone. About 51% of soyabeans are now planted, versus the 5-year average of 71%. Maize is now approximately 86% planted versus the 5-year average of 95%. The rain has impeded planting in Ohio (in the top 5 states for soya) with only 7% planted versus 75% on average. US farmers are reluctant sellers of old crop maize, demand is steady, so old crop prices are unlikely to fall; and if EU wheat continues to follow maize, then we cannot expect wheat prices to fall before harvest. Spring plantings in Canada are also slow, and local authorities in Saskatchewan are planning to extend planting insurance deadlines. The world needs a big cereal crop to replenish stocks; the IGC believes global wheat production will be 667mt (649mt in 2010-11). There was a general weakness about commodities in general, possibly due to the funds squaring their books at the end of the month. One of the main commodity indexes fell 5.5% in May, the first month of losses after 8 months of consecutive gains.

News of Chinese activity is scarce, however we are again hearing stories of drought in China, which means they could be importers of cereals as well as proteins this year. Maize prices in China’s key growing regions are currently near record highs, as are pork prices which are at their highest since the price spike in 2008 [as would be all our meat and eggs if the supermarkets paid fair prices!]. Apparently some traders have bought physical maize, speculating on higher prices, and the government is expected to release maize from government stores to dampen prices [as it has already done with soya oil and soya meal].