Strategie Grains Cuts French Wheat/Barley Production
Strategie Grains cut its forecast for the EU’s 2019 wheat and barley production. The agri-consulting firm acknowledged, however, that recent rain across the EU had eased dryness and left decent harvest prospects.
The production cuts reflect smaller acreage in Denmark and Czech Republic, and drought damage in Hungary
EU soft wheat production in the upcoming 2019/20 season is forecasted at 143.9MMT up from 144.8 million forecast in April.
Barley production in 2019/20 was cut to 60.3MMT from 61.0MMT, +8% YoY
Rains arrived in late April/early May, lifting earlier concerns across much of the EU although some pockets of drought persist in central and north EU countries.
What It Means for the U.S. Farmer: At FBN we believe that the EU wheat production is a negative for the U.S. farmer. There are some dry spots in Europe but our opinion is that aggregate production is set to recover from 2018 and will pose a challenge to the U.S. hard and soft wheat export programs. We continue to maintain that absent a global production shock, the U.S. remains the wheat supplier of last resort.
NOPA’s April Crush AT 159.99MBU- Down from March
April’s monthly soybean crush fell below 2018 levels for a second straight month in April and was below most trade estimates.
NOPA members, which handle about 95% of all soybeans crushed in the United States, processed 159.99MBU of soybeans last month, down from 170.011MBU in March and below the 161.016MBU crushed in April 2018, the record for the month.
April's crush was expected to rise to 161.607MBU.
Soybean oil stocks at the end of April rose to 1.787 billion pounds, up from 1.761 billion pounds at the end of March but below the 2.092 billion pounds at the end of April 2018.
Soymeal exports last month declined to 763,203 tons, from 844,294 tons in March and 946,291 tons exported in April 2018.
What It Means for the U.S. Farmer: At FBN we believe that NOPA’s report is neutral for the U.S. farmer. The domestic crush rate has been running at historical rates for most of the marketing year and has been supportive local basis levels. The oil stocks are interesting and are running behind 2018 levels during key demand.
The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)
