I'm coming to you a day later than usual because the fabulous 5m team that sends out my newsletter is located in England, and yesterday they were celebrating Queen Elizabeth II's Diamond Jubilee, which was a national holiday for all of England. Those lucky English…

On the agenda today is China - even with a slight slow-down in their economy, they are still the one to watch. Following is some new information just released in a USDA Gains Report regarding China's oilseed market.

Low soybean profits in major production areas continue to push farmers toward alternative crops, a trend expected to carry into MY12/13. Soybean production in MY12/13 is forecast at 13 MMT, down from the previous year's estimated 13.5 MMT.

MY12/13 corn and rice planted area reached 95 million Mu (6.33 MHa) and 53 MMu (3.53MHa), respectively, both up 6 MMu (400,000 Ha) and 1.3 MMu (87,000 Ha), while soybean area declined to 40 MMu (2.67 MHa), down 10 MMu (667,000 Ha) over the previous year.

A local Chinese soy consultant expects an even more dramatic shift, forecasting MY12/13 soybean planted area will plummet to 35.5 MMu (2.37 MHa), significantly lower than the 52.2 MMu (3.48 MHa) in the previous year, while corn and rice area will increase 17 percent and 8 percent, respectively over the previous year.

Stable production is expected for MY12/13 rapeseed at 12.5 MMT based on planted area of 7.05 MHa. Modest yield gains due to favorable weather conditions will compensate for a slight decline in planted area.

Many analysts agree that rapeseed production of 13 MMT for MY11/12, as reported by the National Statistics Bureau, is high. Field trips confirmed a reduced planted area for MY12/13 as farmers explained that planting rapeseed is not as profitable as growing wheat or vegetables.

China's industry sources speculate that the government is likely to announce the MY12/13 rapeseed purchase policy in May. Industry insiders believe the purchase price will reach RMB 5,000/MT (or $794/MT, up from RMB 4,600/MT) based on increased labor and input costs and the price ratio among crops.

China's feed production growth is a key factor driving soybean imports. Industry statistics show total feed production of 36.9 MMT in the first quarter of 2012, of which compound feed reached 24.2 MMT, both up 25.6 percent over the same period in 2011. The increasing scale of swine and poultry production nationwide continues to drive feed production and consumption.

I encourage you to take a look at the full report, which includes harvest photos and data charts. And there's a ton of great information regarding imports that I didn't get to in my summary above. Click here to read the full report.