The overnight grains closed lower, with beans around a cent or so easier, corn down 3-4 cents and wheat off 5-6 cents.
The dollar is firmer on a wave of risk aversion and profit-taking. Rumours of Ukraine debt defaults have got the market a little nervous. Crude oil is lower and the shine has disappeared from gold the past day or two after a secession of all-time highs were set earlier in the week.
There's not much change in the US weather forecast with light to moderate rains set for early next week. In South America though significant rains are in the forecast for Argentina, with even the parched south and west getting a chance of 1-2 inches Monday/Tuesday. In parts of Brazil if anything it remains too wet, with Parana in for 10+ inches in the next fortnight, according to QT Weather.
China continue to buy US soybeans at an unprecedented rate, as confirmed by yesterday's USDA export sales and shipments numbers, plus an additional sale of 116,000 MT.
The news today that the Chinese government is to cease it's weekly soybean and corn auctions from Dec 1st could also be seen as supportive. Heavy snow in northern areas is also supportive as it will hinder transport and could potentially lead to a reduction in wheat area and yields.
India says that it has planted around a third of it's intended wheat area for the 2010 crop at 9.39 million hectares.
Profarmer and the Commonwealth Bank of Australia have both cut their wheat production estimates there, coming in around 2-3 MMT lower than the USDA's current estimate.
It looks as if we could be in for a lower end to the week, with funds likely to keep their powder dry until Monday. Early calls for this afternoon's CBOT session: corn called 3 to 4 lower; soybeans called 1 to 2 lower; wheat called 5 to 7 lower.
Friday, 20 November 2009
Here's An Interesting Thing
Figures out today from the Russian customs department show that they exported just over 2 MMT of wheat in October, bringing exports for the current marketing year so far (July/Oct) to just under 7 MMT.
What's so interesting about that, you rightly ask?
One of the takers in October was ultra-fussy we don't need to import anything India with 24,600 MT, apparently.
What's so interesting about that, you rightly ask?
One of the takers in October was ultra-fussy we don't need to import anything India with 24,600 MT, apparently.
Barley Market Will Soon Be On Fire - Simon Cowell
Multi millionaire pop guru and that bloke off the telly who wears his trousers too high, Simon Cowell, says that the global barley market is all set to the next big thing.
Announcing plans to personally groom barley for stardom, Cowell says that he's confident he can "sex-up" the grain by giving it a short skirt and a skimpy lycra top.
"I'm going to relaunch barley with a whole new glittering image, everyone will want it, it'll be £200/tonne by Christmas mark my words," gushed Cowell.
Announcing plans to personally groom barley for stardom, Cowell says that he's confident he can "sex-up" the grain by giving it a short skirt and a skimpy lycra top.
"I'm going to relaunch barley with a whole new glittering image, everyone will want it, it'll be £200/tonne by Christmas mark my words," gushed Cowell.
Ukraine: The Golden Goose Is Dead (Maybe)
Rumours are sweeping the market that Ukraine Rail has failed to restructure its debt on a bond owed to Barclays Bank.
This rumour is compounded by speculation that a second bond is near default - one that is underwritten by Ukraine's government and owed to Deutsche Bank.
That's got the currency markets spooked and we are back to a flight to safety, which sees the unpopular pound taking a spanking in the corner down to USD1.6475.
On a separate issue, to highlight just how badly the bottom has fallen out of the agricultural market in Ukraine, the production of tractors for agriculture and forestry purposes fell by 85.1% in January-October 2009 year-on-year, according to the State Statistics Committee.
The production of seeders shrank by 81.5% and the production of disk harrows fell by 85.7% during the same period, they add.
This rumour is compounded by speculation that a second bond is near default - one that is underwritten by Ukraine's government and owed to Deutsche Bank.
That's got the currency markets spooked and we are back to a flight to safety, which sees the unpopular pound taking a spanking in the corner down to USD1.6475.
On a separate issue, to highlight just how badly the bottom has fallen out of the agricultural market in Ukraine, the production of tractors for agriculture and forestry purposes fell by 85.1% in January-October 2009 year-on-year, according to the State Statistics Committee.
The production of seeders shrank by 81.5% and the production of disk harrows fell by 85.7% during the same period, they add.
Rice Market Simmering Nicely
Whist the poor monsoon season slashed Indian summer rice production, flooding in the south of the country is seen doing likewise with winter rice output, analysts say.
That could leave India needing to import 3-5 MMT of rice next year, which considering that they are normally an exporter of around 4.5 MMT, is a pretty significant turnaround.
This would be the first time India has needed to import rice in more than twenty years, and also coincides with a pick up in demand from the Philippines, who have had their own production slashed by a series of typhoons.
India lost 18% of it's summer rice crop and could lose a similar proportion of it's winter production, analysts say.
That would slash stocks perilously low to under 1 MMT, without imports, and that is only enough to keep hungry India going for just four days.
Government mandates insist that state food agencies hold minimum stocks of 5.2 MMT of rice, pushing import requirements up above 4 MMT in 2010.
Strangely, the Commerce and Industry Minister Anand Sharma told reporters today that the government "have adequate stocks" after refusing to offer a subsidy to state-run companies looking to import rice.
That could leave India needing to import 3-5 MMT of rice next year, which considering that they are normally an exporter of around 4.5 MMT, is a pretty significant turnaround.
This would be the first time India has needed to import rice in more than twenty years, and also coincides with a pick up in demand from the Philippines, who have had their own production slashed by a series of typhoons.
India lost 18% of it's summer rice crop and could lose a similar proportion of it's winter production, analysts say.
That would slash stocks perilously low to under 1 MMT, without imports, and that is only enough to keep hungry India going for just four days.
Government mandates insist that state food agencies hold minimum stocks of 5.2 MMT of rice, pushing import requirements up above 4 MMT in 2010.
Strangely, the Commerce and Industry Minister Anand Sharma told reporters today that the government "have adequate stocks" after refusing to offer a subsidy to state-run companies looking to import rice.
Breaking News
Just popped up on the screen that China's CNGOIC website says that the regular weekly government soybean and corn auctions that have been in operation since September are to cease from Dec 1st. No explanation offered.
That might get the market going this afternoon, particularly after yesterday's strong sales and exports news.
The thoroughly excellent Agrimoney.com say that "this left US soybean sales for the 2009-10 marketing year, which only started in September, at more than 70% of Washington's full-year forecast already" which is a pretty startling statistic, I'm sure you'll agree.
US sales to China, which have been running at almost a million tonnes a week recently, look like continuing unabated.
Chinese soybean imports are expected to be around 3.5 MMT in November, rising to 4 MMT each in Dec and Jan, with the vast majority of that set to come from the US, before the Brazilian harvest gets into full swing.
That might get the market going this afternoon, particularly after yesterday's strong sales and exports news.
The thoroughly excellent Agrimoney.com say that "this left US soybean sales for the 2009-10 marketing year, which only started in September, at more than 70% of Washington's full-year forecast already" which is a pretty startling statistic, I'm sure you'll agree.
US sales to China, which have been running at almost a million tonnes a week recently, look like continuing unabated.
Chinese soybean imports are expected to be around 3.5 MMT in November, rising to 4 MMT each in Dec and Jan, with the vast majority of that set to come from the US, before the Brazilian harvest gets into full swing.
Things Could Be Worse, You Could Be Indian
Food inflation running at 14.55%, prevented from importing foreign wheat in bulk by the strictest quarantine regulations in the world. Whilst the government sits on it's supposed stocks of 27 MMT of wheat, which it will only sell if you want to pay well over the market price for it.
And this is a government who got elected on their promises of cheap food for all. Is it just me, or is there something innately immoral about buying USD6.7 billion worth of gold from the IMF whilst the people are starving?
Subsequently smarting at allegations that they are a load of profiteers who are so bent that they can't lie straight in bed at night, the government are now said to be 'considering' lowering their minimum tender price for wheat from a laughable USD292-USD365/tonne to the equivalent of USD240-290/tonne.
Well whoopee do. Considering that they've been 'considering' whether to release any wheat or not for months now, I wouldn't go holding my breath for a snappy decision on that one.
They should try 'considering' that the average Indian on the street can't afford to be paying almost 15% more than last year for his food, and get their fingers out.
Sell their domestic stocks off cheap, what are they there for food security or profit? Failing that, waive the strict import regulations as they did back in 2006. Nobody can seriously tell me that the wheat in the state granaries is better quality than the French or German material that Egypt just bought at below USD200/tonne yesterday.
Meanwhile, the opening day of parliament was adjourned yesterday after angry farmers marched through the streets of Dehli, protesting against low state-set sugarcane prices. The dispute may delay cane crushing in Uttar Pradesh, pushing domestic sugar prices even higher, and could also affect early sowing of wheat, farm leaders said.
And this is a government who got elected on their promises of cheap food for all. Is it just me, or is there something innately immoral about buying USD6.7 billion worth of gold from the IMF whilst the people are starving?
Subsequently smarting at allegations that they are a load of profiteers who are so bent that they can't lie straight in bed at night, the government are now said to be 'considering' lowering their minimum tender price for wheat from a laughable USD292-USD365/tonne to the equivalent of USD240-290/tonne.
Well whoopee do. Considering that they've been 'considering' whether to release any wheat or not for months now, I wouldn't go holding my breath for a snappy decision on that one.
They should try 'considering' that the average Indian on the street can't afford to be paying almost 15% more than last year for his food, and get their fingers out.
Sell their domestic stocks off cheap, what are they there for food security or profit? Failing that, waive the strict import regulations as they did back in 2006. Nobody can seriously tell me that the wheat in the state granaries is better quality than the French or German material that Egypt just bought at below USD200/tonne yesterday.
Meanwhile, the opening day of parliament was adjourned yesterday after angry farmers marched through the streets of Dehli, protesting against low state-set sugarcane prices. The dispute may delay cane crushing in Uttar Pradesh, pushing domestic sugar prices even higher, and could also affect early sowing of wheat, farm leaders said.
I'll Name That Country In One
Public borrowing in October running at a staggering 88 times what it was in October 2008. Public debt left to spiral out of control by a hapless government so inept that even if it did act to reduce its deficit, it would still be the 'rich' world's largest until at least 2017.
A government who's publicly stated aim is to create a law to reduce the deficit every year for the coming decade, that they look set to break in it's very first year in existence!
Look away now if you don't want to know the score
A government who's publicly stated aim is to create a law to reduce the deficit every year for the coming decade, that they look set to break in it's very first year in existence!
Look away now if you don't want to know the score
EU Barley Pouring Into Intervention
With the current depressed price of barley, and lack of a decent premium for malting varieties, 1.56 MMT of grains have already been offered into intervention during the first fortnight of the programme being open.
Whilst a small amount of wheat has been offered, the vast majority of that total is barley.
At this rate, trade estimates that EU-wide 4-6 MMT of mostly barley could be offered for intervention before the season ends on 30 June 2010, might prove to be far too low. That should take up some of the slack, and do exactly what intervention is designed to do.
The fact that there won't be any barley intervention for the 2010 crop, but stores full of it, will surely have led to a greater reduction in plantings than the 6% drop currently being forecast by Strategie Grains. Nobody is that stupid. Are they???
Whilst a small amount of wheat has been offered, the vast majority of that total is barley.
At this rate, trade estimates that EU-wide 4-6 MMT of mostly barley could be offered for intervention before the season ends on 30 June 2010, might prove to be far too low. That should take up some of the slack, and do exactly what intervention is designed to do.
The fact that there won't be any barley intervention for the 2010 crop, but stores full of it, will surely have led to a greater reduction in plantings than the 6% drop currently being forecast by Strategie Grains. Nobody is that stupid. Are they???
Analysts Cut Australian Wheat Crop Estimates As Temperatures Hit 46 Degrees
November temperature records are being broken all over eastern Australia, with much of New South Wales seeing the mercury hit 10 to 20 degrees above their November average today.
The hottest today was felt through the Upper Western where Wanaaring and Brewarrina reached 14 degrees above average at 46 degrees, making it their hottest November day on record. Other November records broken through the state were at Cobar, Condobolin, Forbes and Trangie all reaching a toasty 45 degrees, according to Elders Weather.
With the wheat harvest well underway lower yields than expected are being reported, not just in NSW but also Victoria and Western Australia. Current sweltering temperatures may knock a bit more off yields yet in late maturing crops, analysts say.
Profarmer Australia yesterday cut their Australian wheat production estimate by 1 MMT to 20.9 MMT, whilst Commonwealth Bank of Australia lopped 700,000 MT off their output ideas to 21.6 MMT.
Both estimates are considerably lower than the hapless USDA's current stab in the dark of 23.5 MMT.
Profarmer now peg Australian barley production at 7.0 MMT and canola output at 1.67 MMT.
The hottest today was felt through the Upper Western where Wanaaring and Brewarrina reached 14 degrees above average at 46 degrees, making it their hottest November day on record. Other November records broken through the state were at Cobar, Condobolin, Forbes and Trangie all reaching a toasty 45 degrees, according to Elders Weather.
With the wheat harvest well underway lower yields than expected are being reported, not just in NSW but also Victoria and Western Australia. Current sweltering temperatures may knock a bit more off yields yet in late maturing crops, analysts say.
Profarmer Australia yesterday cut their Australian wheat production estimate by 1 MMT to 20.9 MMT, whilst Commonwealth Bank of Australia lopped 700,000 MT off their output ideas to 21.6 MMT.
Both estimates are considerably lower than the hapless USDA's current stab in the dark of 23.5 MMT.
Profarmer now peg Australian barley production at 7.0 MMT and canola output at 1.67 MMT.
Thursday, 19 November 2009
CBOT Closing Comments
Soybeans
CBOT Jan soybeans ended 12 cents higher at USD10.39, and March soybeans settled 11 1/2 cents higher at $10.44 3/4. Soybeans finished higher after trading lower overnight and in the early part of the morning session. Weekly export sales were bullish soybeans at 1,349,700 MT against expectations of 750,000 and 950,000 MT. Exports of 1,724,200 MT were a marketing-year high, the primary destination (no surprises here) was China at 914,500 MT.
Corn
December corn futures closed at USD3.95, down 3 cents; March corn futures at USD4.10 ¾, down 3 cents. Weekly corn sales were poor at 352,900 MT compared to trade estimates of 450,000 to 550,000 MT. Export shipments were 683,200 MT down 10% from last week and 7% from the four week average.
Wheat
December wheat futures ended at USD5.62 ½, down 3 ¾ cents. Wheat had been heavily down earlier in the session but recovered to close near to unchanged on ideas that wheat is the "undiscovered laggard" of the day. Funds seem to be looking for something to latch onto at the moment, and wheat seems to fit the bill.
CBOT Jan soybeans ended 12 cents higher at USD10.39, and March soybeans settled 11 1/2 cents higher at $10.44 3/4. Soybeans finished higher after trading lower overnight and in the early part of the morning session. Weekly export sales were bullish soybeans at 1,349,700 MT against expectations of 750,000 and 950,000 MT. Exports of 1,724,200 MT were a marketing-year high, the primary destination (no surprises here) was China at 914,500 MT.
Corn
December corn futures closed at USD3.95, down 3 cents; March corn futures at USD4.10 ¾, down 3 cents. Weekly corn sales were poor at 352,900 MT compared to trade estimates of 450,000 to 550,000 MT. Export shipments were 683,200 MT down 10% from last week and 7% from the four week average.
Wheat
December wheat futures ended at USD5.62 ½, down 3 ¾ cents. Wheat had been heavily down earlier in the session but recovered to close near to unchanged on ideas that wheat is the "undiscovered laggard" of the day. Funds seem to be looking for something to latch onto at the moment, and wheat seems to fit the bill.
EU Wheat Closing Comments
Paris January milling wheat futures closed down EUR0.75 at EUR133.50/tonne, and London May feed wheat ended down GBP1.00 at GBP112.00/tonne.
Egypt bought 60,000 MT of Russian wheat from Louis Dreyfus at USD196.50/tonne, 60,000 MT of French wheat from Granite at USD198.65/tonne, and 55,000 MT of German wheat from Cargill at $198.75/tonne in this weeks tender.
It might be interesting that the tender was split three ways origin-wise. Stories are circulating that whilst Russian wheat may be the cheapest, there are also contamination problems associated with it.
The UK exported 172,402 MT of wheat in September, bringing the cumulative total for the marketing year which began on July 1st to 438,169 MT, say Defra.
Allowing for usage from Ensus, that potentially leaves the UK a surplus of 'only' around 140,000 MT per month to export during Oct 09/Jun 10, which would not appear to be an unachievable target.
We also exported 107,386 MT of barley in September, taking the current MY total to 263,437 MT, said Defra. That's slightly above last year's pace of 215,315 MT, but still leaves plenty to be exported or go into intervention.
Egypt bought 60,000 MT of Russian wheat from Louis Dreyfus at USD196.50/tonne, 60,000 MT of French wheat from Granite at USD198.65/tonne, and 55,000 MT of German wheat from Cargill at $198.75/tonne in this weeks tender.
It might be interesting that the tender was split three ways origin-wise. Stories are circulating that whilst Russian wheat may be the cheapest, there are also contamination problems associated with it.
The UK exported 172,402 MT of wheat in September, bringing the cumulative total for the marketing year which began on July 1st to 438,169 MT, say Defra.
Allowing for usage from Ensus, that potentially leaves the UK a surplus of 'only' around 140,000 MT per month to export during Oct 09/Jun 10, which would not appear to be an unachievable target.
We also exported 107,386 MT of barley in September, taking the current MY total to 263,437 MT, said Defra. That's slightly above last year's pace of 215,315 MT, but still leaves plenty to be exported or go into intervention.
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