17/05/13 -- Soycomplex: Strong demand continues with the USDA today reporting the sale of 120,000 MT of new crop soybeans for delivery to China, along with 18,000 MT of old crop and 120,000 MT of new crop soybeans to "unknown" destinations. Old crop US bean availability remains very tight. May 13 beans went off the board at a premium of more than a dollar to July 13 this week. That doesn't seem to make a lot of sense, and since the May expired July has been clawing back some of that lost ground and putting in a bit of a premium of it's own over new crop. Nov 13 has been tagging along for the ride. Informa Economics today forecasting a US soybean planted area of 78.286 million acres, up more than a million on the USDA's estimate of 77.1 million, although slightly lower than last month's forecast of 78.457 million. Informa estimates soybean yield at an average 43.9 bu/acre, a little lower than the USDA's 44.5 bpa. Soybean production is therefore forecast at 3.388 billion bushels versus the USDA’s May estimate of 3.390 billion. The trade is now gearing up for Monday night's crop progress report. The theory being that rapid corn planting has taken place this week, reducing a wholesale switch into soybean sowing in place of unsown of corn. Soybean planting in Monday's report is only expected to be around 10-15% done as farmers concentrate all their efforts on getting the corn in. Only 6% of the 2013 US soybean crop was in the ground as of last Sunday night, the slowest pace since 1984. In other news the Buenos Aires Grain Exchange forecast the soybean crop there at 48.5 MMT, unchanged from their previous estimate. Harvesting is around 90% complete, they added. Jul 13 Soybeans closed at USD14.48 1/2, up 21 cents; Nov 13 Soybeans closed at USD12.28 1/4, up 10 3/4 cents; Jul 13 Soybean Meal closed at USD425.10, up USD10.20; Jul 13 Soybean Oil closed at 49.52, unchanged. For the week Jul 13 beans were up just shy of 20 cents, with meal up USD18.30 and oil up 29 points.
Corn: Old crop corn closed higher, new crop was lower. Informa reduced their 2013 US corn planting estimate from 97.753 million acres last month to 96.827 million and around half a million lower than the USDA's forecast of 97.3 million. Yields were pegged at 160.9 bu/acre versus the USDA's 158 bpa. The big debate now is how much corn has been planted in the US this week. Estimates vary quite widely. Towards the low end we have planting advancing from 28% done last week to maybe 50% complete as of Sunday night. Others go 60%, some even say 70%. The record for planting the largest proportion ever of the US corn crop in just one week, I am reliably informed, was set in 1992. In what was the equivalent of last week, 43% of the crop was planted in one week, equal to 34 million acres, says Dale Durchholz of Agrivisor. "As the hourglass runs out on corn planting dates for profitable yields, Midwest producers are 'mudding' in seeds. Ag Web is hearing reports that 60-80% of corn may now be planted in Iowa and Illinois, despite exceptional wet field conditions," say Martell Crop Projections. After May 15, it is harder for growers to wait to plant corn University of Illinois agronomist Emerson Nafziger asserts. "In fairness, you get to a certain point and it’s what have you got to lose?" Farmers are getting desperate as the ideal sowing period was 2 weeks ago, they add. In other news the Buenos Aires Grain Exchange estimated the Argentine corn crop at 24.8 MMT, unchanged from a week ago. They say that the harvest there is approaching the halfway point at 46% done. Argentine corn offers are said to be USD30-35/tonne cheaper on an FOB basis for July shipment than they are out of the US. Jul 13 Corn closed at USD6.52 3/4, up 11 1/4 cents; Sep 13 Corn closed at USD5.56, up 2 1/4 cents. For the week Jul 13 was up 16 1/2 cents.
Wheat: Wheat was lower on all three exchanges, although less so in Minneapolis which has been the recurring theme all week. Spring wheat planting delays on the northern US Plains and Canadian Prairies being the reason for that. The USDA will report on planting progress for US wheat on Monday night. Last week saw spring plantings at only 43% done versus the 5-year average of 63%. North Dakota was a notable laggard at only 26% planted versus 92% this time last year and 53% normally. The top spring wheat state experienced the coldest April on record this year, according to Martell Crop Projections. "This explains the delayed snowmelt and cold soil temperatures that set back spring planting," they say. Further south in the winter wheat states "hard red winter wheat experienced freezing temperatures in several cold outbreaks in April and May. How much wheat may have been damaged is still unknown. Kansas wheat has stabilised, but yield potential is still severely reduced by drought and freeze effects with 28% good-excellent, 31% fair and 41% poor-very poor. Poor Kansas wheat ranks among the 15% of worst years on record (out of 28 growing seasons)," they add. Informa reduced their US spring wheat acres by 300 thousand to 12.4 million acres. Although up from last year, that's lower than the March USDA planting intentions report. Elsewhere the market is watching to see if the forecast rains for Ukraine and the Russian winter wheat areas in the south turn up. There's also rain in the forecast for Australia. "Rains across South Australia on Monday, and across southern Queensland and New South Wales Tuesday and Wednesday of next week, will finally begin to replenish moisture which will benefit winter wheat germination and early growth," say MDA CropCast. Meanwhile Turkey was said to have offered wheat at around a USD30/tonne discount to French wheat in it's tender. Jul 13 CBOT Wheat closed at USD6.83 1/4, down 4 1/2 cents; Jul 13 KCBT Wheat closed at USD7.37 1/4, down 6 1/4 cents; Jul 13 MGEX Wheat closed at USD8.03 3/4, down 1/4 cent. For the week that puts Jul 13 CBOT wheat down 26 1/2 cents, with KCBT wheat down 21 3/4 cents and MGEX down a more modest 5 cents.
17/05/13 - Friday was another bad day at the office for London wheat, particularly old crop, which has now slumped almost ten pounds in the past three sessions. There's been a bit of debate around for some time as to whether old crop prices would come down to meet new crop, or if the latter would rise to meet the former. Now it looks like we have the answer.
London wheat closed with front month May 13 down GBP3.75/tonne to GBP181.50/tonne and new crop Nov 13 down a more modest GBP0.50/tonne to GBP178.85/tonne. Paris wheat closed with front month Nov 13 EUR2.25/tonne easier at EUR206.25/tonne.
For the week overall it's been pretty brutal for May 13 London wheat which is down GBP9.75/tonne, with all of those losses coming in the last three days of the week. New crop Nov 13 fared somewhat better, closing the week GBP2.65/tonne lower in London and down EUR2.50/tonne in Paris.
For May 13 London wheat this was the lowest close on the weekly chart since the last week of June 2012. For new crop Nov 13 London wheat it was the lowest close on the weekly chart since mid-October 2012.
Note that Nov 13 Paris milling wheat closed at a sterling equivalent of under GBP175.00/tonne, making London feed wheat still a premium of almost GBP4.00/tonne to it, despite this week's losses.
Brussels issued 213 TMT of soft wheat export licenses this week. Whilst the pace is finally slowing, year to date exports for 2012/13 stand at 17.4 MMT, up over 47% versus year ago levels. As wheat pours out of Europe though, corn pours in. Corn imports currently stand at 9.85 MMT, an increase of more than 100% compared with last season.
As far as crop conditions at home are concerned, "there is certainly a sense of improvement over the last month. Bare patches aside, many winter cereal crops are now seen in good condition, although development is still delayed," said the HGCA. "The situation is less clear for winter oilseed rape," they noted. Indeed it is.
Across the Channel FranceAgriMer report the percentage of winter wheat displaying 2 nodes is up from 74% a week ago to 93% as of May 13, although still a little behind the 99% of a year ago. The crop is 8% headed versus 27% this time last year.
Winter barley at the headed stage is up from 12% a week ago to 46%, although again this lags last year's proportion (when all the crops were particularly forward) of 89%. Spring barley displaying an ear of at least 1cm is 45% versus 19% a week ago and 88% in 2012. Corn planting has advanced from 67% last week to 81%, which is actually marginally ahead of year ago levels of 79%.
The proportion of French winter wheat rated good/excellent increased one percentage point on last week to 67%, versus 69% a year ago. Winter barley good/excellent was also up a point on last week to 67%, versus 62% in 2012. Spring barley rated good/excellent was unchanged on a week ago at 80%, versus 89% this time last year.
In international news Iran's wheat imports are forecast to plunge to just 1 MMT in 2013/14, compared with 6 MMT this season. Officials say that nearly half of the 2012/13 imports were for rebuilding government-owned stocks and that this year’s production outlook is also set to improve significantly from year ago levels.
Next week's price direction is likely to be governed by the weather. The trade is expecting big strides to have been made with US corn planting, possibly record strides, when the USDA issue their weekly crop progress report on Monday night. Planting as of last Sunday night was 28% done, trade estimates put this week's figure at anywhere between 50-70% complete.
Needed rain is in the forecast for Russia and Ukraine, with the latter set to get up to 2 inch totals between now and the end of the month. Crop conditions in Kazakhstan are said to be favourable.
16/05/13 -- Soycomplex: The USDA's weekly export sales report gave us net sales of 15,300 MT of old crop soybeans along with 346,600 MT of new crop. In line with expectations for sales of a combined 2-600 TMT. Net old crop commitments are 99.3% of the USDA target for the season, and 94% of that is already shipped with 3 1/2 months still left to go. Soymeal export sales were stronger than expected at 192,500 MT. MDA CropCast estimated China's 2013 soybean crop at 11.81 MMT down 180,000 MT from last week and down 3.4% on last year. CNGOIC estimated China's June soybean imports at 7.0-7.5 MMT, placing July imports at "above 6.0 MMT" and forecast both August and September shipments at 5.0 MMT each. Argentine farmers continue to hoard soybeans as a hedge against inflation and the weakening peso. The Argentine Ag Ministry said that farmers there have only sold 6.1 MMT of their new crop soybeans, down more than 40% on this time last season. Fund buying in beans was estimated at a net 5,000 contracts on the day. Jul 13 Soybeans closed at USD14.27 1/2, up 14 3/4 cents; Jan 14 Soybeans closed at USD12.24 3/4, up 7 3/4 cents; Jul 13 Soybean Meal closed at USD414.90, up USD4.40; Jul 13 Soybean Oil closed at 49.52, up 17 points.
Corn: Corn export sales came in at 219,900 MT of old crop and a modest 38,600 MT of new crop, at the low end of trade forecasts for a combined 2-400 TMT. The US now has 87% of the USDA target for the season on the books, with a third of that target shipped so far. A report on Reuters said that 2 MMT of South American corn is scheduled to be shipped to the US between now and August. South Korea's Kocopia bought 55 TMT of Brazilian corn for August shipment. MDA CropCast forecast the world corn crop up 12.8% in 2013/14 led by a near 30% hike in US production. They increased their projections for output in Ukraine, Russia, Europe and Argentina versus last week. They also forecast the world barley crop up nearly 7% to 135.9 MMT this year. For US corn "rains were much more limited this past week, which allowed planting to increase considerably. However, rains should now build back across the region, and planting progress will slow a bit, especially in south central and northwestern portions of the Midwest. Planting should progress well in far northeastern areas," they said. Funds were estimated as net sellers of around 8,000 corn contracts on the day. Jul 13 Corn closed at USD6.41 1/2, down 9 1/4 cents; Sep 13 Corn closed at USD5.53 3/4, down 9 3/4 cents.
Wheat: The wheat market fell in line with corn. MDA CropCast increased their estimate for 2013/14 world wheat production by 6 MMT from last week "due mainly to increased acreage and yield expectations in the U.S, EU-27, and FSU." They also upped potential Canadian output by 2.1 MMT from last week to 29.7 MMT, an increase of 12.5% on last year. In Canada this week "the lack of widespread rains allowed spring wheat planting to progress very well," they said. US weekly export sales for wheat were 125,000 MT of old crop and 415,600 MT of new crop versus trade forecasts of a combined 2-500 TMT. The US now 95.7% of the USDA target for the Jun/May 2012/13 marketing year on the books. With only a few weeks remaining to the end of the 2012/13 season though there's still 2.3 MMT worth of outstanding sales left unshipped, meaning that it looks likely that there will be some carryover of sales into 2013/14 and the USDA target of exports of 28 MMT this year is unlikely to be met. Bangladesh bought 50 TMT of optional origin wheat, possibly Indian, for June shipment. Japan bought a 147,620 MT combo of US, Canadian and Australian wheat for June–Aug shipment. Fund selling in CBOT wheat was estimated at a net 2-3,000 contracts on the day. Jul 13 CBOT Wheat closed at USD6.87 3/4, down 6 cents; Jul 13 KCBT Wheat closed at USD7.43 1/2, down 8 1/4 cents; Jul 13 MGEX Wheat closed at USD8.04, up 1/4 cent.
16/05/13 -- EU grains closed lower as production prospects around the world improve. MDA CropCast today increased their global wheat production estimate by 6 MMT from last week, upping their coarse grain forecast by 12.7 MMT from a week ago and raising their world oilseed output forecast by 6.6 MMT versus last Thursday.
May 13 London wheat finished GBP4.00/tonne lower at GBP185.25/tonne and new crop Nov 13 ended GBP2.70/tonne weaker at GBP179.35/tonne. Nov 13 Paris wheat settled EUR1.75/tonne easier at EUR208.50/tonne. For Nov 13 London wheat a close at this level tomorrow would be the contract's lowest close on the weekly chart since mid-October. Even so, Nov 13 London feed wheat is still priced at a premium to Nov 13 Paris milling wheat.
Despite a steady decline since early November, London what has actually fared significantly better than US or French grain during this period. Front month London wheat is "only" down 16% since Nov 8, versus a decline of 25 % in Paris and 24% in Chicago.
Germany's DRV increased their 2013 grain production estimate from 44.4 MMT last month to 45.5 MMT this time round. Their all wheat crop estimate was 23.8 MMT, up 6.1% on last year, with the 2013 OSR crop forecast at 5.36 MMT, an 11.6% increase on 2012.
Ukraine's 2012/13 grain exports currently stand at 21.27 MMT, up 13.8%, and will reach 24.4 MMT by the end of the season, according to the local Ministry. May 1st grain stocks were 8.4 MMT, down 39% on year ago levels.
The leading French grain hub of Rouen exported only 87,774 MT of grains in the week through to Wednesday, down 58% on last week, The total included 55,245 MT of soft wheat, most of which (50,845 MT) was headed for Algeria and the rest (4,400 MT) is coming to the UK.
MDA CropCast forecast the world wheat crop at 680.2 MMT in 2013/14, up nearly 7% on last year. The EU soft wheat crop was pegged at 131.3 MMT, a rise of 3.7% on 2012. They forecast the world corn crop at 912.4 MMT, up 12.8 MMT on last week and up 11.4% on year ago levels. They see the EU barley crop at 54.7 MMT, up 3.8% on last year.
Expectations for much needed rainfall for this weekend and early next week for the drier areas of Ukraine and Russia also had the market under pressure today. MDA CropCast have the Russian wheat crop at 52.5 MMT (up 39% on last year), the Ukraine crop at 20.6 MMT (up 33%) and Kazakhstan output at 15.0 MMT (up 55%) in 2013.
Comments back from people on the ground over there are Ukraine: "About normal for winter cereals and rape; some good, some not so good" and in southern Russia: "1st wheat looking OK, 2nd wheat looking average. More wheat than last year but definitely not a bumper crop."
Bangladesh bought 50,000 MT cargo of optional-origin wheat from Indian trading house Amira Foods, suggesting that India may be finally capitulating in the face of declining global wheat prices.
-- The USDA's weekly export sales report gave us net sales of 15,300 MT of old crop soybeans along with 346,600 MT of new crop. In line with expectations for sales of a combined 2-600 TMT. Soybean shipments slowed to 167,600 MT. Even so, total commitments are 99.3% of the USDA target for the season, and 94% of that us already shipped.
Corn sales came in at 219,900 MT of old crop and a modest 38,600 MT of new crop, at the low end of trade forecasts for a combined 2-400 TMT. Shipments were so-so at 298,500 MT. The US now has 87.2% of the USDA target for the season on the books, with a third of that shipped so far.
Wheat sales were 125,000 MT of old crop and 415,600 MT of new crop versus trade forecasts of a combined 2-500 TMT. Actual shipments were a decent 726,800 MT as the end of the marketing year approaches. There's still 2.3 MMT worth of outstanding 2012/13 wheat sales however. Shipments plus outstanding sales total 26.8 MMT, or 95.7% of the USDA target for the Jun/May marketing year.
16/05/13 -- Little more than a week ago I was sat here in the office sweating my bollocks off and looking up mobile aircon units on the internet, and now it's snowing in Devon! The papers are loving it of course, being full of the usual shite that they trot out when they've got nothing better to do.
"Forecasters predict a repeat of last year's wash-out summer," from the Daily Mail. "Another washout summer on its way as forecasters predict grey skies and more rain," from the Express.
Interesting then to take a shuftie at these weather maps from the US National Weather Service forecasting a drier than normal summer. Here they are on a month by month basis:
They even take us through to the autumn and early winter:
Of course they may know Jack Shit, like the Express and the Mail, but it gives us something to pin our hopes on though doesn't it? Cue "I don't want it to be that dry" emails.....
16/05/13 -- Rapemeal prices on the continent are mixed, with the main feature of note being changes in the Jul 13 position as it adjusts to being somewhere between old and new crop. DRV said yesterday that the German rapeseed crop would come in at 5.36 MMT this year, an increase of 11.6% on last year.
Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session: