.....Kraft Posts Cadbury Offer.
Are they mad? Haven't they heard of email? Kraft Twitters Cadbury Offer might have been a safer, more reliable option.
I can see the headlines in six months:
Hershey Ferrero Cadbury CEO: "What offer?"
One Year's Time:
Kraft Offer Found Stuck To Back Of Radiator In Birmingham Sorting Office - Post Office Offer Full 39 Pence Refund.
January soybean futures closed at USD10.43, down 4 cents; December soymeal at USD320.90, down USD0.60; December soyoil at 39.76 cents, down 0.01 points. Soybean prices closed lower on the day and slightly lower for the week. News that the US jobless rate unexpectedly fell from 10.2% to 10% last month sent the dollar higher. The news also sent gold crashing more than USD65/oz, after reaching a succession of daily highs all this week. Crude oil also fell, which all combined to drag the grains complex lower.
December corn futures finished at USD3.73 ¾, down 11 ½ cents; March corn futures at USD3.88 ½, down 12 ¼ cents. The combo of stronger dollar, weaker crude and gold also dragged corn lower Friday. With more than a fifth of US corn still to be harvested as of last Sunday, the USDA will report Monday night on how much progress has been made this past week. Field losses will mount the longer corn harvesting is strung out in December, as stalks weakened by mould are prone to leaning and toppling over. Research by Ohio State University agronomists indicates that December harvesting causes corn losses of 15-20%, say Martell Crop Projections.
December CBOT wheat futures closed at USD5.36 ¾, down 13 cents; December KCBT wheat futures at USD5.36, down 12 ½ cents; December MGEX wheat futures at USD5.48, down 13 ¾ cents. This was the day in succession of declines for wheat. The dollar and outside markets also pressed wheat lower, along with news that US wheat again lost out to Russian/German wheat in Egypt's latest tender. Reports that some US wheat was sold to Brazil in Thursday's USDA weekly export sales report was a promising sign, as they are one of the world's largest buyers. With Argentina in the midst of their second disastrously small crop in succession, Brazil will be forced to look elsewhere for much of it's requirements in 2010.
EU wheat closed the week narrowly mixed in another very quiet trading session Friday.
March Paris milling wheat futures closed down EUR0.50 at EUR133.50/tonne, and London May feed wheat futures ended up GBP0.20 at GBP112.70/tonne.
Trading in London was particularly light, with less than fifty lots traded all day. An assortment of trade functions Thursday/Friday have been keeping traders away form their desks for much of the past two days.
A weaker tone to the US market in the absence of fund support this week has also added a little bit of downwards pressure.
In short, there doesn't seem like there will be much activity now until the new year, and we will probably see futures trade only EUR1-GBP1/day either way until after Christmas.
After that London wheat's best hopes of a price increase rest on a significant pick-up in demand. This is going to have to come from the bioethanol sector and/or a sharp decline in the value of the pound.
Complete inactivity from the Indian government to help arrest spiraling prices has seen food price inflation at the wholesale level rise 17.47 per cent for the third week of November, up from the previous week's yearly rise of 15.58 per cent.
This followed a surge in the price of basics such as potatoes and onions, which were up 94.17 per cent and 30.89 per cent respectively year-on-year. Pulses were up 37.83 per cent, reports the Hindu Business Line.
The constant stream of rhetoric from the government, insisting that "there's plenty of food to go round, don't panic" must be starting to wear quite thin by now.
And where the hell is that key to the key to that bloody wheat shed??
In contrast to most countries, where 2009/10 grain output is lower than 2008/09's record production, grain output in Turkey this year is seen sharply higher, due to increased plantings and favourable weather.
The Turkish Statistical Institute reports that the 2009 wheat crop in is up by 16% this year to 20.5 MMT (2008: 17.8 MMT). Barley production increased by an even greater amount, up 23% to 7.2 MMT (from 5.9 MMT), corn output was around unchanged at 4.3 MMT.
January soybeans ended 13 cents higher at USD10.47, December soymeal ended USD4.20 higher at USD321.50, and December soyoil finished unchanged at 39.75 cents per pound. Weekly export sales were pretty reasonable once again, although slightly below the levels that we've been used to at 722,600 MT, shipments themselves were also robust at 1,363,700 MT, with China again figuring prominently.
December corn ended down 6 1/2 cents at USD3.85 1/4 per bushel, and March corn ended 5 3/4 cents lower at USD4.00 3/4 per bushel. Weekly export sales of 659,000 MT were in line with forecasts of 400-900,000 MT. A weak dollar and firm outside markets were supportive, as too was talk that the US harvest continues to lag and that some soggy fields will be left until the spring.
March wheat finished down 4 1/2 cents at USD5.71 1/2 a bushel. Kansas City Board of Trade March wheat fell 3 1/2 cents to USD5.62, and Minneapolis Grain Exchange March wheat dropped 3 cents to end at USD5.77 1/4. Weekly export sales of 390,700 MT were in line with forecasts of 300-500,000 MT. Egypt once again passed on US wheat in it's tender buying Russian and German wheat.
EU wheat closed mixed Thursday, with little in the way of fresh impetus to influence prices one way or another.Paris March milling wheat futures closed up EUR0.50 at EUR134.00/tonne, whilst London May feed wheat futures ended flat at GBP112.50/tonne.
The trade seems to already have closed up shop for Christmas.
Stats Canada today pegged all wheat production there at 26.515 MMT, nearly 2 MMT up on their last September estimate.
Reports from Australia continue to indicate that a succession of 30+ degree days through much of November followed by very heavy rains have caused some issues with yields and quality.
Egypt reportedly bought 240,000 MT of Russian/German wheat in a tender today.
The overnight grains closed firmer with beans up around 9 cents, wheat around 5 cents higher and corn up 3 cents or so.
Support came from the weaker dollar, investor enthusiasm and gold hitting another all-time high.
News that the Bank of America would repay USD45 billion of TARP loans appears to have got investors back in the mood, which in turn sent the 'safe' dollar lower.
Crude initially dragged itself higher earlier, despite the US Energy Dept confirming yesterday what the API had said the day before, crude stocks rose by 2 million barrels last week to the highest levels since August. Gasoline inventories also rose by 4 million barrels, whilst fuel demand fell 3.2% year-on-year.
Crude has subsequently slipped from an intra-day high of USD77.50/barrel to currently stand at a little over USD76/barrel.
Weekly export sales were all in line with pre-report estimates. Whilst China again was the main protagonist for soybeans, booking 312,300 MT, activity was somewhat reduced from the very large numbers we have recently got used to seeing.
Even so we don't need to see many sales now to hit the USDA's soybean export target which is only up 3.5% from last year's record pace, yet sales so far are up 58% & actual shipments are up 33%.
The weather in South America remains a bit of a conundrum, too dry in the west of Argentina and too wet in southern Brazil and Uruguay. Brazil will continue to see heavy rainfall, as much as 16-inches, across the Center-West, Centre-South and the SE too, according to QT Weather.
Brazil popped up as a buyer in the USDA's weekly export sales for wheat, the US will be hoping that they might become a regular feature from now on.
Certainly they aren't getting much of a look in with the world's biggest wheat buyer Egypt. They've bought 240,000 MT of Russian/German wheat in a tender today.
Delivery intentions for corn have picked up a little from earlier in the week at 826 contracts, whilst wheat is a little lighter, although still plentiful, at 3,288 contracts.
Stats Canada say that all wheat production there was 26.515 MMT, nearly 2 MMT up on their last September estimate. Barley and rapeseed output estimates were also increased.
Reports from Australia continue to indicate that a succession of 30+ degree days through much of November followed by very heavy rains have caused some issues with yields and quality.
Early calls for this afternoon's CBOT session: corn called 2 to 4 higher; beans called 7 to 10 higher; wheat called 3 to 5 higher.
Where it will all end depends on funds and outside markets, support from crude has fallen away and fund activity has been confined to the beginning of the week recently. I'll call corn to end 3-5 lower, beans around unchanged to 4 higher and wheat 6-10 lower.
Stats Canada have today issued revised estimates for the 2009/10 crop year, increasing production forecasts for wheat, barley and rapeseed.
All wheat production is now seen at 26.515 MMT, nearly 2 MMT up on their last September estimate. Whilst an increase had been widely anticipated, that is a million tonnes more than what was expected, and now falls short of last season's record production of 28.611 MMT by only 7%.
Barley production is seen at 9.517 MMT they say, up from an earlier estimate of 9.164 MMT, and down 19% on last season's 11.781 MMT.
Rapeseed output this season is now pegged at 11.825 MMT, 1.6 MMT up on their previous forecast, although 6% down on last year's 12.642 MMT.
Both the barley and rapeseed numbers are towards the top end of trade estimates which were for 9.16 - 9.60 MMT and 10.50 - 11.80 MT respectively.
For the period November 20-26 the USDA report the following export sales:
Net sales of 722,600 MT were towards the low end of expectations of 650,000 MT to 1 MMT. Featured buyers were China (312,300 MT), Cuba (115,000 MT), Taiwan (112,900 MT), Turkey (69,300 MT), Egypt (65,600 MT) and the Netherlands (65,100 MT). There was also one small sale of 7,600 MT for delivery in 2010/11 for Mexico.
Exports of 1,363,700 MT were down 44 percent from the previous week and 26 percent from the prior 4-week average. The primary destinations were China (723,600 MT), Taiwan (145,300 MT), South Korea (113,100 MT), Egypt (65,600 MT), the Netherlands (65,100 MT), and France (63,400 MT).
Net sales of 659,000 MT were in line with forecasts of 400-900,000 MT. The main buyers were Japan (295,200 MT), South Korea (262,800 MT0, Taiwan (112,300 MT) and Saudi Arabia (95,500 MT).
Exports of 879,500 MT were up 40 percent from the previous week and 27 percent from the prior 4-week average. The primary destinations were Mexico (177,600 MT), South Korea (172,100 MT), Japan (164,500 MT), Taiwan (155,500 MT) and Saudi Arabia (95,500 MT).
Net sales were 390,700 MT, in line with forecasts of 300-500,000 MT. The main homes were Japan (113,700 MT), Iraq (100,000 MT) and Nigeria (56,000 MT). It was also interesting to see Brazil (23,800 MT) feature.
Exports of 385,000 MT were down 8 percent from the previous week and 7 percent from the prior 4-week average. The primary destinations were Japan (60,800 MT), Yemen (42,100 MT), the Philippines (38,300 MT), Spain (36,800 MT), Nigeria (31,200 MT) and South Korea (26,900 MT).
Who says we can't teach the French a thing or two about culinary finesse and fine dining?
The garlic-eating surrender monkeys can't get enough of proper gourmet British foods like baked beans, jelly babies and crisps!
They're flying off the shelves in Paris apparently according to the Telegraph.
What other delights can we export them, marmite, pot noodle and chicken tikka masala?
The Rural Payments Agency says that it has already paid around 80% of claimants under the Single Farm Payment Scheme since the payment window opened on Dec 1st.
That's a darn sight better than their performance last year, when three people had been given some loose change that the RPA had found on the bus.
They say that 86,500 farmers out of the 107,500 claimants have already been paid around GBP1.31 billion, which averages out at GBP15k a throw if you're interested.
That should pay a few bills, and if there's anything left over maybe treat Mrs Farmer to a trip to the Ann Summers shop in town for some nice underwear and 'things'?
I always had trouble undoing Mrs Nogger#1's bra (unlike the lads from the rugby club), that was until I realised it was completely different to the ones my gran used to wear.
Still, to be fair I DID feel guilty about grinding up those pills and putting the into my gran's tea every night for all those years, but I'd never have forgiven myself if she'd have got pregnant.
January soybean futures closed at USD10.34, down 25 ½ cents, December soymeal futures at USD317.30, down USD7.40, and December soy oil futures at 39.75 cents, down 83 points. A firmer dollar, lower crude and the absence of fund money drove prices lower today. Estimates for tomorrow's weekly export sales report range from 650,000 to 1,000,000 MT.
December corn futures closed at USD3.91 ¾, down 8 cents, and March corn futures at USD4.06 ½, also down 8 cents. With a significant amount of this season's corn crop still unharvested, there are legitimate concerns that some of it may not get brought in until the spring. USDA export estimates are 400 to 900,000 MT. The EPA frustrated the ethanol lobby hoping to get the E15 blend passed yesterday by deferring it's decision until 2010.
December CBOT wheat futures finished USD5.54 ½, down 8 cents, December KCBT wheat futures at USD5.51, down 5 ¾ cents and December MGEX wheat futures at USD5.63 ½, down 4 ¼ cents. Export estimates for tomorrows weekly export sales report range from 300 to 500, 000 MT. Japan is expected to buy 105,000 MT of US wheat in a tender tomorrow, along with a smaller quantity of Australia/Canadian wheat.
EU wheat futures edged lower Wednesday in quiet trade with London January feed wheat ending GBP0.55 lower at GBP107.50/tonne, and Paris January milling wheat down EUR0.75 at EUR131.50/tonne.
EU wheat is giving all the signs of having packed up and gone home for the Christmas holidays already.
At this very early stage in the game the outlook for 2010 wheat prospects look pretty good, crop conditions in Ukraine have improved significantly over the last few moths. UkrArgroConsult say that, after an early scare, 85% of the country's grain crops are now in good to fair condition.
In the UK, things look markedly better than they did twelve months ago, and wheat plantings for next season are seen up about 10%, to around 2 million hectares.
That potentially gives us a crop of around 16.0-16.5 MMT next season, up 2.0-2.5 MMT on this year, and more than enough to cope with any extra demand from the likes of Ensus.
Even IF Vivergo starts up on time, and that is a mighty IF, then we would still be in a similar supply/demand situation for 2010/11 as is currently the case.
I'm getting the word SELL!
Now I fully realise that some of my regulars might not like this concept, but I don't ever recall issuing the recommendation: PLANT! either.
Check out what my Uncle Alf had to say back in September: here
From the thoroughly excellent Martell Crop Projections:
Midwest corn harvest is late: US corn harvesting was 79% complete November 28 and advanced only 11% in the week. The trade expected faster harvesting since Midwest weather was generally dry. The slowest harvesting continues in the Northern Midwest and Illinois. Freeze damage may be a culprit in reducing yields and slowing crop drying. Corn test weights are reportedly low, 50-54 pounds per bushel , compared with 56 pounds normally, indicating smaller lightweight kernels.
Cold, damp weather settling in: A much colder weather pattern is developing, compared with exceptional November warmth. The jet stream will dig a trough in southern United States this weekend, funneling cold polar air into Central United States driving temperatures 10-15 F below average in the next 2-3 days. At the same time, a storm track will develop from Texas to Ohio producing dismal damp weather with soaking rainfall. The swath of .5-1 inch rains would affect SE Missouri, Arkansas, Illinois, Indiana and Ohio the next 3 days. Lighter rain is a risk in northern Illinois, SE Wisconsin and Michigan. This is not a welcome forecast for facilitating crop drying and harvesting.
Wheat going dormant: Very cold temperatures in the Great Plains will drive wheat into dormancy. The Texas panhandle will have snow flurries tonight and Thursday and overnight lows in the in the 20s F. Once clearing occurs temperatures may drop into the teens F. Wheat development has advanced nicely with warm November weather in the bread basket states. Kansas growers struggled to get wheat planted due to frequent rain delays this fall that created wet field conditions. If there is a problem with slow development it would be in the nation's biggest wheat state, where planting was still not finished December 1. Typically yields are reduced when the fall growth period is cut short.
The overnight grains closed slightly lower with beans down 4-5 cents and wheat and corn 1-2 cents easier.
Crude is lower ahead of the US Energy Dept's weekly inventories data. Yesterday the American Petroleum Institute pegged US crude stocks 2.9 million barrels higher last week.
The EPA frustrated the ethanol lobby hoping to get the E15 blend passed, deferring it's decision until 2010.
In the US rain and light snow showers continue to hamper farmers' efforts to get the corn crop finished off. As the harvest drags on delivery notices remain light for corn at 481 contracts but much heavier for wheat at 4,560 contracts.
Japan is expected to buy 105,000 MT of US wheat in a tender tomorrow, along with a smaller quantity of Australia/Canadian wheat.
Soft red winter wheat production remains under threat with less than half the crop rated good/excellent entering winter dormancy with under-developed roots, say Martell Crop Projections. That's the second lowest proportion of the crop rated in the top two categories at the beginning of December since at least 1986, they add.
In complete contrast half of the US winter wheat crop is off to a great start. Kansas, Oklahoma and Nebraska have seen decent precipitation and far above normal temperatures leaving early conditions 68% good to excellent in Kansas and Nebraska, and 79% across Oklahoma, say QT Weather.
Tomorrow's USDA weekly export sales will be interesting to see if soybean sales are still holding up, and how exports have fared since last week's large 2.4 MMT set sail.
There was very little sign of the anticipated Dec 1st fund activity yesterday, will they be in today, or have they gone off the idea?
Early calls for this afternoon's CBOT session: corn and wheat called 1 to 3 lower, with soybeans called 2 to 5 lower.
US ethanol production reached 914 million gallons in September 2009, the first month of marketing year 2009/10 (Sept/Aug), say the US Energy Information Administration (EIA).
That's a 13% increase in the 806 million gallons produced in September 2008 and required 325 million bushels of corn (2008: 287 million bu).
Around a third of this year's entire US corn crop is expected to go into ethanol production.
The Environmental Protection Agency yesterday refused to bow to pressure from US ethanol producers and increase the maximum inclusion rate of ethanol in gasoline from 10% to 15%.
The EPA said it needed more time to assess the effect of an increase on the environment, and subsequently delayed a decision until next year.
Cynics say that it might not really be the environment that they are most concerned about in litigation-happy America. They are looking to Congress to protect them from potential lawsuits from car and boat owners against damage to their engines should a blend increase get approved.
A petition from the ethanol industry trade group Growth Energy argued that increasing ethanol levels are safe, and that the ethanol industry is being undermined and economically disadvantaged by this uncertainty fell on deaf ears. I don't know how they kept a straight face when they put that argument together, but that's another matter.
It would seem that when the EPA said to them "well if you're that confident then you won't mind signing here and absolving us for any liability against litigation" - Growth Energy suddenly remembered that they'd left the kettle on and had to dash.
According to the Ag Ministry the Ukraine harvest is just about over, producing 47.8 MMT in bunker weight, which will amount to around 46.2 MMT in clean weight, they say.
That's a decrease of 13.3% on last season's output of 53.3 MMT, but better than had been expected earlier in the season when production was estimated at 42-43 MMT by the Ministry.
In bunker weight the Ministry peg wheat production at 21.6 MMT, down 19% from last season's 26.7 MMT, and barley output at 12.7 MMT (-5% from 13.4 MMT).
That implies clean weight production of around 21 MMT (2008: 25.9 MMT) of wheat and 12 MMT (2008: 12.3 MMT) of barley. Back in the summer wheat output was estimated at only around 18.5 MMT and that of barley at around 9.8 MMT.
Grain exports continue to run ahead of last season, despite this year's lower output. In the first five months of the marketing year (to 30 Nov) Ukraine exported 11.3 MMT of grains say the Ministry, an increase of 7% on 2008.
Wheat exports currently stand at 5.7 MMT (2008: 5.6 MMT) and barley exports at 3.54 MMT (4.2 MMT). Corn exports are sharply higher at 1.93 MMT (0.74 MMT). Rapeseed exports are 26% down at 1.4 MMT, they add.
Total grain exports for the full marketing year are seen at around 20 MMT (2008: 25.2 MMT).
UkrArgroConsult say that, after an early scare, 85% of the country's grain crops are now in good to fair condition, after cooler and wetter weather during October and November improved their outlook considerably.
Dec corn ended down 3 cents, just below the psychologically important USD4/bushel level at USD3.99 3/4 per bushel, and March corn ended 3 cents lower at USD4.14 1/2 per bushel. Private exporters announced sales of 116,000 MT of corn to unknown destinations this morning and 270,000 MT was switched from unknown to South Korea yesterday afternoon. The US Environmental Protection Agency decided to defer a decision on increasing the maximum amount of ethanol blended with gasoline from 10 percent.
Jan soybeans ended 1 cent lower at USD10.59 1/2 a bushel, Dec soymeal ended USD2.10 lower at USD324.70 and Dec soyoil finished 39 points higher at 40.58 cents per pound. Weather conditions in Argentina are improving, although estimates for next season's crop are still widely varied. Rains increase again across Argentina this week, now expected to leave widespread inch totals and two to three inches across key southern areas. Four to six inches will cross northeastern provinces into South Brazil, say QT Weather.
CBOT March wheat closed down 4 3/4 cents at USD5.84, KCBT March wheat fell 3 1/2 cents to USD5.71 1/2, and MGE March wheat dropped 3 cents to USD5.84 3/4. Export inspections for November 26th were 399,361 MT, a significant decrease from last week and last year. Japan is in the market for 145,000 MT of wheat, of which 105,000 MT will be pf US origin. The USDA said yesterday that in the SRW wheat state of Illinois planting still lags at 92% versus 100% normally, along with Indiana at 93% (100%) and the worst affected state of Missouri being only 69% planted (95% normally).
Paris January milling wheat futures closed up EUR0.75 at EUR132.25/tonne, and London May feed wheat futures ended up GBP0.50 at GBP113.50/tonne.
Once again there hasn't been a lot of change or fresh fundamental news. Sellers largely seem to have shut up shop until the new year, so what spot buyers are around need to pay up or make alternative arrangements.
There is still no great shortage of wheat, just a shortage of willing sellers. In the UK spot prices have now moved up the best part of GBP20-25/tonne from post harvest lows set in early September. That's a fair old bit of cash.
I'm inclined to think that that might be close to as good as it gets. If I was a wheat grower then I'd be looking to put some sales on at these levels, for both old and new crop. Nov '10 feed wheat futures closed tonight at GBP116.40/tonne, not that long ago Nov '09 was around GBP91/tonne, as you probably know I was swimming against the tide by not advocating selling then.
Now that looks like a pretty decent premium, if growers didn't think that it was big enough one then they could always have tried planting less. Unfortunately they haven't, improved planting conditions and the lack of demand for barley have seen to that.
Origin Enterprises, the owner of the Masstock agronomy chain, peg UK wheat plantings for next season up 10% to around 2 million hectares according to Agrimoney.com. That's an increase of 200,000 hectares and yield prospects have got to be better than last season after wheat was sown in appalling conditions.
On the other hand you could always leave it until after Christmas, when everyone else awakens from their post-festive slumber and becomes a seller too.
John Maynard Keynes (1883 - 1946) upon being questioned by a reporter about changing his mind on an issue responded by saying:
When the facts change, I change my mind - what do you do, sir?
The overnight grains closed with soybeans around 10-12 cents higher and wheat and corn around unchanged.
The dollar is weaker and crude oil a bit firmer. Tensions in the Middle East following the seizure of five British sailors by Iran, and reports that it was to press ahead with it's decision to build 10 new uranium enrichment plants, are proving supportive for crude.
The USDA report that 21% of the US corn crop was still to be harvested as of Sunday, 4% of soybeans are still left in the field and wheat planting is now 96% done.
On the weather front "rain and snow will fall on Illinois and Indiana’s yet to be harvested corn crop Wednesday along with some gusty winds too. The good news is that freezing temperatures and drier weather will follow this storm from Thursday through next Monday, hardening, freezing and drying to bring home the corn crop," say QT Weather.
That particular weather scenario will, however, do little to help get the last remaining 7-8% of planned SRW wheat acres into the ground in those two states.
Private exporters today reported to the USDA export sales of 116,000 MT of corn for delivery to unknown destinations during the 2010/2011 marketing year.
The US Environmental Protection Agency are due to make an announcement sometime today regarding a proposal to increase the maximum amount of ethanol blended with gasoline from 10 percent. If they were to agree to a hike to 12 or even 15 percent then that would be construed as bullish for corn demand.
The EU approving the import of Sygenta GM corn variety MIR6045 is also seen as friendly for corn and soymeal.
It would not be an enormous shock to see fund money flowing back into agri-commodities today, the first of the month. They maybe don't need an excuse but the EPA could give them one anyway.
Despite a lack of demand and ample supply wheat just seems to be going along for the ride.
Early calls for this afternoon's CBOT session: corn called and wheat called steady to 2 higher; soybeans called 7 to 10 higher.
Basis FOB Hamburg/Lower Rhine in euros/tonne:
May/1st h Jly 127,00
Aug/Oct 10 124,00
Nov/Apr 11 133,00
A malting barley futures contract will begin trading in Liffe/Euronext from early 2010 (with Nov '10 the first month offered), according to media reports.
The contract has been almost two years in the making, as different parties quibbled over the exact contractual specifications.
Incograin - Paris' trade association of commerce and grain - wanted a more "flexible" spec than the maltsters, which would potentially allow any old floor sweepings to be delivered against the contract.
Fancy that, the French being difficult eh?
It would seem that after months of prevarication a spec of min 95% germination, max 14.5% moisture and max 11.5% protein have finally been agreed for a futures contract basis delivery to Antwerp/Ghent.
Let's hope it proves more successful than the last barley futures contract we had, London barley futures ceased trading in 2003. Who remembers them? I'd been in the trade for six months before I realised the contract wasn't called "London barley - no lots traded today".
They may have timed things just right with EU barley intervention closing next summer.
Gold has hit another all-time high today, breaking through USD1,200/oz for the first time ever, as the dollar resumes it's downwards spiral.
Fund buying has helped drive the yellow metal to new highs, after briefly slumping to around USD1,140/oz late last week on profit-taking and a bought of the Dubai Jitters.
As fears over Dubai World defaults ease, and we enter a new month, the funds are back in. Will it be the ags turn this afternoon?
Russian analysts SovEcon say that despite a wheat crop 5% lower than last season's production, milling wheat volumes have remained largely unchanged in 2009.
They currently peg this season's all wheat production at 60.5 MMT (63.8 MMT in 2008), but say that milling wheat will account for a similar volume as last season at39-40 MMT of that. This leaves feed wheat output this season at around 20-20.5 MMT, down around 15% on last season's 24 MMT, they say.
The sixty million dollar question today has to be what sort of mood are the funds going to be in this afternoon? Now that we are into December, they should have had chance to fully digest recent market events along with their Thanksgiving Day turkey.
Recent developments include the "Dubai Jitters", the EU approval of Sygenta GM corn variety MIR6045, last Friday's USDA weekly export sales and shipments plus last night's harvest/planting progress.
The Dubai situation seems calmer today, as Dubai World have announced that they are in restructuring talks over USD26 billion of debt, that's less than half of the kind of money that was being bandied about last week.
Meanwhile Dubai’s ruler and United Arab Emirates Prime Minister Sheikh Mohammed Bin Rashid Al Maktoum has said that last weeks comments by the country's government, which appeared to suggest that they were distancing themselves from Dubai World's problems, had been "misunderstood".
Initial fears that Dubai World might be left to stand, or possibly fall, on it's own two feet appear to have been allayed. Subsequently the sudden rise in popularity of the dollar that we saw late last week has evaporated, and the downtrend looks set to continue.
That will help crude oil, which also has steadied following news emerging over the weekend of the capture of another supertanker by Somali pirates.
Last week's USDA export sales for soybeans were what we've become used to at 1.1 MMT, the surprise was the volume of actual shipments - almost 2.5 MMT with over 1.8 MMT destined for China.
Another supportive factor for soybeans (and corn) was the news that the Chinese government would support domestic prices at the equivalent to a generous USD548/tonne and USD220/tonne respectively.
Yesterday's news that the sloth-like EU Commission had finally approved Sygenta GM corn variety MIR6045 for import may also provide a shot in the arm for corn as it will now also potentially allow the resumption of EU imports of DDGS and Corn Gluten Feed. In addition, the possible "contamination" of US soybeans/meal with traces of this GMO corn variety is now no longer a threat, which could boost US exports further.
Another potentially very supportive factor for corn would be if the US Environmental Protection Agency were to raise the maximum amount of ethanol blended with gasoline from 10 percent by volume now. The EPA is expected to make an announcement today over an industry request to boost that to 15 percent. That seems unlikely, but some analysts are hoping for a compromise of 12 percent to get approved. With around a third of this season's US corn crop destined for ethanol production already, that would have a significant impact on further increased demand.
There's a fair bit of ammunition there, should the funds decide that they need it, to encourage some new money to come into the market at the start of the month. Time will tell.
The USDA report that 79% of the 2009 US corn crop has now been harvested, up 11 points from last week, but still well behind the five year average of 97% complete.
Illinois is only 72% done versus 99% normally, with Indiana running at 84% (98% normally) and the poor old Dakotas at just 58% in SD and 40% in ND (normally 96% and 89% respectively).
The soybean harvest is finally just about back on schedule at 96% complete, versus 98% normally. In Illinois 4% of the crop is still in the field compared to it being fully harvested normally at this time of year. Kansas also lags at 90% compared to 97%.
Winter wheat is 96% planted, versus 98% on the five year average. Top producing state of Kansas is 96% done, whereas wheat is normally fully planted here by now. The SRW state of Illinois lags at 92% versus 100% normally along with Indiana at 93% (100%) and the worst affected state of Missouri being only 69% planted (95% normally).
January soybean futures closed 7 ½ cents higher at USD10.60 ½. December soymeal futures ended 30 cents higher at $USD26.80, with December soyoil futures at 40.19 cents, up 9 points. The dollar was weaker, as concerns over Dubai eased following the announcement from the UAE that it would underwrite it's lenders in the event of any defaults. Whilst soybean demand has been incredible so far this marketing year, the USDA reported only 41.268 million bushels of soybeans were inspected for export last week, below trade estimates of 50-70 million.
December corn futures closed 5 ½ cents higher at USD4.02 ¾. A weaker dollar and firmer crude oil were supportive for corn, as too was talk that the recent run of terrible US weather will lead to quality issues this season. Only three corn contracts were put up for delivery on first notice day today, which seems to back up the theory that quality is a real concern. The USDA reported 23.751 million bushels of corn were inspected for export last week, slightly below trade estimates ranging from 27 to 34 million. Support came from news that the EU Commission had approved Sygenta GM corn variety MIR6045 for import.
Wheat was the strongest leg of the complex for once, with December CBOT wheat futures closing 18 ¾ cents higher at USD5.67 ½. KCBT December wheat ended 17 ¾ cents higher at USD5.60 ½, and MGEX December wheat gained 16 cents to end at USD5.69 ¾.The USDA reported 14.674 million bushels of wheat were inspected for export last week, which fell towards the low end of trade estimates ranging from 14 to 19 million. Fund buying was a feature today, with wheat perceived to be the the cheapest of the three main players in the complex.
EU wheat futures closed higher Monday with Paris January milling wheat futures up EUR0.25 at EUR131.50/tonne and London January feed wheat GBP0.75 higher at GBP108.00/tonne.
It's December tomorrow and already many sellers seem to have shut up shop until the new year.
Consumers aren't exactly falling over themselves to buy, but those that do still need some cover are finding that they need bid a bit higher than they'd like to entice sellers to part with wheat.
Growers are hoping that the imminent opening of the Ensus bioethanol plant on Teesside will generate some much-needed demand, and are largely holding out for better prices yet.
It is not however written in tablets of stone that they must use UK wheat, although not doing so would cast a shadow over the green ethos used to sell the idea to Joe Public.
In the UK less than 12,000 MT of barley so far offered into intervention as of Nov 26th, according to the RPA. EU-wide it's a different matter with 1.8 MMT of cereals, mostly barley (1.6 MMT) being offered up.
EU weather conditions are generally favourable, probably better than last year in most places, for a decent crop again next year.
Having remained relatively static for the past few months, fertiliser prices have risen quite steeply in the last week or so, with urea up by around USD15-20/tonne.
The overnight grains closed mostly firmer with beans around 6 cents higher and wheat up 7-8 cents. Corn was mixed, either side of unchanged.
Dubai fears have eased somewhat from Thursday/Friday, so the dollar is back down. Crude oil started off on a firm footing but is slipping away again now, down best part of a dollar at USD75.22/barrel.
Today is first notice day for deliveries against December CBOT contracts, there have been delivery intentions against almost 3,000 soyoil and 5,000 wheat contracts. Physical meal seems to be in short supply, with poor quality beans said to be causing a lack of availability of high protein meal.
That explains why meal was so strong relative to the rest of the complex on Friday, and why front month Dec is currently a USD13/tonne premium over Jan, which in turn is currently running at USD6/tonne over March.
There have only been three delivery notices on corn due to the lateness of the harvest and quality concerns over contract specs there too.
The USDA will report on harvest progress for corn and beans after the close tonight and also on winter wheat plantings.
Early calls for this afternoon's CBOT session: corn called mixed; soybeans called 4 to 6 higher; wheat called 5 to 7 higher.
Brazil pell Arg. Pel ETL/Sailed ETA Dest
Sea Prince 42000 27-30 Nov etd Amsterdam
Cielo di Savona 22000 27-30 Nov etd Ghent
Forestal Esperanza 20000+hp 4-7 Dec etd Amsterdam
United Challenger 40000+hp 17-Nov 6-Dec Amsterdam
Grain Harvester 34000+hp 23-Nov 8-Dec Amsterdam
Mary Georgia 43000 hp 22-Nov 8-Dec Rotterdam
Silver Pegasus 20000 18-Nov 9-Dec Rotterdam
Globulus 30000 23-Nov 11-Dec Rotterdam
Dyna Voyager 40000 28-Nov 12-Dec Amsterdam
Malaspina Castle 15000 hp 28-Nov 15-Dec Amsterdam
Aquitania 40000+hp 1-Dec 15-Dec Amsterdam
Hamburg 15000+hp 6-Dec 20-Dec Amsterdam
Agios Makarios 15000+hp 4-Dec 20-Dec Amsterdam
Selinda 25000 30-Nov 20-Dec Amsterdam
Eden Maru 10000 49000 30-Nov 21-Dec Rotterdam
Lucija 19000 30-Nov 22-Dec Rotterdam
Hokuetsu Ace 8000 25000 13-Dec 28-Dec Amsterdam
Basis CIF Rotterdam/Amsterdam unless otherwise stated:
Brazil pellets 48%
Argentine pellets 44/45%
Dutch Hipro 49% profat (FOB)
Argentine Hipro 49% profat
UK growers and traders don't seem tremendously impressed with current intervention levels thus far, with less than 12,000 MT of barley so far accepted into the scheme as of Nov 26th, according to the RPA.
EU-wide it's a different matter with 1.8 MMT of cereals, mostly barley (1.6 MMT) being offered up. The Danes have offered the largest amount with 0.6 MMT, followed by the French at 0.3 MMT.
Only 0.2 MMT of wheat has so far been offered, mainly from Eastern European countries.
Scientists in Holland have successfully "grown" their own pork meat in a petri dish, say the Times Online here.
Cock-a-hoop over all the greenhouse gas emissions they are going to save, the Dutch boffins don't seem to considered that getting EU approval on that little baby as safe to eat could take millions of years judged on our prevarications over GM feed.
I can just hear the animal welfare lot: "meat grown under stringent clinical conditions in a petri dish has feelings too you know".
It's only a matter of time before they start growing it in Dr Who-shaped petri dishes with a nice nuggety coating already inside a Happy Meal box, with some Dalek-shaped fries, loads of salt and a bottle of E217 emulsifying tango. Delicious!
The overnight markets are mostly higher with wheat and soybeans up 8-9 cents and corn narrowly mixed.
Chinese soybean futures hit yearly highs today as fund money came into the market. The notion that agricultural commodities are "cheap" relative to some other markets like gold, and encouraged that the Chinese government's support program announced last week also underpins things to the downside seems to be attracting some new investment.
The market still looks a bit nervous on the "Dubai jitters" but seems a bit more reassured after the UAE said it would back it's lenders in the event of any Dubai defaults.
That helped crude oil move higher, as too did news of another Somali pirate attack, this time seizing the 2 million barrel capacity supertanker "Maran Centaurus" near the Seychelles.
Gold is having a little rest after hitting all-time highs last week, but is still on track for a 12 percent rise in November alone.
Soybeans are so far displaying little sign of "harvest pressure" as China continues to buy and import US beans at a phenomenal rate, 1.84 MMT of US beans were reportedly shipped to China last week alone.
This is starting to make the USDA's export forecast of 36 MMT for the entire marketing year look well understated even though China will undoubtedly switch heavily into South America in the new year.
Wheat seems to be moving up "just because" - southern hemisphere crops are getting downsized and downgraded with problems in Australia, Argentina, Brazil and Uruguay. US plantings of SRW wheat are well behind, and late planted crops will be more vulnerable to yields losses next summer.