November soybeans ended 15 1/2 cents higher at USD10.44; December soymeal ended USD0.50 higher at USD296.70; December soyoil settled 1.31 cents higher at 43.14 cents per pound. Hot temperatures in the Mississippi Delta are adding some weather premium to price with traders believing the weather will stress the crop. Demand from China remains strong, but record production potential in the US seems likely to cap any gains.
September corn ended 5 1/2 cents higher at USD4.11 3/4; December corn finished 5 1/2 cents higher at USD4.27 1/4. Although US crop conditions look generally pretty good, elsewhere in the world corn production potential is in decline. The worsening of world wheat prospects is also providing corn with a little fillip. China is set to reduce it's weekly corn auction volume from 1 MMT plus to only around 400,000 MT starting next week.
CBOT December wheat closed down 9 1/2 cents at USD7.34 1/4; KCBT December wheat lost 2 cents to USD7.38; MGE December wheat fell 3 3/4 cents to USD7.28. Weather continues to be a concern for Russia, Kazakhstan and the eastern Ukraine. The trade seems undecided whether these crop losses have already been fully factored in however. Yesterday's USDA WASDE report in reality only trimmed the 2010/11 stocks to usage ratio for wheat from 28.0% to 26.3%.
November London wheat ended GBP2.35 higher at GBP155.00/tonne and November Paris wheat was up EUR1.50 at EUR214.50/tonne.
Prices traded higher earlier in the session although profit-taking ahead of the weekend trimmed gains towards the end.
Export hopes for EU wheat are high following the withdrawal of Russia from the scene for the remainder of 2010. Ukraine hasn't banned exports yet, but a tightening of the regulations around analysis of shipments at the very least means vessels are being severely delayed.
Tenders this week from various North African buyers have specifically excluded Black Sea origins due to the uncertainty surrounding governmental intervention in exports from the region.
The weather forecast for Russia and Ukraine contains little in the way of precipitation through to the end of August, when winter wheat plantings normally begin.
At home Defra yesterday surprised the market my reducing the size of the UK wheat planted area by more than 70,000 ha from their March forecast. With yields down 10% at the moment, that potentially reduces the UK harvest to below 14 MMT this year.
The overnight market closed with beans up 5-7 cents, corn 3-4 cents higher and wheat up around 10-12 cents.
The market continues to digest yesterday's USDA data, although so far there seems to be a lack of inclination to retest last week's highs. Things somehow don't feel quite so manic as they did then.
Crude oil is struggling to add any bullish enthusiasm at USD75.66/barrel. Renewed concerns over both the US and world economy are weighing on demand.
The wheat market clearly likes the idea of Russia and Ukraine being more or less withdrawn, but much of the recent surge in activity is probably due to buyers recovering-in existing purchases rather than lots of new eager fresh buying.
Yesterday's USDA WASDE report in reality only trimmed the 2010/11 stocks to usage ratio for wheat from 28.0% to 26.3%. You'd have to say that in the cold light of day a drop of only 1.7 percentage points has already surely been more than factored in?
We also have the spectre of record US corn and soybean production to contend with, along with another potential "bin buster" of a soybean crop to come from South America again in 2011.
Whilst demand is strong, supply is far from struggling to keep up with it.
Early calls for this afternoon's CBOT session: corn up 2-3c, beans up 3-5c, wheat up 10-12c.
Have moved up sharply I see, prilled urea FOB Yuzhny on the Black Sea was USD220/tonne at the beginning of June and now it's USD280/tonne.
Yet the price of oil during that period has hardly changed. Hmmmm, you don't suppose that the manufacturers are hiking the price just because they've seen the wheat price move up and are simply after a fast buck?
The delightfully named Hydrometeorological Centre of Ukraine reckon that corn production there this season will only total 10 MMT as the recent very hot and dry weather takes it's toll.
Early season hopes had been for a crop of 12-13 MMT. The USDA pegged production at 11.5 MMT only yesterday.
The national weather service has no rain in the forecast for the next 10 days.
Agronomist Mike Lee reports from over there: "It's still cracking the flags with temperatures in the mid to high 30's and no sign of any respite anytime soon."
Defra have not so much moved the goalposts halfway through the game as set them on fire with the release yesterday of their
June Census figures pegging the English wheat area at 1.79 million hectares. An increase of only 98 thousand hectares (5.8%) on 2009.
Yet in March they told us that the UK planted wheat area was up 11.4%. It sad that it takes us until halfway through harvest to find out what was planted almost twelve months ago but there we have it.
With wheat yields being widely touted as down around 10% this year, and if Defra are right, then that would potentially leave us with an English wheat crop of only around 12.7 MMT this year.
Throw in a contribution of say 850,000 MT for the rest of the UK and talk of a domestic crop of 15 MMT+ is suddenly looking extremely unlikely.
Soybeans: August beans closed at USD10.57, up 12 1/2 cents; August soybean meal closed at USD315.40, up USD4.90; August soybean oil closed at 41.09, down 54 points. Weekly export sales were large at 266,200 of old crop and a huge 2,341,700 MT of new crop. China bwas the main buyer of new crop at 1,762,500 MT.
Corn: September corn closed at USD4.06 1/4, up 10 3/4 cents; December corn closed at USD4.21 3/4, up 10 3/4 cents. Net weekly export sales of 439,700 MT for delivery in 2009/10 and 478,800 MT for delivery in 2010/11 were at the low end of expectations for sales of 950,000 – 1,200,000 MT. Shipments were unchanged from the four week average at 1,008,200 MT.
Wheat: Sept CBOT wheat closed at USD7.13, up 18 1/4 cents; Sept KCBT wheat closed at USD7.25, up 15 cents; Sept MGEX wheat closed at w.17 3/4, up 19 cents. Weekly export sales of 1,329,700 MT were well above what we've seen recently. The USDA rojected world wheat production at 645.73 MMT down from last months 661.07 MMT.
November London wheat closed GBP5.05/tonne higher at GBP152.65/tonne, with November Paris wheat up EUR6.25/tonne at EUR213.00/tonne.
Tunisia were in the market for wheat today, but interestingly usurped their normal mates Ukraine by stipulating wheat that they wanted wheat from outside the Black Sea area.
Jordan bought 100,000 MT of German wheat today.
French analysts Strategie Grains cut their EU-27 2010/11 soft wheat production estimate to 128.2 MMT, that's down 1% from last month and 2.5 MMT below last season's output.
The USDA cut the world wheat crop to 645.7 MMT, some 4.3 MMT lower than the 650 MMT that the trade was expecting.
What a day and what an enormous amount of data to sift through. It might take another long arduous weekend going through it all, without the phones ringing every 30 seconds, to try and make any sense of it.
I sense however that there may be one or two more bullish nuggets in there than you might realise at first glance.
At times like this I always ask myself "what would Stealer's Wheel do?"
Trying to make some sense of it all,
But I can see that it makes no sense at all,
Is it cool to go to sleep on the floor,
'Cause I don't think that I can take anymore
Clowns to the left of me, Jokers to the right,
Here I am, stuck in the middle with you.
The early calls are 15-20c up on wheat, 8-10c up on beans and 5-7c higher on corn.
The USDA report is being called bullish despite all time record US production numbers for soybeans and corn. In addition by cutting their wheat production estimates for Europe, Russia, Kazakhstan and Ukraine all they have really done is confirm what we all knew anyway: Last month's numbers were wildly optimistic under the circumstances, the clowns.
Russia 45 MMT, Kazakhstan 11.5 MMT, EU-27 137.51 MMT and Ukraine 17.0 MMT. Do any of those surprise you? They shouldn't do as numbers like that have been kicking around for a week or two now, including on this blog.
Despite raising exports, US ending stocks for wheat still represent almost a 40% stocks to usage ratio, and global carryout dropping 12.3 MMT from to 174.8 MMT from 187.1 MMT still leaves us with a ratio of 26.3%. That's not awash I but it hardly calls for strict rationing either does it?
Those jokers the funds appear to hold the key to where we go from here.
In amongst a plethora of data from the USDA today were the weekly export sales numbers for July 30 - August 5. Here's the highlights of those:
Net sales 1,329,700 MT were well above what we've seen recently and exceeded trade expectations for sales of 800,000 – 1,000,000 MT. Unknown destinations took 414,000 MT and Egypt 190,000 MT.
Net sales of 439,700 MT for delivery in 2009/10 and 478,800 MT for delivery in 2010/11 were at the low end of expectations for sales of 950,000 – 1,200,000 MT.
Net sales of 266,200 MT for delivery in 2009/10 and a huge 2,341,700 MT for delivery in 2010/11 easy surpassed expectations for sales of 1,500,000 – 2,000,000 MT. China took a stunning 1,762,500 MT of the new crop sales with unknown destinations accounting for a further 339,500 MT.
The USDA cut world wheat ending stocks for 2010/11 to 174.8 MMT from 187.1 MMT in last month's report.
They upped their estimate for Chinese soybean imports to 52 MMT from 50 MMT. World ending stocks of soybeans in 2010/11 were cut from 67.76 MMt to 64.73 MMT.
Global corn ending stocks for 2010/11 were cut from 141.08 MMT to 139.2 MMT. The EU-27 corn crop was reduced from 56.99 MMT to 55.95 MMT, and the Ukraine corn crop cut by 1.5 MMT to 11.50 MMT.
The USDA cut the world wheat crop to 645.7 MMT, some 4.3 MMT lower than the 650 MMT that the trade was expecting. That's a reduction of 15.4 MMT on last month.
The main highlights include:
Russia 45 MMT from 53 MMT
Kazakhstan 11.5 MMT from 14.0 MMT
EU-27 137.51 MMT from 141.82 MMT
Ukraine 17.0 MMT from 20.0 MMT
Whilst they are sizable cuts, they are no lower than most of the other estimates already in the market. Indeed they seem to be more like correcting last month's overstates than anything else.
As I noted when last month's figures came out: "Wheat production in Europe was only cut by just over a million tonnes to 141.82 MMT, whilst Russian production was estimated at 53 MMT. Both of those predictions are probably at least 3 MMT, and possibly as much as 5 MMT overstated."
The USDA peg this year's US soybean and corn crops at record highs, and wheat production up 2 percent from their July forecast and up 2 percent from 2009.
US Ending Stocks (bil bu)
2009/10 USDA Avg Guess Range USDA Jul
Soybeans 0.160 0.166 0.153-0.181 0.175
Corn 1.426 1.459 1.390-1.523 1.478
Soybeans 0.360 0.334 0.275-0.404 0.360
Corn 1.312 1.307 0.970-1.535 1.373
Wheat 0.973 0.982 0.800-1.132 1.093
US 2010/11 Production (bil bu)
Soybeans 3.433 3.366 3.290-3.432 3.345
Corn 13.365 13.282 13.120-13.524 13.245
Wheat 2.264 2.233 2.206-2.250 2.216
French analysts Strategie Grains have today cut their EU-27 2010/11 soft wheat production estimate to 128.2 MMT, that's down 1% from last month and 2.5 MMT below last season's output. Two months ago they were forecasting production almost 5 MMT higher than that.
The EU-27 barley crop is now pegged at 53.0 MMT, 1.1 MMT down on last month and 14% below 2009's harvest. They also cut their corn production estimate for the coming harvest by 1.1 MMT to 57.0 MMT.
(MMT) 2010/11 2009/10 Y-o-Y Change
Soft wheat 128.2 130.7 -2.5
Barley 53.0 62.1 -9.1
Corn 57.0 57.1 -0.1
They also increased their forecast for EU-27 soft wheat exports in the current season by 3 MMT to 18.7 MMT. That sounds bullish, although in reality it only brings us back into line with the 18.8 MMT exported during 2009/10.
The most bullish number was the revision of US soft wheat exports up by 6 MMT to 33.6 MMT, a figure 9.7 MMT up on 2009/10 following the withdrawal of Russia from the world stage.
August soybeans closed at USD10.44 1/2, up 8 1/4 cents; August soybean meal closed at USD310.50, up USD1.20; August soybean oil closed at 41.63, up 17 points. Average trade estimates for the USDA WASDE report tomorrow are 3.357 billion bushels at an average yield of 43.060 bu/acre. Private exporters announced soybean sales in the amount of 115,000 MT to China bringing China’s US soybean purchase for the week to 799,000 MT.
September corn closed at USD3.95 1/2, up 2 cents; December corn closed at USD4.11, up 2 cents. The average trade estimate for the USDA WASDE report is 13.279 billion bushels with an average yield projected at 164.08 bu/acre. The USDA reported overnight corn sales of 480,000 MT, 180,00 0MT, 174,000 MT, and 103,632 MT to Mexico, Egypt, Unknown and Japan respectively.
Sept CBOT wheat closed at USD6.94 3/4, unchanged; Sept KCBT wheat closed at USD7.10, down 2 1/2 cents; Sept MGEX wheat closed at USD6.98 3/4, down 6 1/2 cents. An existing "unknown" wheat sale for 220,000 MT has been switched to Egypt, said the USDA. Average trade estimates for the US all wheat crop tomorrow are 2.23 billion bushels. US wheat again missed out as Egypt bought 120,000 MT of French wheat today in a tender.
November London wheat closed GBP1.15/tonne lower at GBP147.60/tonne, with November Paris wheat down EUR0.25/tonne at EUR206.75/tonne.
Wheat traded lower than the close for most of the day.
German agricultural association Deutscher Raiffeisenverband (DRV) forecast grain production there 500,000 MT lower than last month at 43.7 MMT. They did however leave their wheat estimate unchanged at 23.8 MMT.
Egypt bought 120,000 MT of French wheat today in a tender, paying around USD286/tonne FOB for two 60,000 MT cargoes.
The USDA are tomorrow expected to reduce their world wheat production estimate for 2010/11 to around 650 MMT, some 11 MMT lower tha last month.
Early reports from the UK suggest wheat yields down 5-10%, with quality generally pretty good although protein levels are variable. Straw yields are said to be significantly lower than normal.
Only around 15% of the crop is estimated to be harvested nationally.
The overnight markets closed mixed with wheat around 2c higher and corn and beans narrowly either side of unchanged.
Crude oil is down below USD79/barrel on talk of a faltering global recovery.
US exporters have been busy, with the USDA today reporting overnight corn sales of 480,000 MT, 180,00 0MT, 174,000 MT, and 103,632 MT to Mexico, Egypt, Unknown and Japan respectively.
In addition a further 115,000 MT of soybeans was sold to China overnight.
An existing "unknown" wheat sale for 220,000 MT has been switched to Egypt.
Bangladesh only picked up one bid in their 50,000 MT wheat tender, although Egypt got 11 bids at varying prices starting from the USD280/tonne they paid at the weekend. Neither party has confirmed a purchase yet.
One or two longs seem to be looking to cash in their chips today ahead of tomorrow's USDA report. They have a habit of not following rapidly changing crop estimates as quickly as some other market participants.
They also might just have a vested interest in trying to cool some of the market panic that's been around of late, rather than fanning the flames. A "not as bad as expected" WASDE report is highly likely tomorrow I'd say.
Early calls for this afternoon's CBOT session: Corn mixed, beans flat to 1 higher, wheat 1 to 2 higher.
Have been reportedly offered wheat at varying prices starting at USD280/tonne in today's wheat tender. That's the same price it booked 240,000 MT of French wheat at over the weekend.
It would be interesting to see what happened if they passed, saying that the prices quoted were too dear. They've got six months worth of reserves anyway, and seeing as prices are now up by well over USD100/tonne from what they were paying in late June, that would be my strategy if I was them.
The trade seems to think that they have them over a barrel now that Russia is out of the market. A little reminder that they maybe aren't quite so vulnerable would shake things up a little bit on the eve of the USDA report.
Richard Hitchin at Thomas Mawer's Hereford office is known as Dick Itchin. Except when he's wearing his fibreglass underpants and he goes off to make a cup of tea that is. Then he's called Dick Itchin In De Kitchen.
Tomorrow we'll do Pineapple Head, oh no we can't he's a bit touchy about that. I'll think of another one by then...
Oct/Apr Liverpool corn gluten feed has been trading around the GBP147/tonne mark, might have an odd run of that to sell.
Whole maize spot on the Humber, who wants some of that miles below shipper price (sub-GBP170/tonne) for guaranteed movement by the end of the month?
Call or email me on info at nogger dot co dot uk.
August Paris wheat expired with hardly a whimper yesterday, making heavily traded November the new front month. Indeed November is now the front month on all the NYSE/Liffe grains contracts.
The Nov contract for London wheat currently accounts for around 50% of the entire volume of open interest across all contracts. For Paris wheat it accounts for almost two thirds of all open interest.
Those are rather scarily weighted percentages.
The speculative element of that will have to exit those positions at some point. These guys aren't in it to hedge any physical trades they have. They aren't looking to take delivery of the physical goods at any price. They HAVE to sell.
The selling could start at any time and for any seemingly trivial reason. Russian export bans or not a wave of enforced selling of volumes of that kind of magnitude can only mean one thing.
Only a week ago a buying frenzy saw London wheat up GBP18 in a day at one point. That day was just last Thursday when November wheat hit a stunning GBP169/tonne, albeit briefly. As of now it is already GBP24/tonne off that high in only a week.
Yet the open interest now is still as high as it was then.
Just suppose tomorrow's USDA numbers are bearish (which they probably will be - in a "not as low as other estimates already in the market" sort of a way).
That triggers a wave of selling that makes it fall another GBP24/tonne in the ensuing week. Halfway through that stop-less selling kicks as Tarquin and his buddies suddenly have an "enlightening experience" making it fall by the same again the week after that, do you know where we'd be?
It would start with a nine not a one. How ludicrously unlikely is that eh? I mean, that would be like someone telling you at the beginning of June that wheat would be GBP169/tonne before long.
Rank Hovis is to increase the price of flour by almost GBP90/tonne effective 6 September blaming a 70% year-on-year rise in raw material costs.
Newcastle-based Greggs warned of pasty price rises in the pipeline as they posted half yearly pre-tax profits of GBP18.6m yesterday.
Ukraine newspaper Kommersant says that the government there is "considering" introducing grain export quotas. Rumours are that today is decision day and that they may set a limit of 5 MMT for the whole of 2010/11 (around 75% down on 2009/10).
Ukraine farming group Kernel forecast domestic wheat production this year at 18 MMT (-13.9%) and barley output at 9.5 MMT (-19.5%).
Dow Jones report that in Australia J P Morgan think that crop conditions in the east are so good that they've raised their winter grains (incl. rapeseed) production estimate for the region from 15.3 MMT to 17.5 MMT.
Egypt are back in the market tendering for wheat again today. Despite recently embracing "all his little children" they are today excluding the Black (Sea) ones, and the little Romanian orphans too. Funny that.
August soybeans closed at USD10.36 1/4, down 12 1/4 cents; August soybean meal closed at USD309.30, down USD1.80; August soybean oil closed at 41.46, down 26 points. The average trade estimate for the USDA WASDE report this Thursday is 3.357 billion bushels and an average yield of 43.060 bu/acre. China continues to purchase US soybeans for 2010/11 aggressively with today’s announcement of 400,000 MT. Egypt was also in the market for 100,000 MT, along with 180,000 MT to "unknown".
September corn closed at USD3.93 1/2, down 9 1/2 cents; December corn closed at USD4.09, down 9 cents. The average trade estimate for Thursday’s USDA WASDE report is 13.279 billion bushels with an average yield projected at 164.080 bu/acre. A firm dollar and weak crude oil added to the bearish sentiment. On the day funds were estimated to have sold nearly 10,000 contracts.
Sept CBOT wheat closed at USD6.94 3/4, down 17 3/4 cents; Sept KCBT wheat closed at $7.12 1/2, down 7 1/2 cents; Sept MGEX wheat closed at $7.05 1/4, down 10 cents. The USDA today reported the sale of 120,000 MT of wheat to Egypt for 2010/11. The average trade estimates for the US wheat crop are 2.23 billion bushels for all Wheat, 1.504 billion for all winter wheat, 0.614 billion for other spring and 0.105 for durum.
November London wheat closed GBP4.25/tonne lower at GBP148.75/tonne, with November Paris wheat down EUR6.25/tonne at EUR207.00/tonne.
A combination of pre-USDA book squaring, profit-taking and mixed signals coming out of Russia was enough to send EU markets lower.
The Russian Grain Union threw a small spanner in the works by saying that the country's beleaguered grain production would in fact come in higher than the latest 60-65 MMT Ministry estimate.
That just got one or two people thinking ahead of Thursday's USDA report. The market has moved up a hell of a long way in a very short period of time. Exactly how much of that is justified? Is it just possible that supply shortages have been over-estimated?
I think that longs would rather book some profits right now than risk it ahead of Thursday's report.
It might be interesting to note that the open interest in Nov Paris wheat fell to "only " 129k lots today, that's some 5k down from the recent high. Is the "smart" money starting to exit the market?
If it is then surely the only way is down for the November future?
Meanwhile, looking ahead, the signs are that the Argy 2010/11 wheat harvest could be up as much as 80% on last season, and Canadian farmers will plant more winter wheat than ever before. I wonder why that is......?
Farmers in Western Canada are looking at planting more winter wheat than they've ever planted this year, according to this report.
Clearly the current price levels have attracted the interest of many, combined with the idea of spreading the risk of avoiding a repetition of this spring's wash out.
The overnights all closed lower, pressured by a firmer US dollar, weaker crude oil and book-squaring and profit-taking ahead of Thursday's USDA report.
Wheat closed around 8 cents easier, with beans down 8-12 cents and corn off 5-6 cents. Crude oil has just crashed through the USD80/barrel support level.
The Russian Grain Union threw a small spanner in the works by saying that the country's beleaguered grain production would in fact come in higher than the latest 60-65 MMT Ministry estimate.
One or two are now starting to wonder if maybe things might have been a bit overdone here, and indeed have the Russians in fact been a tad over zealous in their production slashes?
Nobody likes a good conspiracy theory more than me. With twenty three (or is it twenty five now?) different regions all announcing states of emergency and crying poverty and deprivation to Moscow, there has to be a chance that some have over-egged the pudding as far as crop damage is concerned in an attempt to wring out a few more roubles in compensation for themselves.
The USDA are out on Thursday with what is expected to be increased production numbers for US corn (13.282 billion bushels), soybeans (3.366 billion) and all wheat (2.233 billion).
The USDA today report the sale of 120,000 MT of wheat and 100,000 MT of soybeans to Egypt for 2010/11. They also say private exporters sold 400,000 MT of new crop soybeans to China and 180,000 MT to "unknown".
Early calls for this afternoon's CBOT session: Corn down 3-5 cents, soybeans down 6-8 cents, and wheat down 7-9 cents.
The USDA are out on Thursday with their revised US and world crop production numbers. Bigger output numbers are expected from the US by most of the private firms like FC Stone and Informa.
Whilst they will undoubtedly drop their wheat (and corn) production numbers from Russia and some of the other Black Sea countries (and possibly Europe too), if they run true to form they won't drop these anything like as much as some of the other numbers that are already in the market.
That could be construed as bearish, although the trade may ultimately decide that the USDA are in fact unaware of the difference between their backsides and a hole in the ground and carry on regardless.
Argie wheat growers are overdue a slice of fortune, after two years of sharply reduced production due to drought and internal squabbling with the government took them from hero to zero on the international export stage.
A crop of 18.6 MMT in 2007/08 saw Argentina export of 11.2 MMT of wheat, comfortably sited in fifth place in world export rankings.
Two successive years of drought-affected output, and lower plantings due to growers dissatisfaction with intermittent export bans, saw production slump to around 7.5 MMT (according to just about everybody except the USDA).
However, perked up by the sight of soaring world prices, Argie farmers are said to have staged a last minute rush to plant wheat pushing the area for 2010/11 to an estimated 4.3-4.5 million hectares.
Given favourable weather between now and harvest this season's crop could reach 13-13.5 MMT, and increase of as much as 80% on last year.
The wheat and barley harvest is just about over in Ukraine, accelerated by the hot and dry conditions. As next door in Russia, yields are looking sharply lower on a combination of increased winterkill losses followed by premature ripening and heat damage.
The Ag Ministry report that 94% of the planted wheat area is cut, producing 16.93 MMT with yields averaging 2.82 MT/ha. In addition 96% of the nation's barley harvest is in producing only 8.95 MMT, with yields averaging 2.11 MT/ha.
Those figures suggest a final wheat crop no better than 18 MMT and a maximum barley output of 9.3 MMT. That would be a wheat crop 14% down on last year and a barley crop 21% lower than in 2009.
As the hot and dry weather continues the potential of the corn crop is now said to be going rapidly downhill too, with sunflowers also being adversely affected.
August soybeans closed at USD10.48 1/2, down 10 1/2 cents; August soybean meal closed at USD311.10, down USD2.50; August soybean oil closed at 41.72, up 33 points. The USDA crop progress report released after the close pegged soybean good/excellent conditions at 66%, unchanged from last week and last year. Blooming was at 93%, up 7 points from last week and 8 points from last year. Chinese demand continues with the USDA announcing fresh sales of 284,000 MT again today.
September corn closed at USD4.03, down 2 cents; December corn closed at USD4.18, also down 2 cents. The USDA crop progress report for this afternoon had corn good/excellent condition at 71%, unchanged from last week and last year. Corn silking was at 97%, up 4 points from last week and 10 from last year. Uncertainty over wheat's price direction looks like keeping corn bears away from selling this market too short. If wheat can hold, or even appreciate from here, then demand for corn should remain strong.
Sept CBOT wheat closed at USD7.12 1/2, down 13 1/4 cents; Sept KCBT wheat closed unchanged at $7.20; Sept MGEX wheat closed at USD7.15 1/4, down 7 3/4 cents. Wheat didn't seem to know what to do during another volatile session. News out of Russia suggests that the export ban could extend beyond Dec 31st. SovEcon now peg the Russian crop at 43-44 MMT and exports at only 3 MMT. The USDA’s crop progress report had spring wheat good/excellent at 82%, unchanged from last week and up 10 points from last year. Winter wheat harvested was at 87 %, up 4 points from last week and 2 points behind last year. Spring wheat harvested was at 20%.
November London wheat closed GBP1.00/tonne higher at GBP153.00/tonne, with November Paris wheat up EUR3.75/tonne at EUR213.25/tonne.
Having traded lower virtually all day EU wheat finished with modest gains after Chicago wheat turned higher an hour or so after the US market opened.
The trade is divided as to whether the market has already factored in all the bad news, or indeed over-factored it in.
German analysts FO Licht today dropped their world wheat production estimate by 10.4 MMT to 645.71 MMT. They pegged the Russian crop at 44 MMT, in line with SovEcon's new estimate of 43-44 MMT.
Egypt bought 240,000 MT of French wheat over the weekend, saying that it wouldn't buy any Russian, Kazakh or Ukraine wheat until their stance on exports had been clarified.
We know what Russia's stance is, there will be no more shipments from there after the weekend until at least Dec 31st and probably until summer 2011. Ukraine have fudged around the issue, not outright banning exports, but making the red tape and analytical criteria surrounding them almost impossible for shippers to operate. Kazakhstan have publicly said that it's "business as usual" but plenty seem to think that Russia will "persuade" them otherwise.
Meanwhile UkrAgroConsult cut their Ukraine wheat crop estimate to 17.75 MMT - 15% down on last season.
Guide prices for EU rapemeal FOB Lower Rhine in euros/tonne:
Nov/Jan 11 197,00
May/1h Jul 195,00
Aug/Oct 11 177,00
Watching the highlights of the Charity Shield match last night that thought neither side looked much cop. Were they simply out for a stroll before the real action starts next week, or are they really just not very good?
I can't see Sir Alex's motley collection of ageing has beens contributing much this season somehow. Despite being joint favourite to finish as the Premier League's top scorer a certain Mr Woodbine Rooney couldn't hit a barn door with a banjo at the moment.
The guy has clearly become mentally unhinged and being "not the sharpest tool in the box" (an assortment of nice pun material there for the discerning reader) will be a very easy wind-up target at every away game across the country I should think. The lovable Red will be picking up reds all over the place before trudging off the pitch muttering profanities and throwing his shirt petulantly to the ground.
Even so ManYoo still somehow managed to end up fairly comfortable winners against a Chelski side that already look tired. Again opposition supporters will be spoilt for choice as to who to boo next when they come to town.
Everybody's least favourite uncle, Egypt, the one that kisses your Mum and sister just a little too enthusiastically at Christmas, New Year, birthdays and any other opportunity it can get has bought 240,000 MT of French wheat.
Paying around USD280/tonne for it equates to almost USD30/tonne more than they bought Russian wheat at just last Wednesday. Of course Russian wheat could be 50p/tonne, but that isn't much use if you can't actually get it.
The Gyppo's went on to say that they won't be buying any more wheat from Ukraine, Kazakhstan and Russia until those countries export position becomes clearer.
Squirming as uncomfortably as your Mum when Uncle Nomani eyes her up across the lounge, Egypt says that it now wants to reschedule more than half a million tonnes of cheap Russian wheat it now isn't going to get. Having to buy it in again is going to cost "between 2.5 and 4.5 billion Egyptian pounds" in 2010/11 it says, a significant sum that it would rather like to recoup back.
SovEcon dropped their estimate of this year's Russian wheat crop to 43-44 MMT. Meanwhile there's a bottleneck developing as the export deadline approaches.
Bangladesh say that they've got 400,000 MT of wheat on contract from the Black Sea but now only expect 100,000 MT of that to be delivered, certainly 120,000 of Ukraine wheat has been cancelled over the weekend.
Kazakhstan says that it isn't going to ban wheat exports, although it indicated in a roundabout way that if asked Russia would get preference over any other potential buyer.