15/11/10 -- Friday's mass stampede for the exit door saw saw the entire Chicago grains complex close at or near limit down on everything but wheat.
Before we get too carried away that wheat manged to buck the trend, front month CBOT wheat has only put in a lower close on the weekly chart twice out of the past sixteen weeks. There have only been 6 days since July 29th that have produced a lower close than Friday's finish.
In contrast CBOT corn has only closed higher than Friday's close four times this year on the weekly chart, and for beans and meal it's just once - last week. And despite a limit down close on Friday that was still soyoil's highest weekly close of the year.
On that basis it might be a little premature to be calling this a major reversal. It certainly could however be called a reminder that there will almost certainly be a sting in the tail of this latest rally to "the new normal". We just don't know how high we go first or when that is coming. Shame that.
I still don't subscribe to the theory that these prices are here to stay and have an inevitable longevity about them. There are just too many eggs in too few baskets in my opinion.
Is it just me or is the global soybean market's almost total dependence on China somewhat scary? Of the near 810TMT of 2010/11 soybean export sales announced by the USDA Friday, more than 75% was to China. For 2011/12 all 120,000 MT of sales were to China. Combined that puts 80% of US soybeans into the large Chinese basket in the corner.
Of course we are all aware that China has a large growing population and they all lie awake at night aspiring to tuck into pizza, hot dogs, burgers and a KFC. That's what all the experts tell us so it must be true, right? We just have to hope that their new-found urge for all things western doesn't include vegetarianism or dieting. And also that they do actually have the money to dine out at TFI Friday's every week.
Meanwhile we have around a third, or more, of the US corn crop currently residing in the ethanol basket over in the other corner. That particular basket has a sell by date of Dec 31st 2010 stamped on it. Don't worry about that though, the blenders tax credit is bound to get renewed in January isn't it?
Wheat? Don't worry about wheat, that's underpinned by spillover demand from the feed sector based on a third of the corn crop going into ethanol. And that's as safe as houses, we've already established that. Meanwhile livestock sector isn't exactly going from strength to strength on the back of rising feed prices. We might all be going vegetarian before too long.
Enjoy the Christmas lunch this year, it could be nut cutlets all round next time.
12/11/10 -- Soybeans
Nov 10 soybeans closed at USD12.63, down 67 1/4 cents; Dec 10 soybean meal closed at USD339.70, down USD18.40; Dec 10 soybean oil closed at 52.53, down 250 poimts. Weekly export sales were on the low end of trade estimates with sales for 2010/11 delivery at 809,821 MT and sales for 2011/12 delivery at 120,000 MT. Talk of a Chinese interest rate rise as early as over the weekend dragged all commodities lower on the day.
Dec 10 corn closed at USD5.34, down the daily 30 cent limit; Mar 11 corn closed at USD5.48, down 30 cents. Corn was down 54 cents for the week. Estimates put fund selling in the corn market at 30,000 contracts today. Weekly corn export sales of 573,600 MT were in line with expectations. Corn exports remain well off the pace required to reach the USDA’s export estimates.
Dec 10 CBOT wheat closed at USD6.69 1/4, down 34 3/4 cents; Dec 10 KCBT wheat closed at USD7.30, down 38 cent: Dec 10 MGEX Wheat closed at USD7.44 3/4, down 32 cents. Weekly export sales were above trade estimates at 831,989 MT. This was higher than the expected range of 300,000 to 600,000 MT. In other export news it was reported that Iraq had purchased 250,000 MT of wheat of which 100,000 MT each was US and Australian origin and 50,000 MT Ukrainian.
12/11/10 -- EU wheat futures closed sharply lower Friday with Nov10 London wheat closing down GBP3.75 at GBP163.25/tonne and Nov11 London wheat down GBP3.65 to GBP144.00/tonne. Jan11 Paris wheat closed EUR8.75 lower at EUR212.50/tonne and Nov11 Paris wheat was down EUR5.75 to EUR195.00/tonne.
The market suffered a severe case of the jitters today as reports of a possible Chinese interest rate increase spread. Gold and other metals fell sharply, dragging soybeans, wheat and other soft commodities with them.
Brussels issued export licences for 501,000 of soft wheat during the past week. That brings the YTD total to 8.8 MMT vs 6.6 MMT a year ago.
The euro was lower again on potential Irish debt defaults.
Late weakness from US CBOT wheat spilled over into EU wheat contracts.
Nov10 London wheat posted losses of GBP5.75/tonne for the week.
12/11/10 -- Supermarket dictatorship Tesco found one of their main distribution centres under blockade from angry farmers again last night I read in the Farmers' Guardian here. Hurrah for the Farmers for Action group I say.
Maybe GBP6,000/minute profit Tesco are getting a very minor little twinge about all the bad publicity they've been receiving of late? I read elsewhere that they've decided to donate GBP40,000 to veteran-aid group The Poppy Appeal to cover the money the would have raised if they hadn't pulled Hovis products that were set to donate 4p/loaf to the same campaign from their shelves.
There doesn't seem to be any word on them reinstating British Hovis at its new prices. That would be too much to ask for. I mean we wouldn't want to go giving the housewife a choice or anything would we?
"The best way to take control over a people and control them utterly is to take a little of their freedom at a time, to erode rights by a thousand tiny and almost imperceptible reductions. In this way the people will not see those rights and freedoms being removed until past the point at which these changes cannot be reversed" - Adolf Hitler.
12/11/10 -- All commodity markets have a severe dose of the jitters this morning, with everything from sugar to soybeans to zinc sharply lower.
Talk of a Chinese interest rate rise as early as over the weekend is one of the major reasons behind the move. With large spec longs in just about all commodities there's been a bit of a scramble to get out of the exit door first.
The Chinese are keen to rein in inflation. Having already ordered an increase in bank reserve requirements early in the week to curb "reckless" lending, a second interest rate rise in a month could be on the cards.
The theory is that raising rates will lead to further yuan appreciation and cool demand for commodities, many of which have set multi-year highs this week.
Cotton, sugar, soybeans, copper and zinc all crashed down the daily limit on Chinese markets early this morning.
On the overnight Globex market soyoil is currently down more than 200 points, with soybeans around 40c lower, wheat down 12-14c and corn down 8-10c. Palm oil had it's biggest daily fall in more than a year on the on the Malaysia Derivatives Exchange overnight. London sugar is down 8.5% in early trade this morning, slumping to its lowest levels this month.
There is also some market nervousness over the current G20 meeting in Seoul, and talk of Ireland defaulting on it's sovereign debt. The the risk premium between Irish 10-year bonds and benchmark German 10-year bunds is now at what analysts are calling "unsustainable" levels.
That is causing euro weakness and also a flight to the US dollar as risk aversion creeps back into the market.
The big question now of course is are we looking at a major reversal or a buying opportunity? Well, the last time that the People’s Bank of China rose interest rates was October 19th - which was in fact the first movement on rates in three years.
The market got similarly spooked then, which last all of a day as I recall.
11/11/10 -- Soybeans
Jan soybeans settled 19 1/2c higher at USD13.39; December soymeal finished USD2.70 higher at USD358.10; Dec soyoil rose 108 points to 55.03. Private firm Informa Economics said that 2011 US soybean plantings will fall to 75.8 million acres in 2011, almost 2 million below the level sown for this season's crop. If that comes to fruition then US stocks look set to remain tight for some considerable time. Earlier this week the USDA cut 2010/11 ending stocks to 185 million bushels. That cut stocks to use to 5.5% or the equivalent of just 20 days worth of supply. Trade estimates for tomorrows export sales report range from 800,000 MT to 1.5 MMT.
Dec corn ended 2 3/4c lower at USD5.64; March corn fell 3c to USD5.78. In the widely touted "battle for acres" next year, corn seems to be winning. Informa said that US farmers will raise their corn plantings in 2011 by almost 5 million acres to 93.1 million, 400,000 short of the all-time record set in 2007. That's 2.7 million up from its September forecast. The weekly report will be out a day later than normal tomorrow. Trade estimates range from 300 to 600 thousand MT.
CBOT Dec wheat ended down 6c at USD7.04 a bushel; KCBT Dec wheat fell 4 3/4c to USD7.68; and MGEX Dec wheat closed 5 1/4c lower at USD7.76 3/4. Informa projected the 2011 wheat area at 56.1 million acres, down almost a million acres from its September estimate, but up from 53.6 million in 2010. Higher corn and cotton prices are competing for wheat acres and beans could be double cropped on several of those acres it seems. Trade estimates for tomorrows weekly export sales report range from 300-600,000 MT.
11/11/10 -- Nov10 London wheat closed with losses of GBP1.50 at GBP167.00/tonne, whilst Nov11 was GBP0.65 higher at GBP147.65/tonne. Paris wheat finished with Jan11 down EUR1.00 to EUR221.25/tonne, whilst Nov11 rose EUR1.00 to EUR201.75/tonne.
The euro was sharply lower on concerns over Irish and Portuguese debt problems. The spread between 10-year Irish and German government bonds is now at its widest ever. The pound rose to over 1.18 against the euro for the first time since late September.
That ultimately dragged old crop London wheat lower. New crop was higher on ideas that the differential between old and new crop is too large at around GBP20/tonne.
French analysts Strategie Grains said today that EU-27 wheat, corn and barley plantings will rise for the 2011 harvest. Wheat area will increase by 2.2% to 23.4 million hectares, whilst barley plantings will grow by 2.9% and corn sowings by 6.2%.
They cut their 2010 EU-27 corn production estimate for the sixth month in a row to 55.1 MMT. The firm also warned on dwindling French and EU stocks as exports continue at a rapid pace.
French wheat ending stocks are projected at just over 2 MMT by FranceAgrimer.
Despite all the bullish rhetoric, it is worth remembering that the livestock sector is hurting badly. Demand for this sector is sluggish at best with prices at these levels, and nobody in the compound feed industry is reporting being overly busy.
They had a very decent summer period, but now that the price rises of the past four months or so have been fully factored into finished feed levels offtake has fallen away markedly.
11/11/10 -- The overnight grains closed mostly a tad firmer, with beans up 3-5c, corn up 2-4c and wheat around a couple of cents firmer.
Crude oil is a bit higher, showing up above USD88/barrel now and seemingly eyeing a test of USD90/barrel.
It's Veterans Day so there's no weekly export sales report until tomorrow as most US government offices are closed, so fresh news is limited.
Informa are however expected to release their early 2011 planting intentions estimates later today.
US weather shows improving prospects for rain over the next few days for dry areas of Kansas, although temperatures are also forecast to drop sharply.
Brazilian soybean farmers are reportedly "planting around the clock" to get their delayed beans into the ground.
Strategie Grains say that the EU-27 will plant more wheat, corn and barley for 2011 - but not vast increases. They also warn on EU wheat exports for the current marketing year running at a rapid pace, with "a very large deficit" on the bottom line of the balance sheet. EU prices need to rise to offset increased demand, they say.
Early calls for this afternoon's CBOT session: Corn up 2-4 cents, soybeans 3-5 higher, and wheat 1-3 higher.
11/11/10 -- Suddenly wheat growers have never been so popular. By the time Vireol get going I foresee a situation when selling wheat will be a bit like going to one of those huge car supermarket things you see next to the motorways.
"You've got 500 tonnes of wheat to sell sir? This is your lucky day, if you sign on the dotted line right now we'll throw in an MP3 player, a Goblin teasmade, two pounds of sausages and a pigs dick for the dog."
Either that or people will be advertising on telly to buy your unwanted wheat.
"Simply pop your unwanted wheat into the supplied jiffy bag and wait for the cheque in the post. Make sure your diamond ring doesn't get mixed in with it now, as we don't want any of that old rubbish."
Keep it quiet right, but I know a man, who knows a man who's uncle grows wheat. Fields full of the bloody stuff he's got. I might be able to get you, erm, an intro like - for a nominal fee of course guv. Five hundred sheets and a week in Marbella should cover it like. I'm sellin meself short at that as well. Come on, think of the kids.
11/11/10 -- No it's not a biscuit or a new lapdancing venue in Goole (that would be called Goolies obviously), it's Frontier releasing details of the kind of supply contracts they are launching to get the 1 MMT plus of extra wheat that they'll be in the market for when Vivergo opens it's intake pits.
There's all sorts of extra bits and bobs on offer.
Full story here: Humber Gold Club
11/11/10 -- The quality of this season's grain harvest in the UK was significantly better than in recent years, according to the results of the HGCA's Cereal Quality Survey.
Wheat specific weights averaged 77kg/hl, with the best results coming from the northern region at 78 kg/hl. Hagbergs averaged 270, with those in the South East (278) and surprisingly Wales (279) the highest. Protein content averaged 11.9% with the best results coming from the Eastern and Midlands regions (both 12.2%). Malacca had the highest average hagbergs at 324, with Hereward achieving the best protein level (13.6%). Detailed results here.
Barley specific weights averaged 67 kg/hl, with nitrogens coming in at 1.64%. Specific weights were highest in the Eastern region at 67.5% and nitrogens best in the Midlands at 1.76%. Carat was the variety that scored best, with the highest specific weight and nitrogen. Detailed results here.
11/11/10 -- Jumping on the bandwagon with the rest, imaginary supermarket Sparks & Mencer are launching a meal deal with a difference. They've put their own slant on things by launching a revolutionary new "Two Copulate For A Tenner" deal, which they say is sure to be a big hit with their customers.
"Basically you get four cans of strong lager, a large bottle of our own label XXX Knickerdropper cider, a chocolate confectionery item of your own choice*, some vaseline, two cigarettes and a match," said a S&M spokeswoman.
"I've had six already this week, and it's only Thursday," she added.
*funsize only, always read the label
11/11/10 -- French analysts Strategie Grains forecast that EU farmers will plant more wheat and barley for the 2011 harvest encouraged by sharply higher cereal prices.
Adverse weather conditions in some areas means that the increase in soft wheat planted area won't grow by that much though - only 500,000 hectares, or just 2.2% to 23.4 million hectares.
Much of the land that hasn't been able to get winter wheat in will be sown with spring barley of corn. The total EU-27 barley area is seen rising 2.9% to 12.6 million hectares, and corn plantings will increase by 6.2% to 8.6 million hectares, they predict.
The total EU-27 oilseed planted area is seen holding steady at 11.6 million hectares, they add.
10/11/10 -- Soybeans
Nov 10 soybeans closed at USD13.09 1/2, down 9 3/4 cents; Dec 10 soybean meal closed at USD355.40, down USD6.90; Dec 10 soybean oil closed at 53.95, up 55. It was a day of profit-taking in beans with the dollar higher and China announcing further tightening on bank lending to curb inflation. Even so the USDA confirmed 110,000 MT of soybeans and 30,000 MT of soyoil sold to China. Weakness in corn and wheat also spilled over into beans.
Dec 10 corn closed at USD5.66 3/4, down 9 1/2 cents; Mar 11 corn closed at USD5.81, down 9 1/4 cents. Pressure was on prices after the market hit new annual highs following the USDA's latest monthly supply demand report on Tuesday. Ideas are that current prices are rationing demand even though South Korea bought 158,000 MT of corn for March/April delivery. Friday's export sales report may confirm whether this is true or not.
Dec 10 CBOT Wheat closed at USD7.10, down 11 3/4 cents; Dec 10 KCBT wheat closed at USD7.72 3/4, down 14 1/4 cents; Dec 10 MGEX wheat closed at USD7.82, down 13 1/2 cents. Egypt purchased 235,000 MT of French, US and Australian wheat for January shipment, with the US portion of that 115,000 MT. Dryness worries on the Plains should be alleviated by rain with amounts up to 3 inches in Kansas over the next few days. Outside markets were mostly negative as too was a firmer dollar.
10/11/10 -- Nov10 London wheat ended down GBP4.25 at GBP168.50/tonne, and Nov10 Paris wheat fell EUR4.75 to EUR223.75/tonne.
There was a disappointing lack of follow through for wheat bulls today, albeit from the highest levels for 2 1/2 years in the case of London wheat's close last night.
Egypt bought some French wheat in a tender today, but the order was spread around, with US and Australian wheat also getting a look in.
The recent weakness of the dollar, and strong euro, appears to be capping EU wheat's competitiveness.
Brussels will report tomorrow on EU soft wheat export licence issues. They have dropped off quite sharply in recent weeks, I expect that trend to continue in the second half of the 2010/11 marketing year.
The French Ministry say that commercial wheat stocks amounted to 13.6 MMT as of Oct 1st, compared to 13.0 MMT a year ago.
10/11/10 -- The overnight grains closed with nearby wheat and beans down 6-7c, and corn 5-6c lower. For beans consolidation was the name of the game following last night's solid gains, for wheat and corn it seems to be a return to "is rationing already priced in?"
It's Veteran's Day in the US tomorrow, so the USDA's weekly export sales report is delayed until Friday. That may provide further evidence that prices are indeed rationing demand - at least for wheat and corn.
Egypt are tendering for wheat today, so which way they swing may influence the market this afternoon. Last week's tender went mostly to Argentina, where the USDA yesterday upped 2010/11 wheat production by 1.5 MMT and increased exports by 1 MMT.
China imported fewer soybeans in October than many had forecast at "only" 3.7 MMT, a sign perhaps that they are returning to importing more soyoil again from Argentina at the expense of lower US bean imports.
The Chinese have been accounting for around 75% of the weekly US exports for some weeks now, so any sign of a fall off in demand from that quarter would have a significant impact on the bottom line for US stocks.
That said, the USDA have today confirmed 110,000 MT of soybeans and 30,000 MT of soyoil sold to China.
Brazil's IBGE peg the 2011 soybean crop there at 68.1 MMT, in line with an estimate from Conab yesterday of 67.7-69.0 MMT.
The US weather is finally turning wetter for wheat on the Plains. "Over the next 5 days, rains will be excessively heavy in Kansas, Oklahoma and parts of Iowa. 1-2 inches is forecast from Wisconsin to Texas and the epicenter will be in Kansas, where 3+ inches will fall," say QT Weather.
As temperatures also plunge however the question is will there be enough time for Kansas wheat to truly benefit from this much-needed moisture before winter dormancy sets in?
"The chance for a major turnaround in Kansas wheat is improbable this season. A strong La Nina is in effect, a known drought producer in the Southern Great Plains," say Martell Crop Projections.
Early calls for this afternoon's CBOT session: corn down 3-5c, beans down 5-7c, wheat down 4-6c.
10/11/10 -- CBOT corn and wheat sold off during the second half of last night's session on ideas that there wasn't really anything that bullish in the USDA report for them. The overnight grains are mixed, but trending a little higher from earlier this morning.
Egypt are tendering for wheat again today, it will be interesting to see which way that one goes.
Chinese customs data shows that October soybean imports were considerably less than many had forecast - 3.73 MMT. That may be down to them resolving their dispute with Argentina over soyoil imports.
The USDA report? What an enormous crock of s**t, it's hardly worth getting the bus out to drive through some of the enormous holes and gaffs it contained. If they had one shred of credibility left then it's surely gone.
Not only did China's corn crop increase by 2 MMT this season to a whopping 168 MMT, but last year's drought-ravaged crop was also increased by 2 MMT.
What size was Argentina's wheat crop last year? According to just about everybody except the USDA it was 7.5 MMT or thereabouts. Yet they have it at 10.5 MMT, 40% more than everybody else, for a crop that was harvested almost a year ago.
Intriguingly, I've only just noticed that number as I had it in my head that the USDA had stood by an old forecast of 9.6 MMT for some time. It seems however that they slipped through an extra 900,000 MT in September.
September's report was itself such a shocker, as you will recall, that that particular piece of minutiae passed me by until this morning.
Aren't these guys are supposed to be the global authority on grains? I wouldn't put them in charge of a sweet shop.
10/11/10 -- One careful owner, beautiful plumage, good runner. Arrival of feed bill forces reluctant sale. Believed to be one of only five left in the country. Taxed and tested. Go on, spoil the missus for Christmas. May consider part-ex for a Porsche 911 targa top in mint condition. £12,995 ovno.
09/11/10 -- The USDA report was scarily bullish for soybeans. They have long been to my mind the strongest leg of the complex, although it is always disconcerting when every man, his dog and now his goldfish are all as bullish as hell.
Who said recently that "the only bearish factor is that there are no bearish factors?"
It wasn't that long ago, just in case you've forgotten, that the self same goldfish was actually as bearish as hell. There was only one sensible option left open for EU barley growers, and that was intervention.
The world was awash with burdensome wheat stocks, and we were all falling over ourselves to sell to China, the Philippines, Thailand or anywhere else that would take the wretched stuff off our hands. Yet suddenly the same wretched stuff is gold dust.
Has a drought in Russia and the loss of around 20 MMT of wheat off the world market really made THAT much difference between feast and famine? Surely not.
I mean, don't get me wrong, I'm in the bullish camp myself now if we are talking where prices are going short to medium-term. But do you REALLY think that this is the dawn of a new era? Are current prices REALLY here to stay long-term?
There are lots of plausible and compelling reasons to suggest that we are indeed at the "new normal" and that all that has gone before is merely history. But then again didn't most people believed that only two, or two and a half, relatively short years ago too?
Somebody emailed me today the old adage that the cure for high prices is high prices, in fact they actually said that the cure for high prices is REALLY high prices.
It looks like we might be about to see REALLY high prices. Prices that the livestock industry REALLY can't afford to pay.
Printing money causes inflation, printing money at a time of soaring food commodity prices coupled with the mandatory use of food for fuel is surely insane. The lawmakers from the White House to Whitehall are overdue a rethink, although sadly it would seem that things look set to get worse, possibly much worse, before they are forced to do so.
I think that we might have been here once before, and not that long ago. Timing might be everything on this one. One swift political u-turn and all bets could be off.
09/11/10 -- Soybeans
CBOT Jan soybean futures settled 54 1/4c higher at USD13.29; December soymeal finished USD17.40 higher at USD362.30; Dec soyoil ended 139 points higher at 53.40. The regular curve ball from the USDA came this month in the form of a surprise reduction in US soybean yields, and therefore production, plus sharply lower ending stocks. Ending stocks were in fact 30% down on last month to 185 million bushels. That cuts stocks to use to 5.5% or the equivalent of just 20 days worth of supply. World soybean ending stocks were almost unchanged at 61.41 MMT. China's import requirements for 2010/11 were raised 2 MMT to 57 MMT.
Dec corn ended down 9c at USD5.76 1/4 a bushel; Mar corn was also down 9c to USD5.90 1/4 a bushel. Corn opened higher on spillover support from beans but fell lower as the session wore on. Corn yields and production were cut a bit more than expected by the USDA today, but nowhere near the magnitude of that for soybeans. The USDA reduced projected exports by 50 million bushels and feed usage was also dropped by 100 million bushels. On a global level world corn ending stocks were reduced by 3.2 MMT to 129.2 MMT, even though they upped Chinese production 2 MMT to 168 MMT.
CBOT Dec wheat ended down 14 1/2c at USD7.21 3/4 a bushel; KCBT Dec wheat fell 8 1/2c to USD7.87; MGEX Dec wheat dropped 8 1/4c to USD7.95 1/2. As with corn, wheat opened higher in sympathy with beans but quickly fell away. The USDA cut US ending stocks slightly, but at at 848 million bushels that is a very comfortable 34.7% stocks to use ratio. They also dropped world wheat ending stocks by 2.2 MMT to 174.7 MMT. Nearby production prospects in Australia and Argentina were also raised. World wheat feeding increased by 2.5 MMT with China taking 2 MMT of that.
09/11/10 -- Nov10 London wheat closed with gains of GBP2.50 to end at GBP172.75/tonne, whilst Nov11 was GBP2.25 higher at GBP148.75/tonne. Paris wheat finished with Nov10 up EUR2.00 to EUR231.50/tonne and Nov11 rose EUR2.50 to EUR203.00/tonne.
London wheat posted the highest close for a front month since April 2008, albeit ending GBP1.85/tonne off the days high.
Prices opened higher but surged sharply higher after another bullish USDA report was issued at 13.30 GMT. Although that report wasn't particularly bullish for wheat compared to what had been expected, it was mildly friendly to wheat, fairly friendly for corn and outrageously bullish for soybeans.
The USDA dropped world wheat ending stocks by 2.2 MMT to 174.7 MMT, with Russian output trimmed by half a million tonnes to 42 MMT, in line with expectations.
Production in Australia was increased by 1 MMT to 24 MMT and that in Argentina upped by 1.5 MMT to 13.5 MMT.
EU-27 2010/11 wheat production was pegged at 136.3 MMT, up from 135.6 MMT last month. Exports were upped 1 MMT to 22 MMT, similar to last season.
US corn production is panning out sharply lower than the USDA's mid-summer optimism suggested. On a global level, despite raising this season's Chinese corn production to an extremely unlikely 168 MMT, world stocks to usage is now seen at only 56 days of supply, the second tightest of the past 35 years.
09/11/10 -- The much awaited USDA numbers are out and generally look bullish, especially for beans.
They cut soybean yields by half a bushel/acre from last month when a 0.3bpa increase was what the trade was expecting. That cut production by 33 million bushels against forecasts for an increase of 25 million. Soybean 2010/11 ending stocks came in well below expectations, falling 80 million bushels to 185 million compared to the 243 million the market was expecting. That cuts stocks to use to 5.5% or the equivalent of just 20 days worth of supply.
Corn yields and production were cut a bit more than expected, taking ending stocks down by 75 million bushels to 827 million, 18 million less than anticipated. That equates to a stocks to use ratio of just 6.2%.
They also cut 2010/11 all wheat production by 15 million bushels to 2.209 billion and trimmed ending stocks by 5 million against forecasts for a small 3 million increase. Even so at 848 million that is a very comfortable 34.7% stocks to use ratio.
On a global level world corn ending stocks were reduced by 3.2 MMT to 129.2 MMT, even though they upped Chinese production 2 MMT to 168 MMT. That will raise a few eyebrows. That pegs world stocks to usage at only 56 days of supply, the 2nd tightest of the past 35 years.
They dropped world wheat ending stocks by 2.2 MMT to 174.7 MMT (Russian output trimmed by half a million tonnes to 42 MMT).
World soybean ending stocks were almost unchanged at 61.41 MMT. China's import requirements for 2010/11 were raised 2 MMT to 57 MMT.
Early calls for this afternoon's CBOT session: corn and wheat up 10 to 20, beans up 40 to 50.
|2010/11 Ending Stocks (million bushels)|
09/11/10 -- ABF's annual accounts are out today in which they report: Group revenue up 10% to GBP10.2 billion; Adjusted operating profit up 26% to GBP909 million; Adjusted profit before tax up 26% to GBP825 million.
Group darling, bespoke tailor and haute couture fashion house Primark weighed in with an "exceptional year" generating revenue of GBP2.73 billion (up 18%) and an adjusted operating profit of GBP341 million (up 35%).
Agriculture chipped in with revenues of GBP954 million (up 4.5%) and an adjusted operating profit of GBP33 million (down 3%).
In the accompanying notes they say: "Construction of Vivergo’s wheat bioethanol plant in Hull in the UK will be completed in December, and commissioned during spring 2011 with operation scheduled for the summer."
09/11/10 -- It's a big day today with the USDA out with their latest production and stocks data. We seem to have a two-tier market developing these days. What do we think the real numbers are? And what do we think that the USDA will say that the real numbers are?
As can be seen lower down on this blog, the trade is forecasting corn yields down a little over a bushel an acre this month and corn production down around 110 million bushels. Soybean yields and production are called slightly higher than last time. Ending stocks are seen lower on both.
A significant portion of the trade seem to believe that whatever corn figure the USDA come up with, it will be erring on the side of caution and that the reality of the situation is in fact worse ie. final output WILL be lower than whatever they say today.
Production numbers from around the world will also be scrutinised this afternoon. As ever there will be plenty who's own Chinese production and stocks estimates, for both corn and wheat, will be substantially lower than the ones served up by the USDA.
Whether the market really believes the USDA numbers or not, it usually but not always, trades them as if they are fact. For a while at least.
What they will throw at us this afternoon is anybody's guess, what is a fairly safe bet however is that it will be inaccurate. Good game this isn't it?
If it's bearish then I think the market will see any downside as a buying opportunity, if it's bullish then I think it will merely vindicate the bulls that they were right all along.
So we might not trade higher tonight, but we probably will be higher by this time next week whatever happens. IMHO.
09/11/10 -- Emily Bishop isn't dead. I'd have put my house on the fact that she was.
Not since the dark days of MrsN#2 have I had to endure an episode of Corrie. Not until last night that was when MrsN#3 spotted that it was to be an emotional tear-jerking night with Jack reunited with Vera in that great bookies in the sky.
So I thought well, half an hour of my life isn't too much to give up is it?
"Is Emily Bishop still in it?" MrsN#3 politely enquires.
"Is she f**k as like, are you on drugs woman? That slimy fella killed her didn't he, the one that was fiddling insurance or something. He was giving Gail one, you know the fella. No not the one who got knocked down by a tram on Blackpool seafront, the other one. Christ give me strength," I wittily retort.
Cut to Rovers Return and there she bloody well is in the corner. Supping. Surely that nasty bloke that was slipping Gail a portion and killed Maxine did for Emily too? I can see her now slumped on the settee round at Ashley's, babysitting, blood coming out of the ear or mouth or somewhere.
And what's Kevin been up to again? How many extra marital affairs can that couple have, is it a competition or something? And hasn't Rosie grown, she was only knee high to a grasshopper the last time I saw her. And we also appear to have gone down the lesbian schoolgirl route just to spice things up a bit (I mean one of them isn't even attractive, how unrealistic is that?). I'm a tad surprised Jack wants away with that lot going on. But I digress, this is Jack's big moment...
So we get to the final few minutes and I'm thinking come on Nogger, keep it together old lad, we can't have a sly tear escaping here. I mean I'm renowned for my sensitivity and all that, but we don't want MrsN#3 taking the mickey do we.
Talk about disappointed, Corrie is apparently on for two separate half hour stints these days, or at least it was last night. So we get to the end and Jack is confusingly still alive. Something I wasn't prepared for.
Then we have to wait half an hour. Then we're back into it..."I know that the baby is Kevin's not Tyrone's"..."don't marry him Leanne, have me"..."stop ringing the bookies will ya"..."let's just tell the vicar that we're dirty lezzers and have done with it"...by the end of it all I'm the one losing the will to live. I'm positively urging Jack on, if I'd have had a gun I'd have gladly put him out of his misery myself.
Finally we get there, and Jack limps over the celestial finishing line.
RIP Jackie Boy, gone to fettle pigeons in the sky now. I bet he couldn't wait to get away.
08/11/10 -- Soybeans
Nov 10 soybeans closed at USD12.64 1/2, down 9 cents; Dec 10soybean meal closed at USD44.90, down USD3.10; Dec 10 soybean oil closed at 52.01, down 21 points. Soybeans settled lower on profit taking prior to tomorrow's USDA reports, after hitting the highest levels since June 2009 on Friday. The USDA export inspections report showed a very respectable 56.9 million bushels inspected for export for the week ending 4/11. The USDA announced 300,000 MT of soybeans sold to China split 120,000 mt for 10/11 and 180,000 mt for 11/12 delivery.
Dec 10 Corn closed at USD5.85 1/4, down 2 1/2 cents; Mar 11 corn closed at USD5.99 1/4, down 2 1/2 cents. For tomorrow's USDA report analysts are looking for corn ending stocks to decline to 845 million bushels from 902 million on the last report. Production is pegged at 12.542 billion bushels compared to the USDA October number of 12.664 billion bushels. The USDA export inspections report showed only 24.890 million bushels inspected for export for the week ending 4/11. The USDA's crop progress report showed corn harvested at 96%, up 5 points from last week and 23 points ahead of the 5 year average.
Dec 10 CBOT wheat closed at USD7.36 1/4, up 7 1/2 cents; Dec 10 KCBT wheat closed at USD7.95 1/2, up 9 1/2 cents; Dec 10 MGEX wheat closed at USD8.03 3/4, up 6 3/4 cents. Analysts are not expecting 2010 crop ending stocks to change much in Tuesday's USDA report. The average estimate is for 855 million bushels for all wheat compared to 853 last month. The USDA export inspections report showed a poor 15.539 million bushels inspected for export for the week ending 4/11. USDA's crop progress report showed winter wheat planted at 95%, 3 points ahead of last week and the 5 year average. Good/excellent conditions were only 45%, down a point from last week.
08/11/10 -- EU wheat futures closed firmer with Nov10 London wheat up GBP1.25 to GBP170.25/tonne and Nov10 Paris wheat EUR4.25 firmer at EUR229.50/tonne.
Paris wheat was aided by the weakness of the euro which fell to a five week low against the pound on concern over Ireland's ability to cope with it's budget deficit.
It's a public holiday in Spain tomorrow, which prompted many traders there to take today off and make a nice ling weekend out of it.
Trading activity was light ahead of tomorrow's USDA reports.
Nothing too startling is expected for US wheat ending stocks, but forecasts for production in other nations around the world will be scrutinised.
The success of Argentine and Australian wheat at last week's Egyptian tender will be keeping traders minds focused on imminent new crop arrivals for those countries. EU wheat export licence applications have slackened off markedly in recent weeks.
Weather concerns remain for US winter wheat even though rain is in the forecast for much of the dry High Plains later in the week. The flip side is that temperatures are also forecast to plummet, with snow even on the radar for some areas, that might bring on winter dormancy and limit the beneficial effect that any rains may have.
08/11/10 -- The overnight trade closed mostly a little lower in positioning ahead of tomorrow's USDA reports.
Wheat finished with losses of 2-3c nearby, with corn down 1-2c and beans off 2-4c.
The dollar is back to pretty much where it was before last week's QE2 announcement from the Fed. Crude oil is slightly lower.
China and Brazil amongst others are voicing their opinions about the Fed seeming to be deliberately undermining the dollar.
The euro is also weak on concerns over Irish debt.
Tonight the USDA will report on harvest progress and crop conditions for US winter wheat. Last week's report showed soybeans harvested at 96% and corn harvesting at 91% complete. Winter wheat was 92% planted and good/excellent conditions were just 46%.
Tomorrow's USDA report will lower corn yields and production and raise slightly that for soybeans. 2010/11 ending stocks will fall for both corn and beans and be about unchanged on wheat. At least that is what just about everyone seems to think.
Soybean planting in Mato Grosso is about 50% done compared with 75% or so normally, with farmers planting round the clock in an attempt to make up for lost time. It's not this season's soybeans they are worried about, it's second "sarfina" crop corn. A crop similar to last season in the 68-69 MMT bracket is what most analysts are forecasting at the moment.
The USDA have just confirmed the sale of 300,000 MT of US soybeans to China.
Early calls for this afternoon's CBOT session: beans down 2-4c, corn 1-2c lower and wheat down 2-3c.
08/11/10 -- This has to be the cheapest land on the planet: Twenty quid an acre!
It's just that it's unfortunately not this planet that your land is actually on.
Still it's priced to sell as they say in estate agent parlance, maybe the lads from Nocton Dairies might consider putting an offer in? Perhaps that could be the milky way forward? Unless Mars bars them from the galaxy of course.
Dow Jones Est
|2010/11 Ending Stocks (million bushels)|
08/11/10 -- Agriculture, food and engineering group Carr's Milling Industries are reporting a pre-tax profit increase of more than 27% to GBP9.0 million today for their FY ended 28 Aug 2010.
Group trading dipped slightly, down 1.7% to GBP344 million, but revenue from agriculture was up 3% to GBP203.0 million, with pre-tax profits up 1% to GBP5.23 million.
08/11/10 -- Vegoils continued to march higher overnight with Malaysian palm oil setting new 27-month highs and soyoil on the Globex market hitting its best in 26 months.
Strong Chinese demand and production problems in Malaysia and Indonesia following a La Nina-induced prolonged rainy season are behind the move.
Food commodities remain in demand with the price cotton up 54%, corn up 29%, soybeans up 22%, orange juice up 17% and sugar up 51% in the past 60 days.
It's been another dry weekend for US winter wheat on the High Plains, with temperatures soaring to an astonishing 20-30 degrees above normal and winds of 40-45mph.
Relief is however in sight, with farmers in these areas only having to wait another few days to see their best moisture since September, according to QT Weather.
"If the GFS is correct, rainfall will be heaviest (heavier than earlier expected) across a large portion of the HRW Belt ,as big changes are forecast for late this week. 1-3 inch rains are expected over Central Kansas and W Oklahoma on Thursday and Friday," they say.
The bad news though is that farmers in the driest areas of the SRW areas of the Ohio Valley will have to wait much longer for their rain relief, they add.