28/01/11 -- Soybeans
March soybeans closed down 1 3/4c at USD13.97 3/4 a bushel; March soymeal traded USD0.40 lower at USD377.00; March soyoil ended 14 points lower at 57.27. Beans were sharply higher in early trade but failed to hold onto those gains on profit-taking. Traders seemed unwilling to sit on longs over the weekend with North Africa in political turmoil, which has also now spread to Yemen. Private exporters announced the sale of 110,000 MT of old crop soybeans to China.
March corn finished down 6 3/4c at USD6.44 a bushel. May corn finished down 6 1/2c at USD6.54 1/2 a bushel. The market looked a little tired heading into the weekend after hitting 30-month highs a week ago. Private exporters announced the sale of 151,638 MT of corn to Japan. The recent arrival of wetter weather for Argentina may have come too late for corn is what many are saying. A flurry of feed wheat sales for Australia of late though indicates that corn can't have things all it's own way on the international export stage.
CBOT March wheat plunged 20 1/2c to USD8.25 3/4 a bushel; KCBT March wheat fell 20 1/2c to USD9.12; MGEX March wheat lost 14 1/2c to USD9.61 1/2. Wheat seems to be giving up some of it's recent gains propelled it to 29 month highs. Profit-taking ahead of an "anything can happen" weekend in North Africa, particularly in Egypt, took some money off the table. Recent excitement that the Arab world's most populous nation will follow the lead of neighbouring Algeria and Tunisia and step up it's wheat purchases is now giving way to caution that the opposite may be true if the government faces overthrow.
28/01/11 -- EU wheat closed mixed, but mostly lower, with Mar London wheat down GBP0.75 to GBP203.25/tonne and new crop Nov GBP0.60 lower at GBP173.90/tonne. Mar Paris wheat rose EUR1.25 to EUR266.00/tonne, with Nov down EUR1.75 to EUR231.50/tonne.
A weaker US market took the shine off things today, although wheat still closed with significant gains on the week, especially for old crop months.
On the week as a whole Mar London wheat rose GBP4.50/tonne, with Nov up GBP1.90/tonne. Mar Paris wheat gained EUR6.50/tonne, with Nov up EUR1.75/tonne.
Yesterday's export figures showed EU soft wheat exports slowing somewhat to 240,000 MT in the past week, but they've hardly ground to a halt. Indeed, they need to slow as we are already 2.35 MMT up on this time last year.
Brussels said that they will make a decision on whether to scrap the existing EUR12/tonne import duty on wheat next month. Spain and other EU nations are already said to be eyeing imports of Australian feed wheat.
Meanwhile it would seem that almost three quarters of the EU barley intervention stocks earmarked for sale (some have been given away to the needy) have now been sold.
Continued unrest in Egypt, where the stock market fell 10% yesterday following declines of more than 6% the day before, is forecast to flush out the world's largest wheat buyer into issuing an import tender any day soon.
28/01/11 -- It's now half past beer o'clock. On a Friday. And I've met my deadline, so there's nothing pressing. And the phones are a bit quiet. And I'm ever so slightly thirsty. And one or two kind souls have hit the donate button this week, so I have some funds burning a hole in my pocket.
So, shall I:
a) go to the pub
b) go to the pub
c) carry on blogging, there's no other decent market info out there Nogger, I'm begging you please stay
d) go to the pub
BTW looking for spot(ish) EU wheat distillers and/or citrus pulp pels in Liverpool if anyone has any spare. Value GBP210 and GBP180 respectively.
28/01/11 -- How many of this season's mush, sorry sugar beet, growers are going to say enough is enough at GBP26/tonne.
Immediately followed by the thought "blimey, look at the price of wheat."
Closely followed by "I do believe that they're building another massive bioethanol refinery right on my doorstep dontyaknow, part of an ill-conceived plan to save the planet that is actually doing the opposite and encouraging us to ship wheat in from the other side of the world 'cos we've already used all of ours, which just happens to be inadvertantly driving up the local price of wheat to unprecedented levels. And the missus wants a Jag."
28/01/11 -- Our chums at the excellent Agrimoney.com carry an interesting story today suggesting that before the combines have stopped rolling and the mops & buckets have been put away, Australian farmers are already thinking about next season.
They may not be very good at winning the Ashes back, but even they can spot a golden opportunity when one presents itself. Unsurprisingly, they fancy planting a bit more wheat next time round, 10% more in the east of the country in fact.
Heavy rains may have cut quality this season but they've also boosted yields, and maybe more importantly replenished the water table rather significantly.
Now you have to remember that this season's say 25 MMT crop, comes despite a harvest disaster in Western Australia, which usually chips in with 35-40% of the total wheat crop Down Under. If they'd have managed a "normal" crop in WA this season then we'd be looking at a total Australian wheat crop of around 30 MMT this time round. And now they're planning on planting 10% more for next season.
And let's face it, the Australian's aren't going to be the only ones looking at the current wheat prices and having these kind of thoughts are they?
Go figure, as they say.
28/01/11 -- Brussels sold 489,000 MT of intervention barley this past week - more than they sold in the whole of December. They're certainly rattling through what not so very long ago was considered "burdensome" stocks that's for sure - by my calculations this month's sales are almost 1.4 MMT. That brings the total sold since sales began in November to around 2 MMT, around three quarters of what was earmarked to be sold-off. What happens though when that runs out?
27/01/11 -- Soybeans
March soybeans settled 14 cents higher at USD13.99 1/2 a bushel; March soymeal ended USD3.00 higher at USD377.40; March soyoil ended 71 points higher at 57.41. Export sales were 780,900 MT for 2010/11 and 159,400 MT for 2011/12. China took a combined total of 511,300 MT of that. The December soybean census crush was 153.05 million bushels, above the average estimate of 152.0 million. Argentine port workers are striking, so exports from there may be disrupted, meanwhile Argentine rains have arrived in force which should help newly planted beans.
March corn closed down 7c at USD6.50 3/4 a bushel; March corn also closed down 7c at USD6.61 a bushel. Weekly export sales for corn were poor at 547,500 MT in total, of that 414,700 MT was for 2010/11 delivery and 132,800 MT for 2011/12 delivery. Late in the day pressure from falling wheat prices also weighed on corn today. Crude oil was also under pressure, finishing below USD86/barrel, which added some more negativity in a heavily overbought corn market.
CBOT March wheat closed down 10 1/4c at USD8.46 1/4 a bushel; KCBT March declined 7 1/2c to USD9.32 1/2; MGEX March fell 1c to USD9.76. As you can see the differential between CBOT wheat and it's higher quality neighbours keeps widening. It all started well for wheat, with March CBOT material coming within 3/4 cent of the early August Russian export ban contract high in early trade, before profit-taking kicked in. Export sales were robust for wheat, coming in above 1 MMT for the second week running.
27/01/11 -- EU wheat futures closed mixed with Mar London wheat GBP0.50 higher at GBP204.00/tonne, and Nov down GBP0.35 at GBP174.50/tonne. Paris wheat closed with Mar down EUR1.25 to EUR264.75/tonne and Nov down EUR0.75 to EUR233.25/tonne.
March London wheat set another all-time high close for a front month on the back of a weaker pound/euro this past couple of weeks. The pound has fallen form over 1.20 to 1.16 in little more than a fortnight. Tuesday's insipid Q4 GDP data didn't help.
Paris wheat also set contract highs earlier in the day before settling slightly lower later on.
News that Brussels only issued 240,000 MT of soft wheat export licences this past week maybe took some of the wind out of the bull's sails, although there is no doubting that they still have a very strong headwind behind them. We've maybe dropped back to a force eight or nine on the Beaufort scale, that's all.
US weekly export sales were strong at over 1 MMT and tender results from a variety of different buyers are expected imminently. At this stage it probably doesn't matter if US, EU, Australian or Argentinean wheat wins - the point is that somebody will and that takes another million or two off the table.
As well as confirming having bought "at least" 1.75 MMT of wheat since the turn of the year, Algeria is also thought to have purchased a further 800,000 MT of durum wheat in recent weeks.
Much of the latter is expected to have come from France, where durum wheat prices delivered to Port La Nouvelle have risen from EUR270-275/tonne to EUR335-340/tonne since the turn of the year - an increase of around 25%.
27/01/11 -- The overnight grains closed mixed with beans and wheat flat to a cent lower and corn around 2c firmer.
There's not much change on the grains, and little movement on the dollar or crude oil either.
Weekly export sales from the USDA were robust for wheat, coming in above 1 MMT for the second week running. Bean sales weren't too far away from that total either, although corn sales were a tad under expectations.
Soymeal sales were disappointing, and also US stocks were seen higher, which may pressure meal relative to beans and oil tonight.
The wheat market is still all excited about North African and Middle Eastern buying. Bangladesh has also joined in the fun, tendering for 50,000 MT of wheat.
The December soybean census crush was 153.05 million bushels, above the average estimate of 152.0 million.
Argentine rains have arrived in force. "The first five days of the latest wet weather regime has past in Argentina and it hasn’t disappointed. Two, three, and even some four inch totals have been seen in key central growing regions and another 10 days of unstable conditions are expected to continue," say QT Weather.
The market still expects that this may have come a bit late for corn though.
Chinese buying may slow down somewhat for their New Year celebrations.
Things just feel a little jaded so far today. As ever large fund length leaves the market vulnerable to downside corrections on days like this. The bulls do after all need to be fed every day, they didn't get fed on Turnaround Tuesday and beans fell 30c.
Early calls for this afternoon's CBOT session: Wheat and corn up 1-2 cents, soybeans down 1-2c.
600 - 800 TMT
900 TMT - 1.2 MMT
600 - 900 TMT
27/01/11 -- Unconfirmed reports reaching Nogger Towers suggest that a load of milling wheat bound for a well-known mill on the south coast was rejected this week for containing a live spaniel!
Said canine had accidentally got scooped up and loaded onto the lorry collecting the grain at a farm in the Basingstoke area, I am told. He arrived relatively unscathed, if a tad "rough around the edges" and was given a drink of water and subsequently returned home with the rejected wheat incurring the farmer a GBP500 debt for a wasted journey to boot.
I have no idea how true this is, but I'd just love it if it was true and the dog was called ergot.
27/01/11 -- So just stop going on about it will you. Sian Massey was apparently "pulled" from running the line in Tuesday night's game between Crewe and Bradford as she had a stack of ironing to get through and her husband always goes out for a game of darts that night.
26/01/11 -- Soybeans
March soybeans settled 11 cents higher at USD13.85 1/2 a bushel; March soymeal added USD1.80 to USD374.40; March soyoil rose 92 points to 56.70. Private exporters announced the sale to China of 60,000 MT of soybeans for 2010/11 delivery and 167,000 MT for 2011/12 delivery. Crude oil firmed, adding outside support and spillover strength from corn and wheat also helped. Argentine weather prospects have improved, but the market is already starting to focus on the so-called US "battle for acres" between corn and beans this spring. Weekly export sales for tomorrow are expected to be 600-800 TMT.
March corn ended up 13 3/4c at USD6.57 3/4 a bushel; May corn also ended up 13 3/4c at USD6.68 a bushel. A lower dollar, firmer crude oil and strong support for wheat underpinned corn today. Corn production in Argentina is likely to take a hit despite an improved weather outlook. "Heat and moisture stress has worsened in the past 6 weeks in the northern corn provinces. Even though heavy rain is predicted this weekend it would too late to rescue drought-stressed corn in Cordoba," say Martell Crop Projections. Heat is also damaging for corn in the pollination and kernel-filling stages, they add. Weekly export sales for tomorrow are expected to be 600-900 TMT.
CBOT March wheat rose 18 1/4c to USD8.56 1/2 a bushel; KCBT March wheat climbed 22 1/2c to USD9.40; MGEX March wheat jumped 21c to USD9.77. Demand from North Africa and the Middle East is the key here. Algeria bought 800,000 MT of optional origin wheat in it's latest tender, bringing their purchases in the past four weeks to a suggested 1.8 MMT. They've also been buying significant quantities of durum wheat on top of that. Assorted other tenders from the same region are also kicking around as buyers look to secure supplies as stocks tighten further. Weekly export sales for tomorrow are expected to be 900 TMT–1.2 MMT.
26/01/11 -- Mar London wheat closed GBP2.50 higher at GBP203.50/tonne, with new crop Nov GBP2.35 higher at GBP174.85/tonne. Mar Paris wheat rose EUR3.50 to EUR266.00/tonne, whilst new crop Nov climbed EUR2.75 to EUR234.00/tonne.
Amongst an assortment of records that was the highest front month close for London wheat ever, a lifetime contract high close for new crop Nov - almost certainly making off the combine harvest wheat the highest that it's ever been too.
Not to be too outdone, Mar Paris wheat also closed at the highest for a front month in 34 months.
Algeria bought another ruck of wheat today, booking 800,000 MT to bring it's total purchases to 1.8 MMT in the past month alone. Iraq and Saudi Arabia are also in the market, and expected to book volume with Egypt seeming increasingly likely to also enter the fray sooner rather than later.
Spain is reportedly eyeing buying Australian feed wheat, providing that the EU Commission don't see fit to impose an import levy on it.
The pound seems to have stabilised after yesterday's heavy losses following a dismal drop in GDP in Q4 of 2010. Further depreciation would obviously be supportive for UK wheat, not that we have anything much left to sell.
Brussels will report tomorrow on EU wheat export licences for the past week, another big number could provide a further leg-up for the market.
26/01/11 -- The overnight grains closed firmer with wheat leading the way around 10c higher, with beans and corn both up around 6-8c.
Algeria bought 800,000 MT of optional origin wheat in it's latest tender, bringing their purchases in the past four weeks to a suggested 1.8 MMT. Egypt hasn't tendered for anything yet this week, but are expected to make a move soon. Seeing as they import almost twice as much wheat as Algeria what might they be in for?
The Egyptian stock market fell more than 6% to a six year low today on nervousness over what the press there are calling the "Day of Anger."
Iraq and Saudi Arabia are also tendering for significant volumes of wheat.
China sold 164 TMT of wheat in today's government auction - more than last week but still only 3.6% of what was on offer.
The USDA today reports 60,000 MT of old crop and 167,000 MT of new crop soybeans sold to China.
Dock workers in the Argentine port of Rosario are striking.
Grupo Bom Futuro, Brazil's largest soybean grower, says that it is standing aside of selling in anticipation of higher prices to come.
Early calls for today's CBOT session: Beans up 8 to 10 cents, corn up 6 to 8 cents and wheat up 10 to 12 cents.
26/01/11 -- Does anyone know how to restore an Outlook Express email inbox that OE helpfully "compacted" for me this morning? Except compacted seems to mean packed up away and hidden somewhere as all my incoming emails between October and now are no longer in my inbox. Thanks, in hopeful anticipation.
PS I've tried a system restore to no avail. Also there isn't a .dbx or .bak file in my recycle bin (or anywhere else on my PC) created recently. It seems that the compaction process failed midway through.
26/01/11 -- Wynnstay Group, based in the mid-Wales town of Total Network Solutions, have just announced an impressive set of record results for their financial year ending 31 Oct 2010.
Trading results for the year show the Group's revenues at GBP243.74m, up 13% on last year and pre-tax profits at GBP5.95m, up 14% year on year.
"Feed sales for the year were excellent, with increased volumes of blends and compound products from all manufacturing sites contributing to 14% like-for-like growth over a more difficult year in 2009," they say.
Looks like lunch is on you next time then Eric?
26/01/11 -- Wheat is up on the overnight market I see, with front month March having hit 848 1/4 - it's highest since the market went mental at the beginning of August just as the Russians announced their export embargo, and a two year high for a front month.
Food rioting all over North Africa has now spread to Egypt, getting the market all excited that they might be in the market for volume of wheat any day now, mirroring the recent actions of Algeria and Tunisia. The former are tendering for 50,000 MT again this week, but may buy much more.
If they wore hats then Saudi Arabia would have thrown theirs into the ring by now, possibly concerned that others are getting there first, tendering for 500,000 MT of hard wheat. The results of an Iraqi tender are also expected anytime.
As you can see there's no shortage of interest in wheat even if it is at two year highs, if anything interest has intensified.
A report on the excellent Agrimony.com this morning says that militant dockers at the Argentine port of Rosario have started an "indefinite" strike just days after a week-long farmers embargo on sales cut deliveries to the Rosario Grain Exchange by more than 80%.
Reuters report that the German chairman of Nestlé says that it is "madness" to turn agricultural areas over to the production of biodiesel, and that this time food price rises are here to stay. So three cheers for Peter Brabeck. So stop harping on about your bombed-out chippy will you, we're all friends now etc.
Another small hurrah! Farmers supplying First Milk are to get a price increase from 1 Feb, says Farmers' Weekly. Milk Link announced a similar move late last week, upping their price to 26ppl, although that's still 4ppl below what farm leaders say they need to make a profit.
Incidentally the latter still haven't responded to my request for free milk, although they did ring me up and say that their demand for free Nogger content for their website for six months was a little out of order. I still don't like them though.
Following on from yesterdays bad news re UK GDP, Merv the Swerve heaped on more misery when he went on to admit that inflation could rise as high as 5% in the next few months. I think he pronounced "could" wrong there.
Unsurprisingly the pound still has the look of a sick puppy this morning, but that's good news if you're a wheat grower or longholder - London has opened around GBP2.00 higher on both old and new crop, Nov has traded at a lifetime contract high of GBP176.00/tonne.
The US Grains Council, talking their own book again, say that China "could" import more than 7 MMT of corn in 2011, and that they still "might" take 3 MMT of DDGS on top of that "if" they get the green light on imports. What was it my Gran used to say "if ifs and buts were pots and pans, then I'd have a cupboard full of them" or something like that. No hang on it wasn't that, it was "if I had a cock I'd be your Grandad" that was it.
US pig futures prices - they call them hogs just to wind them up, but they're pigs really - hit 5 1/2 month highs yesterday. Hopes are up that US exports will increase as Russia looks for alternatives to German pork which has become "about as popular is piles" following the dioxin scare, according to one market insider.
25/01/11 -- Soybeans
Mar 11 soybeans closed at USD13.74 1/2, down 30 cents; Nov 11 soybeans closed at USD13.12 3/4, down 24 cents; Mar 11 soybean meal closed at USD372.60, down USD7.60; Mar 11 soybean oil closed at 55.78, down 140 points. Amazingly little old Britain seemed to be the catalyst to send the market crashing. Already nervous on rumours that China may be about to raise interest rates again in an effort to rein in inflation, news that UK GDP nose-dived in the last quarter of 2010 was enough to spook heavily long investors. Even the news of a large new crop export sale to China couldn't stem the tide.
Mar 11 corn closed at USD6.44 3/4, down 10 1/2 cents; Jul 11 corn finished at USD6.59, also down 10 1/2 cents. The dollar was higher and crude oil prices crashed a dollar and a half, well below the USD 90/barrel mark at USD86.36/barrel. There wasn't much fresh news to excite the bulls today. Argentina is turning wetter, China may be looking to up interest rates again, and the US market is heavily overbought. US export sales are also dropping off, Australian feed wheat is flexing it's muscles internationally - which may have a negative impact on corn demand.
Mar 11 CBOT wheat closed at USD8.38 1/4, up 3 cents; Mar 11 KCBT wheat closed at USD9.17 1/2, up 9 1/2 cents; Mar 11 MGEX wheat closed at USD9.56, up 5 3/4 cents. Wheat managed to gain relative to the other grains/oilseeds on ideas that the US is one of the few shops left open. Unrest in Egypt may also spark some fresh buying, along the lines of what has been witnessed recently in Tunisia and Algeria - the latter is also in the market for wheat today. Iraq may confirm some wheat purchases overnight too.
25/01/11 -- EU wheat futures closed mostly flat to higher Tuesday after trading lower for much of the day. Mar London wheat was unchanged at the close of play at GBP201.00/tonne and new crop Nov was also flat at GBP172.50/tonne. Paris wheat saw Mar rise EUR1.25 to EUR262.50/tonne and Nov EUR2.25 higher at EUR231.25/tonne.
It was a rather choppy session heightened by the surprise news that UK GDP fell in the last quarter of 2010, contrary to expectations of a rise. The pound immediately fell sharply, dipping as low as 1.5850 against the dollar and 1.1565 against the euro, before recovering slightly by the close.
The news would certainly seem to indicate that ideas of a rise in interest rates here as early as the summer may now be on hold.
"Large scale" social unrest in North Africa has now spread to the Arab world's most populous country and the largest wheat buyer on the planet - Egypt. Cynical it may be, but the market seems to be thinking "hang on a minute, the likes of Algeria and Tunisia are tackling this by buying more wheat - suppose Egypt does that too?"
Australia's wheat crop is currently said to be 62% milling grade (versus 86% a year ago), making it 38% feed grade (from 14% last season). Spain are said to be interested in buying Australian feed wheat if EU import tariffs allow it.
EU rapeseed also had a volatile session, with front month Feb falling sharply in early trade - for the second session running - before also recovering much of those early losses by the end of the day. At one stage Feb was down almost EUR20/tonne since Friday.
25/01/11 -- The overnight grains closed with double digit losses for beans and wheat, with corn not too far behind either. Beans finished around 12-14c lower, with wheat mostly in the region of 10-12 easier and corn down around 9c.
Crude oil is also sharply lower, down USD1.21 to USD86.66/barrel, other outside markets like gold are also weaker. The dollar is a bit firmer too.
It looks like another turnaround Tuesday for the time being, although the USDA is this afternoon reporting export sales of a whopping 2.74 MMT of new crop beans to China (note: this sale was initially and incorrectly reported as being old crop, which would have been far more significant). I can only assume that this was part of last week's "showcase" deal when the Chinese Premier was in town?
There was also a sale of 114,000 MT of old crop beans to Taiwan.
Talk of China upping interest rates before the start of its New Year celebrations seems to be encouraging profit-taking across commodities in general.
Argentina is looking wetter, much wetter. "today...the best rains of the growing season reach central growing areas leaving 10 day totals of 6-10 inches," say QT Weather.
Drought persists in the North China Plain though, with no respite in sight.
Get the bunting out because the Chinese government actually managed to sell some soybeans at today's auction, at 5,000 MT it was only 1.7% of what was on offer but it's a start. They also sold 153 TMT of the corn on offer, representing 8.5% of the total available.
Argentine farmers have lifted their one week sales embargo, for now. They have issued the government with a two-week ultimatum to stop meddling with wheat exports. Here's another road we've been down before.
With heavy fund long positions in place the market is always going to be vulnerable to a corrective slide, this afternoon it looks like we are going to get one of them.
Early calls for this afternoon's CBOT session: Beans down 10 to 12 cents, corn down 8 to 10 cents and wheat down 10 to 12 cents
25/01/11 -- McDonalds is set to raise it's prices later this year following the increased cost of staple raw materials.
A report on Reuters today says that ten key commodities account for 75% of the Golden Arches food preperation costs. These are listed as "Beef, chicken, pork, bread and milk products, paper, cola, ketchup and other sauces, and fruits and vegetables." What, no salt, or is that the "missing" 25%?
Interestingly, costs in Europe are seen rising at almost double the rate of those in the US.
25/01/11 -- The pound fell sharply in early trade following the shock news that UK GDP fell 0.5% in the last quarter of 2010, contrary to expectations of an increase by a similar amount.
It's all the weather's fault. The sudden arrival of heavy snow and sub-zero temperatures is largely to blame, how very British.
"This really isn't our fault. We inherited a lot of snow and ice from the previous reckless Labour administration," said David Cameron. Probably.
Prices rising and growth falling, what does the Bank of England do now? Fire up the Thomas Caxton and order more ink?
The pound dropped below 1.58 against the dollar shortly after the news and fell to not much more than 1.16 against a suddenly popular euro.
24/01/11 -- Soybeans
March beans settled 7 3/4c lower at USD14.04 1/2 a bushel; March soymeal closed USD0.60 higher at USD380.20; March soyoil ended 38 points lower at 57.18. The outlook for much improved rainfall in Argentina took the bullish shine off beans today. "In an amazing turn of events in Argentina, some of the driest areas will see two week rain totals of 8-14 inches. This very wet weather begins late Tuesday and lasts (at least) into early February," says QT Weather. The USDA announced the sale of 114,000 MT of 2010/11 soybeans to China, who also agreed to buy 11.5 MMT of US beans for the 2010/11 and 2011/12 marketing years.
March corn ended down 2c at USD6.55 1/4 a bushel; March corn also closed down 2c at USD6.65 a bushel. Private analyst Informa upped its corn acreage estimate for 2011 slightly to 90.9 million acres on Friday. The much improved Argentine weather outlook is probably less helpful for corn than beans. Strength in wheat lent some support, but the market seems nervous about pressing much higher with funds already holding a record long position. Everybody is bullish and downside risk is almost inconceivable, which is dangerous territory to be in. Meanwhile the two-headed ethanol monster continues to devour US corn.
CBOT March wheat closed up 10 3/4c at USD8.35 1/4 a bushel; KCBT March wheat climbed 8c to USD9.08; MGEX March wheat rose 13c to USD9.50 1/4. As you can see ten dollar wheat isn't that far away in Minneapolis. China is dry, and set to remain that way, but we've been here before and they only emerge as a major wheat buyer very, very rarely. The market is however waking up to the fact that the US are pretty much the only volume seller of quality wheat. Unless you want Argentine unreliability. Much of their exportable surplus will likely go to neighbouring Brazil anyway.
24/01/11 -- EU wheat closed mostly higher with March London wheat up GBP2.25 at GBP201.00/tonne, and new crop Nov GBP0.50 higher at GBP172.50/tonne. March Paris wheat rose EUR1.75 to EUR261.25/tonne and Nov fell EUR0.75 to EUR229.00/tonne.
In London new crop Nov set a new contract high of GBP173.50, in Paris old crop March did likewise hitting EUR263.75/tonne. The Mar/Nov London spread is GBP28.50/tonne, broadly similar to that in Paris.
London wheat gained relative to Paris as the pound weakened against the euro, falling below 1.17 at one point.
The UK continues to export wheat, and seems highly likely to go well over 2 MMT this season - 2.3/2.4 MMT would be my guess, which would be a million tonnes more than Defra currently estimate.
Many trade pundits estimate that maybe 10% of the UK crop still has to be sold ex-farm - around 1.5 MMT. Other talk suggests that maybe 30% of new crop has already been sold.
Tunisia bought 100,000 MT of optional origin hard wheat again on Friday, and Algeria are back in the market tendering for wheat again today too, having already supposedly bought somewhere in the region of 600 TMT- 1 MMT in the past few weeks.
Nearby Feb Paris rapeseed fell sharply late in the day, closing EUR11.75/tonne lower at EUR503.00/tonne on talk that price finally is rationing demand. Reports suggest that OSR is now so expensive that it is more economical for the large fuel companies to fail to meet their biodiesel blending obligations and pay the fine instead than meet EU-imposed mandatory levels of inclusion.
24/01/11 -- The overnight grains closed firmer with the bulls nicely comfortable in a first class carriage supping Bollinger on this particular gravy train. Wheat finished with gains of around 7-10c, with beans up 6-8c and corn 1-3c higher.
Heavy, possibly drought-busting, rains are in store for Argentina during the next fortnight. Will they arrive too late to be of much help for corn? Certainly they should aid beans, planting of which isn't even fully completed yet.
The market seems to be ignoring this forecast though and concentrating on continued rains in Australia, dryness in China and extreme cold in the US.
French wheat has set new three year highs as stocks dwindle, America has plenty - but there's no point giving it away is there? It's a sellers market.
Buyers meanwhile are scratching each others eyes out to get to the front of the queue.
The US EPA said that they will extend the recently announced E15 blend of 15% ethanol in gasoline to include vehicles built from the 2001 model year and later (from the 2007 upwards permitted in October).
That's another shot in the arm for corn demand then. Not that it really needed it. China keep buying soybeans like they're the last iPad in the store and meanwhile the US wheat shop is the only one left open after the Australian one got flooded, the Russian one burnt down and the French one is only open between midnight and 12.01am.
Oh, and guess what, that's right the USDA have just announced a sale of 114,000 MT of 2010/11 soybeans to a certain slightly jaundiced looking Far Eastern gentleman today.
Early calls for this afternoon's CBOT session: corn 1-3c higher; beans 6-8c higher; wheat 8-10c higher.
24/01/11 -- New crop November London wheat has set a fresh contract high of GBP173.50 this morning, up GBP1.50 on the day so far. Front month March Paris wheat has also set a lifetime high of EUR263.75/tonne, and currently trades just below that, up EUR3.50 on the day.
Resurgent Chicago wheat is up 12c on the overnights, adding to 21c gains on Friday, boosted by robust weekly export sales of over 1 MMT. The pace of French sales has to slacken off now as we enter the second half of the 2010/11 marketing year, that leaves the door open for the US, and to a more limited degree Argentina and Australia to boss the export arena.
The world's major wheat buyers haven't stopped buying wheat, if anything they've upped the pace as if they're frightened that we're going to run out. We aren't, but they don't know that do they? So we'd better let them have just one or two more cargoes just in case. Tunisia bought 100,000 MT of optional origin hard wheat again on Friday.
In the UK, GBP160/tonne ex farm is now widely achievable for new crop wheat off the combine. The current futures spread suggests that would value August 2012 as available at around GBP135/tonne - would that be the sale of the century or fools gold?
24/01/11 -- Parts of drought parched Argentina are in for a serious soaking, with more a foot of rain suddenly in the forecasts for the next fortnight.
"In an amazing turn of events in Argentina, some of the driest areas (where seasonal rains have been eight inches below normal and drought conditions categorized as “extreme”) will see two week rain totals of 8-14 inches. This very wet weather begins late Tuesday and lasts (at least) into early February," says QT Weather.
The market either hasn't heard or doesn't care, with the overnights up around 8-10c on beans.
24/01/11 -- Or is everybody's favourite search engine getting a little bit too big for it's boots? They've just announced a tasty 29% rise in net profits to USD2.5 billion in the past quarter, yet their new "intelligent" software which tries to guess what you're searching for as you type may be starting to drive people away. It certainly is in my case, and I now seem to spend 50% of my search time using Bing instead. Sometimes less is more.