EU Grains Close
07/06/11 -- EU wheat futures closed lower with Jul London wheat down GBP2.50/tonne to GBP190.00/tonne and with new crop Nov falling GBP5.00/tonne to GBP184.50/tonne. Nov Paris wheat was down EUR4.00/tonne to EUR225.50/tonne whilst May12 declined EUR3.25/tonne to EUR229.25/tonne.
This was the lowest close for a front month on London wheat since Mar 17, when the market was rebounding from the aftermath of the Japanese earthquake and subsequent tsunami.
Recent significant rains across northern France and central/western Germany are seen benefiting crops there. Southern areas of the UK have at least received something, although coverage here has been more localised.
Despite weather problems in Europe and America the trade seems to be coming to terms with the notion that the crops in eastern Europe and the FSU are looking if not bumper at least ample.
The three lions of the Black Sea - Russia, Ukraine and Kazakhstan - are back on the prowl eager to gobble up any export order going.
Ukraine's Deputy Farm Minister pegs the wheat crop there at no less than 20 MMT, an increase of a minimum 19% on last year. Exports are estimated to be anywhere from 8.5-10.0 MMT, a rise of 140-185% on 2010/11.
The Russian Deputy Agriculture Minister says that their wheat exports may reach 13 MMT in 2011/12, 3 MMT more than the USDA estimate and a 225% increase on the current marketing year.
Wheat production and exports in Kazakhstan meanwhile are seen rising by at least 50% in the season ahead.
NWF Shares Jump
07/06/11 -- Shares in my old chums NWF are up more than 4% today, and are now trading at 133.5p having been under 110p for a net gain of over 20% in less than a month ago. They've just had their year-end on 31st May and released a trading statement on 17th May which said:
"The Board now anticipates a record year for the Group following strong trading in the key winter and spring months in its Feeds and Fuels divisions."
Adding: "Profit in our Feeds division is expected to be significantly ahead of expectations." And: "the outcome of the current financial year will be significantly ahead of its prior expectations."
What a hot tip that was.
An interesting article in the FT recently compared the relative merits of NWF, Wynnstay and Carrs: Sector provides food for thought
News Snippets
07/06/11 -- China says that the winter wheat harvest there is 35% complete, and you'll never guess what, that's right - they expect increased output in all the major growing regions. Again.
It continues to piddle it down in Paris - 38mm in the past 24 hours to 09:45 London time.
Nov11 London wheat is GBP4.50/tonne lower in early trade, with Paris wheat down EUR3.50-4.75/tonne. Nov London wheat has fallen GBP12.00/tonne, or 6%, since the lifting of the Russian export embargo. Nov Paris wheat has declined by EUR23.25/tonne, or 9.3%, and Dec CBOT wheat by almost 70c, or 7.6% (incl the overnight market), in the same time frame. That suggests that London is still a little overpriced relative to the rest of the wheat market.
Joachim, my German correspondent, says that he expects the barley harvest in his region of Rhineland to start at the end of June, which is very early he says. He estimates this year's winter wheat yields at around 7.5 MT/ha, with OSR yielding 3.2-3.8 MT/ha. That wheat yield estimate is in line with last year, although the rapeseed estimate is well below last season's 3.9 MT/ha average.
The FAO peg world wheat production in 2011 at 674 MMT, some 4.5 MMT higher than the USDA estimate. EU-27 output this year will be 137 MMT. World 2011/12 ending stocks will be 183 MMT, 2 MMT more than last month's USDA estimate, they say.
Humberside Police, under pressure to cut their budget, ended up forking out GBP110,00 it hadn't expected in overtime costs to police the construction workers protest at Vivergo, according to the Yorkshire Post.
Ukraine will produce 45-46 MMT of grains in 2011/12 and export 20-21 MMT, according to the Agrarian Confederation there. Exports in 2010/11 are expected to be in the region of 12.0-12.5 MMT.
CBOT Close
06/06/11 -- Soybeans: Jul 11 soybeans closed at USD13.83 1/4, down 31 1/4 cents; Nov 11 soybeans closed at USD13.72 3/4, down 24 1/4 cents; Jul 11 soybean meal closed at USD359.40, down USD9.00; Jul 11 soybean oil closed at 58.03, down 70 points. After the close the USDA reported that US soybean plantings were 68% complete as of Sunday, against trade expectations of 70-75% done. Personally I don't see that as particularly bullish as there is still more than plenty of time to get the crop into the ground.
Corn: Jul 11 corn closed at USD7.32, down 22 cents; Dec 11 corn closed at USD6.67, down 19 1/4 cents. The USDA pegged planting progress at 94% done, in line with trade estimates. European weekend rains may have helped crop production prospects there it is thought. Ohio has caught up from being only 19% done last week to 58% complete this week. Funds sold an estimated 13,000 contracts on the day ahead of the anticipated "Goldman Roll" starting tomorrow.
Wheat: Jul 11 CBOT wheat closed at USD7.44, down 29 3/4 cents; Jul 11 KCBT wheat closed at USD8.90, down 24 1/4 cents; Jul 11 MGEX wheat closed at USD10.42, down 18 1/2 cents. After the close the USDA pegged US spring wheat planted at 79% done, down 19 points from average. Rain in Europe across the weekend drove wheat futures lower. US wheat is seen as being "miles out" compared to Russian and Ukraine wheat inweekend tenders.
EU Wheat Close
06/06/11 -- EU grains closed lower with July London wheat down GBP2.50 at GBP192.50/tonne and with new crop Nov closing GBP3.50 easier at GBP189.50/tonne. Nov Paris wheat fell EUR6.50/tonne to EUR229.50/tonne whilst May12 was down EUR6.00/tonne to EUR232.50/tonne.
Decent weekend rains for France, and Germany, with more in the forecast over the next few days put the market under pressure. London wheat fell a bit more modestly as rains here were more scattered. Some lucky places in the south east got localised amounts of 30-50mm, but many others reported only 2-5mm.
How much good these rains will do at this stage is also a matter for debate. Whilst they certainly can't do any harm as far as head filling is concerned they aren't going to create any new tillers. Damage limitation is perhaps the name of the game from hereon in.
Reports circulating suggest that Russia has a significant volume of extra carryover wheat than official estimates reveal. It seems that growers there were maybe a little "over zealous" in their estimates on exactly how bad yields were in 2010 in an effort to gain maximum disaster compensation out of the government. This only seems to be coming to light now as long-holders look to liquidate stock now that the export ban has been lifted in an eleventh hour rush to make room for the impending harvest.
At home, what remaining UK wheat balances there are have few willing takers now that Ensus is out of the frame. From a feed compounder's point of view general demand is slack, and wheat is now a rather expensive raw material within that sluggish demand sector.
The USDA will report on corn and soybean planting progress later this evening, and also on that of spring wheat together with winter wheat crop conditions. Later in the week we have the WASDE report on Thursday, which may provide some fresh impetus.
Early Call On Chicago
06/06/11 -- The overnight grains finished lower with corn down 8-10c, beans down 6-8c and wheat falling 10-12c. Crude is lower on global economy fears and the dollar is broadly unchanged.
Weekend rains in northern France and central/western parts of Germany are the bearish catalyst today. More rain is forecast for both for the next few days with the SE of the UK and western parts of Poland also seen picking up varying amounts.
There's speculation that Russia may have more carryover stocks left from 2010 than official figures suggest. We've already seen them undercut US wheat substantially in one or two tenders in the past few days, with Ukraine then usurping Russia by coming in even cheaper.
That probably sets the tone for many of the tenders that will come out of the Middle East and north Africa for much of the remainder of 2011. Algeria seems to be still excluding Black Sea origin grain though, booking 600,000 MT of probably French wheat over the weekend.
Ukraine will produce will produce 43.4-48.7 MMT of grains in 2011 depending on weather conditions between now and harvest-time, say APK-Inform. They also have significantly larger than normal carryover old crop stocks. With a domestic demand of only 14.7 MMT there's going to be plenty to sell on the international market.
The US markets appear to be trading semi-oblivious to the notion that the balance of export power is switching back to the Black Sea, where price is an almost secondary consideration. What is going on in their own flooded (or parched) backyard is of far more importance.
The USDA will report on planting progress after the close tonight. Last week corn was 86% done, that should be in the 90-95% region today. Soybean plantings were only just past halfway, whilst spring wheat sowings were 68% complete. I expect to see bean plantings around the 70-75% mark tonight, leaving plenty of time left to get the remaining crop into the ground. Spring wheat planting delays in the northern Plains continue to see Minneapolis wheat, appropriately enough, paddle it's own canoe.
Early call for this afternoon's CBOT session: corn down 8-10c, beans down 6-8c, wheat down 10-12c.
The Lunchtime News
06/06/11 -- It seems that you can't trust anybody any more doesn't it? No sooner have we discovered that the Germans were somewhat premature in telling the Spanish to stick their cucumbers up their youknowwotsits when the problem was in their own backyard, than we now discover that the Russians may have been telling porkies with regards to the size of their grain crop last year.
Top site Agrimoney.com report Russia grain losses exaggerated by up to 6m tonnes, adding some weight to the notion that the real reason behind the recent lifting of the embargo may be to make some room for the coming new crop. My Romanian correspondent was in Russia recently and suggested that there was indeed some truth in reports that despite a "disastrous" harvest last year the ports are still choc-full of grain looking for a home.
None of it is expected to be headed for Algeria though, they've just bought 600,000 MT of what is thought to be French wheat over the weekend. Poor Russia must be wondering what they need to do to win an order. After being reputedly USD70/tonne cheaper than US wheat in last week's Lebanese tender, they still missed out to the tune of USD15/tonne to those cheeky scamps the Ukrainians.
By my lightening fast calculations that makes Septic wheat USD85/tonne out on price into the Middle East. I was always good at maths though, did I ever tell you about the time I tipped Grundy to win the Derby to my maths teacher Mr Dale? He set the rest of the class come complicated calculus and told them to shut up whilst me and him were hanging out if the classroom window listening to the race on his car radio - which he'd thoughtfully parked adjacent to the maths classroom. Happy days.
In an interesting bit of trivia, did you know that the dog's website is now getting 7,000 hits/month of it's own? I bet that's more than some of your corporate sites. Not only that but I am delighted to report that the little fella is about to start buying his own biscuits as he has now secured his first ever paying advertiser! Don't email him to tell him that there isn't an ad on there yet, he's waiting for all the legal stuff to be signed first. Not bad for a two and a half year old border terrier.
London and Paris wheat are lower after weekend rains turned up in many parts. The slippery garlicky surrender monkeys appeared to get the lion's share of it, although the glow in the dark beansprout peddlers got some too. In God's homeland "scattered" seems to be the watchword, with some in the SE reporting locally heavy totals, yet others not that far away receiving only a few millimetres. Still, that's what you get for living Darn Sarf innit?
The Drought may cost UK farmers £400m says the Daily Bellylaugh today. Mind you, according to EULEAKS Britain's farmers get GBP3 billion a year in subsidies. Discuss.
And now for that funny little story, from the dog, at the end of the news like they used to do in the old days: My mate Frank
RainWatch
06/06/11 -- My Sussex correspondent reports 27mm of rain in the past twelve hours (to 6am this morning) and tells me that it's still raining now.
That almost matches the 31mm total that he's seen since February.
Up here in North Yorks we had a cool, grey and relatively dry weekend, picking up just 0.5mm around 6pm last night. We did see 49mm in May though, much of it in the last week of the month. 
It looks like rain did eventually make it into central and western Germany in late afternoon and early evening last night too judging by the 6pm UK time radar image (click to enlarge). Meanwhile those Parisian walkways must be soaking by now, they've had 76mm in the 24 hours to 08.30 this morning.
If your down in the SE "danger zone" or even on the continent, email me what your rainfall situation is looking like this morning and I'll post the results up later.
Parisian Walkways
05/06/11 -- The old Parisian walkways may be a bit slippy underfoot after picking up 16mm of rain in the past 24 hours (to 9am Sunday), see the various radar images which are clickable to enlarge.
Some of these rains may make it across the channel and into the south (and if you're luck even the south east) later today, providing some heavy downpours in places, according to the BBC.
It looks like northern Germany largely missed out on much of this needed moisture however, although the Beeb are giving them the chance of picking up some heavy rainfalls Tuesday/Wednesday.
There's more rain on the cards for Paris early next week, with Accuweather forecasting an 88% chance on Monday and a 92% chance on Tuesday before the outlook turns a bit drier later in the week.
Berlin has an 88% chance of rain today, rising to 92% tomorrow, 70% Tuesday and 88% Wednesday, according to Accuweather. Thunderstorms are likely with temperatures today set to hit highs of 30C before things cool off a little later in the week, they forecast.
Rain moving up from the Med, pushing north and eastwards should even make it into Poland by Tuesday, according to the BBC.
At home it's turned much cooler as the wind turns north-easterly. Here in North Yorks we had a daytime high of 25.7C on Thursday, 25.4C Friday and just 15.4C on Saturday. No rain yet so far this month though.
Chicago Close
03/06/11 -- Soybeans: Jul 11 soybeans closed at USD14.14 1/2, up 7 1/2 cents; Nov 11 soybeans closed at USD13.97, up 4 1/4 cents; Jul 11 soybean meal closed at USD368.40, up USD2.40; Jul 11 soybean oil closed at 58.73, down 18 points. On the week as a whole Jul beans gained 34 3/4 cents, with new crop Nov climbing 28 1/2c. Planting remains sluggish in some of the more northern soggy states like Ohio. There's still time to get a bean crop in though, but these delays and tight old crop stocks have encouraged new money back into the market. Weekly export sales were a bit disappointing at 155,500 MT, compared with expectations of 150-350 TMT. That's six weeks in a row of sales below 200,000 MT.
Corn: Jul 11 corn closed at USD7.54, down 12 1/2 cents; Dec 11 corn closed at USD6.86 1/4, down 8 3/4 cents. Corn fell despite the late planting story on ideas that it is simply too expensive relative to wheat. Stories coming out of Asia suggest that as a feed grain US corn is currently around USD60/tonne more expensive than Australian feed wheat. An improved weather forecast for the Corn Blet this weekend may finally see many of those unplanted acres get sown. The USDA will report on planting progress on Monday night, 14% of the crop was unseeded as of last Sunday night. Corn export sales were a combined 700,900 MT, in the middle of trade ideas of 500TMT - 1 MMT
Wheat: Jul 11 CBOT wheat closed at USD7.73 3/4, up 4 cents; Jul 11 KCBT wheat closed at USD9.14 1/4, up 5 1/4 cents; Jul 11 MGEX wheat closed at USD10.60 1/2, up 41 cents. Minneapolis wheat raced away, extending the gap between it and Chicago wheat now to close to three dollars. Spring wheat plantings remain well behind schedule, and final yield potential is being reduced with each day that passes. Winter wheat production estimates are also falling with Linn Group and Informa Economics cutting their forecasts this week. Export sales of 308,800 MT were in line with expectations for sales of 200-500,000 MT.
EU Grains Close
03/06/11 -- EU grains closed with July London wheat down GBP0.45 to GBP195.00/tonne and with new crop Nov up GBP1.55/tonne to GBP193.00/tonne. Nov Paris wheat closed EUR1.50/tonne lower at EUR234.25/tonne whilst May12 was down EUR1.25/tonne to EUR238.50/tonne.
Based on today's exchange rates Nov London feed wheat is only 20 euros cheaper than French milling wheat, which sounds like a relatively a small differential to me.
Maybe that's a function of weekend weather forecasts being on the wet side across the Channel yet remaining dry over here? In addition, reports are coming through of farmers in the SE of the UK already talking of using wheat for whole crop silage rather than see what can be gleaned from it come August.
On the week as a whole July London wheat was GBP1.50/tonne lower, whilst Nov fell GBP4.00/tonne. Nov Paris wheat EUR15.00/tonne and May EUR10.50/tonne.
That means that Nov London wheat has only fallen 2% since last Friday, whereas Nov Paris wheat is down 6%.
The pound fell to a four week low against the euro after weaker than expected PMI data. Even so the euro is hardly a strong currency at the moment, and neither is the dollar. Going into the second half of 2011 the pound may prove to be marginally the best of a bad bunch.
London feed wheat therefore may be a little over-valued, although farmers are understandably reluctant sellers until they have a better handle on yields here.
Early Call On Chicago
03/06/11 -- The overnights closed mixed with beans and wheat around 3-5c firmer and corn 1-2c lower.
Jobs data just out from the US is being described as "horrible" and "shockingly bearish" by some. US non farm payrolls rose by only 54,000 last month, well below expectations of an increase of around the 165,000 expected in a Bloomberg survey.
US unemployment rose from 9% to 9.1%, analysts had expected a fall to 8.9%.
On the back of those numbers crude oil is down USD1.65/barrel to USD98.75/barrel on concerns that the US may be heading for a double dip recession, backed up by news of US house prices falling to 2002 levels. Wall Street is expected to open lower on the news too.
The question this afternoon is can the grains sector ignore these outside influences?
Yesterday was all about fund money as they weighed in for an estimated 12,000 corn, 6,000 beans and 3,500 wheat contracts. Will they have the stomach to be back for more today ahead of the weekend?
Paris wheat is a little lower on the back of forecasts for fairly widespread rain for France and Germany over the weekend. If the funds don't show up this afternoon then we could be heading lower I'd suggest.
Weekly export sales numbers from the USDA were all within trade expectations, although it is notably that soybean sales have fallen away sharply of late.
Early calls: wheat and beans up 3-5c and corn unchanged to 2c lower
USDA Export Sales
03/06/11 -- The USDA's weekly export sales for the week ended May 26th are out this afternoon. They reported combined wheat sales of 308,800 MT, in line with expectations for sales of 200-500,000 MT. Corn sales were a combined 700,900 MT against trade ideas of 500TMT - 1 MMT. Soybean sales were a bit disappointing at 155,500 MT, very much towards the low end of expectations of 150-350 TMT.
EU Rapemeal Prices
03/06/11 -- Guide prices for EU rapemeal, basis FOB Lower Rhine in euros/metric tonne, with change from previous day:
| Jun11 | 194.00 | +4.00 |
| Jul11 | 200.00 | +5.00 |
| Aug/Oct11 | 201.00 | +4.00 |
| Nov11/Jan12 | 205.00 | +5.00 |
| Feb/Apr12 | 207.00 | +5.00 |
| May/Jul12 | 204.00 | +3.00 |
| Aug/Oct12 | 184.00 | -1.00 |
Chicago Close
02/06/11 -- Soybeans: Jul 11 soybeans closed at USD14.07, up 20 3/4 cents; Nov 11 soybeans closed at USD13.92 3/4, up 18 cents; Jul 11 soybean meal closed at USD366.00, up USD5.30; Jul 11 soybean oil closed at 58.91, up 48 points. A fresh inflow of fund money spurred July beans to close above USD14.00/bu for the first time for a front month since the last day of March. Funds bought an estimated 6,000 contracts on the day and were also featured buyers of corn and wheat. Trade estimates for tomorrows export sales data are in the range of 150TMT-350TMT.
Corn: Jul 11 corn closed at USD7.66 1/2, up 8 cents; Sep 11 corn closed at USD7.41 1/2, up 13 1/4 cents; Dec 11 corn closed at USD6.95, up 15 1/2 cents. As with soybeans fund money was pouring in for corn, buying an estimated 12,000 contracts and brushing aside anything negative. There were a few such factors about, like a rising dollar and Informa increasing it's world corn production forecast by 11 MMT, including pegging China's output some 8 MMT higher than last month's USDA number. Instead the funds are more interested in what's going on in their own backyard and concentrating on planting delays. Trade estimates for tomorrows export sales data are in the range of 500TMT-1MMMT.
Wheat:
Jul 11 CBOT wheat closed at USD7.69 3/4, up 10 1/2 cents; Jul 11 KCBT wheat closed at USD9.09, up 17 1/2 cents; Jul 11 MGEX wheat closed at USD10.19 1/2, up 14 cents. Ukraine dropping their wheat export target for 2011/12 was seen as supportive along with speculation that Russia will introduce an export duty on grains. Lebanon found that Ukraine wheat was even cheaper than Russian in their tender and bought accordingly. Informa dropped their US winter wheat production estimate to 1.421 billion bushels. Trade estimates for tomorrows export sales data are in the range of 200TMT-500TMT.
EU Grains Close
02/06/11 -- EU wheat futures closed mostly higher with Jul London wheat up GBP3.45/tonne to GBP195.45/tonne and with new crop Nov rising GBP3.80/tonne to GBP191.45/tonne. Nov Paris wheat was up EUR1.25/tonne to EUR237.50/tonne whilst May12 rose EUR1.50/tonne to EUR239.75/tonne.
It was a bit of a mini recovery after a few days of losses since Russia announced the lifting of it's export embargo. Interestingly since then we've seen Nov Paris wheat fall 4.7% yet Nov London wheat has only declined by a more modest 2.6%.
Ukraine intriguingly lowered their 2011/12 grain export estimate from 19-20 MMT to 15-18 MMT, despite having plenty of carryover old crop stocks and a potentially bumper 2011 harvest only a few weeks away.
The trade is debating whether new crop prospects are as rosy as the Ministry there insist, or indeed whether they are actively trying to understate their potential for next season in the hope of shoring up prices a little.
Politics also seem to be at work across the border in Russia. Trade talk suggests that the rapid domestic price increases that they've seen since the ban was lifted may herald the imposition of some sort or quota system, or even the introduction of export tariffs.
The trade awaits the results of assorted international tenders kicking around from the Middle East and North Africa to gauge just how cheap the Black Sea is going to be relative to EU/US wheat.
It was a hot day across much of the UK today with the mercury hitting 26C in Poole. That may have caused further yield loss potential in the SE areas that didn't get much in the way of rain over the past fortnight.
Early Call On Chicago
02/06/11 -- The overnight grains finished mixed with wheat around 6-10c firmer, beans up 3-5c and corn trading fractions either side.
Crude is slightly firmer and the dollar a tad weaker. The USDA weekly export sales report is delayed until tomorrow after Monday's Memorial Day holiday. Also out tomorrow are some pretty important US jobs numbers, the vibe is that they could send the dollar into a tailspin.
Fresh news is pretty limited. Algeria are tendering for 50,000 MT of any origin wheat with the results expected any day now. It will be interesting to see if the Black Sea gets the nod, and if so exactly how much cheaper than EU/US origin they are. Lebanon are also said to be in the market.
Wheat's overnight action can probably be attributed to nothing more than a rebound from 60c losses since last Friday after the Russian export ban was lifted over the long weekend.
Linn Group put out some pretty bearish planting numbers for corn, beans and wheat yesterday. They can't be right on all three can they?
Things certainly look pretty washed out in Canada too at the moment it has to be said.
It seems like we are about to see the global grains supply pipeline switch from West to East. The West was only too happy to accept the baton from the East last summer, and wheat prices have moved up more than three dollars a bushel since then.
The question now is how will prices fare with the "lookie, lookie, for you I make special price" men of the East back in charge of the game?
Whilst we are considering that one, there's also the point that the futures markets that are driving the bus are still located in the West. That may mean that they are more likely to concentrate on what is happening here (ie production problems), than what is happening there (ie the shops are open 24/7 and the sales are on).
Early calls for this afternoon's CBOT session: wheat up 7-10c, beans up 3-5c, corn 2c higher to 2c lower.
Ukraine: Giant Clearance Sale Now On
02/06/11 -- With early barley cutting expected to be only a fortnight away, Ukraine still has a large carryover grain surplus to shift from the 2010 harvest. With only one month of the 2010/11 marketing year remaining the FSU country has exported little more than half of what it shipped in 2009/10 due to export bans and a complicated quota system.
Now that the floodgates are open they expect to increase grain exports this month to around 1.5 MMT (from 1.1 MMT in May). That however would only bring total 2010/11 exports to around 12 MMT leaving the country with carryover old crop grain stocks of a hefty 8 MMT at the end of the July/June marketing year.
With the deputy Ag Minister recently saying that grain production this season could be "significantly higher" than 45 MMT, exports in 2011/12 have the potential to break through 20 MMT. Strange then that they should chose today reduce their export target from 19020 MMT to 15-18 MMT. Trying to keep prices from falling out of bed wouldn't be the reason surely?
Redhall Profits Slump
02/06/11 -- The loss of the Vivergo contract seems to have proven to be a bit of a spanner in the works for the engineering company Redhall Group Plc. Pre-tax profits fell 70% to GBP1m for the six months ended March 31 compared with GBP3.3 million a year ago figures released today show.
"The board believes this is a low point and trading will be much improved in the second half and beyond," they said.
Chicago Close
01/06/11 -- Soybeans: Jul 11 soybeans closed at USD13.86 1/4, up 10 1/4 cents; Nov 11 Soybeans closed at USD13.74 3/4, up 11 1/4 cents; Jul 11 soybean meal closed at USD360.70, up USD5.40; Jul 11 soybean oil closed at 58.43, down 6 points. Beans wrestled with bearish outside influences like crude oil being sharply lower and the late planting scenario outlined by the USDA last night which put sowings 20 points behind normal at 51% done. Personally I don't think that this is such a HUGE issue at this stage as there is still plenty of time to get beans into the ground. But it's more important what the market thinks than what I think. Above normal temperatures and below normal rainfall forecast for much of the Midwest over the next fortnight should allow bean planting to catch up. Linn Group disagree, pegging this season's soybean acreage at 74.9 million.
Corn: Jul 11 corn closed at USD7.58 1/2, up 11 cents; Dec 11 corn closed at USD6.79 1/2, up 6 1/2 cents. As with beans corn was torn between bearish outside influences and the late planting storyline. Linn Group estimated this season's corn area at 87.2 million acres, miles below the USDA's 92.2 million. Funds bought an estimated 11,000 contracts on the day. Wheat was a negative influence as too was lower crude oil and soft employment and manufacturing data. An improved weather outlook for the US east of the Rockies for the next two weeks should enable much of the outstanding 14% of unplanted corn acreage to make it into the ground.
Wheat: Jul 11 CBOT wheat closed at USD7.59 1/4, down 23 cents; Jul 11 KCBT wheat closed at USD8.91 1/2, down 16 1/2 cents; Jul 11 MGEX wheat closed at USD10.05 1/2, down 19 1/2 cents. The Russian story dominated the wheat market dragging all three exchanges lower despite US winter and spring wheat having different bullish stories of their own. Funds sold an estimated 6,000 lots on CBOT. Forecast wetter weather for northern Europe starting this weekend and lasting into the middle on June was also a negative influence. Linn Group's spring wheat planting estimate was 13.8 million acres, some 600,000 lower than the USDA's May estimate.
EU Wheat Close: Reports Of My Death Were Greatly Exaggerated
01/06/11 -- EU grains closed lower with July London wheat down GBP1.00 at GBP192.00/tonne and with new crop Nov closing GBP1.85 easier at GBP1987.65/tonne. Nov Paris wheat fell EUR1.50/tonne to EUR236.25/tonne whilst May12 was down EUR0.50/tonne to EUR2538.25/tonne.
As well as the impending arrival of Russia onto the global grain export stage the market was today also considering the potential of an improved European weather outlook.
Flagged up on here last night we had Martell Crop Projections reporting the GFS weather model predicting 0.75-1.5 inches of rainfall for France, Germany and the SE of the United Kingdom in the 4-day June 3rd-6th time frame.
Today other weather forecasters appeared to concur, with the possible exception of the SE of the UK.
QT Weather are now forecasting "a much wetter period seen starting late this week and lasting into mid-June," giving 0.5-1.0 inches in Western France and up to 2-4 inches for the rest of France and into Germany & Poland.
Two weeks from now these rains are seen spreading east into Eastern Europe and the FSU, whilst continuing in France and Germany, they add.
Exactly how much good these rains will do if they materialise remains to be seen, but they certainly can't do any harm can they?
One of my spies in upper Bavaria today reports that "the corn here is low in the fields, between maybe 3 and 7 inches high. Otherwise at this time of the year, it should be a foot or two tall.
"The winter wheat looks good, all green and blueish and with healthy grains developing. Not much sign of the spring drought.
"Today it's raining all over Bavaria, and in Munich it was raining since late yesterday, and quite a bit so far. Almost incessantly, so the crops should catch up. Farmers told me on my biking trip that the corn looks bad, but assured me it will be back in time."
Early Call On Chicago
01/06/11 -- The overnights closed mostly lower, led by wheat which finished with losses of around 10-12c, corn was 2-5c lower and beans down 1-3c.
Crude is a tad lower and the dollar barely changed.
Wheat is lower on the back of the Russian news and also some ideas that France and Germany may be in for a wet weekend. QT Weather are forecasting "a much wetter period seen starting late this week and lasting into mid-June."
They're giving 0.5-1.0 inches in Western France and up to 2-4 inches for the rest of France and into Germany & Poland.
Two weeks from now these rains are seen spreading east into Eastern Europe and the FSU, whilst continuing in France and Germany, they add.
In the US, a the warmer and drier outlook should be favourable for early crop development and planting of what is left to go into the ground.
Early calls for this afternoon's CBOT session: wheat down 10-12c, corn down 3-5c, beans down 2-4c.
Morocco Harvest Seen Up 20 Percent
01/06/11 -- Morocco, the third-largest wheat buyer in North Africa, is set for a bumper harvest this year reducing the country's need for imports, say the United Nations’ Food and Agricultural Organization.
The wheat harvest is seen rising 20% to 5.9 MMT from 4.9 MMT in 2010, whilst barley production is expected to amount to 3.1 MMT, also an increase of 20%, the FAO said.
"Timely and good rains during land preparation and plantings led to an increase in planted area. About 4.9 million hectares have been planted to wheat (2.2 million hectares of soft wheat and 1.5 million hectares of durum wheat) and 1.6 million hectares with barley," they say.
"Moreover, soil moisture levels have generally been adequate to meet the crops’ water requirement since the beginning of the growing season, allowing satisfactory crop development in main producing zones," they added.
Harvesting begins this month.
The country’s overall grain imports are forecast to fall by more than a quarter to 4.44 MMT in 2011-12 from 6.04 MMT in the current marketing year, the FAO say.
EU Rapemeal Prices
01/06/11 -- Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:
| Jun11 | 190.00 | -5.00 |
| Jul11 | 195.00 | -3.00 |
| Aug/Oct11 | 197.00 | -5.00 |
| Nov11/Jan12 | 200.00 | -5.00 |
| Feb/Apr12 | 202.00 | -5.00 |
| May/Jul12 | 201.00 | -5.00 |
| Aug/Oct12 | 185.00 | -1.00 |
Rapeseed Shortage Looming?
01/06/11 -- With an estimated crush of around 23 MMT in 2011/12 Europe could do with a bumper rapeseed crop this year, unfortunately it doesn't look like it's going to get it.
Oil World peg the 2011 EU-27 rapeseed crop at 19.2 MMT (down 6.8% on last year), with sharp falls coming from Germany, Poland and France. The German crop will be down 19% from last year at at 4.65 MMT, they say.
Toepfer agree, pegging German output at 4.4-4.8 MMT vs 5.7 MMT a year ago, a decline of between 16-23%.
In Poland GUS, the Central Statistical Office, say that winter rapeseed plantings fell 12.5% as a result of the exceptionally wet conditions in August and September. In addition the hard winter then killed off 15.7% of those fields that did get planted, they add.
My man in Romania, Europe's fifth largest producer, says that OSR potential in the south is looking particularly poor and that a "severe shortage of rape" is likely there in the coming season.
Meanwhile wet weather and flooding in Canada also is delaying planting of spring rapeseed for the second year in a row. Take a look at this short video here from my mate Brad in Saskatchewan.
