01/07/11 -- Soybeans: Jul 11 soybeans closed at USD13.22 1/4, up 16 cents; Nov 11 soybeans closed at USD13.12 1/2, up 18 1/2 cents; Jul 11 soybean meal closed at USD340.90, up USD8.70; Jul 11 soybean oil closed at 55.16, up 12 points. On the week overall soybeans, meal and oil were virtually unchanged. Having got dragged lower by corn yesterday, soybeans managed to reassert themselves today as the USDA numbers were in fact bullish for soybeans as far as new crop production was concerned pegging planted area down 1.4 million from March ideas at 75.2 million acres. Money inflows, or outflows, still hold the key to market direction from here in my opinion. As fund cash pours out of corn it is interesting to note that today's commitment of traders report show managed money reducing their soybean longs to the lowest levels in a year.
Corn: Jul 11 corn closed at USD6.40 3/4, up 11 3/4 cents; Dec 11 corn closed at USD5.96 3/4, down 23 3/4 cents. Jul was down almost 30 cents on the week, with Dec losing around 35 cents. As with soybeans managed money has cut its net corn long to the lowest levels in a year. The USDA announced the sale of over a million tonnes of US corn to "unknown" today. That's split 360,000 MT old crop and 780,000 MT new crop and is widely rumoured to be China looking to pick up a bargain on this latest price shake-out. The markets are shut Monday for Independence Day, so it would be of no surprise to see some fireworks again when trading begins on the overnight session on Tuesday.
Wheat: Jul 11 CBOT wheat closed at USD5.84 1/2, down 1/4 cent; Jul 11 KCBT wheat closed at USD7.03, up 14 1/4 cents; Jul 11 MGEX wheat closed at USD8.31, up 7 3/4 cents. On the week as a whole CBOT wheat fell over 50 cents, with Kansas down more than 45 cents. Minneapolis wheat rose 5 cents. Growers on the northern Plains are struggling to get their remaining spring wheat in, and must be thinking about giving up by now. Ditto Canadian farmers across the border. Weakness from corn is weighing on wheat where managed money is now showing a net short position.
01/07/11 -- EU grains finished mostly higher in a rebound from yesterday's steep losses. July London wheat ended up GBP3.45 to GBP174.45/tonne and with new crop Nov also rising GBP3.45/tonne to GBP160.50/tonne. Nov Paris wheat closed EUR3.25/tonne higher at EUR187.75/tonne whilst May12 also rose EUR1.75/tonne to EUR2194.50/tonne.
At the end of a choppy week Nov London wheat finished GBP3.00/tonne lower overall, with Nov Paris wheat falling EUR8.00/tonne.
The UK barley harvest has just about begun in a few places, and the pace should accelerate over the weekend with the weather set to remain fine. More unsettled conditions are forecast for the middle of next week though.
Coceral cut their forecast for EU-27 soft wheat production to to 126.53 MMT from their previous March estimate of 131.44 MMT. With a durum output of 7.89 MMT that gives us a total EU-27 wheat crop of 134.42 MMT, only a million tonnes below last season and a fall of less than 1% on 2010.
That's a surprisingly small drop and almost 4 MMT above the USDA's most recent estimate.
UK output is seen at 13.95 MMT, down 3% on last season's 14.4 MMT crop. French production for soft wheat is forecast at 32.7 MMT (down 8.2%) and German output at 23.7 MMT (down 1%). All pretty modest reductions compared to all the "up to 25% of the crop may have been lost" stories that were doing the rounds a month or two ago.
Significant soft wheat production gains in 2011 come from the UK's top export home of Spain, up 15% to 5.1 MMT; Denmark up 8% to 5.45 MMT; Romania up 10% to 7.22 MMT; Bulgaria up 13% to 4.3 MMT.
EU-27 barley production is now seen at 51.76 MMT, 1.5% down on last year. The UK crop is pegged at 4.54 MMT, a reduction of 9.5% on last year.
Coceral also unsurprisingly dropped their estimate for the EU-27 rapeseed crop from a figure of 20.2 MMT in March to 18.46 MMT, that's a fall of 2 MMT or 10% on last season. Even so the UK crop is still estimated at a record 2.275 MMT.
All in all these numbers hardly paint the crisis picture that many had feared. The question now is how accurate will the ultimately prove to be?
The market still has plenty of weather premium built in, even allowing for recent losses, if we are ultimately going to have an all wheat crop less than 1% down on last year. Meanwhile the USDA have EU exports falling by almost a third in 2011/12.
01/07/11 -- The shakeout seems to have settled judged on the overnight action so far. September corn, for which today's revised limit is 45 cents, currently stands 40 cents lower, with new crop months around 30 cents easier. Wheat hovers around unchanged and soybeans are 10-12 cents firmer.
Front month July corn is flat so in effect we've seen old crop months lose 70 cents and new crop 60 cents on the back of yesterday's USDA numbers.
On the week as a whole so far that puts old crop July corn down around 40 cents and Dec down 45 cents. CBOT wheat is 54 cents weaker and soybeans barely changed.
Last night's shakeout means that we've now had three successive weeks of heavy fund liquidation on corn.
Further bearish influence on the corn market is news that the IGC have raised their 2011/12 world production estimate by 15 MMT to 858 MMT largely due to Chinese and US production being revised higher.
World wheat production for the coming season was also raised 3 MMT to 666 MMT and ending stocks upped 3 MMT to 185 MMT.
A reminder that it's a three day weekend in the US with Independence Day on Monday.
In Europe on the week so far we see Nov London wheat down GBP6.45/tonne and Nov Paris wheat EUR11.25/tonne. That's narrowed the gap between the two to the equivalent of EUR11.00/tonne, at the beginning of June that was over EUR22.00/tonne.
Greece voted through its detailed austerity measures by 155-135 votes yesterday to secure the next tranche of cash from the EU/IMF averting a euro crisis for now.
30/06/11 -- Soybeans: Jul 11 soybeans closed at USD13.06 1/4, down 28 cents; Nov 11 soybeans closed at USD12.94, down 29 cents; Jul 11 soybean meal closed at USD332.20, down USD5.70; Jul 11 soybean oil closed at 55.04, down 79 points. The USDA's June 1st stocks were above the average trade estimate at 619 billion bushels. Planted area was down 1.4 million from March ideas at 75.2 million acres. Even so spillover weakness from corn was so great that soybeans couldn't avoid the fallout. The USDA pegged weekly soybean export sales at 122,500 MT, a bit below expectations of 200,000 to 400,000 MT.
Corn: Jul 11 corn closed at USD6.29, down 69 cents; Dec 11 corn closed at USD6.20 1/2, down the 30 cent daily limit. The USDA shocked the market with a corn acreage and June 1st stocks number both in excess of even the largest trade estimate. The acreage number was in fact the second highest since the war. Funds liquidated an estimated 35,000 contracts on the day, the equivalent of around 4.5 MMT. Weekly export sales came in at 934,300 MT for corn, towards the top end of expectations of 650,000 to 950,000 MT. If the funds want out then there is very little that the market can do to correct that, they built this house of cards.
Wheat: Jul 11 CBOT wheat closed at USD5.84 3/4, down 56 1/2 cents; Jul 11 KCBT wheat closed at USD6.88 3/4, down 56 1/4 cents; Jul 11 MGEX wheat closed at USD8.23 1/4, down 52 3/4 cents. The June 1st stocks figures from the USDA were above the average trade estimate whilst the planted area was broadly in line with what was expected. Very bearish corn numbers also pressured wheat. Weekly export sales of 545,100 MT for wheat were low compared with expectations of 550,000 to 750,000 MT.
30/06/11 -- EU grains closed sharply lower with the exception of nearby July London wheat which ended down GBP0.50 to GBP171.00/tonne. New crop Nov was GBP11.45/tonne lower at GBP157.05/tonne. Nov Paris wheat closed EUR15.25/tonne lower at EUR184.50/tonne whilst May12 fell EUR13.00/tonne to EUR192.75/tonne.
There's an open interest of less than 100 lots on July London wheat, so I guess that we can largely ignore that from hereon in. New crop London wheat closed GBP11.40-11.45/tonne weaker with the 2012 crop shedding GBP7.50/tonne.
This was the lowest close for November London wheat since March 15th and the lowest for November Paris wheat since October.
A stunningly bearish USDA planting estimate for this year's US corn crop was the catalyst, coming in at 92.3 million acres, 1.6 million up on their previous forecast and 0.8 million higher than even the highest trade estimate.
For good measure June 1st US corn stocks were higher than anticipated at 3.67 billion bushels, which again was higher than even the highest trade estimate.
Chicago corn opened down the 30c daily limit and stayed there throughout the duration of the remainder of the European session, with limitless front month July being down more than 80c at one stage before recovering slightly.
Having dumped around 85,000 contracts in the last two weeks (around 10.8 MMT) it will be interesting to discover later tonight how much more length fund money was estimated to have liquidated today.
Chicago wheat was also caught in the crossfire approaching limit down (-60c) itself towards the close of play despite a largely neutral USDA report.
30/06/11 -- It's carnage on the dance floor in Chicago this afternoon as the fund boys scramble for the exits. Limitless front month July corn opens 63 cents lower (double limit down) and then moves to 80 cents down. All other months are locked in down the daily 30 cent limit.
There's incredulity from the remaining bulls, but what they need to remember is that it was the funds that got them this high up the mountain in the first place.
Beans are around 25-35 cents lower in spillover selling, wheat is down 47-54 cents.
30/06/11 -- We can forget what the overnights did now that we have the USDA numbers to hand. And for corn bulls that is exactly what there are in cryptic crossword parlance NUMB-ers, as in things that make you numb. The corn area estimate was the second highest since the war.
Not only did the USDA come out with a corn acreage number miles above what the market was expecting, they went for the double whammy of June 1st stocks much bigger than anticipated. Indeed both numbers were higher than even the highest trade estimates.
The June 1st stocks were above the average trade estimate for wheat and beans as well as corn, although all those extra corn acres have to come from somewhere, and in this case it's soybeans.
Soybean acres were 1.3 million lower than the average trade guess and 300,000 under the lowest trade estimate. Wheat was about in line with what was anticipated.
So you could call the report very bearish on corn, neutral wheat and friendly for soybeans. The early vibe is already for a limit down opening on corn, which may well drag the others down with it.
Lost in all the excitement were the USDA's weekly export sales figures. They came in at 545,100 MT for wheat (550,000 to 750,000 MT expected); 934,300 MT for corn (650,000 to 950,000 MT) and 122,500 MT for beans (200,000 to 400,000 MT).
The soybean sales were actually 335,600 MT negative for old crop and 458,100 MT positive for delivery in 2011/2012.
From a weather perspective things look less threatening.
"The heat wave this weekend will be cut off by a cool Canadian air mass descending into the Dakotas, Nebraska, Iowa and Minnesota on Saturday. This would weaken a dome of hot air. High pressure is expected to rebuild next week, strengthening Tuesday-Wednesday, and bringing heat back to the Midwest. However, once again a wave of cool Canadian air would descend into the United States Thursday. This one would be stronger, pushing cool air deeper in the South, and forcing the heat dome to retreat westward.
"Rainfall chances look good for the Midwest and Mid South next week with deep penetrating cool front. The dome of hot air would take up residence in the Southwest United States as cooler air gains the upper hand in the Midwest. Very favourable growing conditions are indicated on the 6-10 day forecast," say Martell Crop Projections.
Having sold around 85,000 corn contracts in the last fortnight, the funds seemed to have regained a bit of belief this week, it will be interesting now to see if this is the final nail in the coffin for corn.
Early calls for this afternoon's CBOT session: corn limit down, soybeans and wheat down 15-20c.
30/06/11 -- The USDA numbers are out and no surprises for guessing that they've thrown in a curved ball or two again this afternoon. The corn market has moved limit or near limit on each of the past three years on the day of this report, and it looks like it may do the same again today with corn plantings pegged at 92.3 millin acres, 1.6 million up on their previous forecast and 0.8 million higher than even the highest trade estimate.
For good measure June 1st corn ending stocks were higher than anticipated at 3.67 billion bushels, which again was higher than even the highest trade estimate.
Here's the numbers, Plantings:
June 1st Stocks:
30/06/11 -- There's an interesting and thought provoking piece on the euro and European debt on a Wall Street Journal blog here today: The Euro Has Bigger Fish to Fry Than Greece.
The PIIGS story is clearly far from over, which would suggest that today's sterling exchange rate of 1.1050 against the euro is somewhat miserly. However with the ECB looking likely to raise interest rates imminently, things may get worse for the pound before they get better.
Merv the Swerve seems smugly rather content to see the pound slide further in an attempt to boost our exports. Out of interest in 2010 our primary export homes were the US (14.71 percent), Germany (11.06 percent), France (8 percent), Netherlands (7.79 percent), Ireland (6.89 percent), Belgium (4.65 percent) and Spain (4 percent).
With the pound at, or close to, it's lowest levels against the dollar since January, as well as a fifteen month low against the euro then exports (including grains) to all of of those countries should in theory take a boost.
But that's only if they can afford to buy what we have got to sell.
As EU interest rates rise, the rate at which the PIIGS accelerate into their own shit will also increase. And I for one don't want to be standing too close to the fan when that happens.
30/06/11 -- Here's something that you probably didn't know. Saudi Arabia and Kazakhstan are looking at doing some "joint agricultural projects" together. It's a sign of the times and follows a trend that we have seen developing recently where oil-rich but largely infertile nations are looking to buy/rent or "jointly develop" agricultural land abroad.
One interesting thing about this article is that it clearly states that Kazakhstan is the third largest wheat producing country in the world. Is that what they told you Saudi Arabia, don't sign anything until you've done a bit more research!
A pig in a poke
30/06/11 -- Today has the feeling of being a big mover, the only problem is that until the USDA come out at 13.30 BST we don't know whether it's going to be limit up or limit down. So I guess that we'll just have to wait and see. Here's a note of what the trade is expecting.
USDA June 30th Planting Estimates:
USDA Jun 1st Stock Estimates:
USDA Mar 11
In other news Ukraine has harvested almost a million tonnes of grain to date with yields averaging 2.86 MT/ha compared to 2.51 MT/ha at the same time in 2010.
India is hinting that it may withdraw its ban of grain exports and could be prepared to sell 2 MMT of wheat and 1 MMT of rice.
The pound is down to 1.1050 against the euro, its lowest since March following the Greek austerity vote and further hints from ECB boss Jean-Claude Trichet that a eurozone interest rate rise is imminent.
Greek Prime Minister George Papandreou must be looking forward to the weekend, he's got to get another vote on the second phase of the austerity package through today.
Drought, what drought? Leading SE grain merchant GH Grain are reporting on barley being cut in Ashford in Kent yesterday coming in over the weighbridge at a very impressive 7 MT/ha.
30/06/11 -- World agri-weather highlights from the excellent Martell Crop Projections:
- Midwest cool weather will rapidly end; highs near 90 F are predicted Friday through the weekend; Midwest corn-soybean fields are flooded after a deluge of rain the past 2 weeks; a stretch of heat and sunshine will encourage drying; Mid South crop potential is on the rise with increased rain; June has been very hot in the Mid South; crops are burning up in Texas-Oklahoma-Southern Kansas with historic drought and incredible heat
- Abnormally cool conditions coming to South Brazil, Paraguay; Parana and Rio Grande do Sul expecting frost; mid 30s occurred overnight in northern Argentina, Uruguay with scattered frost; cool front is pushing north, setting off showers in Paraguay and Rio Grande do Sul; very heavy rain anticipated in Parana state with a stalled cool front
- Heat wave under way in Western Europe; highs Tuesday 98-100F in Spain, mid 90s France, upper 80s F Germany; 3rd straight day of intense heat; source region for hot air was northern Africa; strong cooling is underway; below- normal temperatures expected balance of the week in Western Europe; not much rain, however; very wet forecast in Eastern Europe; rain needed Baltic countries, Belarus, with a hot forecast
- Western Australia getting generous rain, from .30 to .65 inch yesterday, 1.5 to 2.5 inches the past week; rain badly needed for newly sown wheat after a very dry May; cool forecast ahead, ideal for wheat development; field moisture running low in southeastern Australia, Victoria, southern New South Wales; roughly half of normal rainfall the past 30 days; forecast not real hopeful for rain the next 7 days
- China corn-soybean are becoming very dry in June; very low rainfall the past 3 weeks in Heilongjiang, Inner Mongolia, Jilin; crops with shallow roots may be suffering moisture stress ; new forecast for next week looks wetter; hot temperatures prevailed yesterday, highs in the 90s F; North China Plain is expecting heavy rain in Jiangsu, Anhwei, Henan; rain is badly needed after a dry spring in this key peanut, cotton, corn area; no major weather problems in central and South China; drenching June rains reversed a serious drought in Yangtze Valley
- Monsoon has brought heavy rain to northern Pakistan, NW India, the Ganges Plain, northeast India rice area, Madhya Pradesh in central India; no complaints about ample June rain in mentioned areas; elsewhere, conditions are dry and hot; highs over 100 F occurred yesterday in central Pakistan, western India; the key peanut and cotton growing areas in central-southern India are dry; still waiting for the monsoon to begin in earnest; weather forecast next week once again calls for rain in the more northern areas and persistent dryness in the south
- Ukraine heavy rain has boosted summer crops; recurring showers the past 2 weeks added up to 3-4 inches, locally more in central Ukraine; wonder if rain was too late for winter wheat and rapeseed; very severe drought occurred March-May, capped off by May heat wave; a little rain has reached Russia Black Earth, not enough to cure ailing crops; incredibly dry spring -early summer has damaged Black Earth winter wheat, yields expected to be low; best crops in Russia are in the Volga; small grains barley and wheat are getting ready to head out; GFS model forecasts a heat wave and hardly any rain the next week; would be detrimental for the yield; Kazakhstan June growing conditions have been ideal, very wet and cooler than normal; just the opposite of last year's severe drought and heat
29/06/11 -- Soybeans: Jul 11 soybeans closed at USD13.34 1/4, up 3 1/2 cents; Nov 11 soybeans closed at USD13.23, up 4 cents; Jul 11 soybean Meal closed at USD337.90, down USD1.00; Jul 11 soybean oil closed at 55.83, up 49 points. Soybeans managed to close a choppy session bit higher, although well below the highs set early in the day. Greece got it's austerity vote, but traders seemed to lack the enthusiasm to establish significant fresh longs ahead of tomorrow's USDA reports. Funds did however buy an estimated 2,000 soybean contracts on the day. Trade estimates for tomorrow's weekly export sales report range from 200 to 400 thousand MT.
Corn: Jul 11 corn closed at USD6.98, up 15 cents; Dec 11 corn closed at USD6.50 1/2, down 2 1/2 cents. Futures finished well off early session highs ahead of tomorrow's USDA data. Funds did however get credited with buying an estmated 6,000 contracts on the day. The USDA are estimated to come out with a planted area figure of 90.77 million acres tomorrow, with quarterly stocks seen at 3.3 billion bushels. Estimates for tomorrow’s export sales range from 650 to 950 thousand MT.
Wheat: Jul 11 CBOT wheat closed at USD6.41 1/4, up 1 cent; Jul 11 KCBT wheat closed at USD7.45, up 1 1/4 cents; Jul 11 MGEX wheat closed at USD8.76, up 37 cents. Concerns over spring plantings in North Dakota and across the border in Canada saw Minneapolis wheat close sharply higher. For CBOT and Kansas wheat however it was a different story. The USDA today announced the sale of 120,000 MT of SRW wheat to unknown. Weekly export sales estimates for tomorrow range from 550,000 to 750,000 MT.
29/06/11 -- "A strong opening that tails away as the session wears on with grains ultimately giving up half their gains by the close of play." I think that I may double up and have a tenner on a white Christmas now.
MrsN#3 is watching old re-runs of Tenko on the TV as I type. I keep looking up out of the corner of my eye to see some short bloke attempting to control a gaggle of unruly, sweaty, eczema-ridden harridans. Which for some strange reason reminds me of both my earlier marriages...
29/06/11 -- EU grains finished higher but off session highs with July London wheat up GBP4.00 to GBP171.50/tonne and with new crop Nov rising GBP4.25/tonne to GBP168.50/tonne. Nov Paris wheat closed EUR4.75/tonne higher at EUR199.75/tonne whilst May12 also rose EUR4.75/tonne to EUR205.75/tonne.
Spillover strength from a sudden reversal in fortunes of US grains got EU futures off on a firm footing. Greece got it's austerity measures through parliament mid-afternoon lending further support.
The pound was already taking a bit of a battering prior to that news filtering through, which maybe explains why London wheat was a bit firmer than it's Parisian cousin.
Reports out of France suggest that what has been cut there so far is throwing up highly varied yields. That will keep everybody guessing on final output numbers for some time yet.
US markets opened sharply higher but were starting to ease off towards the close of European trading, with traders seemingly reluctant to open up fresh longs ahead of tomorrow's USDA reports.
They will report on US stocks and acreage numbers, the International Grains Council will also release their latest supply and demand estimates.
After those numbers are released the crucial question is will the funds fancy returning for another foray at attempting to push prices higher again.
29/06/11 -- The overnight grains finished stronger on follow-through momentum from last night and a renewed conviction that Greece would get it's austerity vote through parliament. Beans closed around 14-15c higher with corn up 22-23c on old crop and 12-16c on new crop, wheat gained around 14-17c.
After the overnight Globex market closed Greece did indeed narrowly get the vote through by 155-138, which may encourage global investors back into the grains market, although there is a long way to go yet on this Greek story methinks.
We've got the USDA tomorrow to give us their June planted area figures, although these are already being dismissed as likely to be inaccurate before they are even released.
All wheat area is estimated by the trade at 57.7 million, although there is already widespread talk that whatever figure the USDA come up with will probably be too high given the scale of unplanted acres in North Dakota.
Soybean plantings are seen falling slightly from the March estimate to around 76.5 million acres. Corn area is pegged a little higher than previously at 90.8 million.
Once we get this report out of the way it will then be interesting to see if fund money fancies returning to the fold in an attempt to push prices back up to where they were.
The USDA have announced the sale of 120,000 MT of SRW wheat to unknown. South Korea have bought four cargoes of optional origin feed wheat, most likely Australian I'd suggest.
Bulls are pointing to Monday night's fall in crop conditions and a coming heatwave as other supportive factors. The latter may well correct the former however come next week's crop ratings.
Early calls for this afternoon's CBOT session: corn up 20-25c, wheat up 14-16c, beans up 13-15c.
I'll stick my neck out and go for a strong opening that tails away as the session wears on with grains ultimately giving up half their gains by the close of play, and I'll have a fiver on a white Christmas.
29/06/11 -- The Greek government have had their austerity measures vote passed in parliament this afternoon. The vote went 155 for, 138 against with 2 abstentions.
Unemployment is already at a record high and now taxes are going up and public spending being cut.
I somehow feel that this isn't the end of this particular Greek tragedy, starting with more street protests and violence tonight no doubt.
29/06/11 -- It's all supposed to be about the euro today, not that you'd realise it as it's the pound that has been taken round the back of the bike sheds and given a happy slapping.
Falling to an 8-week low against the euro of 1.1096 we are perilously close to slipping under 1.1050. If we do that then we are looking at an exchange rate against the single currency not seen since March 2010.
So what's going on? Firstly optimism seems to be growing by the minute that Greece will push it's austerity measures through parliament today. Secondly we've had the ECB head honcho Trichet hinting at an EU interest rate rise as soon as next month, coupled with the BoE governor Merv the Swerve saying that a similar move here was unlikely to be on the cards this side of Kerry Katona marrying Prince Harry.
Merv went on to further put the mockers on the slightest hint of sterling strength by refusing to rule out more QE measures. You don't want to see the pound down by any chance do you Merv? That's what happens when you put a grandad in charge. Talking of which has anyone noticed the striking resemblance between the Swervster and Clive Dunn?
Come on, that's the same bloke that is.
29/06/11 -- The overnight Globex markets are firmer across the board building on last night's strength. Front month corn is very close breaking back up above the USD7/bu mark. Crude oil is flat at just under USD93/barrel.
The euro is firmer on the back of hopes that the Greek parliament will push through the required austerity measures. They start debating on the subject at 0700 GMT and will vote at some point later today. There will also be another vote tomorrow on a separate implementation law.
With CBOT wheat closing strongly last night and adding another 10-12c overnight it would seem that European grains will open firmer this morning. With only a small open interest left on July London wheat anything could happen to that.
My Romanian correspondent says that "the combines are rolling in southern Romania, 2-3 weeks later than usual in barley. No yield reports as such. In the north no combines moving yet and won't be for at least 10 days. Significant rainfall through June has for sure benefited wheat and with temperatures also low delaying the ripening. I'm expecting reasonable yields."
Good rainfall in central and northern Western Australia has boosted wheat production potential there. More than 50mm fell in some northern parts of the state in the last seven days and some 20mm in central areas. Southern areas however largely missed out.
Forecasters are giving a daytime high of just 18C today for Perth, with a 90% chance of showers bringing 10-20mm of rain. Further inland rainfall amounts are less heavy but still respectable with Northam having a 90% chance of picking up 5-10mm.
Libyan rebels are active in the world wheat and flour market, according to this report on Reuters.
Frost has hit northern parts of Parana state in Brazil, potentially causing some damage to safrinha (second crop) corn.
Depending on events in Greece it could be a volatile day. Traders are also nervous ahead of tomorrows key USDA data.
28/06/11 -- Soybeans: Nov soybeans ended up 4c at USD13.19/bushel; Dec soymeal was down USD.80 at USD338.70; Dec soyoil finished up 39 points at 56.59. Crude oil was up more than USD2/barrel which was supportive as was spillover strength from corn. Beans however haven't given up quite so many gains as corn of late so that maybe explains why they rose less this evening. The average trade estimate for June 1 soybean stocks on Thursday morning is 592 million bushels. Planted acreage is seen at 76.53 million.
Corn: July corn was up 22 1/4 at USD6.83/bushel; Dec corn was up 26 1/4c at USD6.53/bushel. Corn rebounded from some very steep recent losses with funds supposedly buying 17,000 contracts on the day. The average trade estimate for June 1 corn stocks on Thursday morning is 3.302 billion bushels. Planted acreage is seen at 90.767 million. By and large, the 5-day forecast is dry in Central United States including key corn states Iowa and Nebraska, say Martell Crop Projections. That should be beneficial for spring growth.
Wheat: CBOT July wheat climbed 17 1/4 cents to USD6.40 1/4 per bushel; July KCBT wheat gained 15 1/4 cents to USD7.43 3/4; July MGEX wheat gained 33 1/4 cents to USD8.39. The average trade estimate for June 1 wheat stocks on Thursday morning is 826 million bushels. All wheat planted acreage is seen at 56.671 million. Deputy Prime Minister Viktor Zubkov says that with grain prices where they are now that "there is no need to impose export duties on grains."
28/06/11 -- EU grains finished sharply higher for once with July London wheat up GBP12.50 to GBP167.50/tonne and with new crop Nov climbing GBP5.75/tonne to GBP164.25/tonne. Nov Paris wheat closed EUR7.50/tonne higher at EUR195.00/tonne whilst May12 rose EUR7.00/tonne to EUR201.00/tonne.
Futures effectively reversed yesterdays losses, although little more than that with the exception of front month July London wheat. Seeing as that has fallen GBP33.00/tonne in the past fortnight then maybe that was understandable.
There was no particular reason for the reversal in fortune, apart from maybe profit-taking from those that had been quick to jump onto the short selling bandwagon during the recent demise.
There also seems to be a bit more optimism about that Greece will get their austerity measures through or else be thrown a Plan B lifeline.
Early barley harvesting is underway Russia and Ukraine, and initial yield results are promising. There has even been some very early barley cut in the UK, with more lined up for later in the week. Also there are reports of rapeseed being sprayed off ready for harvest.
There are suggestions of more than ample domestic old crop stocks still hanging around in storage in the hands of one notable major player. The same dealer got their fingers badly burnt last month assuming that May short sellers couldn't come up with the wheat to tender against the expiry of that contract. Today's price action suggests that maybe they are hoping to have a better result with July.
With the UK wheat harvest only a few weeks away too, and with consumer interest having more or less dried up they will be hoping for non-stop rain throughout July to recoup recent losses.
28/06/11 -- Fresh news is thin on the ground, there seems to be some optimism that the Greeks will get their austerity measures voted through and that the EU/IMF will therefore come up with the next tranche of loan money.
Deputy Prime Minister Viktor Zubkov says that with grain prices where they are now that "there is no need to impose export duties on grains."
Japan says it won't be issuing it's regular wheat tender this week, no reason was given.
Tunisia is in for a wheat crop of more than double last season reducing their import needs, according to the FAO.
The UK barley harvest is underway I hear, with some grain being cut over the weekend at Brampton in Cambs.
Hungary's Agriculture Ministry peg this year's wheat crop up 4.5% on last year to 3.93 MMT.
Agritel report that French grain yields are highly variable, and although generally better than feared a month ago, production will still be down significantly.
28/06/11 -- Early barley harvesting is underway in the FSU, with results so far coming in significantly better than last year.
In the Krasnodar Region of Russia the local Ag Ministry report yields of 5.0 MT/ha, hugely better than the national average last year of just 1.2 MT/ha although those results are off a very small harvested area so far (1,500 ha).
In Ukraine things are a little more advanced with around 15,000 hectares cut as of June 24th and with yields so far coming in at just under 3.0 MT/ha, 50% up on the national yield of 2.0 MT/ha last year.
The last time Ukraine had yields like that was in the bumper pile it high and sell it cheap crop year of 2008.
27/06/11 -- Soybeans: November soybeans rose 5 3/4c to USD13.15/bushel; Dec soymeal was up USD2.60 at USD339.50; Dec soyoil fell 16 points to 56.20. The USDA confirmed the sale of 132,000 MT of soybeans to China. Beans managed to distance themselves from falling corn and wheat. After the close the USDA pegged the crop at 97% planted, one point ahead of normal. Condition ratings however fell three points from last week to 65% good/excellent. On Thursday the USDA is expected to show planted soybean acreage down slightly from last month to 76.53 million from 76.609 previously and 77.404 last year.
Corn: July CBOT corn ended down 9 1/4c at USD6.60 3/4 per bushel; Dec corn closed down 5 1/4 cents to USD6.26 3/4. Funds just don't fancy corn anymore, selling an estimated 8,000 lots on the day. The weekly export inspections report came in well below trade estimates of 33-39 million bushels at just under 29 million. After the close the USDA pegged good/excellent crop ratings down 2 points from last week to a still healthy 68%. The USDA reported 230,000 MT of corn sold to unknown - 130,000 MT of old crop and 100,000 MT of new crop. Corn acreage for Thursday's report is estimated roughly unchanged from last month at 90.767 million acres.
Wheat: CBOT July wheat fell 13c to USD6.22 3/4 per bushel; KCBT July wheat dropped 20c to USD7.28 1/2; MGEX ended down 20 1/4c to USD8.05 3/4. Harvest pressure continues with better than expected yields and quality coming out of Kansas. After the close the USDA pegged winter wheat harvesting at 44% complete, up from 31% last week and 37% normally. Good/excellent conditions fell one point to 35% however. Spring wheat plantings are only 95% done as opposed to 100% normally. For Thursday's USDA report all wheat acres are estimated at 56.671 million against 57.70 million previously, although well up on 53.603 million last year.
27/06/11 -- EU grains closed sharply lower with July London wheat down GBP7.65 to GBP155.00/tonne and with new crop Nov falling GBP5.00/tonne to GBP158.50/tonne. Nov Paris wheat closed EUR8.25/tonne lower at EUR187.50/tonne whilst May12 fell EUR7.50/tonne to EUR194.00/tonne.
We haven't seen a front month close this low on London wheat since early October, and we are now GBP62.50/tonne, or 29%, lower from the highs set little more than two months ago.
For Paris wheat this was the lowest front month close since last July.
Chicago grains offered little in the way of encouragement, with shell-shocked bulls there pinning their hopes on reports of corn sales of 230,000 MT to unknown, of which 130,000 MT was for the 2010/2011 crop year and 100,000 MT for the 2011/2012 marketing year.
The suggestion is that these sales may have been to China but the market reaction was uninspiring. That news/rumour would have got the market surging a couple of months ago. Today it caused hardly a ripple. That is probably indicative of the current market situation in which we now find ourselves, bullish news is largely ignored and bearish news seized upon. The complete polar opposite of where we were a few months ago.
Reports of a major rain event for all of the Ukraine/Black Sea area should seal the crop there. SovEcon now peg Russia's 2011 grain crop at 82-86 MMT.
At home old crop wheat's fall from grace may be at least partially attributable to reports of substantially higher wheat stocks than most market participants realised/expected a few months back. Demand from the feed sector has also fallen off a cliff and of course there's no hungry Ensus to rely on at the moment either.
That explains why July has now slumped to a GBP3.50/tonne discount to Nov, when just a month ago it was a GBP25.00/tonne premium. Old crop wheat is now trying to price itself at a level which attracts consumer demand with the harvest now only four weeks away.
End-user buyers however are very few and far between. It's not that the consumers don't want wheat at these levels and are buying something else, they simply don't want anything at the moment. Other products such as wheatfeed, soya hulls and citrus pulp are equally friendless.
27/06/11 -- Yes folks, he's at it again, letting me down and getting my back up with aplomb. Richard Bloody Branson and his poxy wanky tosspot piss poor broadband my arse. Bollocksband that's what you are delivering my son, pure bollocksband. Thanks for making me spend my entire afternoon on the blower to Mumbai. Thanks for not coming even close to sorting my problem out. "I can tell you sir that your modem is working perfectly." Well why can't I connect to the internet then?
"Let me just try something for you, sir. Let's just delete all your browsing history, cookies etc, just to make it nice and difficult for you when we do finally get our arses into gear and send a slug out with your new modem, that I'm sure you don't need. Click this this and this, and then hit delete. That'll be fine sir you worry too much, there's nothing wrong with your Virgin Media modem I can assure you of that. It's probably your crappy Belkin router that's to blame."
"Well I'm sorry sir things seem to be malfunctioning a bit. Have you tried switching the modem off and one again. Really, fifteen times, well lets just try that one more time shall we just in case....there has that fixed it. No, well sorry for this sir, I'm fair flummoxed I am, anyway how are you today, Andy Murray is nice man, yes, no?"
"Well bugger me rigid sir, it would seem that it isn't your Belkin router after all it's us that's to blame and no mistake. We're going to have to send a technician out to have a look at what is causing the problem."
Surprise, surprise, they are inundated with technical call outs and malfunctions it would seem (either that or they only have one technician to cover the whole of Europe), as they can't get anyone out to see me for a week. Yes a chuffin, ball-breaking, bollock sapping, buggering week.
"Is there anything else I can help you with...?" Erm, well no actually, as that kind of implies that you've "helped" me with this problem doesn't it?
You could start by giving me Branson's address, I think that the dog may have an urgent parcel for him...and it's probably going to get there quicker than my bloody modem gets here. Tell the girl that opens the post to take some rubber gloves in with her for the rest of the week....Chummy, here boy, here's some of that nice Chicken Vindaloo that you like and a couple of onion bhaji's from your Uncle Richard.
It could be another quiet week on the blog if this persists.
27/06/11 -- It's pretty much a sea of red everywhere, with London wheat down around GBP3.50-5.00/tonne and Paris wheat EUR5.00-6.00/tonne lower.
Globex wheat was around 8-10c lower, with corn down 5-8c and beans 3-5c weaker.
At home, anecdotal reports I am hearing suggest that there is more old crop wheat out there than the market realised. And as things stand we will be harvesting in four weeks.
Looks like we aren't going to run out after all then. In fact carryover into new crop could me more sizable than many thought possible. Whether that is down to an accumulation of higher carryins from previous years or a production underestimate from 2010 is unclear.
Wxrisk.com are forecasting a "dry warm week coming up for all of western and central Europe and a major rain event for all of the Ukraine/Black Sea area," according to our mates at Agrimoney.
The normally very reliable SovEcon now peg Russia's grain crop at 82-86 MMT, in line with government estimates of around 85 MMT.
Palm oil has set a new seven month low in Kuala Lumpur this morning.
As well as Greek jitters we also now have the market talking about inflation in China potentially damaging demand for commodities.
The BBC are reporting that the International Criminal Court has issued arrest warrants for Col Gaddafi, his son Saif al-Islam and his intelligence chief.
A firm dollar and weak crude oil are bearish for grains.
The USDA today reports 230,000 MT of corn sold to unknown: 130,000 MT sold in the 2010/2011 crop year and 100,000 MT for 2011/2012 marketing year. The bulls will immediately conclude that these are sales to China, and indeed they may be. It will be interesting to see if fund money continues to pour out of corn anyway.
The USDA have also confirmed the sale of 100,000 MT of soybeans to China, along with a switch of HRW wheat from unknown to Iraq.
Early calls for this afternoon's CBOT session: wheat 6-8c lower, beans 4-6c lower and corn 2-4c lower.
27/06/11 -- The overnight markets are all lower, continuing with the recent theme. The firmer dollar is clearly aiding the negative sentiment that's around at the moment.
The euro remains weak ahead of this week's Greek vote on austerity, and the pound is caught in the middle, falling to 1.5930 against the USD, but steady at around 1.1270 against the euro.
NYMEX crude is more than a dollar lower, and at 8.30am London time only 3 cents away from falling under USD90/barrel for the first time this year. Brent is down the best part of two dollars to it's lowest since mid-February.
At home, it rained heavily across much of the UK Friday and into the early part of Saturday followed by a pretty decent weekend. Temperatures are set to soar today followed by the chance of heavy showers later in the week.
It also rained heavily over the weekend in Ukraine, with Kiev picking up 35mm, whilst Russian Central and Southern regions also got some beneficial moisture.
On Thursday we have the USDA stocks and June plantings numbers. Prior to that we have crop conditions, spring plantings and winter wheat harvest progress tonight.
Fund money looks like it's shed around a third of it's length in Chicago corn in the past two weeks, and may continue to lighten the load ahead of Thursday and on the back of continued Greek debt concerns.
Russia are officially back in the export market Friday.
Lower looks to be the path of least resistance.
Can I also just say, come on Andy, you useless Scottish git, just to cover myself.