EU Wheat Close
07/12/11 -- EU grains ended mixed with Jan 12 London wheat up GBP1.90/tonne to GBP144.90/tonne, Jan 12 Paris wheat was EUR0.25/tonne higher to EUR180.00/tonne.
Some London wheat months were slightly lower as were many Paris positions. Exactly why front month Jan 12 London wheat managed to post enough gains to make it a GBP0.85/tonne premium to further forward March is difficult to explain.
It was a low volume day as the market sits and waits, or more like hopes, for some direction to come on Friday. They may be disappointed if the comments of one German official are to go by, he said that more time may be needed to finalise plans to save the eurozone than Friday's self-imposed deadline affords.
The pound rose above 1.17 against the euro to close to its highest levels since February.
Also on Friday we have the latest missive from the USDA detailing world production and stocks numbers. Trade opinion is that they will raise slightly their estimate for world wheat ending stocks for the 2011/12 season from what they already say is the highest level in a decade.
Tomorrow we will get the figures on the latest weekly EU export licences and also the numbers on USDA weekly export sales and shipments. The latter will be particularly of interest for wheat as shipments have slumped quite alarmingly of late.
US corn sales are also on the decline. If domestic demand over there also falls away sharply once the ethanol blenders' tax credit gets removed in a couple of weeks then things could get interesting.
Late Call On Chicago
07/12/11 -- The overnight markets ended mixed with wheat down 3-6 cents, corn down a fraction and beans up 3-4 cents. Crude oil is a little lower too.
A German official's comments that more time may be needed to iron out EU treaty changes and a plan to resolve the ongoing European debt crisis put the euro under pressure. The markets had, foolishly perhaps, been pinning their hopes on a blinding flash of inspiration to come out of this week's EU leaders' summit on Thursday and Friday.
Apart from that fresh news is thin on the ground ahead of the USDA's crop production and stocks numbers also on Friday.
US wheat remains pretty uncompetitive on the export stage, and tomorrow we will likely have another set of below par weekly shipment numbers to digest from the USDA.
Corn sales have also dipped lately in the face of fierce competition from Ukraine and Argentina and also feed wheat out of the Black Sea and Australia.
Brazil is meanwhile forecasting a record soybean crop with Argentina expecting a second highest crop of their own.
Late calls for this afternoon's CBOT session@ beans up 2-4 cents, coen down 1-2 cents, wheat down 4-6 cents.
EU Rapemeal Prices
07/12/11 -- Guide prices for EU rapemeal, basis FOB Lower Rhine in euros/metric tonne, with change from previous day:
| Dec11 | 157.00 | +1.00 |
| Jan12 | 158.00 | +3.00 |
| Feb/Apr12 | 157.00 | +3.00 |
| May/Jul12 | 155.00 | +4.00 |
| Aug/Oct12 | 144.00 | +1.00 |
| Nov12/Jan13 | 150.00 | unch |
| Feb/Apr13 | 151.00 | unch |
The Morning Vibe
07/12/11 -- Not much to get ones teeth into this morning as the trade waits for enlightenment on Friday with the conclusion of the EU leaders' summit and the issuing of Decembers WASDE and stocks numbers from the USDA.
The trade is expecting 2011/12 US soybean stocks to rise from the previously predicted 195 million bushels to 214 million this time round. Corn stocks are seen falling from 843 million to 831 million, with wheat inventories pretty flat at 830 million from 828 million.
On a global level soybean stocks are seen falling slightly from 63.56 MMT to 62.98 MMT, with corn and wheat stocks both up a little from 121.57 MMT to 121.87 MMT and from 202.6 MMT to 203.03 MMT respectively.
It will be interesting to see what production numbers they come out with for southern hemisphere crops like Australian wheat, and Argy & Brazilian corn and beans.
For UK and US wheat growers reading this who are unhappy with falling prices, spare a thought for your compatriots in landlocked Kazakhstan. They've just had a record wheat harvest but find themselves struggling to reach export homes far away as Russia and Ukraine busy themselves with shipping their own bumper harvests.
Stores, elevators, trucks and railcars are rammed with wheat with nowhere to take it. What price can a Kazakh farmer therefore expect to get for his ex farm wheat right now? Little more than EUR50/tonne is the answer, say Agritel. Ouch.
Elsewhere, as well as upping their wheat production estimate by more than 2 MMT from their last report in October StatsCanada also increased their 2011/12 rapeseed output forecast by more than a million tonnes to 14.16 MMT, 11% up on last season.
As the storm clouds gather over Europe, China has warned that export data due on Saturday will show a sharp slowdown in growth as demand from it's leading export home slumps.
Meanwhile, presumably keen not to be seen as the big wet that he undoubtedly is, our very own David Cameron has said that he'll be signing "bugger all" on Friday if France and Germany's proposals damage British interests. That's a bit like Ron Weasley offering Voldemort a fight behind the bike sheds.
Chicago Markets Sitting Tight Until Friday
06/12/11 -- Soybeans: Jan 12 Soybeans closed at USD11.29 1/2, up 3 1/4 cents; Mar 12 Soybeans closed at USD11.39 1/2, up 3 cents; Dec 11 Soybean Meal closed at USD282.20, up USD1.10; Dec 11 Soybean Oil closed at 49.98, down 9 points. As with European grains, the US markets remain in a state of flux, awaiting news from this side of the pond from the EU leaders' summit at the end of the week to determine direction. We also have the USDA out on Friday with their supply & demand numbers. US ending stocks are seen rising in 2011/12 to 214 million bushels from 195 million last month. Parts of Brazil are dry, but overall another large, and potentially record large, crop is in the pipeline.
Corn: Dec 11 Corn closed at USD5.85 1/4, up 5 cents; Mar 12 Corn closed at USD5.96 1/2, up 5 1/2 cents. The corn market is pondering the demand side of the equation as we head into 2012. Australia is harvesting what is expected to be a record wheat crop, much of which will only be feed grade, of which they already still have an abundance left over from last season. That will compete with US corn sales into Asia next year. Argentina are expecting a record corn crop, and are also flexing their export muscles. Meanwhile Japan is also seen buying record volumes from "Europe", which in this case probably means Ukraine who have also just brought in a record corn crop and who forecast plantings up 12% for 2012.
Wheat: Dec 11 CBOT Wheat closed unchanged at USD5.98 3/4; Dec 11 KCBT Wheat closed at USD6.67, up 1/2 cent; Dec 11 MGEX Wheat closed at USD8.54 1/4, up 6 cents. US wheat continues to miss export orders with Egypt buing 240,000 MT of Argentine/Russian wheat. Once again US wheat wasn't even offered. StatsCanada upped their wheat production estimate in one of America's biggest export rivals to 25.3 MMT, more than a million tonnes higher than the USDA and two million up on 2010/11. the trade was anticipating a number around 24.5 MMT. ABARES pegged Australia's 2011/12 wheat crop at an all-time record 28.3 MMT, which is 2.3 MMT more than the USDA. There isn't much change anticipated by the trade in Friday's USDA report as far as wheat is concerned, but I wonder if we may see world ending stocks for 2011/12 raised again from last month's 202.6 MMT.
EU Wheat Flat Awaiting News On Debt Crisis Plans
06/12/11 -- EU grains ended narrowly mixed with Jan 12 London wheat unchanged at GBP143.00/tonne and Jan 12 Paris wheat also unchanged at EUR179.75/tonne.
The market is still waiting for European leaders to put some flesh on the bones of their plans to resolve the debt crisis, and seems to be prepared to give them the benefit of the doubt and wait to give them one last shot at them pulling a rabbit out of the hat on Friday.
Hence another low volume day with very little price movement. Whilst we are treading water waiting for news from these outside markets, the grain market fundamentals are starting to stack up against a push higher though.
Australia's ABARES today said that this season's wheat crop would be a record 28.3 MMT. September/October rains may have damaged quality in some cases, but they've certainly helped yields it would appear. Their estimate is 2.3 MMT more than the USDA projected last month.
There's talk now of record Australian wheat exports of 21.6 MMT in 2011/12 from a nation still carrying a huge inventory of leftover grain from last season. That would see them stand above Russia, the EU-27 and Canada as second only to the US in terms of global wheat sales.
StatsCanada were also out with revised production estimates today, pegging the wheat crop there at 25.26 MMT, more than a million tonnes higher than their previous forecast and that of the USDA, and more than two million up on 2010/11.
Egypt bought four cargoes of wheat on the export market today, with Russia only getting the nod for just the one and Argentina sharpening the pencil to pick up the vote for the other three despite an enormous freight disadvantage.
The Russian wheat was priced at around USD244.50 FOB, with the winning Argy wheat coming in at around USD220-221/tonne FOB - the equivalent of less than the price of UK feed wheat at the moment.
This is the first time Egypt has bought wheat from outside the Black Sea region this season. France yesterday forecast that it's sales to the world's largest wheat buyer would slump 92% in 2011/12.
The USDA are out with revised world and US production and stocks data on Friday, increases in both are what the market is anticipating.
EU Rapemeal Prices
06/12/11 -- Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:
| Dec11 | 156.00 | +3.00 |
| Jan12 | 155.00 | +2.00 |
| Feb/Apr12 | 154.00 | +1.00 |
| May/Jul12 | 151.00 | -1.00 |
| Aug/Oct12 | 143.00 | +1.00 |
| Nov12/Jan13 | 150.00 | +2.00 |
The Morning Vibe
05/12/11 -- It's all looking a bit shaky this morning after S&P's put fifteen of the seventeen countries that use the euro on watch for a credit downgrade. The "lucky" two being Cyprus who are already on watch and Greece who are already rated council house scum.
Merkel and Sarkozy say that they've agreed on proposals to change the governance of the eurozone. No worries there then, only another 15/17 to convince and they're home. And even if they can be convinced how long is it going to take, and who may have already fallen by then?
Widespread rumours suggest that there are all sorts of Plan B, C & D activities going on behind the scenes.
So the euro is back out of favour again this morning, and the overnight Globex market sees Dec corn 10 1/4 cents down to USD5.70/bushel, the lowest for a front month in almost a year.
Wheat is around 8-9 cents lower after ABARES announced that Australia's 2011/12 wheat crop will be an all-time record 28.3 MMT. Logistics is now the only barrier to Australia becoming the second largest wheat exporter in the world next year. Around a quarter of this season's crop could only be feed wheat, which could put a bit of pressure on US corn demand in 2012.
Japan is said to have bought 700,000 MT of EU corn (a very significant non-US volume by it's standards) for shipment in the first quarter of 2012 at substantial discounts to US origin material.
The potential failure of as much as 20% of Ukraine's winter crops means that spring plantings will be sharply higher in 2012, led by corn where the area sown is expected to increase by around 12% to more than 4 million hectares.
Chicago Close - Monday
05/12/11 -- Soybeans: Jan 12 Soybeans closed at USD11.26 1/4, down 9 1/2 cents; Mar 12 Soybeans closed at USD11.36 1/2, down 9 3/4 cents; Dec 11 Soybean Meal closed at USD281.10, down USD5.30; Dec 11 Soybean Oil closed at 50.07, up 2 points. Weekly export inspections of 31.649 million bushels for beans were poor and continue to lag last season's pace by a considerable margin. Celeres increased their estimate for Brazilian output to a record 75.6 MMT, 1.6 MMT more than the USDA project. The USDA issue revised December WASDE numbers on Friday. Funds were said to have sold around 3,000 soybean contracts on the day.
Corn: Dec 11 Corn closed at USD5.80 1/4, down 6 1/4 cents; Mar 12 Corn closed at USD5.91, down 4 1/4 cents. European debt woes continue to weigh on the market, with S&P warning of possible downgrades for an assortment of EU countries in the months ahead. Funds were said to have sold around 5,000 contracts on the day. Weekly export inspections came in at 38.546 million bushels with 9.3 million of that going to China. Informa Economics appear to concur with last week's bumper Chinese corn production estimate, raising their own figure by 5.5 MMT to a record 190 MMT. They also increased their Brazilian estimate by 1 MMT to a record 63 MMT.
Wheat: Dec 11 CBOT Wheat closed at USD5.98 3/4, down 13 1/2 cents; Dec 11 KCBT Wheat closed at USD6.66 1/2, down 9 1/2 cents; Dec 11 MGEX Wheat closed at USD8.48 1/4, down 7 3/4 cents. Weekly export inspections of 14.497 million bushels bring the year to date total to 533.5 million, around 42 million behind last year. Saudi Arabia bought 330,000 MT of wheat of various origins over the weekend, spreading the business around to include EU, US, Canadian, Australian and Argentine production. Egypt issued a tender after the close, US wheat is unlikely to feature in that one though. Funds added an estimated 3,000 contracts to their hefty Chicago wheat short on the day.
EU Wheat In Limbo Ahead Of Big Week For Europe
05/12/11 -- EU grains finished mostly lower with Jan 12 London wheat down GBP0.15/tonne to GBP143.00/tonne and Jan 12 Paris wheat falling EUR1.50/tonne to EUR179.75/tonne.
All eyes are on Europe this week, as Merkel and Sarkozy meet in Paris today ahead of an EU summit on Friday. Following today's meeting the two main protagonists issued a joint statement saying that treaty changes to prevent a repetition of the Eurozone crisis "should" be in place by March.
Ideally, they'd like all EU-27 members to vote these changes through.
At the very least though those changes, which include outside checks on budget deficits and sanctions against those that breech them, will need to be ratified by all 17 member states that use the euro. How easy (and how long) to obtain that will prove to be is anybody's guess.
Meanwhile these alterations don't appear to contain anything to address the current debt problems.
Whilst all this is going on the grain markets are left in limbo, trading in a narrow range.
France Export Cereales say that the country is unlikely to export more than 200,000 MT of wheat to Egypt in the current marketing year - just 8% of what they sold the world's leading wheat buyer in 2010/11.
Vietnam is said to be buying Australian feed wheat at USD255/tonne including freight, around USD20-25/tonne cheaper than it was a month ago, from a nation awash with low grade wheat for the second year in a row.
Japan is buying Argentine corn and sorghum as Asian buyers turn away from more expensive US corn.
Ukraine's Ag Ministry has lowered it grain export forecast for the current season from 26-27 MMT to 23-24 MMT. Corn will constitute around half of that, according to the USDA. Some private analysts peg corn's share of the export market significantly higher than that.
EU Rapemeal Prices
05/12/11 -- Guide prices for EU rapemeal, basis FOB Lower Rhine in euros/metric tonne, with change from previous day:
| Dec11 | 153.00 | +3.00 |
| Jan12 | 153.00 | +3.00 |
| Feb/Apr12 | 153.00 | +3.00 |
| May/Jul12 | 152.00 | +2.00 |
| Aug/Oct12 | 142.00 | +3.00 |
| Nov12/Jan13 | 148.00 | +3.00 |
| Feb/Apr13 | 150.00 | +3.00 |
The Morning Vibe
05/12/11 -- Credit is due to James Nott for getting a dull Monday off to a bright start by emailing me this image this morning.
We've just had our first few flurries of snow here in North Yorkshire this morning, and the wind certainly has a bit of a chilling bite to it all of a sudden. Let's hope that's enough to get the last of the cows indoors! Whether it means we will see a bit of a pick-up in feed demand remains to be seen.
It's another big week for the euro with Sarkozy and Merkel meeting in Paris today ahead of the Dec 9th deadline that they gave us when the details of their cunning plan are to be revealed.
Hmmmmm, I remain unconvinced. I wonder what the markets would make of a "we need more time to finalise the cunningness of our secret plan" announcement? Whatever treaty changes they want to make will presumably need ratifying by at least the 17 countries that use the euro if not the entire 27 member states? And how long is that going to take?
Meanwhile, the Italian Welfare Minister apparently broke down in tears on national TV yesterday when outlining the severity of the pension reforms she is being forced to introduce to tackle the budget deficit.
Still, I suppose a politician in tears on the telly makes a change from seeing them kissing babies heads or getting eggs (or punches) thrown at them.
Chicago Close - Friday
02/12/11 -- Soybeans: Jan 12 Soybeans closed at USD11.35 3/4, up 7 3/4 cents; Mar 12 Soybeans closed at USD11.46 1/4, up 7 3/4 cents; Dec 11 Soybean Meal closed at USD286.40, down USD0.80; Dec 11 Soybean Oil closed at 50.05, up 53 points. Beans ended the week 29 1/4 cents firmer, with meal up USD3.70 and oil rising 182 points. Crude oil was higher closing above USD100/barrel for the first time on the weekly chart in six months. Even so as we approach the end of 2011 front month soybeans are more than USD2.50/bu lower than where they ended 2010. South American weather has been fairly non-threatening so far although it's early days yet.
Corn: Dec 11 Corn closed at USD5.86 1/2, down 8 1/4 cents; Mar 12 Corn closed at USD5.95 1/4, down 6 1/4 cents. Corn was 4 cents higher on the week. Funds sold an estimated 7,000 contracts on the day. The latest commitment of traders data shows them continuing to reduce their net long position which now stands at the lowest in almost 18 months. China's National Bureau of Statistics pegs this year's corn crop there at 191.75 MMT, 8.2% up on last year. That's part of a total grain harvest of over 571 MMT, they say - the eight straight year of increases. Normally the market would take those numbers with a pinch of salt, they haven't however been as active in the corn market of late as their "insatiable" appetite would seemingly suggest with prices below USD6/bushel.
Wheat: Dec 11 CBOT Wheat closed at USD6.12 1/4, up 10 1/4 cents; Dec 11 KCBT Wheat closed at USD6.76, up 13 cents; Dec 11 MGEX Wheat closed at USD8.56, up 1 1/2 cents. On the week as a whole Chicago wheat was up 37 3/4 cents, with Kansas rising 32 1/2 cents and Minneapolis up 28 3/4 cents. Fund money reduced their net short position on Chicago wheat for the week through to Tuesday, but still hold a significant short. Higher prices will do little to improve US exports which have dropped off sharply in the second quarter of the current marketing year. Australia's wheat crop continues to take a quality hit from widespread harvest rains. China's wheat crop came in at just under 118 MMT this year, according to their National Bureau of Statistics.
EU Wheat Ends Week Barely Changed
02/12/11 -- EU grains ended mostly higher walthough Jan 12 London wheat was down GBP0.90/tonne to GBP143.15/tonne, Jan 12 Paris wheat was EUR2.00/tonne higher to EUR181.25/tonne.
There wasn't much change on the week as a whole with Jan 12 London wheat up GBP0.90/tonne and Jan 12 Paris wheat up a marginal EUR0.25/tonne.
The market seems to be treading water looking for direction, the week ahead may provide some with EU leaders supposedly set to put some flesh on the bones of their promised plan to save the world by December 9th. Ahead of that Merkel and Sarkozy meet on Monday.
Whilst this week's coordinated central bank action may improve liquidity it won't do anything to help solvency, and that is what this crisis is really all about.
There are some concerns starting to form over crop prospects in Ukraine, where dryness means that almost a quarter of autumn-planted grains still haven't emerged. "Ukraine rainfall has been less than 40% of normal in the 90 days ending mid November," according to Martell Crop Projections.
In contrast, analysts in Russia are indicating the potential for a bumper 100 MMT grain crop in 2012, which would be the second highest harvest in the post-Soviet era.
China's National Bureau of Statistics says that this season's corn harvest there is a huge 191.75 MMT, far higher than other estimates in the market (the USDA say 185.4 MMT). Their activity, or otherwise, on imports over the coming months will perhaps offer a few clues as to how accurate that number is likely to be.
The Morning Markets
02/12/11 -- It's all very much as you were this morning with little excitement so far in the overnight markets.
Angela Merkel is today promising "concrete steps towards a fiscal union" without saying what those steps are. French President Nicolas Sarkozy is nodding sagely and smiling. Oui, Oui.
Am I the only one who thinks that a) they haven't got a clue what they're doing and b) they know that this crisis is far worse behind the scenes than they are letting on.
The promised a mystical, intangible bailout fund increase to one trillion euros clearly isn't worth the paper that it isn't written on.
Rumours from earlier in the week that the central banks moves to provide liquidity were only brought about as a result of a major European bank, possibly a French one, being on the verge of folding carry more than a ring of truth methinks.
George Soros is a man with his eye on the ball, and he says that the world financial system is "on the brink of collapse." I think I agree with him. The question is when and where will it start?
Not much blogging getting done today, I'm off to the chilly North East to speak to a group of grain growers. Many others will be attending the London Bourse so it looks like being an inactive day on the markets.
Chicago Closing Comments
01/12/11 -- Soybeans: Jan 12 Soybeans closed at USD11.28, down 3 1/4 cents; Mar 12 Soybeans closed at USD11.38 1/2, down 2 1/2 cents; Dec 11 Soybean Meal closed at USD287.20, down USD3.20; Dec 11 Soybean Oil closed at 49.52, up 25 points. Weekly export sales were a bit below expectations at 489,600 MT, China actually bought more than that themselves but there were also some switches from unknown and cancellations to take into account. Year to date accumulative sales are running well behind last year's pace. The market remains acutely nervous over European debt. The world financial system is on the brink of collapse, according to legendary financier George Soros in the Wall Street Journal.
Corn: Dec 11 Corn closed at USD5.94 3/4, down 6 1/2 cents; Mar 12 Corn closed at USD6.01 1/2, down 6 1/2 cents. Corn fell as the USDA reported another uninspiring set of weekly export figures at 352,200 MT for both old and new crop. Funds were said to have sold an estimated 8,000 contracts on the day, having been buyers all week. With export demand faltering in recent weeks it remains to be seen of domestic interest holds up once the ethanol blenders tax credit is removed at the end of the year. Six dollar corn is supposed to attract the buyers, but there hasn't been too much sign of them lately, with even the Chinese staying largely out of the market now they have their own new crop available.
Wheat: Dec 11 CBOT Wheat closed at USD6.02, up 6 1/4 cents; Dec 11 KCBT Wheat closed at USD6.63, up 12 cents; Dec 11 MGEX Wheat closed at USD8.54 1/2, up 18 1/2 cents. Weekly export sales were good and towards the upper end of trade estimates at 503,000 MT. Shipments however were poor once again and have now failed to meet the level required to meet the USDA's target for the 2011/12 marketing year in seven of the last eight weeks. Russia meanwhile is exporting record volumes of grain with over 14 MMT having been shipped out in the Jul 1st - Nov 20th timeframe, of which 12 MMT was wheat. Ukraine's sales are also picking up after a slow start with 2.2 MMT of grain being exported in November.
EU Wheat Mostly Cautiously Higher
01/12/11 -- EU grains ended mixed although wheat was mostly higher as Jan 12 London wheat finished up GBP1.40/tonne at GBP144.05/tonne and Jan 12 Paris wheat ended EUR0.75/tonne higher at EUR179.25/tonne.
New crop Paris wheat was a little lower, as too were most months on corn, rapeseed and malting barley.
The European debt crisis remains the key driver. Support today came from news of Spain and France auctioning off debt at better levels than last week. We are still probably only one or two pieces of proper bad news away from a full blown Armageddon.
Ukraine says that it has brought in a record clean weight 54.5 MMT grain harvest this year. Foreign sales are increasing, with November exports at 2.2 MMT - the highest of the marketing year so far.
Russia is already turning its attention to 2012. Influential analysts SovEcon are prediction a winter wheat crop of 39.5 MMT, a 14% increase on 2011. They also increased their forecast for 2011/12 grain exports by 2 MMT to 24.5 MMT.
IKAR say that Russia has exported a record 14.1 MMT of grains in the Jul 1st - Nov 20th period, of which 12 MMT was wheat.
At home, the HGCA say that despite "unseasonably mild weather and below average rainfall in many regions" this autumn, crops are largely in good condition heading into winter.
"Early drilled crops of winter wheat are now well established with lush growth," they add.
US wheat shipments continue to lag. Based on the mean of exports over the last 8 weeks the US will ship 23.3 MMT of wheat in 2011/12 - well below the 26 MMT currently forecast by the USDA.
EU Rapemeal Prices
01/12/11 -- Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:
| Dec11 | 150.00 | +2.00 |
| Jan12 | 150.00 | +2.00 |
| Feb/Apr12 | 150.00 | +2.00 |
| May/Jul12 | 150.00 | +3.00 |
| Aug/Oct12 | 139.00 | unch |
| Nov12/Jan13 | 145.00 | +2.00 |
Early Call On Chicago
01/12/11 -- The overnight markets closed firmer with wheat mostly 4-6 cents higher, corn up 3-4 cents and beans 8-10 cents better.
The market is searching for direction, wondering exactly how helpful to the global economy will yesterday's central bank announcement really be.
Farmer selling interest at these levels is light, even though in historic terms prices are still high.
Despite corn and wheat at or below USD6/bushel export demand hasn't exactly been snapping grains up. Today's USDA weekly export sales came in at just 280,600 MT for corn for the 2011/12 marketing year, plus a further 71,600 MT for delivery in 2012/13. Trade estimates were for sales of 350-450 TMT.
Wheat sales totalled 503,000 MT, in line with trade estimates. Weekly shipments were poor yet again though at just 302,000 MT, way below what is needed to hit the USDA's 2011/12 goal of 26 MMT.
Soybean sales were a little below trade estimates of 550-850 TMT at 489,600 MT.
Domestic US demand for corn remains strong courtesy of the ethanol sector, but once the blenders' tax credit expires that could come down along with the Christmas decorations in January.
Spain and France managed to auction off debt at better rates than the market feared. European is still only one or two steps away from the abyss though IMHO.
Russia, Ukraine and Kazakhstan still have plenty of grain to market, with the first two mentioned rattling through exports at a strong pace. The landlocked latter will be eager to take advantage of any easing up by Russia to use their Black Sea ports to reach export homes in Europe and North Africa.
South American weather remains non-threatening for the time being, with record or near record production on the cards for corn and soybeans.
Early calls for this afternoon's CBOT session: corn up 2-4 cents, wheat up 5-7 cents, soybeans up 8-10 cents.
Ukraine Latest
01/12/11 -- Ukraine has harvested a record 57.8 MMT in bunker weight grain crop this year, or 54.5 MMT in clean weight - that's 1 MMT up on the 2008/09 all time high.
Grain exports for the month on November were a marketing year high of 2.2 MMT, up 47% on October. Interestingly corn accounted for over 80% of those shipment at 1.8 MMT with wheat exports only 18% at 400 TMT.
Chicago Close Disappoints Bulls
30/11/11 -- Soybeans: Jan 12 Soybeans closed at USD11.31 1/4, up 6 1/4 cents; Mar 12 Soybeans closed at USD11.41, up 6 cents; Dec 11 Soybean Meal closed at USD290.40, up USD4.30; Dec 11 Soybean Oil closed at 49.27, up 9 points. Prices rebounded from overnight lows as world central banks announced an initiative aimed at improving liquidity. The dollar fell sharply on the news and crude oil rose above USD100/barrel. Bulls were jubilant and initially acted as if this was for sure the catalyst that they'd been waiting for to propel the market back to summer highs. Ultimately then a 6 cents firmer close must be seen as a huge disappointment seeing as beans were 19-20 cents up at one stage.
Corn: Dec 11 Corn closed at USD6.01 1/4, up 3 1/4 cents; Mar 12 Corn closed at USD6.08, up 2 1/2 cents. As with soybeans corn closed well off session highs as the initial euphoria over the central banks' announcement waned. Funds were buyers for the third straight session, picking up an estimated 5,000 contracts on the day. Argentina's Ministry said that they are expecting a record 30 MMT corn crop in 2012. They are the world's second largest exporter after the US. Trade estimates for tomorrow’s weekly export sales report, which have been a bit flat of late, are 350 to 450 thousand MT.
Wheat: Dec 11 CBOT Wheat closed at USD5.95 3/4, up 1 1/4 cents; Dec 11 KCBT Wheat closed at USD6.51, down 5 cents; Dec 11 MGEX Wheat closed at USD8.36, down 2 3/4 cents. Trade estimates for tomorrow’s weekly export sales report are 350 to 550 thousand MT. Weekly shipments now need to come in at over 480,000 MT for the remainder of the season to meet the USDA's targeted 2011/12 export estimate of 26 MMT. It seems unlikely at this stage that this is going to be achieved unless the dollar declines considerably from current levels.
