Trading Times Over Easter - And How Things Looked 12 Months Ago

06/04/12 -- As per usual there's no rest for the wicked with a heavy work schedule lined up for yours truly over the "holiday" weekend. I will spend that catching up on writing market reports, updating my charts, building Mrs N#3 an outdoor stand to accommodate all her seedlings which are starting to make the kitchen & utility room look like the summer house at Kew Gardens. Oh, and there's a couple of websites to produce too.

Meanwhile you lot will no doubt all be putting your feet up and stuffing your fat faces with Easter eggs.

No doubt bored shitless one or two of you will stumble inevitably towards the PC at home to check on what's happening, in an effort to prise yourself away from Aunty Beryl and her embarrassing stories about the time you stuck a lego brick up your nose when you were three.

Today the answer is that nothing is happening, it's Good Friday and everything is shut. Monday however is a different bain marie full of halibut. There's an overnight market Sunday night/Monday morning, and Chicago will operate a full normal trading session on Monday afternoon whilst London and Paris grains remain closed.

Monday night the USDA will release their weekly crop progress report, which will reveal how much corn and spring wheat has gone into the ground in the past week.

Tuesday everything returns to normal with London and Paris back open. Tuesday afternoon the USDA will issue their April WASDE and stocks report, so there could be some firework potential there. Suffice to say that by the time we finish our next trading session on Tuesday night there's the potential for prices to be fairly dramatically different to where they finished Thursday night.

Checking back to what was going on at Easter last year, Chicago closed Easter Monday with soybeans up 9 cents at USD13.89, corn was 25 1/4 cents higher at USD7.62 1/2 and CBOT wheat was ending the day with gains of 26 1/2 cents at USD8.26.

The day back after Easter saw May 11 London wheat close at GBP212.00/tonne with new crop Nov 11 at GBP180.00/tonne. May 11 Paris wheat was ended the session at EUR253.50/tonne.

As you can see, aside for soybeans, everything was a lot higher back then compared to where we currently reside.

Last Easter we were also concerned about UK and European drought (and it was three weeks later than it is this year). Spring wheat plantings in the US on Easter Sunday were only 6% done (they're already 8% complete as of last weekend).

It's early days. Downside potential still exists, particularly for wheat IMHO, and also of course for new crop corn. Soybeans and OSR could be another matter though...

Chicago Soybeans Hit Fresh 7-Month Highs

05/04/12 -- Soybeans: May 12 Soybeans closed at USD14.34, up 14 1/2 cents; Nov 12 Soybeans closed at USD13.81 1/2, up 6 cents; May 12 Soybean Meal closed at USD391.90, up USD3.70; May 12 Soybean Oil closed at 56.64, up 62 points. It's been a short week on which May 12 beans have added 31 cents, and new crop Nov 12 gaining 23 1/2 cents. Meal ends the week just USD2.20 higher than it began it whilst oil has added 154 points. Beans only closed higher than this on four days in the whole of 2011, the last one being seven months ago. They are also now within 15 cents of the 2011 closing highs. Weekly soybean export sales of 406,900 MT of old crop and 706,000 MT for delivery in the 2012/13 beat analysts expectations of a combined 600-850 TMT. China took 257,200 MT of old crop and 525,500 MT of the new crop.

Corn: May 12 Corn closed at USD6.58 1/4, up 1 1/2 cents; Dec 12 Corn closed at USD5.50 1/4, up 6 cents. For the week overall May 12 corn was 14 1/4 cents higher and new crop Dec 12 was 10 cents firmer despite the outlook for sharply higher US plantings this spring. Weekly export sales of 937,600 MT of old crop and 185,100 MT new crop corn also beat trade guesses for combined sales of 400-700 TMT. Catching trader's eyes was China taking 394,000 MT of the old crop. US weather remains generally favourable for early corn planting, although night-time temperatures could dip to freezing across the next couple of nights. The USDA will report on planting progress after the close on Monday (plantings were 3% done as of last Sunday), and will issue revised world supply & demand estimates Tuesday.

Wheat: May 12 CBOT Wheat closed at USD6.38 1/2, down 3/4 cent; May 12 KCBT Wheat closed at USD6.62, down 7 1/2 cents; May 12 MGEX Wheat closed at USD8.46, up 1/4 cent. On the week as a whole May 12 Chicago wheat fell 22 1/4 cents, with Kansas wheat down 35 1/2 cents and Minneapolis falling 8 1/2 cents. Weekly export sales for wheat of 408,300 MT for old crop wheat and 103,400 MT for new crop just about beat expectations for combined sales of 300-500 TMT. In amongst the old crop sales was a surprise 38,000 MT to China. US wheat won a 115,000 MT Egyptian tender today, apparently confirming that US wheat is amongst the cheapest origins around. Including freight French wheat was beaten by around USD20.00/tonne.

EU Wheat Rises, Paris Rapeseed Closes At 14-Month High

05/04/12 -- EU grains finished higher, with the exception of malting barley futures. May 12 London wheat ended GBP2.25/tonne higher at GBP171.75/tonne, whilst new crop months were GBP0.55/tonne steadier. May 12 Paris wheat ended EUR2.00/tonne higher at EUR211.25/tonne, Nov 12 was EUR2.25/tonne firmer at EUR204.75/tonne.

For the holiday shortened week as a whole May 12 London wheat closed GBP3.00/tonne lower with May 12 Paris wheat EUR1.50/tonne easier. At these levels May 12 London feed wheat is little more than a EUR3.00/tonne discount to Paris milling wheat.

European wheat as a whole remains too expensive on the international stage. Egypt bought 115,000 MT of US wheat in a tender today at USD259.75/tonne plus freight, that was more than USD30.00/tonne cheaper than French wheat. The freight differential between shipment from the US and France is currently only around USD10.00/tonne.

Further highlighting Europe's lack of a competitive edge is news that Brussels issued soft wheat export licences to the tune of 251 TMT this past week, bringing the marketing year-to-date total to 10.7 MMT - 5 MMT, or 32%, behind last season's pace 40 weeks into the campaign.

London wheat's strength on the day was all the more mystifying given that the pound closed at 1.2125 against the euro, it's best closing level on the weekly chart since August 2010.

The US winter wheat harvest will soon be upon us in southern States, Informa Economics estimated production at 1.631 billion bushels this week (44.4 MMT) - up 9.2% on last year.

Meanwhile harvesting in Pakistan is already underway and India are expected to begin harvesting an all-time high record crop of their own next week. With plentiful carryover stocks left over from last year India sold wheat to Bangladesh this week.

Meanwhile, the continued firmness in the world soybean market saw Paris rapeseed close the week at EUR504.00/tonne, up EUR13.75/tonne on the week and the highest closing price for a front month in 14 months.

Opinions as to how much damage has been done to the 2012/13 EU-27 rapeseed crop vary quite widely. The EU Commission currently forecast output in the coming year at 20.4 MMT, 1.1 MMT up on 2011/12. Coceral are less optimistic forecasting a crop of 19.1 MMT, Copa Cogenca are even more bearish giving us a figure of just 18.3 MMT.

Whichever way you look at it production looks likely to be well below usage, which the Commission peg at 22.9 MMT.

Early Call On Chicago

05/04/12 -- The overnight grains see beans 3-4 cents higher, wheat a cent higher to 2 cents lower and corn around 1-2 cents easier. Crude is slightly higher and so too is the dollar.

The USDA reveals weekly export sales of 408,300 MT for old crop wheat and 103,400 MT for new crop, compared to expectations of 300-500 TMT. In amongst the old crop sales was 38,000 MT for China. Exports of 404,700 MT were in line with recent weekly totals.

Soybean sales of 406,900 MT of old crop and 706,000 MT for delivery in the 2012/13 beat analysts expectations of 600-850 TMT. Once again China took the lion's share accounting for 257,200 MT of old crop and 525,500 MT of the new crop.

Corn sales of 937,600 MT old crop and 185,100 MT new crop also beat trade guesses of combined sales of 400-700 TMT. What will catch trader's eyes is China taking 394,000 MT of the old crop.

China present in the weekly export sales for all three of the main protagonists has to be something of a first for quite some time. That may support the market tonight, particularly old crop corn.

As we head into a long weekend nearby beans are up 19 3/4 cents on the week so far, with corn down 11 3/4 cents and wheat falling 20 1/4 cents, including the overnights.

South American soybean production estimates keep falling.

Midwest weather forecasts seem mostly favourable, although there's a light frost on the cards for some places little damage is expected with only 3% of the corn crop in the ground as of last Sunday.

The results of today's Egyptian wheat tender will be out mid-session.

Early calls for this afternoon's CBOT session: soybeans up 3-4 cents; wheat up 1-2 cents; old crop corn up 2-3 cents, new crop corn down 1-3 cents.

EU Rapemeal Prices

05/04/12 -- Rapemeal prices on the continent are mixed today, with little trade expected as the trade winds down for the long Easter weekend. Front month Paris rapeseed futures closed at their highest in more than twelve months last night.

Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:











































Apr12
241.00
-1.00
May/Jul12
237.00
-1.00
Aug/Oct12
207.00
+1.00
Nov12/Jan13
209.00
+3.00
Feb/Apr13
211.00
+2.00
May/Jul13
203.00
-2.00
Aug/Oct13
178.00
unch
Nov13/Jan14
187.00
unch

The Morning Vibe

05/04/12 -- It's the last day of trading ahead of the long weekend, with soybeans and rapeseed continuing to rise. May 12 Paris rapeseed closed at EUR500.00/tonne last night, the first close starting with the magical "5" for a front month since the last day of January 2011.

May 12 soybeans are 7 1/4 cents firmer overnight at USD14.26 3/4, closing in on the 2011 high of USD14.51 set in early February of last year.

With oilseed prices this high the market will surely turn round at some point and bite itself on the arse, but when? If the USDA's 73.9 million acres figure is correct, or even if it turns out to be the 75 million that the market was expecting, given that soybean losses in South America that are already irreversible there's a long old wait for South American growers to have another shot at milking the soybean cow.

That hasn't stopped Informa Economics having a long range stab at production prospects for next season though. It's very early days yet, but they forecast that Brazil's 2012/13 harvest will come in at 78.5 MMT and that Argentina's will achieve 60.0 MMT.

In the case of Brazil that's and 18% increase on this season's still being harvested crop and for Argentina it's up by a third on what they haven't even started on yet, or 27 MMT of extra production between the two of them.

If rapeseed prices also continue to rise it will not go unnoticed by European growers when planting time comes along again.

The only problem is that the fruits of that particular harvest are so long away. Meanwhile we are stuck with the hand that Mother Nature has dealt us for 2012.

Chicago Close - Beans Up, Corn And Wheat Lower

04/04/12 -- Soybeans: May 12 Soybeans closed at USD14.19 1/2, up 2 3/4 cents; Nov 12 Soybeans closed at USD13.75 1/2, down 3 1/4 cents; May 12 Soybean Meal closed at USD388.20, up USD1.70; May 12 Soybean Oil closed at 56.02, up 12 points. Funds bought an estimated 6,000 soybean contracts on the day. Informa Economics cut it's Argentine soybean crop estimate to 45 MMT and it's Brazilian number to 66.5 MMT. That's 1.5 MMT and 2 MMT respectively below the USDA's March estimate, and Informa - like the USDA - have a reputation for erring on the high side. The USDA will issue revised world S&D numbers next Tuesday. Trade estimates for tomorrow's weekly export sales are 600-850 TMT for soybeans.

Corn: May 12 Corn closed at USD6.56 3/4, down 1 1/2 cents; Dec 12 Corn closed at USD5.44 1/4, down 1 1/4 cents. Informa Economics said that Brazilian corn production this year will come in at 62 MMT, and Argentina's will amount to 22 MMT. Both estimates are down 0.5 MMT on last month, but in line with the USDA. Some private firms are now forecasting the Argentine crop to fall below 20 MMT. Funds were said to have sold 2-3,000 contracts on the day. Trade estimates for tomorrow's weekly export sales are 400-700 TMT.

Wheat: May 12 CBOT Wheat closed at USD6.39 1/4, down 18 3/4 cents; May 12 KCBT Wheat closed at USD6.69 1/2, down 20 1/2 cents; May 12 MGEX Wheat closed at USD8.45 3/4, down 4 1/2 cents. US wheat is competitively priced versus European wheat but still faces competition from Australia, Canada and Argentine. Australia exported 2.42 MMT of wheat in February, almost a third more than in the same month last year and believed to be the largest monthly total in nine years. The results of upcoming Egyptian and Iraqi tenders will be of interest. Egypt's last tender was split 50:50 between US and Argentine wheat, whilst Iraq recently passed on US origin to buy 300,000 MT from Canada. Trade estimates for tomorrow's weekly export sales are 300-500 TMT.

EU Wheat Falls On Rain And US Price Declines

04/04/12 -- EU grains finished mostly lower with May 12 London wheat falling GBP2.50/tonne at GBP169.50/tonne - the first time it has closed below GBP170.00/tonne in three weeks. New crop months were GBP3.50/tonne lower and May 12 Paris wheat fell EUR2.25/tonne to EUR209.25/tonne.

The market followed US wheat lower, knowing that EU prices are already at uncompetitive levels relative to American origin. Based on last night's closing levels May 12 Chicago wheat was the equivalent of USD242.00/tonne, compared to USD273.50/tonne for London wheat and USD279.00/tonne for Paris wheat.

Widespread rain (and snow) across much of the UK, and some parts of France and Germany too, will have eased drought fears.

The EU Commission forecast EU-27 wheat production in 2012/13 at 139.9 MMT, 3 MMT higher than last year, and more than recent estimates from Copa Cogenca (137.2 MMT) and Coceral (134.6 MMT).

The Commission see a 2 MMT cut in animal feed usage in the coming season. Demand from the bioethanol industry is only seen rising 0.2 MMT following Abengoa Rotterdam's switch to using corn as a feedstock as opposed to wheat.

EU-27 2012/13 wheat ending stocks are seen rising by a third to 13.9 MMT.

They are also relatively bullish on rapeseed production prospects compared to Copa Cogenca and Coceral, estimating the 2012/13 crop at 20.4 MMT - although that is still 2.5 MMT below domestic usage.

In international news Jordan bought 50,000 MT of wheat of unspecified origin in a tender today. Iraq is tendering for a minimum of 50,000 MT wheat, although it usually buys more, last time round Canadian wheat got the nod.

Brazil Latest

04/04/12 -- Brazil's corn crop could end up coming in higher than it's soybean crop this year, according to Agroconsult's lead analyst.

Citing hopes for an increase in planted area and better yields from second crop corn the South American analysts have raised their Brazilian corn crop estimate to 64.6 MMT from the 63.7 MMT it projected in March.

Meanwhile, estimates for soybean production potential keep falling with Agroconsult now forecasting output at 65.2 MMT, some 3.3 MMT below where the USDA currently line up.

Enthused by high prices, Brazilian farmers are already eyeing an increase in soybean plantings for 2012/13 to a record 26.2 million hectares, they say. That's up 4% on this season and 2 million hectares, or 8%, more than the 2010/11 area that produced the country's record 75.5 MMT crop.

EU Rapemeal Prices

04/04/12 -- Rapemeal prices on the continent are a little lower today with some of protection built into these levels earlier in the week now being taken out.

Guide prices, basis FOB Lower Rhine in euros/metric tonne, with change from previous day:


























































































































































Mar12


unq



n/a
Apr12


242.00



-1.00
May/Jul12


238.00



unch
Aug/Oct12


206.00



-3.00
Nov12/Jan13


206.00



-4.00
Feb/Apr13


209.00



-2.00
May/Jul13


205.00



-3.00
Aug/Oct13


178.00



-2.00
Nov13/Jan14


187.00



-3.00

The Morning Vibe

04/04/12 -- The overnight grains show wheat down 5-7 cents, corn up 2 1/2 cents in front month May to down 2 1/4 cents in new crop Dec. Soybeans are 2-4 cents weaker and NYMEX crude is down half a dollar.

Fresh news is thin on the ground. Wheat is supported by tightness in old crop corn, but aside from a European crop maybe 5-7 MMT lower than originally anticipated what is going to support it going forward?

If we talk about London wheat specifically people keep asking me is old crop too dear or new crop too cheap? Well, firstly it should be noted that London wheat regularly tops out around this time of year.

Secondly, based on last night's close, May 12 London wheat at GBP172/tonne is the equivalent of around USD273.50/tonne. Chicago wheat at USD6.58/bu equates to around USD242.00/tonne - a big discount. Paris wheat at EUR211.50/tonne is the equivalent of USD279.00/tonne, a narrow gap historically between it and London considering the difference in quality.

Can we see Chicago wheat moving significantly higher from where it is now given that harvesting of the winter crop begins in six weeks, crop conditions are mostly very good at 58% good/excellent, spring planting is progressing well, world ending stocks are at or near all time highs and a modern day record corn crop is about to go into the ground over there?

I'll let you decide on that one.

Let's have a look at new crop November then, what do we know about that? Well, it's twelve quid cheaper than May for one. Again, based on last night's closing levels, we have new crop London wheat the equivalent of USD254.50/tonne, Paris wheat USD271.50/tonne and Chicago wheat (using Dec as there is no Nov) USD259.00/tonne.

Well, it's priced competitively relative to Paris wheat at least. Does that mean it's a buy though? We'll have a bigger than last year crop on our hands by then (hopefully now that rain has arrived), but we will also probably have Vivergo up and running also. Ensus, who knows? I wouldn't want to bank on it personally. We will also possibly have a record US corn crop on the market, and Russia once again exporting wheat aggressively.

Those that should know better than me tell me that what old crop wheat is left around is in strong hands. Let them keep it then I'd say, but I think that they will pretty soon decide that there's not much point carrying it into what the cash market is currently pricing as a GBP22/tonne discount from July into new crop August is there?

For new crop I'm a bit less confident on that, but if you put a gun to my head I'll go for Nov to be cheaper that last night's GBP160/tonne when harvest time comes around, although the off the combine GBP125/tonne that I was predicting four or five months ago now maybe looks a bit too low.

The wildcards that could change everything? Spain or a serious US weather scare.

Chicago Closing Comments - Tuesday

03/04/12 -- Soybeans: May 12 Soybeans closed at USD14.16 3/4, down 4 1/4 cents; Nov 12 Soybeans closed at USD13.78 3/4, down 6 1/2 cents; May 12 Soybean Meal closed at USD386.50, down USD4.70; May 12 Soybean Oil closed at 55.90, down 26 points. Beans traded both sides but settled slightly lower in light consolidation from recent steep gains that pushed them to seven month highs. Funds were said to have been net sellers of around 5,000 soybean contracts on the day. The Rosario Grains Exchange cut it's forecast for Argentine soybean production by 1.4 MMT from last month to 43.1 MMT. That's the lowest number in the market yet and 3.4 MMT below the USDA's March estimate. Agroconsult peg Brazil's crop down 13% from last year at 65.69 MMT and 2.8 MMT below the USDA.

Corn: May 12 Corn closed at USD6.58 1/4, up 3 1/4 cents; Dec 12 Corn closed at USD5.45 1/2, up 1/2 cent. The gap between old and new crop widened a little bit further. Funds stepped in for an estimated 12,000 of mostly old crop corn contracts on the day, according to floor estimates. The Rosario Grains Exchange cut their Argentine corn crop estimate to 19.7 MMT, down 2.3 MMT on the USDA's latest forecast and way below the 29.0 MMT expected from them as recently as December. Informa Economics suggested that US corn acres could rise even higher than last week's forecast 95.9 million from the USDA, saying that 96.4 million was a possibility.

Wheat: May 12 CBOT Wheat closed at USD6.58, up 1 cent; May 12 KCBT Wheat closed unchanged at USD6.90; May 12 MGEX Wheat closed at USD8.50 1/4, up 1 cent. Wheat also traded both sides today with funds buying an estimated 3,000 Chicago contracts on the day. US winter wheat is in much better condition than last year at 58% good/excellent, and spring wheat plantings are off to a great start at 8% complete as of Sunday. US wheat looks competitively priced relative to other origins. Europe's wheat crop looks like coming in lower than early season hopes following the winter drought, with crop losses in Spain particularly bad where Coceral see soft wheat production down 29%.

EU Wheat Ends Mostly Lower

03/04/12 -- EU grains finished mostly lower with May 12 London wheat down GBP1.75/tonne to GBP172.00/tonne and May 12 Paris wheat falling EUR1.50/tonne to EUR211.50/tonne.

After posting sharp gains Friday and Monday, Chicago grains were a bit subdued today in a mini Turnaround Tuesday. EU wheat, and particularly London wheat, looks too expensive relative to grain from US and other origins around the world.

Rain and snow for Scotland is pushing south bringing a shot of much needed moisture for most areas of the UK by Wednesday afternoon. France too is also seeing some showers across southern and eastern areas, replenishing depleted soil moisture profiles there.

Copa Cogenca peg EU-27 wheat production at 137.2 MMT, 0.2 MMT down on last year, but considerably better than the 134.6 MMT given to us by Coceral on Friday. Barley production will be 53.9 MMT, an increase of 2.2 MMT and corn production will be down 1.2 MMT to 65.1 MMT, they say.

They say that UK wheat output will be 16.3 MMT in 2012, 6% up on last year and see barley production virtually unchanged at 5.5 MMT.

The market has risen substantially since the mid-December lows. Back then Strategie Grains were projecting and EU-27 wheat crop of 142 MMT. The mean of the Copa Cogenca and Coceral estimates fits in with a report by Agritel today suggesting that the winter drought and the February freeze wiped 6 MMT off EU-27 wheat production.

The Rosario Grains Exchange today cut their Argentine corn crop estimate to 19.7 MMT - down 2.3 MMT on the USDA's March number and almost a third lower than the 29 MMT that was expected back in December from what is normally the world's second largest corn exporter.

Early Call On Chicago

03/04/12 -- The overnight grains saw a bit of light consolidation with beans down 5-6 cents, wheat falling 5-10 cents and corn 2 cents higher on old crop to 3 cents lower on new crop. Brent crude is around half a dollar lower, NYMEX crude is three quarters of a dollar easier.

The USDA reveal that spring wheat plantings are off to a flyer, with 8% of the crop already in the ground as of Sunday compared to just 2% normally. Winter wheat crop conditions are much better than last year at 58% good-to-excellent.

Corn plantings however haven't progressed a lot, contrary to market expectations, going from 2% done last weekend to just 3% complete this weekend. Maybe that will see some corn acres shift into beans? Or maybe that's just caution, with few willing to plant ahead of the first planting insurance dates?

Celeres have cut their Brazilian soybean crop forecast by almost 2 MMT to 67.97 MMT, around half a million less than the USDA although towards the higher end of other trade estimates. For corn, they've increased things slightly from 60.4 MMT to 60.71 MMT. Soybean harvesting is 76% done as of Friday, nine points ahead of a year ago. Summer corn harvesting is 61% complete, they added.

A report on Bloomberg quoting French analysts Agritel says that European wheat prospects may have taken a 6 MMT hit at the hands of the February freeze and winter drought.

Russia's exports have slowed right up with the Grain Union saying that the country only shipped 1.6 MMT of grains in March. Russia’s Ag Ministry estimate 2011/12 grain ending stocks at 18 MMT.

Ukraine says it exported 2.41 MMT of grain last month, full 2011/12 exports are likely to be around 21 MMT.

US winter wheat crop development is ahead of normal and harvesting of the 2012 crop is now only six weeks away!

Early calls for this afternoon's CBOT session: wheat 5-10 cents lower, soybeans down 5-7 cents, corn 1-2 cents higher old crop and 1-2 cents lower on new crop.

EU Rapemeal Prices

03/04/12 -- Rapemeal prices on the continent are mostly a tad lower today, as some of yesterday's "protection" gets taken off. The market is still fully steady though, with concerns that Europe's rapeseed crop won't come in at much more than 18 MMT this year.

Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:
















































Mar12
unq
n/a
Apr12
243.00
-2.00
May/Jul12
238.00
-2.00
Aug/Oct12
209.00
+2.00
Nov12/Jan13
210.00
-1.00
Feb/Apr13
211.00
-2.00
May/Jul13
208.00
-1.00
Aug/Oct13
180.00
unch
Nov13/Jan14
190.00
unch

The Morning Vibe

03/04/12 -- The overnight market sees corn and beans slightly lower in light consolidation. Wheat is down 5-7 cents, crude oil is around half a dollar lower.

Copa Cogenca came out with some crop numbers on Friday I see that got overlooked in all the excitement caused by the USDA.

They said that the 2012/13 EU-27 wheat crop would come in at 137.2 MMT, 0.2 MMT down on last year. Barley production will be 53.9 MMT, an increase of 2.2 MMT and corn production will be down 1.2 MMT to 65.1 MMT, they say.

Their wheat number is higher than Coceral's estimate of 134.6 MMT, the barley estimate is just about bang on the same whilst the corn figure is more than 3 MMT up on Coceral.

Copa Cogenca have UK wheat production at 16.3 MMT, up 6% on last year. Barley output is seen 3.5% higher at 5.84 MMT.

They also estimate EU-27 rapeseed production down 1 MMT this year at 18.3 MMT. They have the UK crop yielding 3.3 MT/ha, from last year's record 3.9 MT/ha, giving us an output of 2.5 MMT - almost 11% down on 2011.

That little snapshot of UK and EU production forecasts appears to mirror what is going on elsewhere around the world. Generally speaking we are looking at wheat and corn production prospects holding steady/increasing with oilseed potential decreasing.

This re-enforces my belief that we will see soybeans and rapeseed remain strong relative to corn and wheat as we progress through 2012.

Chicago Soybeans And Corn Extend Rally

02/04/12 -- Soybeans: May 12 Soybeans closed at USD14.21, up 18 cents; Nov 12 Soybeans closed at USD13.85 1/4, up 27 1/4 cents; May 12 Soybean Meal closed at USD391.20, up USD2.50; May 12 Soybean Oil closed at 56.16, up 106 points. Funds were said to have bought around 9,000 soybean contracts on the day. May 12 closed around the middle of the day's trading range, with new crop gaining on old following Friday's bullish 2012/13 acreage number from the USDA. The latter also reported the sale of 120,000 MT of old crop beans to China despite current prices, along with 120,000 MT of new crop meal to unknown. The IGC forecast the world soybean crop in 2011/12 at a three-year low of 242.1 MMT vs Oil World's 243 MMT and the USDA's 245 MMT.

Corn: May 12 Corn closed at USD6.55, up 11 cents; Dec 12 Corn closed at USD5.45, up 4 3/4 cents. Unlike soybeans, for corn we have old crop widening the differential between it and new crop, in line with the USDA's projection for US corn plantings of 75.9 million acres this spring. After the close the USDA said that 3% of the 2012 corn crop has been planted so far, only just ahead of 2% a year ago and below trade expectations of 6-8% complete. Funds were said to have been net buyers of around 15,000 contracts on the day. The IGC cut 2011/12 world corn ending stocks by 4 MMT to 122 MMT, but raised production for 2012/13 to a record 900 MMT, a 4% increase on this season. South Korea bought 65 TMT of optional origin corn for August shipment.

Wheat: May 12 CBOT Wheat closed at USD6.57, down 3 3/4 cents; May 12 KCBT Wheat closed at USD6.90, down 7 1/2 cents; May 12 MGEX Wheat closed at USD8.49 1/4, up 11 3/4 cents. Unlike beans and corn funds were net sellers of Chicago wheat on the day, shorting an estimated 3,000 lots. The USDA pegged winter wheat crop conditions at 58% good/excellent, much better than the 37% this time last year. With 20% of the Ohio crop in poor/very poor condition there are some reports of wheat in the state being ripped up and replanted with soybeans. The USDA also said that 8% of the spring wheat crop has been planted as of April 1, versus 1% a year ago and 2% normally. The IGC said that world wheat production in 2012/13 to fall by 15 MMT to 681 MMT.

EU Grains Closing Comments

02/04/12 -- EU grains finished mixed with May 12 London wheat ending down GBP1.00/tonne at GBP173.75/tonne, and May 12 Paris wheat ending EUR0.25/tonne higher to EUR213.00/tonne.

Ideas that Friday's gains were overdone saw London wheat edge lower, especially after Chicago came in around 10 cents weaker in afternoon trade. Rapeseed on the other hand was sharply higher in line with strong gains in Chicago soybeans.

The IGC increased their forecast for this season's 2011/12 world wheat crop by 1 MMT to 696 MMT, but cut carryout slightly although to a still very healthy 210 MMT. The outlook for next season is not quite so rosy though they project, estimating production 15 MMT lower at 681 MMT, with ending stocks reducing slightly to 208 MMT.

World corn production in 2012/13 will rise to an unprecedented 900 MMT, they said. That's a 4% increase on this season, and a huge 100 MMT more than was produced just four seasons previously - even so "the supply and demand outlook for corn is projected to remain quite tight in 2012/13," they added. Carryout for 2011/12 was cut 4 MMT from last month to a spartan 122 MMT, with ending stocks next season only seen recovering a little to 129 MMT.

The USDA resume their regular weekly crop progress report tonight, which the trade expects to show US corn planting at 6-8% complete and 58-60% good to excellent winter wheat condition ratings versus only 37% a year ago.

The HGCA say that UK spring planting is well ahead of normal due to the recent favourable weather conditions. Over 80% of spring barley is now drilled, compared to 50% normally. Dry conditions are not yet said to be adversely affecting crops, they add.

The UK, France and Germany are set for light showers to locally moderate precipitation over the next few days. Spain is in for scattered to widely scattered showers and thundershowers today through to Wednesday.

Production prospects are however getting trimmed on the Continent with Coceral last week pegging EU-27 all wheat output at 134.6 MMT, almost 3 MMT less than in 2011. The Spanish all wheat crop is seen 29% lower, accounting for 2 MMT of that loss.

The EU-27 barley crop will come in at 54.0 MMT this year, an increase of 4% aided by increased spring plantings, with corn production falling 4% to 62.0 MMT despite a larger planted area, they add.

Coceral peg the EU-27 rapeseed harvest slightly higher than last year at just over 19 MMT, as opposed to last year's crop which was just under. Despite a higher planted area a return to more normal yields should see the UK produce a crop of around 2.6 MMT, they predict. Germany's crop is forecast almost 1 MMT higher than last year at 4.8 MMT, with French output unchanged.

"The weather pattern is undergoing a major change in the United States and around the Northern Hemisphere, as the jet stream ridges and trough become realigned. Weekend weather in the Midwest turned sharply cooler across the Great Lakes region as maximum temperatures Saturday fell into the 40s-50s F. A few northern Great Lakes growing areas even reported frost. The sudden cooling was a sharp reversal from predominant warmth in March when temperatures were 15-25 F above normal," say Martell Crop Projections.

"Northern Europe now faces a much colder forecast. March was incredibly warm with a dominant ridge of high pressure. Now a cold trough is developing. The Russia weather has turned suddenly warm in the Volga and Black Earth districts, causing rapidly melting snow and standing water in frozen fields. We still anticipate a delayed spring grain planting campaign in the spring grain belt from sodden fields," they add.

Russia's Ag Ministry have announced that they are to start selling 2 MMT of intervention grain stocks in Southern, North-West and North Caucasus regions this week to keep a lid on prices and replenish stocks there.

Kazakhstan's Ag Ministry say that their 2012 grain harvest is likely to fall 44% to 15 MMT (from almost 27 MMT in 2011) due to adverse weather conditions.

Early Call On Chicago

02/04/12 -- The overnight markets saw a bit of consolidation with wheat ending 6-9 cents lower on old crop and with losses of 10-12 cents on new crop. Corn was 4 cents higher in front month May, but slightly weaker in new crop positions. The strongest leg, soybeans, were around 8 cents higher for old crop and 10-14 cents firmer for new crop. Crude is around half a dollar lower.

April heralds the start of the regular Monday night crop progress reports, the first of which will be out after the close this evening. Winter wheat crop conditions will be of interest, so too will be a corn planting progress comparison with normal.

Based on Friday's acreage numbers soybeans look set to remain the strongest leg of the complex for some time, even if the final planting figure is significantly higher than 73.9 million given South America's recent production losses.

For corn we have the bullish tight old crop stocks story and the bearish highest plantings in 75 year bearish new crop story.

For wheat we have much better than a year ago crop conditions, a harvest that isn't that far away now we are into April, and ample world stocks. We also have a still significant short position in Chicago and a European crop that looks like it's shrinking rather than growing.

A new month usually also means new money. Funds are already record long soybeans, will they fancy coming in for more? For corn, they exited a decent slug of their length in the run-up to Friday's reports and for wheat they've held a sizable short for some time now, the magnitude of which has underpinned the market.

The USDA report today the sale of 120,000 MT of old crop beans to China, that should add underlying support. They also report a similar volume of new crop meal sold to unknown.

Early calls for this afternoon's CBOT session: corn up 2-4 cents, wheat down 8-10 cents and soybeans up 10-12 cents.

EU Rapemeal Prices

02/04/12 -- Rapemeal prices on the continent are sharply higher this morning in line with steep gains in Chicago soymeal on Friday night, and again this morning. There is likely to be some protection built into these levels as traders seem unsure where to price this market up.

Guide prices, basis FOB Lower Rhine in euros/metric tonne, with change from previous day:
















































Mar12
unq
n/a
Apr12
245.00
+10.00
May/Jul12
240.00
+12.00
Aug/Oct12
207.00
+11.00
Nov12/Jan13
211.00
+12.00
Feb/Apr13
213.00
+12.00
May/Jul13
209.00
+17.00
Aug/Oct13
180.00
+16.00
Nov13/Jan14
190.00
+17.00

73.9 Million Isn't Enough

01/04/12 -- Whichever way you look at it 73.9 million acres of US soybeans this spring is a very low number. Oil World said last week that 2011/12 world soybean production is set to decline by 22-23 MMT this season. The USDA currently say 21 MMT, but that is using a Brazilian production estimate of 68.5 MMT and an Argentine one of 46.5 MMT.

Local forecasts are lower. AgRural cut their 2011/12 Brazilian soy estimate by 2% last week to 66.7 MMT. The Buenos Aires Exchange peg the Argentine soybean crop at 45 MMT, the Ag Ministry say 44.0 MMT and the Rosario Exchange 44.5 MMT.

It seems likely therefore that the USDA are, shall we say, a little optimistic that production will "only" be down 21 MMT. To kick off the coming season then the lowest US soybean plantings since 2007 aren't really what the doctor ordered to remedy the inevitable strong demand from China.

A serious weather scare in the US this summer (and who would want to bet heavily against that?) could really set the cat amongst the pigeons, especially if backed by heavy fund buying (and who would want to bet against that either?) - USD14/bu could look cheap, very cheap.