01/08/14 -- Soycomplex: Beans closed lower across the board, with the heaviest losses in new crop months, on forecasts for drenching rains for large parts of the US Midwest to develop across the weekend and last into next week. This wetter forecast, coupled with the arrival of a new month prompted some fairly heavy fund selling - estimated at around 12,000 contracts in beans, plus a further 4,000 in meal. The differential between the Aug and Sep 14 soybean contracts has now widened to over $1.40, as the latter heralds in the arrival of new crop. Private analyst Linn Group pegged 2014 US soybean yields at 45.8 bu/acre, estimating production at a record 3.849 billion bushels. The USDA were at 45.2 bu/acre and 3.8 billion bushels in their July WASDE report. Informa Economics are due out next week with their revised estimates, before the USDA themselves on Aug 12. The Buenos Aires Grains Exchange said that the 2013/14 Argentine soybean harvest is finally complete They left their production estimate unchanged at a record 55.5 MMT. Tonight's Commitment of Traders Report shows managed money finishing the week through to Tuesday night as net buyers of just over 10,000 contracts, giving them a modest net short position of 8,319 lots. Monday night's USDA crop progress report is expected to maybe show a small decline in the percentage of this year's crop rated good/excellent. Last week's report showed a 2 point drop week on week to 71% good/excellent - but still the highest rating since 1994 heading into August. A further 2 point drop isn't going to hurt too much, especially if the forecast rains arrive. Aug 14 Soybeans closed at $12.15, down 9 1/2 cents; Nov 14 Soybeans closed at $10.58 1/2, down 23 1/2 cents; Aug 14 Soybean Meal closed at $387.50, down $3.80; Aug 14 Soybean Oil closed at 35.45, down 66 points. For the week that puts front month beans virtually unchanged - up 3 2/4 cents, although meal was down $10.50 and oil fell 64 points to levels not seen since 2009.
Corn: The corn market closed with losses of around 4-5 cents. Next week's wetter forecast is also seen as being beneficial to corn, although perhaps maybe to a lesser extent than soybeans. Temperatures are also expected to trend a little warmer, which won't do any harm either. Confidence in a record-breaking 170+ bu/acre yield this year is growing with every passing day. Linn Group estimated US corn production at 14.518 billion bushels with an average national yield of 172.8 bu/acre today. Both figures would be records. Doane came out with production at 14.440 billion bushels with an average yield of 172.3 bu/acre this week. The USDA's estimates for once look conservative, with yields left unchanged at 165.3 bu/acre and production at 13.86 billion bushels last month. They did however hint at a possible rise on those figures come the August report, saying "for much of the crop, the critical pollination period will be during middle and late July." That period is now over, with seemingly little, or no, damage done. The USDA cut corn crop ratings by one point to 75% good/excellent last week, a 1-2 point drop might be on the cards again on Monday. Again, as with soybeans, these numbers are amongst the highest on record for this time of year, so a small decline won't hurt too much. In their weekly crop report, the Buenos Aires Grains Exchange said that the Argentine rain-dogged corn harvest was now 80% complete, up 7 points in a week, although the harvest there was finished a year ago. They left their production estimate unchanged at 25 MMT, a 7.4% decline on last year. The latest Commitment of Traders Report shows managed money cutting their net corn long for the week through to Tuesday night to just over 63,000 lots. Sep 14 Corn closed at $3.52 1/2, down 4 1/2 cents; Dec 14 Corn closed at $3.62 1/4, down 4 3/4 cents. For the week that puts Sep 14 corn 10 1/2 cents lower, the lowest level for a front month since June 2010.
Wheat: The wheat market closed flat to 7 cents higher across the three exchanges. Chicago and Kansas wheat were little changed on the week, and Minneapolis was lower. The latter remains under particular pressure on the outlook for a good US spring wheat crop this year. Widespread quality concerns in Europe give rise to ideas that US wheat might pick up a bit of extra international interest, even if it has to wait a while for the initial glut of cheap Russian wheat to be absorbed onto the market. Russia are said to have exported a record volume of grain in the month of July - 2.9 MMT according to Rusagrotrans. The previous record volume shipped out in the month of July was 2.5 MMT in 2011. That's the highest start ever for the first month of a new marketing year. There's talk that the toughening of Western sanctions against Russia may only serve to speed up sales in the early part of the marketing year as a "let's get it out while we can" mentality kicks in. The Buenos Aires Grains Exchange said that the Argentine 2014/15 wheat crop is 91.3% planted, on 3.83 million of the anticipated 4.2 million hectares. That's already better than the final planted area of 3.62 million ha last year. If they do get their intended 4.2 million ha into the ground then that would represent a 16% rise versus 2013. Dr Cordonnier said that Brazilian growers may not plant as large a wheat area as was originally expected due to adverse weather conditions and lower domestic prices. CONAB's current forecast is for a 33% hike in Brazil's 2014/15 wheat production to 7.4 MMT. They are the largest wheat importer in South America and the third largest in the world after Egypt and Indonesia. The latest Commitment of Traders Report shows managed money adding almost 7.5k contracts to their overall net short position in Chicago wheat. Their new short as of Tuesday night is almost 72k lots. Sep 14 CBOT Wheat closed at $5.34 1/4, up 4 cents; Sep 14 KCBT Wheat closed at $6.32 3/4, up 7 cents; Sep 14 MGEX Wheat closed at $6.16, unchanged. For the week CBOT wheat was down 3 3/4 cents, Kansas rose 1 1/2 cents and Minneapolis was down 11 3/4 cents.
01/08/14 -- EU wheat closed mixed. Both London and Paris wheat slumped to fresh 4-year lows, with the front month in London trading below GBP120/tonne at one point, and Paris wheat slipping beneath EUR170/tonne, before managing a small pre-weekend recovery in afternoon trade.
The day ended with new crop Nov 14 London wheat closing GBP0.10/tonne lower at GBP122.00/tonne, Nov 14 Paris wheat was EUR1.25/tonne firmer at EUR171.75/tonne, Aug 14 Paris corn was up EUR1.25/tonne to EUR163.50/tonne and Nov 14 Paris rapeseed fell EUR4.50/tonne to EUR328.00/tonne.
For the week that puts London wheat GBP4.30/tonne (-3.4%) lower, with Paris wheat down EUR8.00/tonne (-4.5%), corn up EUR7.25/tonne (+4.6%) and rapeseed EUR0.50/tonne higher (+0.2%). Note though that Aug 14 corn is still old crop, the more active and new crop Nov 14 future closed EUR0.75/tonne lower on the week.
Rain at precisely the wrong time seems to have consigned a much larger proportion than normal of this year's French wheat crop to the feed bin. There are concerns of similar problems too in Germany and possibly Poland as well, although harvesting there is less advanced.
However, just because it's in the feed bin, doesn't necessarily seem to mean that it can't be delivered against the MATIF milling wheat contract it would seem, hence the erosion of the premium over feed that had been available on that contract.
FranceAgriMer said today that the French wheat harvest was 76% complete as of Monday, up from 44% done a week previously and versus only 26% this time a year ago. The French winter barley harvest is now complete and even 67% of the spring barley crop is already in the bin, up sharply from 15% a week ago and far higher than just 11% this time last year. They said that 88% of the corn crop is silking versus 62% a week ago and more than double the 42% of a year ago.
With the harvest well progressed it's hardly worth reporting on crop condition ratings, save for those for corn which were unchanged on a week ago at 84% good/very good, which is considerably improved on 54% this time last year.
The German wheat harvest is estimated to be around 45-50% complete, whilst in Poland it's said to be perhaps only 20% done.
Meanwhile dry weather in Russia has allowed them to make excellent progress with their harvest and also seems to mean that quality there is high. The latest figures from the Ministry show that they've now passed the 50 MMT mark (in bunker weight), up 35% on progress this time a year ago. Average yields are said to be 3.4 MT/ha, up almost 22% on a year ago.
Western sanctions against Russia don't appear to be having any effect on grain exports for the time being, buyers in the Middle East and North Africa are more concerned with who has the quality that they want, and who's price is the cheapest. In most cases at the moment the answer seems to be Russia.
Ukraine will also prove to be a thorn in the side again this season. Agritel say that the Ukraine authorities are estimating a grain crop of 58.2 MMT, that's down from last year's record 63 MMT, but still the second highest ever. There are also said to be significant volumes of old crop grain being carried over into 2014/15 in Ukraine.
The Ag Ministry forecast a 20.5 MMT wheat crop, with barley production at 7.3 MMT and corn output reaching 28.4 MMT. Exports in 2014/15 will be 8.5 MMT, 2.5 MMT and 20.65 MMT in that order, they estimate.
Belarus say that they've currently harvested 5.13 MMT of grains off 53% of the planned area, leaving them on target to hit the record 10 MMT crop that they are aiming for this year.
A large European and FSU corn crop again this year, coinciding with what looks like an unusually large EU feed wheat harvest, points to a glut of feed grain on the market in 2014/15. That's why the market is where it is at the moment. The bears would say that it's only going to get worse once we get harvest pressure from new crop corn as well.
What would the bulls say? I don't know as I haven't found one yet. Something WILL turn the market around, it always does. We just don't know what it will be, when it will happen, or how low prices might go before then.
01/08/14 -- The answer to the question appears to be "when it's MATIF milling wheat than we are talking about".
The finer details of the MATIF milling wheat contract are surprisingly lacking in finer detail: "Sound, fair and merchantable quality of the following standard: Specific weight 76 kg/hl; Moisture content 15%; Broken grains 4%; Sprouted grains 2%; Impurities 2%" - that's it. Not even a mention or protein in there, let alone Hagbergs. After that it's down to the silos themselves to "refine" the contract specifications to accommodate the grain that they are prepared to accept.
Soufflet, whose Socomac silo becomes a new approved delivery point against the MATIF contract in November, say that they haven't even decided what quality specs they will accept themselves yet, according to a report on Reuters. "The Matif contract is designed to be representative of the French market in general, and this year French wheat is tending towards feed quality," one trader was quoted as saying in that report.
There's the answer then to why the MATIF contract (-5.1% as of last night's close versus last Friday night) has fallen out of bed even more than London feed wheat (-3.3%) this week. See, there's always someone worse off than yourself isn't there? And it's always extra nice when they're French!
In other news, a Canadian wheat crop tour found yield potential in spring and durum wheat there to be the second highest ever (only beaten by last year's record crop). Quality also looks good at this stage, although persistent cool temperatures does add the caveat of getting the harvest in before any possible early frost strike.
It seems a tad bizaare than with EU grain prices at 4-year lows we're letting cheap Ukraine kit into Europe at preferrential duty-free rates, but that is exactly what we are doing. This loop-hole is currently open until the end of October, and Brussels yesterday confirmed that they'd issued 336,625 MT worth of corn import licences this past week alone, along with approving 191,600 MT worth of Ukraine wheat imports.
Now let's have a look at Russia: there are two options here. Either a) they are lying or b) their harvest is going to be much larger than official estimates have suggested up until now.
ProZerno yesterday estimated Russia’s 2014/15 grain crop at a large looking 102.6 MMT, up from a previous estimate of 98.9 MMT and compared to 92.4 MMT a year ago. That total includes 58.2 MMT of wheat, a figure larger even than IKAR's hitherto largest hat in the ring of 57.5 MMT from earlier in the week.
This morning the Russian Ag Ministry say that the country has harvested 48.2 MMT of grain off little more than 30% of the planned area, with yields currently up 22% on a year ago. Final production in 2013 was "only" 92.4 MMT. Let's half that gain and sat that yields eventually come in 11% up on last year, what production number would that give us? Blimey, it's 102.6 MMT!
They're said to have harvested 38.5 MMT of wheat off 10.6 million ha - 42% of the planned area, with yields averaging 3.62 MT/ha so far (+19.5%). OK, most of what's left to be harvested will be coming from the less productive areas, and be lower yielding spring wheat so that average is going to drop off. Note though that the USDA are using an average Russian wheat yield estimate exactly the same as a year ago - yet the Russian Ministry are telling us that yields are currently almost 20% up on last year.
Say they end up 10% higher, using the USDA's harvested area estimate of 23.75 million ha (the Russian Ministry's figure is higher, but we don't trust them right?) we'd end up with a Russian wheat crop of guess what? The answer is 58.1875 MMT - ProZerno and me (wasn't that a film starring Richard E Grant?) must definitely be using the same calculator!
And you could easily make out a case for production potentially being higher than that.
It's a good job that the Russian quality seems to be OK. You can always rely on the French to let you down can't you?
31/07/14 -- Soycomplex: Beans closed with mostly small gains. Weekly export sales of 187,400 MT of old crop and 1,268,700 MT of new crop trumped expectations for combined sales of 1.0-1.2 MMT. Meal sales of a combined 751,100 MT were also at the top end of trade estimates of 550-750 TMT. As per usual China was a featured buyer on beans and unknown destinations was the leading taker on the meal. The IGC raised their forecast for global soybean production in 2014/15 by 4 MMT from last month to a new record 304 MMT, which is a 7.8% increase on the previous year. The US 2014/15 soybean crop was raised from 98.9 MMT to a new record 103.4 MMT, in line with the latest changes from the USDA. China's imports in the year ahead were upped 1 MMT to a record 72 MMT. Global consumption was increased by 3 MMT, ending stocks were raised 2 MMT. In addition "with a record EU crop set to partly compensate for declines elsewhere, notably Canada, the 2014/15 global rapeseed/canola out-turn is still expected to be the second largest of all time," they added. Separately, China’s Ministry of Commerce estimated July bean imports at 5.87 MMT and Aug bean imports at 3.84 MMT. The Argentine Ag Ministry said that Argentine farmers have sold 49.23% of their 2013/14 soybean crop versus 57.2% this time last year. Argentina defaulted in its debt for the second time in 13 years today, which may further discourage farmer selling. Aug 14 Soybeans closed at $12.24 1/2, up 4 cents; Nov 14 Soybeans closed at $10.82, up 3/4 cent; Aug 14 Soybean Meal closed at $391.30, up $3.70; Aug 14 Soybean Oil closed at 36.11, up 6 points.
Corn: The corn market closed with losses of around 3-4 cents despite another good set of weekly export sales statistics. These came in at 173,800 MT of old crop and 1,093,200 MT of new crop. That was towards the top end of trade estimates for sales of a combined 800 TMT - 1.2 MMT. The IGC raised their estimate for the global corn crop in 2014/15 by 6 MMT to 969 MMT, which is just shy of last season's record 974 MMT. Consumption was only increased by 1 MMT, ending stocks rose 7 MMT to 187 MMT, a 10.7% hike versus carryout at the end of 2013/14. These higher corn stocks take global grains inventories in 2014/15 (including rice) to a 15-year high of 419 MMT, they said. The US corn crop in 2014/15 was estimated at 353 MMT, up 3 MMT on a month ago and 1 MMT above the USDA's latest estimate. Separately, MDA CropCast upped their forecast for this year's US corn crop by 4.5 MMT from a week ago to a record 361.9 MMT. In other news, China were said to have sold 95.7% of the corn on offer at today’s auction. CEC estimated South Africa’s 2014 corn crop at 14.0 MMT versus a previous estimate of 13.9 MMT and up 18.6% on the 11.8 MMT produced last year. The Argentine Ag Ministry said that Argentine farmers have sold only 53.47% of their 2013/14 corn crop versus 71.07% a year ago. Remember though that the harvest is well behind last year's pace. The USDA attaché in Indonesia estimated the country's 2014/15 corn imports at 2.6 MMT versus 3.1 MMT in 2013/14. US weather forecasts remain non-threatening, with rain forecast for much of the corn belt starting Sunday and lasting through to the middle of next week. Ideas that there could be a much larger volume of feed wheat on the world market in 2014/15 could keep corn under pressure for a while yet. Sep 14 Corn closed at $3.57, down 4 3/4 cents; Dec 14 Corn closed at $3.67, down 4 1/2 cents.
Wheat: The wheat market closed higher, aided by weekly export sales of 801,000 MT which beat modest trade expectations for sales of 350-550 TMT. Nigeria (167,000 MT), Panama (128,500 MT), Brazil (116,100 MT), Mexico (88,800 MT), Japan (74,600 MT) and the Philippines (50,000 MT) were featured buyers. The IGC raised their forecast for global wheat production in 2014/15 by 3 MMT to 702 MMT. Consumption was up by 2 MMT to 699 MMT and carryover reduced by 1 MMT to 193 MMT, although that's still 3 MMT higher than in 2013/14. Australia's 2014/15 wheat crop was raised 1 MMT from last month to 26.5 MMT. Europe's wheat crop (excluding durum) was increased from 139.2 MMT to 140 MMT. Russia's wheat crop was increased significantly, from 51 MMT to 55 MMT, and Ukraine's was raised from 20 MMT to 21.5 MMT. There were decreases for Argentina (down 0.4 MMT), the US (down 0.5 MMT) and Canada and Kazakhstan (both down 1 MMT). In other news, Taiwan bought 84,800 MT of US wheat for Sept-Oct shipment. Tunisia are tendering for 184,000 MT of optional origin wheat and 125,000 MT of optional origin barley, both for Sept–Nov shipment. Bangladesh are looking for 50,000 MT of optional origin wheat. The Argentine Ag Ministry said that Argentine farmers have only sold 64.03% of their 2013/14 wheat crop versus 96.20% a year ago. Ukraine's Ag Ministry said that the country had exported 2.03 MMT of grain in July versus 853,800 MT in June. ProZerno estimated Russia’s 2014/15 grain crop at a large 102.6 MMT, up from a previous estimate of 98.9 MMT and compared to 92.4 MMT a year ago. That total includes 58.2 MMT of wheat, which is 0.7 MMT more than IKAR estimated at the beginning of the week, and far higher than the USDA's current forecast of "only" 53 MMT, even if they are referring to a bunker weight total. Sep 14 CBOT Wheat closed at $5.30 1/4, up 3 cents; Sep 14 KCBT Wheat closed at $6.25 3/4, up 8 3/4 cents; Sep 14 MGEX Wheat closed at $6.16, up 3 1/4 cents.
31/07/14 -- EU grains closed mostly lower with Nov 14 London wheat down GBP2.50/tonne at GBP122.10/tonne, Nov 14 Paris wheat was down EUR5.00/tonne to EUR170.50/tonne, Aug 14 Paris corn fell EUR0.75/tonne to EUR162.75/tonne and Aug 14 Paris rapeseed rose EUR7.75/tonne to EUR325.00/tonne.
For both London and Paris wheat these were new 4-year lows.
The HGCA said that the UK grain harvest was already around 20% complete, double the norm for the end of July.
"Harvesting of winter barley and winter oilseed rape is nearing completion in the southern half of England and has started further North and into Scotland and Wales. Harvesting has commenced in Southern regions on wheat, spring barley and some oats," they said.
Nationally they said that the winter OSR harvest was now 75% done, along with 85% of the winter barley crop. Yields of the latter were described as "well above average".
"Winter barley yields are good, averaging 7.2-7.4 MT/ha, whilst winter oilseed rape yields are averaging 3.4-3.6 MT/ha," they reported.
It's still too early to suggest where winter wheat yields will end up. "There has been a great deal of variability in the early yields with some of the lightest land in the Eastern region yielding just 4.5 MT/ha, whilst heavier land in the same region is yielding 9.0-9.6 MT/ha. In the West Midlands and Yorkshire and Humber, some of the best crops have yielded up to 11-12 MT/ha," they added.
"Early quality data for milling wheat is showing some high Hagberg falling numbers," they said. That could be good news for milling wheat growers, with France (and possibly others too) said to be suffering problems with low Hagberg levels this year.
Note though that there is no sign of a minimum Hagberg level within the terms of the Paris milling wheat contract.
As was widely expected, there was no eleventh hour deal or last minute reprieve, Argentina defaulted on it's debt to the "hedge fund vultures" early this morning. The trade is still wondering what this means for global trade in wheat, corn and soybeans.
Argentina are expected to be the world's 7th largest exporter of wheat in 2014/15, and the 3rd largest for both corn and soybeans. They are also the biggest global exporter of soymeal, set to ship a larger volume than the US and Brazil combined in 2014/15, according to the latest projections from the USDA.
The trade is also considering the possible ramifications of an intensifying of Western sanctions against Russian banks, and how that might possibly disrupt global trade in wheat in particular. Russia are forecast to be the world's joint fourth largest wheat exported in 2014/15.
Certainly they look like having plenty of wheat to sell this year. The 2014 Russian wheat harvest is 41.3% complete, already producing a crop of 38 MMT with average yields up 19.8% at 3.63 MT/ha.
MDA CropCast today raised their forecast for the Russian 2014 wheat crop by 1.2 MMT from last week, saying that drier weather will favour winter wheat drydown and harvesting. Spring wheat growth will be finishing up, they also noted.
30/07/14 -- Soycomplex: Beans closed lower as mid-day weather forecasts re-iterated a welcome rain event for the Midwest next week after a couple of weeks of dryness. "Upper Midwest field moisture has become depleted with sharply reduced rainfall. Less than half of normal moisture has accumulated the past 2 weeks over much of the farm belt, not only the Upper Midwest but also the Great Plains," said Martell Crop Projectons. Safras e Mercado estimated Brazil’s 2014/15 soybean planted area at 31.213 million ha, up 4.4% versus last year. Planting usually begins in late September. They forecast the 2014/15 Brazilian crop at a new record 94.451 MMT, up 9% versus last year's production of 86.613 MMT. There's talk that a possible Argentine debt default tomorrow would lead to a further weakening of the domestic peso, encouraging farmers to hold onto their beans as a hedge against inflation and the falling value of the local currency. Beans are essentially a dollar-based commodity. The trade is expecting that tomorrow's weekly export sales report will reveal another week of robust interest for US beans and meal, with bean sales forecast to be around 1.0-1.2 MMT and meal sales of 550-750 TMT. Aug 14 Soybeans closed at $12.20 1/2, down 6 cents; Nov 14 Soybeans closed at $10.81 1/4, down 13 3/4 cents; Aug 14 Soybean Meal closed at $387.60, down $7.80; Aug 14 Soybean Oil closed at 36.05, down 20 points.
Corn: The corn market closed with little change. There's some talk of this year's US corn crop almost being "made" now that we've reached the end of July, but there's still a fair way to go yet. "Corn crop ratings have continued mostly favourable in July due to prevailing cool temperatures. Soil moisture was conserved while corn was pollinating and for soybeans starting to set pods. Corn would be less damaged by August drought, should it develop," said Martell Crop Projections. Dr Cordonnier said that unusually wet weather in Brazil's Mato Grosso has slowed harvesting of their safrinha corn crop to around 50% complete. The USDA attaché in Russia estimated corn production there this year at 13 MMT, that would be an increase of nearly 12% on a year ago. There's some talk of heat/dryness issues developing for Russian corn. Ukraine Weather Forecasters estimated this year's corn crop there at 29.0 MMT, down 6% from last year's record, although still the second highest ever. New crop Ukraine corn offers continue to hover around the $188-190/tonne mark on an FOB the Black Sea basis. US ethanol production this past week came in at 954,000 barrels/day, a 5,000 bpd fall on a week ago, although that was the second highest weekly output of the year so far. Trade estimates for tomorrow's weekly export sales report for corn are quite robust at 800 TMT - 1.2 MMT. Sep 14 Corn closed at $3.61 3/4, up 1/4 cent; Dec 14 Corn closed at $3.71 1/2, up 1/2 cent.
Wheat: The wheat market ended around 2 to 7 cents higher across the three exchanges. Egypt bought all Russian wheat in it's tender, although US wheat was said to be the cheapest on an FOB basis, it was the freight that kicked it out. The FOB prices paid were similar to last week's tender, although freight rates were a dollar or two higher. The trade is pondering what effect increased Western sanctions against Russia might have on their ability to conduct "business as usual" on the international grain market. The trade is also weighing up what sort of wheat quality we will end up with in Europe this year. Germany's DBV released a crop update, but didn't forecast wheat yields or production. In what has been cut already yields vary "very strongly" they said. "The weather in the coming days is crucial for the remainder of the winter wheat crop," they added. There are said to be question marks over quality in Poland and Romania too, as well of course as France. A Canadian crop tour came up with potential yields of 59.0 bu/acre versus 55.0 bu/acre a year ago and 43.0 bu/acre on average. The USDA attaché in Russia estimated the wheat crop there at 52 MMT, unchanged on last year, but 1 MMT lower than the official USDA figure. The USDA announced 205,500 MT of US wheat sold to Nigeria. Trade estimates for tomorrow's weekly export sales report are around 350-550 TMT. Sep 14 CBOT Wheat closed at $5.27 1/4, up 7 1/4 cents; Sep 14 KCBT Wheat closed at $6.17, up 5 1/2 cents; Sep 14 MGEX Wheat closed at $6.12 3/4, up 2 1/4 cents.
30/07/14 -- EU grains managed a mostly higher close at the end of a mixed two-sided trading session. We can probably attribute this to light consolidation/profit taking following the recent slump to 4-year lows.
The day finished with Nov 14 London wheat up GBP0.65/tonne at GBP124.60tonne, Nov 14 Paris wheat ended EUR0.50/tonne firmer at EUR175.50/tonne, Aug 14 Paris corn was up EUR1.00/tonne at EUR163.00/tonne, whilst Aug 14 Paris rapeseed fell EUR2.25/tonne to EUR317.25/tonne.
The German Farmers Association, DBV, said that the winter barley harvest there was almost complete, forecasting good yields of 7.3 MT/ha versus 6.9 MT/ha last year. They see production in 2014 at 9 MMT.
German winter OSR yields were estimated at 4.1 MT/ha, producing a crop of 5.8 MMT. The harvest is more than 66% complete, they said.
They also commented that early winter wheat yields vary "very strongly" and that the 2014 harvest is held up by repeated rains, without giving a production forecast.
Ukraine said that it's Jul 1-29 grain exports were 1.757 MMT, including 558 TMT of wheat, 896 TMT of barley and 286 TMT of corn. There's a further 332 TMT of grain loaded onto vessels waiting to sail, they added.
Belarus said that they are 42.9% through their 2014 grain harvest, which is expected/hoped to produce a record crop of 10 MMT.
Russia said that they'd harvested 45.4 MMT of grains off 28.4% of the planned area, including 37.2 MMT of wheat and 4.4 MMT of barley. Grain yields so far are said to be up 23% at 3.43 MT/ha.
The USDA attaché in Russia estimated the 2014/15 total grain crop at 94.0 MMT (excluding Crimea which could add a further 1.2 MMT to that total) versus a previous estimate of 92.0 MMT. That includes 52 MMT of wheat, 16 MMT of barley, 13 MMT of corn.
The attaché estimated Russia's 2014/15 grain exports at 26.0 MMT.
Meteorolgix Weather said Europe’s weather forecast calls for generally warmer and drier weather next week, which will be favourable for harvesting.
The US were said to have imposed extra sanctions on three Russian banks. These are the VTB Bank, the Bank of Moscow and the Russian Agricultural Bank. It's not clear at this stage how that will impact, if at all, on Russia's grain business in the year ahead.
Egypt's GASC were said to have bought 175 TMT of exclusively Russian milling wheat for September shipment in their tender today at a little over $260/tonne C&F.
Ukraine feed wheat is said to be offered in the market at $205/tonne FOB for Aug/Sep shipment, which is around GBP120.50/tonne.
29/07/14 -- Soycomplex: Beans closed lower as the latest weather forecasts for the Midwest adopted a wetter outlook for the beginning of August, the key month for determining soybean yields. The USDA announced 135,000 MT of US new crop soymeal sold to unknown. China only sold 94,009 MT of the 353,843 MT of state-owned soybeans (26.6%) on offer at today’s auction. Dr Cordonnier estimated US 2014 soybean yields at 45.0 bu/acre, unchanged from his previous estimate. Goldman Sachs forecast US soybean prices to fall to $10.50/bu within the next 3-12 months. Although the USDA cut US soybean crop ratings by 2 percentage points to 71% good/excellent last night, these are still the highest ratings since 1994 heading into August. "The forecast continues very cool in the week ahead. Temperatures are predicted to be 5-7 F below normal in the Midwest and Mid South," said Martell Crop Projections. Aug 14 Soybeans closed at $12.26 1/2, down 10 cents; Nov 14 Soybeans closed at $10.95, down 12 3/4 cents; Aug 14 Soybean Meal closed at $395.40, down $7.40; Aug 14 Soybean Oil closed at 36.25, down 27 points.
Corn: The corn market closed around 5-6 cents lower, essentially reversing all of yesterday's gains. Whilst August is the key month for soybean development, for corn it's July. Benign weather conditions throughout the month mean that confidence is now pretty high that record corn yields will be achieved in the US this year. That said, there's always the nagging doubt that persistent much cooler than normal temperatures throughout the summer could mean that Jack Frost pays an early visit to the Midwest this year. Any sign of the F word in the forecast would have the shorts scrambling for cover. Dr Cordonnier estimated US 2014 corn yields at 169.0 bu/acre versus a previous estimate of 167.0 bu/acre. The USDA announced 147,000 MT of US new crop corn sold to Columbia under the daily reporting system. Egypt are said to be seeking corn for October shipment. Taiwan's MFIG bought 50,000 MT of South Africa corn for Sept/Oct shipment. Safras e Mercado said Brazil’s second corn crop is 38.2% harvested versus 37.1% this time last year. Sep 14 Corn closed at $3.61 1/2, down 6 1/4 cents; Dec 14 Corn closed at $3.71, down 5 3/4 cents.
Wheat: The wheat market closed sharply lower. CBH Group said that Western Australia's state grain harvest this year would total 15.4 MMT, including 9.4 MMT of wheat. The latter number is 1 MMT more than ABARES current estimate. WA is the largest wheat exporting state in Australia. South Korea's MFG passed on a tender for 65,000 MT of optional origin feed wheat for Oct-Dec shipment. Russia's grain harvest is progressing well, with yields said to be sharply higher than a year ago. Quality is also said to be good. Ukraine is also getting higher yields than anticipated earlier in the year, when all the talk was of reduced inputs cutting yield potential. UkrAgroConsult estimated the 2014 average Ukraine wheat yield at 3.42 MT/ha versus a previous estimate of 3.33 MT/ha and nearly 7% up compared to 3.20 MT/ha in 2013. They estimated 2014 Ukraine barley yields at 2.41 MT/ha versus a previous estimate of 2.39 MT/ha and up more than 6% compared to 2.27 MT/ha in 2013. The German statistics office said Germany had exported 14.6 MMT of grain between July 2013-May 2014 versus 12.4 MMT a year previously. Egypt's GASC are back in the market tendering for wheat, although US origin material is unlikely to feature. Sep 14 CBOT Wheat closed at $5.20, down 14 3/4 cents; Sep 14 KCBT Wheat closed at $6.11 1/2, down 14 cents; Sep 14 MGEX Wheat closed at $6.10 1/2, down 10 3/4 cents.
29/07/14 -- EU wheat futures slumped to fresh 4-year lows on harvest pressure and rising production estimates coming out of Russia and Ukraine.
The day ended with new crop Nov 14 London wheat closing GBP1.55/tonne lower at GBP123.95/tonne, Nov 14 Paris wheat was EUR3.25/tonne weaker at EUR175.00/tonne, Aug 14 Paris corn was up EUR2.25/tonne to EUR162.00/tonne (although new crop months were mostly lower) and Aug 14 Paris rapeseed fell EUR0.50/tonne to EUR319.50/tonne.
UkrAgroConsult raised their forecast for the Ukraine 2014 grain crop to 57.4 MMT, a 4% increase on their previous estimate. The increase was largely due to the better than anticipated yields being achieved this year, they said.
They now see 2014/15 Ukraine grain exports at 31.7 MMT, a 2 MMT hike on their previous estimate. That includes wheat exports of 9.5 MMT versus a previous estimate of 9.0 MMT and up compared to 2013/14 exports of 9.2 MMT.
The Ukraine analyst also raised their outlook on corn production and exports in 2014/15 to identical levels to the records set in 2013/14.
The Ukraine Ministry said that the early grains harvest, which excludes corn, had been completed on 7.1 million ha, producing a crop of 23.6 MMT to date. That total includes 16.3 MMT of wheat and 6.8 MMT of barley. Yields thus far are averaging 3.33 MT/ha, up nearly 10% on a year ago.
IKAR yesterday estimated Russia’s 2014 wheat crop at 57.5 MMT versus a previous estimate of 56.3 MMT.
The Russian Ministry said that this year's grain harvest was 27.2% complete at 43.6 MMT, with yields averaging 3.44 MT/ha, a sharp rise of more than 23% on a year ago. The total includes 35.9 MMT of wheat off 38.9% of the planned area, with yields at 3.64 MT/ha, a 20% increase on this time last year. Barley adds a further 3.8 MMT, with yields at 3.05 MT/ha, up 33% on a year ago.
Morocco are said to be planning to lower their import duty on wheat from Sept 1, in a moved that seems to be linked to quality concerns over French wheat which could allow more grain into the country from the Black Sea.
Egypt announced a late tender for wheat for September shipment with the results expected tomorrow. Russia, Romania and Ukraine wheat all scored successes in the last GASC tender.
China is said to be buying large volumes of cheap foreign barley for import, to supplement it's virtual embargo on US DDGs. They've already taken more French barley this month than they did in the whole of 2013/14.
28/07/14 -- Soycomplex: Beans closed with strong gains. Weekly soybean export inspections came in at 112,345 MT versus 97,160 MT last week. That takes the 2013/14 marketing year total to date to over 43 MMT versus 35.3 MMT a year ago. In addition the USDA reported 486,000 MT of new crop beans sold to China, split 66,000 MT optional origin and 420,000 MT of US origin. There's talk of an Argentine debt default for the second time in 12 years on Thursday. That would potentially put the peso under more pressure, increase inflation even further, and could lead to more "hoarding" of soybeans by Argentine farmers. After the close the USDA cut soybean crop ratings by 2 percentage points in the good/excellent category to 71%. The trade was expecting ratings to be unchanged. That's still better than 63% a year ago though. They said that 38% of the crop is setting pods, up from 19% a week ago and compared to the 5-year average of 31%. They said that 76% of the crop is blooming versus the 5-year average of 72%. Aug 14 Soybeans closed at $12.36 1/2, up 24 1/4 cents; Nov 14 Soybeans closed at $11.07 3/4, up 24 1/4 cents; Aug 14 Soybean Meal closed at $402.80, up $4.80; Aug 14 Soybean Oil closed at 36.52, up 43 points.
Corn: The corn market closed around 4-5 cents higher. Weekly export inspections came in at 805,365 MT, down from 941,977 MT the previous week, and a bit below expectations of 850 TMT to 1 MMT. The 2013/14 marketing year to date total is now 41.8 MT. Taiwan are tendering for 60,000 MT of US or South American corn for Sept-Oct shipment. Chinese analysts estimated their 2014 corn crop at 223.0 MMT, up 2.1% from a year ago. The country's hard line stance on MIR 162 appears to have effectively barred US DDGs from entering the country and will also at the very least hinder US corn export prospects to China. The USDA cut corn crop ratings by one point to 75% good/excellent versus trade expectations of unchanged. That's far from a disaster and much better than 63% this time last year. They said that 78% of the crop is silking versus 56% a week ago, 67% this time last year and 75% for the 5-year average. They said that 17% of the crop is at the dough stage versus 8% a year ago and 16% for the 5-year average. "The forecast continues very cool, with the 7-day outlook calling for temperatures 7-10 F below average in Midwest corn," said Martell Crop Projections. However the forecast is also mostly dry, which could provide some threat, particularly for corn yet to pollinate when moisture needs are high, they add. Sep 14 Corn closed at $3.67 3/4, up 4 3/4 cents; Dec 14 Corn closed at $3.76 3/4, up 5 cents.
Wheat: The wheat market closed lower across the three exchanges. Weekly export inspections came in at 395,963 MT, down from 527,633 MT the previous week, and a bit below expectations of 400-550 TMT. That takes the marketing year to date total to 3.64 MMT versus 5.12 MMT a year ago at this time. The USDA announced 101,000 MT of US wheat sold to Nigeria under the daily reporting system. Taiwan are tendering for 84,800 MT of US milling wheat for Sept-Oct shipment. IKAR estimated Russia’s 2014 wheat crop at 57.5 MMT versus a previous estimate of 56.3 MMT. That's just about the highest estimate in the ring so far. Wheat harvesting there is said to be 36% complete, producing 33.2 MMT to date. There's some talk of possible dry weather damage to wheat in northern New South Wales and Queensland. Other parts of Australia's wheat growing belt are said to be experiencing largely favourable conditions though. The USDA reported the 2014 US winter wheat harvest at 83% complete, up from 75% a week ago and a bit better than the 5-year average of 80% done at this time. Spring wheat crop prospects remain favourable. The USDA held steady with their ratings for that crop at 70% good/excellent versus 68% this time last year. They said that 93% of the crop was headed, up from 84% a week ago and exactly in line with last year and the 5-year average. Sep 14 CBOT Wheat closed at $5.34 3/4, down 3 1/4 cents; Sep 14 KCBT Wheat closed at $6.25 1/2, down 5 3/4 cents; Sep 14 MGEX Wheat closed at $6.21 1/4, down 6 1/2 cents.
28/07/14 -- EU grains closed mixed with Nov 14 London GBP0.80/tonne lower at GBP125.50/tonne, Nov 14 Paris wheat was down EUR1.50/tonne to EUR178.25/tonn, Aug 14 Paris corn was up EUR3.50/tonne at EUR159.75/tonne and Aug 14 Paris rapeseed rose EUR2.25/tonne to EUR320.00/tonne.
Trading was subdued, with many buyers absent for the Eid al-Fitr holiday, an Islamic celebration that marks the end of the month-long Ramadan
There's still widespread trade talk of hagberg problems with the French crop.
Traditional export homes for French wheat like Algeria, Morocco and Egypt all carry minimum requirements for hagbergs of at least 200 if not higher, which potentially gives French traders a large headache this year. It could also provides UK milling wheat with a nice little window of opportunity.
For UK feed wheat it's a different story, with French origin grain seen undercutting the market in anticipation of a glut coming onto the market. French feed wheat apparently traded into Ireland last week at EUR10/tonne under offers from the UK, according to Agrimoney.
UK milling wheat will have still have to compete with the Black Sea for export business too, and Russia's crop at least seems to be getting larger. IKAR today raised their estimate for the wheat crop there to 57.5 MMT versus a previous forecast of 56.3 MMT. That's considerably higher than the USDA's current 53 MMT forecast and 5.5 MMT more than last year's production.
Russia's Ag Ministry said that as of July 25th Russia had harvested 33.2 MMT of wheat (of 36% of the total planned area) with an average yield of 3.66 MT/ha, up more than 20% on a year ago. They are also said to have exported 1.6 MMT of wheat already this month.
In excess of 80% of the Russian wheat harvest is currently said to be of milling standard.
Russian 12.5% milling wheat FOB the Black Sea is currently offered in the market around $240-242/tonne FOB, which is the equivalent of around GBP142/tonne.
25/07/14 -- Soycomplex: Beans closed mixed, a little stronger nearby and a touch weaker further forward. The USDA announced 360,000 MT of US beans sold to China along with 134,700 MT of US meal sold to Mexico, both for 2014/15 delivery. Persistent cool Midwest weather is seen being probably of more benefit to corn than it is to soybeans. August weather still holds the key to determining final soybean yields. A Reuters poll put the average trade guess for US soybean yields this year at a record 45.5 bu/acre versus the USDA's current forecast of 45.2 bu/acre. The previous record was 44.0 bu/acre in 2009. The range of estimates was 44.2-46.85 bu/acre. The Doane crop tour estimated Iowa average soybean yields at 50-53 bu/acre versus 44.5 bu/acre a year ago. The Buenos Aires Grains Exchange said that the Argentine soybean harvest is virtually all done at 99.5% complete, and left their 2013/14 production estimate unchanged at a record 55.5 MMT. Safras e Mercado estimated Brazil’s 2014/15 soybean planted area at 31.2 million ha, up 4% from last year. Planting will begin in Mato Grosso in the second half of September. They forecast Brazil’s 2014/15 soybean crop at a record 94.45 MMT versus their 2013/14 crop estimate of 86.6 MMT. Market expectations for Monday's USDA crop progress report are for soybean conditions to be unchanged from a week ago at 73% good to excellent. Aug 14 Soybeans closed at $12.12 1/4, up 4 3/4 cents; Nov 14 Soybeans closed at $10.83 1/2, down 1 1/4 cents; Aug 14 Soybean Meal closed at $398.00, up $2.70; Aug 14 Soybean Oil closed at 36.09, down 15 points. For the week that puts front month beans up 36 1/4 cents, with meal gaining $18.00 and oil falling 38 points.
Corn: The corn market closed with small gains to end the week, but still lower for the week as a whole. The USDA announced 269,084 MT of US corn sold to Mexico split 23,368 MT old crop and 245,716 MT new crop. A Reuters survey estimated 2014 US corn yields at a record 170.476 bu/acre versus a previous estimate of 166.104 bu/acre. The current USDA estimate is "only" 165.3 bu/acre, although that in itself would still be a record. The previous record was made in 2009 at 164.7 bu/acre. The Doane crop tour was said to have pegged western Iowa corn yields at 200 bu/acre. The Buenos Aires Grains Exchange said that the Argentine corn harvest is 72.4% complete versus 65.4% a week ago and 92.4% a year ago. They have production in 2013/14 estimated at 25.0 MMT, unchanged from their previous estimate. Safras e Mercado said that they expect Brazil’s 2014/15 corn planted area to decline 6% this year. They still see production at 77.99 MMT versus their 2013/14 crop estimate of 75.95 MMT however. It was reported yesterday that China will only import US DDGs if they can be certified completely free of the disputed MIR 162 corn variety. And by "completely free" that's exactly what they mean, there's no 0.5% tolerance or whatever, it's zero or nothing (no pun intended). The CEO of the US Grains Council said “China is asking for something that cannot be done. This certificate that they are asking for does not exist” according to Reuters. That would appear to draw a line under that then for the time being, and must also surely cast a large black cloud over the prospects for US corn exports to China too. US corn crop condition ratings are expected to be unchanged at 76% good/excellent on Monday. Sep 14 Corn closed at $3.63, up 1 1/2 cents; Dec 14 Corn closed at $3.71 3/4, up 2 1/4 cents. For the week Sep 14 lost 7 cents and Dec 14 fell 5 3/4 cents.
Wheat: The wheat market ended around 8-10 cents higher on the day, although still mixed for the week. Repeated reports of damage to crop quality in Europe are providing support for US wheat, along with ongoing unrest in Ukraine and the corresponding rise in tensions between Russia and the West. European and US leaders are calling for further sanctions against Russia, although it's unclear exactly what form these might take (apart from removing them from hosting the 2018 World Cup). They appear to be in the middle of harvesting a pretty good 2014 wheat crop, in terms of both quality and quantity. If some of the world's leading buyers were to shun Russian wheat, for whatever reason, then it could certainly provide a shot in the arm for demand for US grain, especially if the concerns about quality in Europe ultimately prove to be founded. FranceAgriMer said that the French wheat harvest had made good progress in the past week (through to July 21st) at 44% complete versus only 5% done a week previously. They also actually raised their forecast for the proportion of the crop rated good/very good by one percentage point from a week ago to 71%. Meanwhile, the US Spring Wheat Crop Tour projected average yields at 48.6 bu/acre this year, said to be the highest since at least 1992. The Saskatchewan government said that as of July 21st 78% of spring wheat in the province is in good to excellent condition versus 87% a year ago at this time. Taiwan cancelled a tender for 80,900 MT of US milling wheat for Sep-Oct shipment due to high prices. The Buenos Aires Grains Exchange said that the 2014/15 Argentine wheat crop is 87.8% planted versus 80% a week ago and 92.7% a year ago. In Monday's upcoming crop progress report from the USDA spring wheat crop conditions are expected to be unchanged from a week ago at 70% good to excellent. Sep 14 CBOT Wheat closed at $5.38, up 9 1/4 cents; Sep 14 KCBT Wheat closed at $6.31 1/4, up 10 3/4 cents; Sep 14 MGEX Wheat closed at $6.27 3/4, up 8 cents. For the week that puts Chicago wheat up 5 1/2 cents, with Kansas wheat down 1 3/4 cents and Minneapolis down 2 1/2 cents.