12/12/14 -- Soycomplex: Beans closed a two-sided day with gains of around 5 cents. Expiring Dec 14 meal took a complete nose-dive, other months were mixed. The USDA reported 110 TMT of US beans sold to "unknown" for 2015/16 delivery. A Chinese trade delegation are in town next week, with "showcase" deals likely to be forthcoming. The last time these guys were over in September when 4.8 MMT worth of soybean sales were reported to have been signed. The Argentine Ag Ministry said that farmers there have 71.94% of their 2013/14 soybean crop sold versus 80.39% a year ago. You will recall that the National Bank of Argentina, the country's top agricultural lender, recently said that it will stop extending credit to, and possibly even close the accounts of, farmers who cannot prove that they have sold all of their old crop inventory come Jan 1st. New crop soybeans are 4.23% sold versus 4.43% a year ago. NOPA release their November US crush data on Monday "with estimates of a year on year increase of 3.3% which, if realized, would be at a record 165.4 mln bushels," according to Benson Quinn. Jan 15 Soybeans closed at $10.47 1/4, up 5 cents; Mar 15 Soybeans closed at $10.53 3/4, up 5 cents; Dec 14 Soybean Meal closed at $378.90, down $27.20; Dec 14 Soybean Oil closed at 31.97, up 4 points. For the week Jan 15 beans added 11 1/4 cents, with Dec 14 meal down $15.30 and Dec 14 oil 4 points lower.
Corn: The corn market closed with decent gains on fund buying. A rumour that China had approved MIR 162 corn was doing the rounds, but it cannot be confirmed. Reuters reported that Syngenta said that they expected approval "soon" and the US Grains Council said it hoped for confirmation of approval "in the coming days". Reports that Ukraine is struggling to fulfil its obligation to ship 19 cargoes of corn to China, and may default on around 20% of the agreed volume, raises a bit of hope for US corn to again step into the void left. Ukraine exporters are saying that the fighting in the country means that they may not be able to ship the agreed volume by the Feb 2015 quota deadline. Sceptics might suggest that they simply think they can now make better prices elsewhere. Certainly in local currency terms they definitely can. The Argentine Ag Ministry said that growers there have 90.78% of their 2013/14 corn crop sold versus 84.14% a year ago. New crop is 15.31% sold versus 6.15% a year ago. Turkey, said to be the seventh largest importer of the product, announced that they are to ban the import of US DDGs on GM issues. South Korea bought 60,000 MT of optional origin corn for Feb-March shipment. The corn market did its best to ignore the alarming slump in crude oil values, which now stand at their lowest levels since May 2009. "There is a case to be made for institutional traders identifying the Ag sector as their best option to put capital to work," suggested Benson Quinn. Dec 14 Corn went off the board at $3.96 1/4, up 6 1/4 cents; Mar 15 Corn closed at $4.07 1/2, up 9 cents. For the week Dec 14 was 14 3/4 cents higher, with Mar 15 up 12 1/2 cents.
Wheat: The wheat market closed higher on more rumours of Russia introducing measures to at least slow up exports, if not go the whole hog and issue a formal embargo. Nearby Dec 14 went off the board on all three exchanges. "Newswires confirmed comments made by an Agricultural Minister that all options would be considered except for an outright export ban, which can’t happen due to Russia’s recently joining the WTO," said Benson Quinn. Intervention prices might be raised next week it seems, but that could be just the tip of the iceberg. As well as the new phytosanitary rules to cope with, there are now reports circulating of an emergency draft law being put together to force Russian companies and exporters to sell half of their foreign currency reserves to the Central Bank in an effort to shore up the ailing rouble. Recent Bank of Russia intervention in the currency markets has done little to help stabilise that for anything more than hours. In other news, Egypt said that it's wheat stocks were sufficient to last until April. That would be assuming that all their Russian purchases turn up! Argentina approved a further 1 MMT of wheat for export. The head of the Rosario Grain Exchange said this week that Argentina's 12 MMT wheat crop this year, plus carryover stocks from last year, will enable them to supply all of Brazil's anticipated 7 MMT import requirement in 2014/15. The Argentine harvest is now past halfway done. The Argentine Ag Ministry said that growers there have still only sold 80.13% of last year's crop, versus 100% this time a year ago. Conversely, new crop wheat is said to be 32.09% sold versus 15.71% a year ago. Dec 14 CBOT Wheat closed at $6.27 1/2, up 17 1/4 cents; Dec 14 KCBT Wheat closed at $6.34, up 10 1/2 cents; Dec 14 MGEX Wheat closed at $6.70, up 50 cents. For the week that puts nearby Chicago wheat up 18 1/2 cents, with Kansas just 1 1/2 cents firmer and Minneapolis up 50 1/2 cents.
12/12/14 -- EU grains closed mostly higher on the day, but with relatively small gains for the week. Renewed rumours concerning the introduction of some form of Russian export restrictions, if not an outright ban itself, were supportive today.
At the finish Jan 15 London wheat was up GBP3.55/tonne at GBP130.20/tonne, Jan 15 Paris wheat jumped EUR4.50/tonne to EUR188.75/tonne, Jan 15 Paris corn was EUR2.25/tonne firmer at EUR157.25/tonne, whilst Feb 15 Paris rapeseed was up EUR0.25/tonne to EUR342.75/tonne.
For the week, that puts London wheat up GBP1.20/tonne, with Paris wheat EUR0.75/tonne firmer, corn up EUR1.50/tonne and rapeseed EUR2.50/tonne higher.
Russia's Agriculture Minister Nikolai Fedorov described the fact that the country had exported almost a third more grain so far this season than in 2013/14 as "a disturbing trend". He said that the Ministry will consider all options (except an embargo) to contain grain exports.
One option being touted is to increase the price that the government pay to purchase grain for their intervention program. Despite two bumper harvests in a row, the government hasn't been very successful in buying grain for that on the domestic market, the demise of the rouble means that better returns are available elsewhere.
Whether the government will set the intervention price high enough is debatable, so too is where are they going to find the money to pay for it. The rouble hit new lows against the US dollar and euro again today, forcing the Bank of Russia to intervene in the market (again) to try and halt the demise of the currency.
Now we have reports of the Russian State Duma drawing up a draft law that would require exporters to sell the Central Bank half of their foreign currency reserves. It isn't hard to imagine the uproar that would cause, and I think we can all guess in who's favour the exchange rate(s) would be set.
The Interfax news agency quoted Nikolai Pankov, chairman of the State Duma agrarian affairs committee, as saying that "it was necessary to more actively use the legal framework that exists for regulating prices on socially significant food items."
All interesting stuff, and a storyline that is far from over yet.
Meanwhile Reuters are carrying a report today that suggests that Ukraine exporters may default on something like 20% of around 1.1 MMT of corn sold to China, as they are unlikely to be able to ship all they have sold to the Far Eastern buyer under a special quota system that expires in February.
In other news, Brussels said that they'd issued 344 TMT of EU soft wheat export licences this past week, taking the cumulative season to date total to 13.1 MMT, which is around 5% ahead of this time a year ago.
FranceAgriMer said that the French winter wheat crop is 99% sown as of Monday, and that the 2014 corn harvest is now officially complete. Arvalis said that the French corn crop this year could reach a record 18 MMT.
FranceAgriMer said that French winter wheat crop conditions were 93% good to very good, unchanged on a week ago (although there was a 2 point shift from the former to the latter) and 13 points ahead of this time last year. Winter barley conditions are also 93% good to very good, similar to last week and up versus 81% a year ago.
11/12/14 -- Soycomplex: Beans closed around 10 cents higher. Weekly export sales of 810,300 MT for 2014/2015 were down 31 percent from the previous week and 20 percent below the prior 4-week average. "Soybean sales have reached 84.5% of the new USDA export estimate, which compares to a 5 year average of 76.8%," said Benson Quinn. "Soy meal sales have reached 59% of the current USDA estimate, which compares to a 5 year average of 51.2%," they added. Actual shipments of 2.4 MMT remain very robust, with China alone taking more than 1.5 MMT of that total. The Rosario Grains Exchange, in their first estimate for the season, forecast Argentina’s 2014/15 soybean crop at 55.0 MMT, which is in line with yesterday's USDA figure. IMEA said Mato Grosso farmers have sold 34.1% of their 2014/15 soybean crop versus 48.8% this time a year ago. Jan 15 Soybeans closed at $10.42 1/4, up 10 1/4 cents; Mar 15 Soybeans closed at $10.48 3/4, up 10 1/4 cents; Dec 14 Soybean Meal closed at $406.10, up $0.90; Dec 14 Soybean Oil closed at 31.93, up 26 points.
Corn: The corn market closed around 4-5 cents higher, save for the expiring Dec 14 which closed up 7 1/2 cents. Weekly export sales of 962,800 MT for 2014/15 were down 18 percent from the previous week, but up 9 percent from the prior 4-week average, and in line with expectations. Exports of 678,300 MT were primarily to Japan (246,400 MT), Peru (103,900 MT), Mexico (95,000 MT), Colombia (77,000 MT), Costa Rica (38,400 MT) and Saudi Arabia (36,300 MT). The Rosario Grains Exchange estimated Argentina’s 2014/15 corn crop at 21.5 MMT, unchanged from previous estimate and 0.5 MMT below the USDA's forecast of yesterday. Ukraine said that their 2014 corn harvest is now 98% complete at 27.52 MMT. They said that 2014/15 grain exports were 16.358 MMT, including 5.172 MMT of corn. Fund money was estimated as being a net buyer of around 3,000 corn contracts on the day. The market continues to do a decent job of ignoring the ongoing slump in crude oil prices. Iran said that crude could hit $40/barrel if OPEC doesn't get itself in order soon. US ethanol production though is running at record levels. Dec 14 Corn closed at $3.90, up 7 1/2 cents; Mar 15 Corn closed at $3.98 1/2, up 4 3/4 cents.
Wheat: The wheat market closed with good gains. Weekly export sales of 442,300 MT for delivery in the 2014/15 marketing year were up 39 percent from the previous week and 16 percent above the prior 4-week average. They were also towards the top end of trade estimates for once. Egypt's GASC picked up 180 TMT of wheat in their tender, two cargoes being Russian origin and one of French. The prices paid were significantly cheaper than their last purchase, and it was particularly interesting to see Russian wheat be competitive again. Some are suggesting that this was a "let's get it sold and shipped whilst we still can" move. "News eventually began to trickle out that a Russian ag minister made statements indicating they would attempt to reduce exports and would eventually raise Russian intervention prices to keep the domestic market supplied," said Benson Quinn. That's the first time that there's been anything but a flat denial from Russia that this sort of move could be on the cards, even if it has been widely rumoured. Japan bought 143,317 MT of milling wheat for Jan/Feb shipment in their regular weekly tender. The origin was split between US, Canada and Australia. Dec 14 CBOT Wheat closed at $6.10 1/4, up 17 cents; Dec 14 KCBT Wheat closed at $6.23 1/2, up 8 3/4 cents; Dec 14 MGEX Wheat closed at $6.20, up 22 cents.
11/12/14 -- EU grains were mixed, with Jan 15 London wheat ending down GBP0.95/tonne to GBP126.65/tonne, Jan 15 Paris wheat was unchanged at EUR184.25/tonne, Jan 15 Paris corn was EUR0.50/tonne easier at EUR155.00/tonne, whilst Feb 15 Paris rapeseed ended EUR3.00/tonne higher at EUR342.50/tonne.
Now that the December USDA WASDE report is out of the way, the trade has developed a distinct "holiday" feel.
Egypt's GASC bought three cargoes of wheat for Jan 11-30 shipment in a tender. Two consignments were Russian origin and the other French wheat. With freight included all were priced around the $262.50-263/tonne mark.
It was interesting to see Russian wheat feature again. One theory doing the rounds as to why this should suddenly be the case is that traders are looking to "clear the decks" ahead of any possible export ban in the new year. Another is that Russian growers are emerging as sellers again, despite rouble weakness, in order to generate some cash to pay the bills.
The Russian rouble fell to new lows against both the US dollar and euro today.
Meanwhile Morgan Stanley forecast that the pound could fall to 1.45 against the dollar in 2015. Uncertainty over next year's general election and further fiscal consolidation were the reasons given.
With the three leading UK political parties in various states of disarray, a potentially strong showing from UKIP in the polls isn't difficult to imagine, which would certainly put sterling under pressure. That potentially could be helpful to UK wheat exports in the second half of the season, and boy do we need some help.
The UK finally exported more wheat than it imported in October, for the first time since May 2012.
"The big UK wheat crop of 2014 requires a return to the export market. However, low protein levels in the domestic crop means that imports of high quality milling wheat are likely to remain a factor," said the HGCA.
"The upshot is that the UK export pace not only needs to mitigate the size of the 2014 crop but also imports, if stock accumulation and possible price issues are to be avoided at the end of the season," they added.
UK growers are certainly currently carrying a lot of inventory, judged on comments made at recent farmer meetings I have attended. It will be interesting to see how long they can continue/are willing to sit on that stock when we get into the new year.
Barns three quarters full of unsold grain don't help to pay the bills. Neither do they leave much room for the 2015 harvest once that draws nearer.
10/12/14 -- Soycomplex: Beans closed lower, and near session lows. The decline came despite the USDA raising US 2014/15 soybean exports and lowering ending stocks a bit more than the average trade guesstimate. Exports were increased 40 million bushels, with a corresponding drop in carryout of the same magnitude to 410 million bu. That was a little below the 425 million ballpark that was the average trade guess. There were no changes to 2014/15 production for the US, Brazil, Argentina, China or India. Paraguay and Canada were tweaked a little higher. The world import picture was virtually unchanged, except for a small increase for Indonesia. A 1 MMT rise in US soybean exports was virtually matched by reductions of 700 TMT and 200 TMT respectively for Brazil and Argentina. The US crush was left unchanged, contrary to some people's ideas. World ending stocks therefore came in at around 400 TMT lower than last month at almost 89.9 MMT, which was pretty much in the middle of the 88.5-91.5 MMT range expected. Jan 15 Soybeans closed at $10.32, down 17 1/4 cents; Mar 15 Soybeans closed at $10.38 1/2, down 17 cents; Dec 14 Soybean Meal closed at $405.20, down $6.40; Dec 14 Soybean Oil closed at 31.67, down 24 points.
Corn: The corn market closed around a cent or two lower. The USDA lowered US 2014/15 corn ending stocks by 10 million bushels to just under the 2 billion mark, contrary to trade expectations for a 15 million increase. World ending stocks came in at 192.2 MMT, a small rise versus last month and almost slap bang in the middle of trade expectations of between 190 and 194 MMT. The trade was expecting production in Argentina to be unchanged, and Brazil maybe to be lowered by 1 MMT. The USDA went the other way round, cutting Argentina 1 MMT to 22 MMT and leaving Brazil unchanged at 75 MMT. China's production was raised 1.5 MMT to 215.5 MMT, and Europe's was increased 0.5 MMT to a record 73.6 MMT. China's import needs were scaled back from 2.5 MMT to now only 2 MMT "on a larger crop and as policies continue to encourage imports of alternate feed grains." Chinese sorghum imports were raised 400 TMT to 5 MMT. Conab forecast Brazil's 2014/15 corn crop at a large 78.9 MMT, which is some 10 MMT more than Informa said last week. This appears to suggest a larger "safrinha" crop than many think is possible given that this season's soybean harvest is likely to be later than hoped for. The US Energy Dept put ethanol production at a new record 988k barrels/day for the past week. Dec 14 Corn closed at $3.82 1/2, down 1/2 cent; Mar 15 Corn closed at $3.93 3/4, down 1 1/2 cents.
Wheat: The wheat market closed lower. The USDA estimated US ending stocks at 654 million bushels, up 10 million from last month. "US stocks are forecast slightly higher year-to-year in spite of a smaller crop as high relative prices make exports less competitive," they said. World wheat production was raised by more than 2 MMT to a new record 722.2 MMT. That came courtesy of a surprise hike in output for Canada, up from the 27.5 MMT forecast last month to 29.3 MMT. Kazakhstan's crop was also raised, up from 12 MMT to 12.5 MMT. Australia's crop was left unchanged at 24 MMT where some had expected a reduction. World ending stocks were increased 2 MMT to just shy of 195 MMT. These were only expected to come in around 191.8 MMT, from within a range of guesses from 189.5 MMT to 193.2 MMT. "Global wheat consumption is projected at a record in 2014/15. Food use is expanding because of population growth, urbanization, and rising incomes. Growth is particularly strong in Sub-Saharan Africa and Southeast Asia. Even with consumption at a record, exporter ending stocks are up nearly 20 percent from last year," they noted. Dec 14 CBOT Wheat closed at $5.93 1/4, down 7 1/4 cents; Dec 14 KCBT Wheat closed at $6.14 3/4, down 2 1/4 cents; Dec 14 MGEX Wheat closed at $5.98, down 6 cents.
10/12/14 -- EU grains finished the day lower, with Jan 15 London wheat down GBP1.20/tonne to GBP127.60/tonne; Jan 15 Paris wheat was EUR2.25/tonne easier at EUR184.25/tonne; Jan 15 Paris corn fell EUR1.25/tonne to EUR155.50/tonne; Feb 15 Paris rapeseed ended EUR3.50/tonne weaker at EUR339.50/tonne.
France said that it had exported 1.68 MMT of soft wheat in October, a near 17% rise on a year previously. The top homes were Algeria (293 TMT) and Egypt (252 TMT).
FranceAgriMer increased their forecast for French soft wheat exports by 1% from last month to 17.28 MMT for the current season. Even so that's still 13% lower than the volume shipped out in 2013/14. Ending stocks will therefore rise almost 6% to 4.547 MMT, they predict.
They also increased their forecast for French barley exports, up 3% from last month to 6.1 MMT. That's also a 20% jump on last season. Even so, ending stocks here are also still up year-on-year, seen rising more than 25% to 1.3 MMT.
They said that this year's French grain harvest was 71 MMT, a 7% rise versus 2013. Wheat production was up 2% to 37.1 MMT, and barley output up 13% to 11.7 MMT, they said. The 2014 French corn crop finally came in at 17.3 MMT, an all time high and a 19% increase compared to 12 months ago, despite a lower planted area, they added.
The UK meanwhile had it's best wheat export month of the season so far in October, shipping out more than 218 TMT. Spain was the largest buyer, with (unusually) Algeria in second place. That takes exports for the season so far (Jul/Oct) to almost 507 TMT.
That would put us in line to export 2 MMT of wheat in 2014/15, if we continue at the same pace. Defra estimate the UK exportable surplus at 3.5 MMT this season.
Late in the day the USDA released their December world supply and demand numbers. EU wheat exports were raised by 1 MMT from last month to 29 MMT for the current season. That's still a reduction of almost 2 MMT on last season though, despite the fact that current exports are ahead of even last year's record pace.
Russia's wheat exports in 2014/15 were trimmed from 22.5 MMT to 22 MMT (although that's still a record volume), and Ukraine's were tweaked higher, up from 10 MMT to 10.3 MMT. There was also a 0.5 MMT increase for Kazakhstan to 5.8 MMT. Egypt's imports were increased from 9.5 MMT to 10 MMT.
Wheat production in Europe this season was left unchanged at 155.4 MMT, consumption was lowered 1.5 MMT to 126.5 MMT and ending stocks here were raised 0.5 MMT to just over 17 MMT.
"The EU is forecast to be the world’s largest (wheat) exporter and prices currently are the most competitive. Russia’s exports are projected at a record, while Ukraine’s exports are its second highest. Even though these countries are exporting large amounts of wheat, they are still expected to have a surplus, which will continue to pressure prices," they said.
In other news, the HGCA said that "fears around winter crop condition in parts of Russia and Ukraine look to be subsiding for now as forecasters project less harsh temperatures and greater snow cover in the coming days."
09/12/14 -- Soycomplex: Beans ended with fairly modest 5-6 cents gains ahead of the release tomorrow's USDA WASDE report. That is expected to reflect the current very strong pace of US soybean exports by raising those from the existing forecast of 46.8 MMT, with a subsequent lowering in ending stocks. These were projected at 450 million bushels last month, but could come in around the 425 million mark this time round. Strong demand for meal could also lead them to up the size of the US crush this season, also potentially eating into those ending stocks and reducing them further. World soybean ending stocks are expected to be around 88.5-91.5 MMT versus 90.3 MMT a month ago. Conab are also due to release their revised Brazilian production numbers tomorrow as well. Jan 15 Soybeans closed at $10.49 1/4, up 5 1/2 cents; Mar 15 Soybeans closed at $10.55 1/2, up 5 3/4 cents; Dec 14 Soybean Meal closed at $411.60, up $10.10; Dec 14 Soybean Oil closed at 31.91, up 14 points.
Corn: The corn market closed higher in what looks like book-squaring and short covering ahead of tomorrow's report. US corn ending stocks are forecast to rise around 15 million bushels to 2.023 billion bu in that. Argentine production will probably be left unchanged at 23 MMT, but Brazil's might be lowered from the current 75 MMT it is thought, with some other analyst's estimates below 70 MMT. The late planting of their full season soybean crop is likely to eat into their second crop corn area it is thought. Current corn prices in Brazil also offer little incentive. The world ending stocks figure is expected to come in between 190 and 194 MMT, according to a Bloomberg survey. Last month's figure was 191.5 MMT. The trade will also be looking at Conab's take on Brazilian corn production tomorrow, and in addition to that we will also have the weekly US ethanol grind data from the US Energy Dept. Last week's production was 962,000 barrels/day. Ukraine said that they'd now exported more than 5 MMT of corn this season. Dec 14 Corn closed at $3.83, up 5 1/2 cents; Mar 15 Corn closed at $3.95 1/4, up 5 cents.
Wheat: The wheat market closed sharply lower. The trade is wondering what tomorrow's report will hold for wheat. It seems that there is a possibility that the USDA might lower projected US wheat exports in 2014/15 from last month's 25.5 MMT estimate. That could raise ending stocks from the 644 million bushels estimated in November. EU wheat exports on the other hand might rise from last month's 28 MMT. World ending stocks are expected to come in around 191.8 MMT, from within a range of guesses from 189.5 MMT to 193.2 MMT, and versus 192.9 MMT a month ago. Essentially, there is no shortage of wheat around at the moment, and although demand is also buoyant, it's not generally US wheat that the world is buying. ABARES cut their forecast for the Australian wheat crop by 1 MMT to 23.2 MMT. "The worst damage has occurred in Victoria where the wheat harvest is pegged down 28%. Western Australia, the leading wheat state, is expecting a 20% shortfall," said Martell Crop Projections. Dec 14 CBOT Wheat closed at $6.00 1/2, down 9 1/2 cents; Dec 14 KCBT Wheat closed at $6.17, down 17 cents; Dec 14 MGEX Wheat closed at $6.04, down 13 cents.
09/12/14 -- EU grains closed mostly lower, with wheat down after the Russian Deputy PM said that the subject of possible grain export restrictions hadn't even been discussed at today's cabinet meeting of government ministers.
At the finish Jan 15 London wheat was down GBP1.30/tonne at GBP128.80/tonne, Jan 15 Paris wheat fell EUR2.50/tonne to EUR186.50/tonne, Jan 15 Paris corn was EUR0.25/tonne firmer at EUR156.75/tonne, whilst Feb 15 Paris rapeseed was unchanged at EUR343.00/tonne.
The French Farm Ministry said that the country's winter wheat area was a six year high of 5.08 million hectares, up 160k ha on last year. Durum plantings are seen up almost 10% to 309k ha, although this is still an historically low area.
Winter barley plantings were also forecast at a 6 year high of 1.26 million hectares, up 14.5% versus last year.
Where's the extra area coming from? Partly winter OSR, where plantings for next year's harvest are seen falling to 1.486 million ha, although that's still only a relatively modest 1% decline on a year ago.
Rusagrotrans said that Russia had exported 2.99 MMT of grains in November, a 13% decline compared to October's 3.42 MMT. They noted a "significant slowdown" in exports towards the end of the month.
Whether this is simply down to adverse weather conditions, seasonal factors, or the much talked about new phytosanitary rules and/or delays in obtaining the necessary export certificates is unclear, but the situation merits watching.
Wheat accounted for 68.5% of November's exports, down from 72% in October. Barley's share rose to 21.3% from 18.3%, and corn's fell to 7.7% from 8%, they added.
SovEcon apparently said that they expect December's Russian grain exports to remain high due to the weakness of the rouble however.
The Ukraine Ag Ministry said that the country had exported 16.22 MMT of grains so far this season, including 7.57 MMT of wheat, 3.37 MMT of barley and 5.09 MMT of corn.
A spokesperson for Ukraine's DZI said that 2014/15 grain exports could reach 35 MMT, a 3 MMT rise compared to last season's record, although this would depend on the political, economic and world market situation, they added.
All eyes are now on the USDA who are due to release their December world supply and demand numbers tomorrow. I'll be looking for them to potentially raise 2014/15 EU-28 wheat exports from the existing 28 MMT estimate, and possibly trim US exports a little.
08/12/14 -- Soycomplex: Beans closed a two-sided session higher. The USDA announced 130,000 MT of beans sold to Spain for 2014/15 shipment under the daily reporting system. Weekly export inspections were impressive once again at 2.2 MMT, taking the 2014/15 season to date total to 23.7 MMT versus 19.1 MMT a year ago. Chinese customs data showed that the country imported 6.03 MMT of beans in November, up 47.1% from October, but about the same as a year previously. China has now imported 62.87 MMT of beans between Jan-November, up 12.3% from a year ago. Trade analysts expect them to import around 7.5 MMT this month. Safras e Mercado said that Brazilian soybean planting is 92% complete versus 85% a week ago and 95% on average. Ag Rural estimated Brazilian plantings at 85% done, up 9 points on a week previously and 4 points behind normal. They forecast production up 10% this year at a record 94.9 MMT. Emater estimated soybean planting in Brazil's southern state of Rio Grande do Sul to be 80% done, with the crop largely in good condition. The Argentine National Bank, the largest agricultural lender in the country, are said to have announced that they will not give loans/credit to farmers who can't prove that they're not hoarding old crop soybeans. The Argentine government have been searching for a way of pressurising farmers into liquidating their crops, which some are holding as a hedge against the falling peso and raging inflation. Whether the move works remains to be seen. Jan 15 Soybeans closed at $10.43 3/4, up 7 3/4 cents; Mar 15 Soybeans closed at $10.49 3/4, up 7 3/4 cents; Dec 14 Soybean Meal closed at $401.50, up $7.30; Dec 14 Soybean Oil closed at 31.77, down 24 points.
Corn: The corn market closed lower. March corn tried to break through $4/bushel but failed. The trade appears to feel that anything approaching $4/bushel on corn is a sell. The USDA announced 136,000 MT of corn sold to Japan for 2014/15 shipment, which failed to cause much excitement. Weekly export inspections of only 532,498 MT were less than expected and below the level required to hit the USDA target for the season. The strong US dollar continues to hamper foreign sales. Emater said that Brazil's Rio Grande do Sul is more than 90% planted on corn, and will be finished by the end of the month. Crop conditions are mostly good. Dr Cordonnier said that the first corn got planted in the state around August/September, and that some of that will be ready for harvesting by the end of December, so whilst some are getting ready to harvest others will only just be wrapping up with planting. Safras e Mercado said that nationally, Brazil corn planting is 95.9% complete versus 99.1% a year ago. Ukraine is now concentrating it's export efforts on corn, with 539.3 MMT, or 83%, of the 649.4 MMT of grains shipped out of the country's seaports last week being corn, according to APK Inform. South Korea KFA bought 60,000 MT of US or South American origin corn for April shipment. New lows in crude oil was seen as a bearish influence, even though recent weekly US ethanol production levels have been very good. Dec 14 Corn closed at $3.77 1/2, down 4 cents; Mar 15 Corn closed at $3.90 1/4, down 4 3/4 cents.
Wheat: The wheat market closed narrowly mixed across the three exchanges. Weekly export inspections were less than stellar at only 269,319 MT, around half of what they were in the same week a year ago. The strong US dollar continues to hurt demand for US wheat, whilst Europe is exporting at a pace that is currently even ahead of last year - when exports went on to be record high. The world wants wheat, just not US wheat, at least for the time being anyway. Russia's exports are also well ahead of last year's levels, they've exported 14.6 MMT of wheat so far this season. Bangladesh are tendering for 50,000 MT of optional origin wheat for Dec-Jan shipment. Jordan are in the market for 100,000 MT of hard milling wheat of optional origin. India said that it had sown 20.86 million hectares of wheat for the 2015 harvest so far, down from 21.37 million this time a year ago. Weakness was seen on the front month Dec 14, relative to the deferred positions. The trade might be questioning why in the case of Chicago wheat, this should command a healthy premium over Mar 15, given the current sluggish demand scenario for US wheat, and the slow pace of exports. Ukraine said that it's winter grains were 95% emerged, and that 82% of the crop was in good to satisfactory condition. Large parts of Russia's winter grains remain vulnerable to winterkill. "World supplies aren’t ample enough to completely ignore potential export restrictions out of the Black Sea, but it is hard to get too excited so far ahead this far away from spring, when new crop issues could actually be confirmed," said Benson Quinn. Dec 14 CBOT Wheat closed at $6.10, up 1 cent; Dec 14 KCBT Wheat closed at $6.34, up 1 1/2 cents; Dec 14 MGEX Wheat closed at $6.17, down 2 1/2 cents.
08/12/14 -- EU grains finished a choppy two-sided start to the week mostly higher.
At the close Jan 15 London wheat was up GBP1.10/tonne to GBP130.10/tonne, Jan 15 Paris wheat was EUR1.50/tonne higher at EUR189.00/tonne, Jan 15 Paris corn was EUR0.75/tonne firmer at EUR156.50/tonne, whilst Feb 15 Paris rapeseed ended EUR2.75/tonne higher at EUR343.00/tonne.
Fresh news was relatively scarce to start the week, with the trade already developing a holiday feel.
Strategie Grains estimated EU-28 rapeseed plantings at 6.5 million hectares, a 3% fall on last year. They also see yields dropping in 2015, down 8% to an average 3.3 MT/ha.
That would take production 10% lower next year to 21.6 MMT, they calculate. That's lower than the 22.5 MMT forecast by Informa last week, or Lanworth's 22.3 MMT estimate.
It does however tie in with thoughts of lower plantings across Europe due to farmer dissatisfaction with current prices, and also the new EU rules on neonicotnoids.
APK Inform said that grain shipments via Ukraine's seaports totalled 649.4 TMT last week, up from 534.4 TMT for the week prior. Corn accounted for 539.3 TMT of that volume, or 83%, which is similar to 85% the previous week, continuing with the recent trend towards majoring on corn. Wheat shipments were only 8% of the weekly total, down from 15% the week before.
Ukraine's Ag Ministry said that Ukraine had exported 15.85 MMT of grains between July 1-Dec 2nd, up 10% from a year ago.
The Ukraine Ag Ministry also said that 95% of winter planted crops are now emerged, and that 82% are in good to satisfactory condition and 18% week/thinned.
Russia said that it had exported 18.267 MMT of grains so far this season, a rise of 31% compared to a year ago. Wheat accounts for 80% of that volume (14.6 MMT).
Russian growers are said to be emerging as more active sellers, despite the fact that the rouble has yet to stabilise, as some need the cash to pay bills before the end of the year.
Congestion and adverse weather conditions at the leading Russian grain export port of Novorossiisk is said to be delaying some shipments from the region.
Morocco's 2014/15 grain imports are said to be up 80% on a year ago (Jun 1-Oct 31) at 2.2 MMT. That total includes 750 TMT of wheat, 220 TMT each of durum and barley and over 1 MMT of corn. The leading wheat suppliers are Ukraine (260 TMT), France (210 TMT), Russia (120 TMT) and Germany (80 TMT). Argentina (580 TMT) is the leading corn supplier, followed by Brazil (230 TMT) and the US (150 TMT).