30/12/15 -- Soycomplex: Beans closed around 4-5 cents firmer. The market seems torn between ongoing dryness in Brazil's Mato Grosso and other northern states, and the potential for Argentina to regain some lost ground as far as exports go under the new Macri leadership. "Brazil’s tropical drought has worsened from mid to late December, now affecting the majority of soybeans. Rainfall deficits of 100-200 millimeters (4-8 inches) have accrued in Mato Grosso, the leading soybean state. Bahia, Goias, Tocantins and Minas Gerais have also succumbed to severe drought," say Martell Crop Projections. Daytime highs near 100 F as well as due to reducing showers have less evaporative cooling, they add. Argentina removed export quotas on corn and wheat overnight. There's talk that they may be gearing up to sell old beans aggressively before the 2015/16 Brazilian harvest begins. Trade ideas for tomororrow's weekly export sales report for beans are in the 750,000 to 850,000 MT region. The next monthly USDA crush report is due out on Monday. Jan 16 Soybeans settled at $8.75 1/2, up 5 1/2 cents; Mar 16 Soybeans settled at $8.70 1/4, up 4 1/2 cents; Jan 16 Soybean Meal settled at $265.80, down $2.70; Jan 16 Soybean Oil settled at 30.84, up 32 points.
Corn: The corn market closed around 3 cents or so weaker. The news out of Argentina that not only are export duties on corn now history, but so to are quotas confirmed the market's fears. Ideas are now that the will soon become a very aggressive seller, especially following the demise of the peso since the recent elections. Weekly US ethanol production for Christmas week came in at a respectable 992,000 barrels per day, up 19,000 barrels per day from the week. Ethanol stocks were reported at 20.2 million barrels, down 200,000 barrels from the week before. US flooding is reported to be starting to peak along parts of the Mississippi. South Korea's KFA bought 50,000 MT of South American corn in a tender for 65,000 MT of any origin and were reported to have paid $180.99 C&F. Ukraine say that they will remain a keen corn exporter in 2015/16, despite a much lower crop there this year. Trade ideas for tomororrow's weekly export sales report for beans are in the 600,000 and 650,000 MT region. Sales last week were 803,600 MT. Mar 16 Corn settled at $3.59, down 3 1/2 cents; May 16 Corn settled at $3.65 1/4, down 3 3/4 cents,
Wheat: The wheat market closed around 5-7 cents lower across the three exchanges. The Russian rouble fell to a new all-time low versus the US dollar today, making US wheat's job of competing even more difficult. The rouble is down around 12% versus the US in the last 2 months. There's some talk of possible winter-kill damage to Russian and Ukraine winter grains, although more seasonal heavier snow cover is now moving into the region. Egypt said that it aims to be 80% self-sufficient in wheat by 2018. Jordan were said to have purchased 100,000 MT of wheat of origin unknown, for $218/ton C&F. The US weather forecast is dry in the upcoming week in most areas of the heartland, a welcome change that would allow flood waters to abate, reported Martell Crop Projections. There's talk of a possible cold snap being on the cards for Eastern Europe across the next couple of weeks. "Winter crops were prevented from gaining frost tolerance due to the mild temperatures in these regions, and are now potentially exposed to frost kill if temperatures abruptly move to seasonal values," MARS recently warned. Weekly export sales of only 250-300,000 MT are expected tomorrow. May 16 CBOT Wheat settled at $4.76 1/2, down 5 1/2 cents; May 16 KCBT Wheat settled at $4.75 1/2, down 7 3/4 cents; May 16 MGEX Wheat settled at $5.01, down 5 3/4 cents.
30/12/15 -- EU grains finished mostly a little higher on the day, although as the runners and riders approach the finishing line of the marathon that has been 2015, only rapeseed looks like ending the year dearer than it began it.
At the close of trading, Jan 16 London wheat was up GBP0.30/tonne at GBP113.90/tonne. In Paris, Mar 16 wheat was up EUR0.75/tonne at EUR174.75/tonne, Jan 16 corn rose EUR1.75/tonne to EUR146.75/tonne and Feb 16 rapeseed rose EUR0.50/tonne to EUR374.00/tonne.
Argentina announced the official removal of export quotas on wheat and corn today, just a week or two after duties were decreased to zero.
It's the depths of winter, or at least it should be in the northern hemisphere, so it's not unsurprising to hear of one or two areas of concern around the globe concerning winter wheat production.
The US Midwest and Great Plains are wet. "Precipitation the past several weeks has been more than twice the average in the Midwest and 3-4 times normal in the Great Plains," said Martell Crop Projections.
"Rivers in Missouri and Illinois are in “major” flood stage. A host of smaller rivers that feed into the Mississippi have moderate flooding. The influx of water flowing into the Mississippi River is causing it to overflow its banks. This is the main shipping route for corn, soybeans and wheat for export," they say.
Apart from perhaps causing some logistical problems, it is perhaps unlikely at this stage that we can legitimately start to discuss production losses here though.
Most of Europe remains warmer and wetter than normal. Whilst that wetter than normal pattern persists for almost all through the first 14 days of January, some models are now starting to split to a warmer than normal in the west and colder to much colder than normal outlook for countries in the east of Europe.
Again it's very early days, but this will be raising one or two eyebrows: Is winter finally about to bite? Flooding remains a concern at home where it has been excessively wet in the north and west.
The Black Sea is in for a cold snap too. with temperatures falling to -10° and -20° in the coming days, say Agritel. This could possibly cause some crop damage after a very dry autumn, they add.
The Ukraine 2015 grain harvest was estimated at 59.7 MMT, and 2015/16 ending stocks are seen falling from 10.96 MMT to 6.24 MMT as exports (particularly of corn) remain high despite sharply lower production in 2015.
Russia said that they'd exported 2.74 MMT of grains Dec 1-23. The largest buyer was Egypt (22%), followed by Turkey (16%) and Saudi Arabia (9%). Maybe that's why they aren't quite so keen to ban shipments to Turkey over the shooting down of the Russian jet over the Syrian border last month?
The Russian ruble hit a new all time low versus the US dollar today and traded at 73 to the US unit at one point. That says "let's export to whoever wants it and has the dollars to pay" for the time being.
29/12/15 -- South American Weather: "Torrential rainfall over the last several weeks have resulted in the worst flooding in over 20 years along the border areas of Brazil, Paraguay, Argentina, and Uruguay," said Dr Cordonnier. "The capital of Paraguay, Asuncion, appears to have been the hardest hit with flooding along the Paraguay River which has displaced over 100,000 people. In Argentina, the floods are impacting the provinces of Entre Rios, Chaco, Corrientes, Formosa, Missiones, and Santa Fe. Most of the flooding is occurring along the region's rivers, but much of the farmland in the region is flat and poorly drained, so some crop losses are expected. This is also the last region in Argentina to plant their summer crops and the heavy rains are expected to delay the end of spring planting," he added.
Soycomplex: Beans closed higher, recovering around half of yesterday's losses. Price falls then were linked to reports that "heavy rains over the weekend in key growing regions, including Mato Grosso, helped to ease concerns about potential yield losses following a period of dry weather," said the HGCA. But as indicated above, elsewhere it's too wet. Far too wet in many places. We have however had similar flooding problems in Argentina in recent years and still emerged with good yields. The newly devalued Argentine peso hangs over the bean market, threatening to unleash a flood of cheap beans onto the market. Concerns over the Chinese economy remain. Midwest flooding is also causing some disruption to movement of grains and beans at terminals on the Mississippi. Jan 16 Soybeans settled at $8.70, up 5 cents; Mar 16 Soybeans settled at $8.65 3/4, up 4 1/2 cents; Jan 16 Soybean Meal settled at $268.50, up $1.20; Jan 16 Soybean Oil settled at 30.52, up 32 points.
Corn: The corn market closed managed small gains, as it too partially reversed some of Monday's thin losses. The weather situation outlined above offers a "6 and two three's" type scenario. Argentine currency weakness offers real bearish potential though. The Buenos Aires Grain Exchange estimated that Argentinean corn plantings are nearly 74% complete. There's still talk of an late eleventh hour push in corn acres due to President Macri's recent election victory. US grower interest in selling at these current levels remains light. Around 85% of the state of Illinois and 50% of Missouri are said to currently be covered by flood warnings. Ukraine are busy exporting corn, bit their crop is sharply lower this year, so they won't be unable to hold that pace for as long as normal. "Very serious drought has developed in South Africa, damaging corn prospects for the second straight year. The current drought this season is the worst since 1992, local sources claim," note Martell Crop Projections. Mar 16 Corn settled at $3.62 1/2, up 1 1/2 cents; May 16 Corn settled at $3.69, up 1 1/4 cents.
Wheat: The wheat market closed with fair gains, possibly more due to year-end short covering/book squaring than anything else. The Argentine wheat harvest is only said to be around 59% done versus 75% normally. They are keen to find buyers though, judged on last week's Egyptian success. New lows for the Russian rouble will keep them coming back for more. They've publicly ruled out export sanctions against Turkey over the downing of the Russian jet over Syria last month. Their 2015/16 wheat exports have set a new record high, and their 2015 wheat crop is said to be around 2 MMT up on a year ago. Morocco are said to have tendered for 360,000 MT of US wheat for May 31 delivery.I wouldn't be surprised to see Egypt back testing Argentina (an others) resolve again next week or even sooner. Winter weather conditions in Russia and Ukraine have finally turned "normal" with snow and colder temperatures moving in. Ukraine say that their winter grains area is the lowest seeded in 10 years. May 16 CBOT Wheat settled at $4.82, up 8 3/4 cents; May 16 KCBT Wheat settled at $4.83 1/4, up 7 cents; May 16 MGEX Wheat settled at $5.06 3/4, up 5 1/2 cents.
29/12/15 -- EU grains closed mostly higher, as London wheat awoke from it's holiday slumbers.
At the finish, Jan 16 London wheat was up GBP1.15/tonne at GBP113.60/tonne, Mar 16 Paris wheat was up EUR1.00/tonne to EUR174.00/tonne, Jan 16 corn was flat at EUR145.00/tonne and Feb 16 rapeseed was EUR0125/tonne higher to EUR373.50/tonne.
This wasn't ever going to be a day for fresh ground breaking news, and so it proved.
Choppy Jan 16 Paris corn, which expires next Tuesday had an uneventful day for once. having taken a bit of a technical pasting these past few thin sessions,
A bit of today's strength may have been derived from news and images flashing across the media of widespread flooding in the UK - particularly in northern and central areas.
This may be causing some crop damage and we must also consider the implications for the unusually large volume of old crop grain left on farm from the 2015 harvest.
Russia's Interfax News Agency said that the Ministry there are finalising production numbers for 2015, pegging this year's all important wheat harvest around 2 MMT higher than a year ago at 61.79 MMT.
Russia's 2015 corn crop is seen up 12.3% at 12.69 MMT, and this year's barley crop is being called 14% lower at 17.55 MMT.
The Russian Deputy PM has apparently re-iterated previous comments that the country do not intend to introduce restrictions on wheat sales to Turkey following the Nov 24 downing of a Russian military jet on the Syrian border.
Maybe they are still surprised by Argentina's clean sweep in last week's Egyptian wheat tender and don't want to close too many doors to themselves prematurely?
Wheat currently accounts for around 70% of their post-Soviet era record Jul 1 -Dec 28 grain exports.
Ukraine said that their winter grain harvest in 2016 might only total 20 MMT, as the country is forced to rely more heavily on spring sown crops next year.
Winter grain plantings in Ukraine were said to be the lowest in 10 years due to adverse weather conditions, with around 6 million ha of wheat and only 983k ha of barley going into the ground.
Bangladesh has announced a tender for the purchase of 50,000 MT of optional origin wheat with a closing date of Jan 10, according to Reuters.
India said that as of Christmas Day, wheat plantings there for the 2016 harvest - one of the earliest in the northern hemisphere - had caught up a little and were now 2 million ha behind those of a year ago at 25.94 million ha.
The market continues to meander along it's own sweet way. It looks like we will need to get into the New Year to get some "serious" new direction, but the weight of old crop stocks and fierce competition for new business would seem to point to a renewed downwards trajectory perhaps being more likely at the moment than an upwards one.
28/12/15 -- Soycomplex: Beans closed lower, with Jan 16 Soybeans ending at $8.65, down 10 1/4 cents; Mar 16 Soybeans closed at $8.61 1/4, down 11 3/4 cents; Jan 16 Soybean Meal closed at $267.30, down $1.70; Jan 16 Soybean Oil closed at 30.20, down 67 points. Weekly export inspections of 1.403 MMT, were good, down down just 4% from the week before. Heavier rains in the forecast for Mato Grosso were seen as being a bit bearish today.
Corn: The corn market closed around 3 cents easier, with Mar 16 Corn at $3.61, down 3 1/2 cents and May 16 Corn closed at $3.67 3/4, down 3 cents. Weekly export inspections of 570,923 MT were down about 20% from the previous week. Fresh news was lacking and trade was thin, and looks likely to continue that way until next week.
Wheat: The wheat market closed slightly lower. Mar 16 CBOT Wheat closed at $4.66 1/2, down 1 cent; Mar 16 KCBT Wheat closed at $4.66, down 1 1/2 cents; Mar 16 MGEX Wheat closed at $4.91 3/4, down 3 1/4 cents. Weekly export inspections of 305,472 MT were modest, being down nearly 37% from the previous week, although in line with what might be anticipated at this time of year.
28/12/15 -- London wheat remains closed, and activity is predictably thin and volume light in Paris. Soon to expire Jan 15 Paris corn has extended it's period of "jittery" trade into the last week of the month.
At the close, Mar 16 Paris wheat was EUR1.00/tonne lower at EUR173.00/tonne, Jan 16 Paris corn was down EUR5.50/tonne at EUR145.00/tonne, whilst Feb 16 Paris rapeseed was EUR2.50/tonne weaker at EUR372.25/tonne.
As the year draws to a close, London wheat looks like ending 2015 around 15-16% lower than began it. with Paris wheat is set to close around 13-14% easier, with technical corn down 10-11% and rapeseed up 6% or so.
Continually hampering London wheat all year has the weakness of the euro, which is looking to close 2015 around 5.5% below where it started against sterling. In contrast sterling is down by around 3.6% versus the US dollar compared with 12 months ago.
The Russian Ag Ministry confirmed their 2015 grain harvest at 104.3 MMT. a small 1% fall year-on-year, although small volumes of tail-end corn and sunflowers are still being cut, they said.
That's not a bad result, and one that is far better than was feared/expected last spring, during the height of the troubles in Ukraine and talk of Western Sanctions against them slashing inputs. Yet here were are fully 12 months later wondering if 2016 bring similar results?
APK Inform said that Russian seaports had exported 685.8 TMT of grains last week, a respectable volume for a holiday week, and one that is only marginally down from 700.7 TMT the week before. Wheat accounted for 82% of that total.
Russia said that their total grain exports so far this season (Jul 1 to Dec 28) total 22.22 MMT, of which 70% (15.58 MMT) was wheat. That's a record grain volume for the first half of any post-Soviet era Russian grain export total.
Ukraine's grain exports last week were 652.7 TMT, which was actually up from 563.5 TMT the previous week. Corn accounted for 84% of their total last week an wheat only 32%.
As far as wheat goes, we came perhaps summarise 2015 as the 3rd year of global wheat production in a row (and the second successive year of all time high EU wheat output), combined with world ending stocks also rising for 2 years in a row to levels never seen before.
Early season worries about production problems in the FSU proved to be unfounded, and whilst early summer heat and dryness cut corn production here in Europe quite significantly, it came too last to harm wheat output on our doorstep.
Meanwhile despite euro weakness, the EU is still struggling to keep exports competitive enough to usurp other origins - some of whom (eg Russia and Ukraine) have been aided even more by their own domestic currency weaknesses.
What will 2016 bring? The closing weeks of the old year often bring subdued, sometime technical, trade. The new year often brings with it a new sense of vigour (even if it's downwards vigour!). It might be worth noting that wheat in London, Paris and Chicago all fell 21-22% between Jan and May this year once the bell herllding the arrival of 2015 sounded!
24/12/15 -- Soycomplex: Beans closed lower despite weekly export sales of 2,069,700 MT for 2015/16 being up noticeably from the previous week and 99 percent from the prior 4-week average. That more or less doubled trade expectations for sales of 850,000 MT and 1.1 MMT and was the best total in 12 weeks. China took more than 1.5 MMT of that total. Exports of 1,619,100 MT were up 4 percent from the previous week, but down 6 percent from the prior 4-week average. The primary destination again was China (1,039,900 MT). Meal sales of 252,500 MT for 2015/2016 were also up noticeably from the previous week and up 51 percent from the prior 4-week average, coming at the top end of trade ideas of 100,000 – 250,000 MT. Talk of rain relief for northern/central Brazil seemed to usurp all of that today. Developments in Argentina add to the bearish vibe in the market at the moment. Jan 16 Soybeans closed at $8.75 1/4, down 6 1/2 cents; Mar 16 Soybeans closed at $8.73, down 7 3/4 cents; Jan 16 Soybean Meal closed at $269.00, down $3.40; Jan 16 Soybean Oil closed at 30.87, up 35 points. For the holiday shortened week that puts front month beans 17 cents lower, with meal down $12.00 and oil up 34 points.
Corn: The corn market closed around a cent or so lower on the day and in the region of 10 cents easier for the week. Weekly export sales were seen as a mixed bag. At 803,600 MT for 2015/16 these were up 39 percent from the previous week, but down 23 percent from the prior 4-week average. They did however beat trade expectations of 500,000 and 750,000 MT and last week's 579,449 MT total. Increases were reported for Mexico (323,600 MT), Colombia (159,700 MT), Saudi Arabia (143,700 MT), Japan (143,100 MT), El Salvador (79,500 MT), Panama (36,300 MT) and Jamaica (34,500 MT). Exports of 823,600 MT were though a marketing-year high, up 66 percent from the previous week and 75 percent from the prior 4-week average. Separately, South Korea's Kocopia were reported to have bought 55,000 MT of US origin corn for April shipment. The trade remains nervous that recent developments in Argentina are a sign that the corn export floodgates there are soon to about to open. Rain relief talk in northern/central Brazil also adds pressure in a market that will be glad to see the end of 2015. Will 2016 bring anything better? Mar 16 Corn closed at $3.64 1/2, down 1 cent; May 16 Corn closed at $3.70 3/4, down 1 cent. For the week that puts Mar 16 corn exactly 10 cents lower, with May 16 down 9 3/4 cents.
Wheat: The wheat market closed lower - in line with the other markets. Weekly export sales of 370,300 MT for delivery in marketing year 2015/16 were up 16 percent from the previous week and 19 percent from the prior 4-week average, but still less than stellar. Trade expectations were for sales of 250-500,000 MT. Increases were reported for Japan (94,800 MT), Mexico (87,900 MT), Nigeria (54,700 MT), Yemen (47,300 MT), Guatemala (34,400 MT), Ecuador (20,000 MT) and Colombia (19,200 MT). Exports of 407,300 MT were up 23 percent from the previous week and 35 percent from the prior 4-week average. The trade is still digesting the news that Argentine wheat is now the cheapest global offer, based on yesterday's Egyptian tender at least. Priced around $175/tonne before freight, it easily beat the most competitive French and Russian bids, leaving US wheat hopelessly stranded. "It's the equivalent to $4.30-4.40 a bushel basis March," said one US analyst. Morocco announced that it was to cut the import duty on wheat from 50% to 30%. Egypt said that following yesterday's purchase they now have enough wheat bought to last them until the first week of May. Mar 16 CBOT Wheat closed at $4.67 1/2, down 2 cents; Mar 16 KCBT Wheat closed at $4.67 1/2, down 1 1/2 cents; Mar 16 MGEX Wheat closed at $4.95, down 1 3/4 cents. For the week that puts CBOT wheat 25 1/2 cents lower, with Kansas down 24 3/4 cents and Minneapolis falling 22 1/2 cents.
24/12/15 -- EU grains finished a predictably subdued holiday-shortened trading session with little change.
At the close of trading, Jan 16 London wheat was down GBP0.30/tonne at GBP112.45/tonne. In Paris, Mar 16 wheat was up EUR0.50/tonne at EUR174.00/tonne, Jan 16 corn fell EUR0.50/tonne to EUR150.50/tonne and Feb 16 rapeseed rose EUR0.25/tonne to EUR374.75/tonne.
For the short week, London wheat ended virtually unchanged from last Friday, with Paris wheat down EUR2.25/tonne, corn shedding EUR9.00/tonne and rapeseed adding EUR0.75/tonne.
Fresh news was understandably thin on the ground today. Yesterday's victory for Argentine wheat in Egypt's latest tender was certainly news of merit this week, particularly the magnitude of difference compared what was put up from them compared to "local favourites" France and Russia - around $12.50-17.50/tonne cheaper on an FOB basis.
"These developments are likely to give ammunition to lobbyists in Russia calling for the removal of the export tax. With changes in the Argentine market, Russia is the only mainstream exporter with export taxes in place so we should expect the duty to be reduced or set to zero if Russia is to meet its own export targets. The market clearly sees this as bearish, but before we know it we’ll be back into a weather market, particularly given the minimal amount of snow cover for many winter wheat crops," said the HGCA's Jack Watts.
The recent weakness of the Argentine peso is also a factor, and one that highlights the fact that currency considerations are likely to have a significant impact on grain prices in 2016.
It is interesting therefore, and offers maybe a small crumb of comfort to UK growers, to see major analysts revising down their forecasts for STG/EUR strength over the coming months.
News this week that the UK economy grew by 0.4% in the third quarter of the year seemingly adds to the case deferring a possible UK interest rate rise early in 2016.
Barclays yesterday became the latest analyst to pare back their forecast on the outlook for the pound versus the euro. They were pretty bullish on sterling a month or two back, estimating a GBP/EUR peak of around 1.47 by Q3 of 2016. They're now saying only 1.37 in Q1 and 1.38 in Q2 of next year.
As far as the GBP/USD trajectory goes, they are now forecasting 1.47 in Q1 and 1.43 in Q2. For the EUR/USD they are considerably less bearish than they were, with latest ideas of 1.07 in Q1 and 1.03 in Q2 far better than thoughts of parity and 0.98 just a month ago.
All of that could mean that he case for London wheat is not quite so bearish compared to the market in Paris as it seemed a month or two back. Only time will tell, although UK exports have improved they certainly aren't pulling up too many trees right now.
UK growers then are faced with a similar set of circumstances to those they faced 12 months ago - albeit that they've probably now got even more old crop sat unsold around them than they did back then.
The good old forward carry isn't putting too much pressure on those that can afford, and have the space to do so, to carry old crop into new. There's around a GBP12.50/tonne premium on offer tonight to sell Nov 15 over Jan 15 - around a pound more than was on the table a fortnight ago and in fact better than the GBP9.15/tonne carrot that was dangling there last Christmas Eve.
The almost 2 year Jan 15 - Nov 16 premium a year ago was incidentally GBP12.75/tonne and tonight the differential on offer to carry front month Jan 16 wheat all the way through the next crop year and into Nov 17 is GBP18.60/tonne.
At the end of the day they are pretty hefty premiums, and ones that are worth possibly pondering over during the festive break.
23/12/15 -- Soycomplex: Beans closed a touch lower, although Brazilian planting delays remain. "Hot and dry weather across central Brazil is delaying the completion of the 2015/16 soybean planting as well as forcing some farmers to replant their soybeans. As a result, various farm organizations in the states of Mato Grosso and Goias are petitioning the state government to grant an extension of 30 days concerning the last day when farmers are permitted to plant soybeans," said Dr Cordonnier. IMEA recently cut their forecast for the soybean harvest in Mato Grosso by 1 MMT to 28.3 MMT citing dryness. Nevertheless, a probable record crop is still on the cards again nationally. Argentina is said to be around 90% planted with their first lot of soybean planting, and 50% done with their second wave, according to the Buenos Aires Grain Exchange. Exports from both countries will remain strong in 2015/16, helped by local currency weakness and the phasing out of the export tax on beans in Argentina. Trade estimates for tomorrow's US weekly export sales report on beans are 850,000 MT and 1.1 MMT and 100,000 – 250,000 MT on meal. Jan 16 Soybeans settled at $8.81 3/4, down 3 1/2 cents; Mar 16 Soybeans settled at $8.80 3/4, down 4 3/4 cents; Jan 16 Soybean Meal settled at $272.40, down $4.50; Jan 16 Soybean Oil settled at 30.52, up 8 points.
Corn: The corn market closed fractionally lower. Talk of late bean plantings in central/northern Brazil inevitably leads to discussion of second string "safrinha" corn going in late, or some not at all. The weekly Energy Dept report had ethanol production down to 973,000 barrels/day, down from 1 million barrels per day for the second time in four weeks last week. Ethanol stocks were up 100,000 barrels at 20.4 million barrels. With Argentina surprising the market somewhat with a very cheap offer on wheat for Egypt's tender today, the trade may well be considering if it will soon start to do likewise on corn under the new leadership of president Macri. The Buenos Aires Grain Exchange stuck by their Argentine 2015/16 corn for grain planting estimate of 2.85 million ha, of which they say planting is 68.7% complete. That's still a sharp reduction on sowings of 3.4 million ha a year ago, and quite a few think that the 11th hour Macri election victory could have come just in time to spur that area up to 3 million ha or more in light of the more relaxed export vibe. Trade estimates for tomorrow's weekly export sales report are in the region of 500,000 and 750,000 MT. Mar 16 Corn settled at $3.65 1/2, down 3/4 cent; May 16 Corn settled at $3.71 3/4, down 3/4 cent.
Wheat: The wheat market closed with small losses. US wheat was never likely to be in with a shout of winning a slice of the Egyptian tender, but despite rumblings that Argentine wheat might feature, it was a surprise to see them win so emphatically. The cheapest, and winning, FOB offers out of Argentina were $174.85/tonne and $176.20/tonne. They were well over $10/tonne below the best French FOB bids, and around $17.50/tonne under the lowest Russian offer. It would seem that the change of leadership and subsequent removal of the export duty on wheat in Argentina has indeed opened up some fresh supply pipeline. More time will be needed to see if this was little more than a one-off. Argentina have now harvested more than two thirds of their new crop wheat area for a crop of 6.43 MMT to date. With heavy interest likely from Brazil in the season ahead, exactly how much wheat Argentina will have to send to such far flung destinations remains to be seen, even if international freight is cheap at the moment. Syria were said to have bought 200,000 MT of Russian wheat in a tender. Weekly export sales of 250-500,000 MT are expected tomorrow. May 16 CBOT Wheat settled at $4.77, down 2 cents; May 16 KCBT Wheat settled at $4.79, down 2 cents; May 16 MGEX Wheat settled at $5.06, down 1/4 cent.
23/12/15 -- EU grains closed narrowly mixed, just for a change, with the exception of the nearby, getting technical and soon to expire Jan 16 Paris corn contract. The market seems generally to be trading water ahead of the year end in typically thin pre-holiday trade.
At the finish, Jan 16 London wheat was unchanged at GBP112.75/tonne, Mar 16 Paris wheat was down EUR0.50/tonne to EUR173.50/tonne, Jan 16 corn slumped EUR6.00/tonne to EUR151.00/tonne and Feb 16 rapeseed was EUR0.25/tonne higher to EUR374.50/tonne.
The day's most interesting development came in the form of the latest tender for wheat for Jan 21-31 shipment from Egypt's GASC.
This was won by Argentine wheat from Louis Dreyfus, of which GASC purchased two cargoes (120,000 MT in total) priced at $174.88/tonne and $176.20/tonne each on an FOB basis plus freight of $15.40/tonne on both. That takes the C&F cost up to $190.74/tonne.
These were said to be the first successful winning bids for Argentine wheat - a previous regular player in such tenders in the past - for 3 years. An interesting development following the recent leadership change and subsequent removal of the export duty on wheat in Argentina.
The best other offers on the table on an FOB basis were: French $187.42/tonne; Russian $193.00/tonne; Romanian $196.70/tonne; Ukraine $201.93/tonne.
So, Argentine wheat was priced to sell, at more than $10/tonne below the best French offer. Even adding on lower freight from France the winning Argentine bids came in on average $5.18/tonne cheaper. Whether the trade focuses in this aspect, or the fact that French wheat was more than $5.50/tonne cheaper than Russian wheat (and that Ukraine offers already seem to be drying up) remains to be seen.
Ukraine again seems to have concentrated the bulk of its wheat export efforts into the first half of the season, as is customary for them. Ukraine grain exports so far this season are now 20 MMT, up 18% versus this time a year ago. The Ukraine Ministry currently estimate full season grain exports at 36 MMT, beating the 2014/15 record of 34.8 MMT by 3.4%.
However, given the much smaller size of this year's Ukraine corn crop this might ultimately prove to be quite a tall order. Barley exports, as is typical for them, have already almost hit the anticipated total for the whole of 2015/16.
Back on the international tender front, Syria were said to have bought 200,000 MT of Russian wheat. Jordan were said to have passed on a tender for 100,000 MT of hard wheat for LH Apr/FH May shipment and immediately re-issued a fresh tender for the same.
Algeria said that they'd imported 12.3 MMT of grains in the first 11 months of 2015, a 5% increase on a year ago. Soft wheat imports were up 21.6% at 6.08 MMT.
There are a few rumblings that the current very mild weather (for the time of year) across Europe, which is forecast to last through at least until the end of the first week of January, could leave EU crops vulnerable to a sudden hard freeze (should we get one) a bit later down the line.
This was alluded to in the recent MARS crop report. "Winter crops were prevented from gaining frost tolerance due to the mild temperatures in these regions, and are now potentially exposed to frost kill if temperatures abruptly move to seasonal values - even though this is not forecast for the coming days," they said.
This is getting a bit of air-time, much as the "avalanche" of (now lost) money betting on a white Christmas was a few months ago, in what currently appears to be a "what do we talk about on a no news day like this" sort of a way.
For those growers pondering their marketing moves for 2016. hope still remains a pretty weak strategy.
22/12/15 -- Soycomplex: Beans closed lower despite lingering drought talk in Brazil's top producing Mato Grosso state, where moisture deficits range from 47% to 53% of normal, according to Martell Crop Projections. Focus seemed to shift today to slacker demand and more than ample global supplies. The outlook in Brazil is still for a record crop in 2015/16, and world carryout is seen up 6.3% at the end of the season, having risen 24.1% the season before that and 11.3% the season prior to that. That puts 2015/16 world inventories at 82.58 MMT - the largest on record and more than 49% higher than they were back in 2012/13. Let's hope that Chinese demand remains at the oft quoted "insatiable" levels! Jan 16 Soybeans settled at $8.85 1/4, down 6 cents; Mar 16 Soybeans settled at $8.85 1/2, down 6 cents; Jan 16 Soybean Meal settled at $276.90, down $2.10; Jan 16 Soybean Oil settled at 30.44, down 33 points.
Corn: The corn market closed lower for a second straight session. It too is concerned about relatively slack demand for US product, with cumulative season-to-date export inspections reported at 22% smaller than last year yesterday. US dollar strength, and the outlook for further gains in 2016 is also a problem in that respect, as too are crude oil prices hovering around multi-year lows. The world stocks situation for corn is similar to that for beans too. Carryout in 2015/16 is seen up 1.8% at 211.85 MMT, but that is 59.4% higher than the total we were looking at back in 2012/13. Ukraine's corn exports in November were reported at 1.853 MMT, down 17% versus November 2014. October to November corn exports were said to be down 7% than the same period a year ago. Production there is about 19% lower this year, according to the USDA. Mar 16 Corn settled at $3.66 1/4, down 5 3/4 cents; May 16 Corn settled at $3.72 1/2, down 5 1/2 cents.
Wheat: The wheat market closed lower. Three record large world wheat crops in a row and global stocks up almost 30% compared to 2012/13 paint a picture of very ample supplies. And US inventories in particular are struggling to find homes in the face of fierce competition from elsewhere around the globe: Europe, the Black Sea, Canada, Australia and new kid back on the block Argentina. Prospects for a firmer US dollar again in the New Year therefore don't help. YTD US export inspections are already nearly 14% smaller than last year, as reported by the USDA yesterday. They are currently only predicted to be 3.3% down at the end of the season. Morocco tendered for 150,000 MT of domestic wheat. Egypt tendered for an unspecified volume of wheat for January 21-31 delivery late in the day, with the results expected tomorrow afternoon. Mar 16 CBOT Wheat settled at $4.79, down 7 1/4 cents; Mar 16 KCBT Wheat settled at $4.81, down 3 1/4 cents; Mar 16 MGEX Wheat settled at $5.06 1/4, down 5 cents.
22/12/15 -- EU grains closed mixed. London wheat fared better than it's French counterpart as the pound slipped to 1.35 versus the single currency - it hasn't closed lower than that level more than a few times since February. Sterling also seems to be ending 2015 on a low note against the US dollar, against which it currently looks like ending the day at it's lowest since April.
At the finish, Jan 16 London wheat was up GBP0.75/tonne at GBP112.75/tonne, Mar 16 Paris wheat was EUR0.75/tonne lower at EUR174.00/tonne, Jan 16 Paris corn was down EUR2.00/tonne at EUR158.75/tonne, whilst Feb 16 Paris rapeseed was EUR1.25/tonne lower EUR374.25/tonne.
Data showing that the UK public sector borrowed more than expected in November stung the pound, just as Germany consumer confidence came in above market expactations. Some, although certainly not all, market analysts are talking of a wind of change ahead in the currency markets in 2016 - with the euro possibly not set to remain the international forex "whipping boy" for too much longer.
That's not to say that it's position will be replaced by the pound at all, there are still plenty of pundits out there calling for a GBP/EUR exchange rate in the 1.40-1.45 region in the first half of next year. However, year-end is looming, and some players may be taking some money off the table and banking a few profits - the pound has (until recently) been in a more or less upwards trajectory against the single currency for 2 1/2 years now. Having closed below 1.15 on the last day of July 2013 it had appreciated more than 25% by the time of it's 1.44 peak in July of this year.
Sticking with currencies for a little while longer, the Russian rouble hit a fresh all-time low of 72 versus the US dollar today. Weakness in crude oil is one of the ongoing factors behind the rouble's demise, along with continued tensions/sanctions with the West. The currency has now weakened to the extent that the "floating" export duty on wheat, which was raised not too long ago to be nothing more than a token amount, has now kicked in again to something a bit more significant.
Following Argentina's recent change of leadership, Russia is now the only major international seller who currently has a wheat export tax in place, leading to calls for it's removal from various leading Russian traders and analysts.
Russia's complicated on-off export duty, which was in place at the start of the season, appeared to hinder the pace of what sales during the first part of 2015/16, before the ceiling at which more than a token level was introduced was increased a couple of months ago.
That meant that Russia's Q1 (Jul/Sep) grain exports were officially 9.78 MMT, a 15.2% decrease compared to the same period a year ago. By Dec 9, these were only down 6% versus the same period in 2014.
Of course we can never be 100% sure that what the official Russian Ministry numbers say are indeed to whole truth. Respected Russian analysts SovEcon tell the HGCA that Russia's Jul/Nov actual wheat exports were probably around 1 MMT higher than the official Ministry numbers suggest, and that final exports this season could even beat last season's record 21.6 MMT total.
Whilst Russia would therefore seem to be exporting considerable, and maybe even record or at least near to record, volumes of wheat/grains now, it also of course potentially means lower carryover at the end of the season heading into 2016/17. Whilst concerns remain over crop prospects for next season, that could shed a rather more bullish tone on things 6 months from now when we have a much clearer idea about final production prospects in 2016.
The weak rouble will also of course mean increased input costs, potentially meaning increased use of lower quality seed and reduced levels of fertiliser/agrochemicals. It needs also to be remembered though that these are some of the exact same issue being debated a year ago - and things largely seem to have turned out pretty well despite these concerns. For now all we have to go on, much as we did back then, is the usual early doors Ag Ministry forecast for grain production of or around this season's levels.
Somewhere where the alarm bells are already ringing a little louder is next door in Ukraine. French analysts Agritel, who have offices in Ukraine, and following a recent crop tour of the country say that wheat production there could fall 30% 24.55 MMT to 17.2 MMT next year.
Late summer/autumn/early winter drought cut wheat plantings, meaning that the 2016 harvested are might fall to around 4.65 million ha, down 21% decline compared to this year, and the lowest acreage in the last 10 years. They also see average yields falling to 3.70 MT/ha from 3.85 MT/ha this year.
At this stage that takes production down to 17.2 MMT in a medium case scenario, with a current best case of 18.1 MMT and a worst case of 16.4 MMT, they say. Production in 2014 was seen at around 24.55 MMT, so if the worst case scenario proves to be right then a production fall of 33% compared with this year could be on the cards.
21/12/15 -- Soycomplex: Beans closed a touch lower. Weekly export sales of 1.463 MMT were fairly good, and up 7% on a week ago. They were however 36% smaller than the same week in 2014. YTD exports are 7% down on this time a year ago. Jan 16 Soybeans settled at $8.91 1/4, down 1 cent; Mar 16 Soybeans settled at $8.91 1/2, down 1 1/4 cents; Jan 16 Soybean Meal settled at $279.00, down $2.00; Jan 16 Soybean Oil settled at 30.77, up 24 pips.
Corn: The corn market closed around a couple of cents lower. Weekly export sales of 718,888 MT were pretty good and up 27% from the week before. YTD inspections are sill 22% smaller than last year however. South Koreas's MFG bought 232 TMT of optional origin corn for May/Jun delivery said to be at $182-184 C&F. Russia said that they'd exported 1.55 MMT of corn Jul 1 to Dec 16. Mar 16 Corn settled at $3.72, down 2 1/2 cents; May 16 Corn settled at $3.78, down 2 1/2 cents.
Wheat: The wheat market closed lower a across the three exchanges. Weekly export sales of 475,375 MT were in line with expectations and 8% up on a week ago. YTD inspections are still nearly 14% smaller than last year. Jordan were reported to have bought 25,000 MT of hard wheat for Jan shipment. Russia said that they'd exported 18.6 MMT of grains Jul 1 to Dec 16 - a 5% drop on a year ago, with wheat accounting for 75.8% (14.1 MMT) of that total. May 16 CBOT Wheat settled at $4.86 1/4, down 6 3/4 cents; May 16 KCBT Wheat settled at $4.84 1/4, down 8 cents; May 16 MGEX Wheat settled at $5.11 1/4, down 4 3/4 cents.
21/12/15 -- EU grains closed mixed in what already looks like being a typically uneventful and thin Christmas week.
At the close of trading, Jan 16 London wheat was down GBP0.40/tonne at GBP112.00/tonne. In Paris, Mar 16 wheat was down EUR1.50/tonne to EUR174.75/tonne, Jan 16 corn fell EUR0.50/tonne to EUR159.00/tonne and Feb 16 rapeseed rose EUR2.00/tonne to EUR375.50/tonne.
As far as wheat goes, if you forced me to put money on it right now, then mine would go on more of the same between now and Thursday - a further grind lower. We might see a change in the following holiday-shortened week between Christmas and New Year as fund money banks some profits and squares up the books a little ahead of year-end. That could see some modest late-year upside, but a direction changer it's unlikely to be.
Once we get into the New Year it may be unlikely that the wheat market might move significantly higher without the aid of some outside catalyst - and what that might be we probably don't really know what that is (if it exists at all) right now. Current "worries" over Russian/Ukraine winter grain crop health (or the lack of it), won't be anything like properly quantifiable until well into the spring.
As mentioned on numerous occasions before, we also need to keep an eye on exchange rates. Luckily, analysts seem generally be in line with what they expect the "usual suspects" to do - in the first quarter of 2016, if not at least until the second. Further forward of that, but perhaps not surprisingly, the waters muddy a little unfortunately. Just like the weather, the further forward you go the lower the degree of forecaster certainty there is when it comes to currency movements it would seem.
The current consensus indicates a strong dollar, a moderate pound and a weak-ish euro. That tentatively suggests wheat prices doing pretty much the same across the next 6 months as they have in the last, with Paris performing the best of the wheat markets - if not exactly setting the world on fire - and Chicago wheat the worst with the London market caught somewhere between the two.
The other thing that warrants keeping an eye on going forward is the old crop/new crop (and even far flung new crop 2017 too) premiums. Whilst the old crop/new crop London wheat premium is currently rather wide, I wouldn't rule out it getting even wider yet (not that means at all that Nov 17 will go up). Similar comments might also apply to Paris wheat and also comparisons the even larger premiums on offer for the 2017 harvest too.
As far as other fundamentals go, at this stage it looks like the world will plant/has already sown largely the same wheat area for the 2016 harvest as the one just passed.
The German Stats Office estimate little alteration to winter wheat plantings at 3.22 million ha, with winter barley sowings up 35 at 1.3 million ha. Various private estimates have UK wheat plantings relatively unaltered for the 2016 harvest too.
France meanwhile is expected to plant even more wheat than it did for this year's ultimate record 41 MMT soft wheat crop - an 80 year high in sown area in fact.
Strategie Grains see overall EU-28 winter wheat plantings little changed compared with 12 months ago at 24 million ha.
Ukraine said that their winter grain plantings for the 2016 harvest were 11.4% down on a year ago at 7.1 million ha, and that OSR sowings had fallen 26.5% to 650k ha. Additionally only 86% of these winter grains and 87% of winter OSR have so far emerged. Further downgrading production potential in 2016, only 67% of winter grains and 68% of winter OSR are in good to satisfactory condition.
18/12/15 -- Soycomplex: Beans closed with decent gains on the day and for the week. Private exporters reported the sale of 220,046 MT of US soybeans to unknown destinations for 2015/16 delivery. Northern Brazil remains hot and dry. In Goias, the fourth largest soybean producing state in Brazil, the local farm group were said to have cut its 2015/16 production figure by nearly 6% to 9.8 MMT. In Argentina farmers are said to be 77% sold on old crop beans versus 73% sold a year ago. On new crop they are said to be 4% committed, similar to their position 12 months ago. The Argentine peso is now floating, and devalued by as much as 30% versus the US dollar yesterday. Whilst this may encourage some fresh exports it is also going to mean some production increases down the line too.
Jan 16 Soybeans settled at $8.92 1/4, up 15 1/4 cents; Mar 16 Soybeans settled at $8.92 3/4, up 15 cents; Jan 16 Soybean Meal settled at $281.00, up $5.10; Jan 16 Soybean Oil settled at 30.53, up 46 points. For the week, Jan 16 beans were 21 3/4 cents higher, with Jan 16 meal up $8.80 and Jan 16 oil down 55 points.
Corn: The corn market closed with little change on the day, or for the week. Argentine growers were said to be 85% sold on old crop corn versus almost 92% a year ago. They are 8% sold on new crop corn against 13% committed a year ago. The new president and his promise to cut the export duty on corn therefore don't appear to have made any difference to farmers' selling strategy's just yet. That could start to filter through shortly though. The trade is still adjusting to the "new Argentina" under the leadership of president Macri. The corn acreage in Argentina could expand by 20% to 30% in 2016/17 as farmers revert back to a more normal rotation between corn and soybeans, said Dr Cordonnier. Ukraine said that it had finally finished it's 2015 grain harvest, bringing in a crop of 61.1 MMT, down 5% from 64.37 MMT a year ago. The corn harvest this year finished up at 23.25 MMT (USDA: 23.00 MMT this year and 28.45 MMT in 2014). Brussels announced 462 TMT worth of EU corn import licences this past week. Talk of a Brazilian corn boat heading for the US might cap market upside ideas. Mar 16 Corn settled at $3.74 1/2, up 1/4 cent; May 16 Corn settled at $3.80 1/2, up 1/4 cent. Mar 16 corn ended the week 1 1/2 cents higher than it began it.
Wheat: The wheat market closed mixed on the day, but with decent gains for the week. Argentine growers are said to be 11% sold on new crop wheat against 35% committed a year ago at this time. Morocco are said to be in the market for 360 TMT of milling wheat and 315 TMT of durum wheat, both of US origin, in an inter-governmental deal between the two countries. Jordan said that it had bought 100,000 MT of optional origin milling wheat and immediately tendered for a similar volume for Apr/May shipment. The EU said that they'd issued a record weekly volume of soft wheat export licences for the 2015/16 marketing campaign this week. Cumulative season to date licences are still down considerably versus 12 months ago (-16%), but this number is now dropping on an almost weekly basis - it was almost double that deficit at the end of November. The Deutsche Bank are predicting a GBP/USD exchange rate of 1.35-1.40 "in 2016/17" and a EUR/USD exchange of 0.95 next year. Both rates are significantly below where those respective currencies currently trade, and should make it even more difficult for US wheat to compete on the export front going forward. May 16 CBOT Wheat settled at $4.93, up 2 cents; May 16 KCBT Wheat settled at $4.92 1/4, up 1 1/4 cents; May 16 MGEX Wheat settled at $5.17 1/2, down 3 3/4 cents. For the week that puts Chicago wheat 10 1/4 cents higher, with Kansas up 24 cents and Minneapolis 19 1/4 cents firmer.
18/12/15 -- EU grains closed mostly higher on the day, but still mostly lower for the week when all said and done.
At the finish, Jan 16 London wheat was up GBP1.75/tonne at GBP112.50/tonne, Mar 16 Paris wheat was up EUR1.25/tonne to EUR176.25/tonne, Jan 16 corn was EUR0.75/tonne firmer at EUR159.50/tonne and Feb 16 rapeseed was EUR5.25/tonne higher to EUR373.50/tonne.
For the week that puts London wheat GBP0.20/tonne lower, with Paris wheat unchanged, corn EUR5.00/tonne lower and rapeseed down EUR5.75/tonne.
On the good news front, EU exports are staring to pick up. Brussels announced more than 1 MMT worth of soft wheat export licences this past week - the second week in the last three that these have beat the 1 MMT mark, and with this week's total being the highest of the season so far.
Cumulative soft wheat export licences for the season so far have now reached 11.4 MMT. That's still down 16% on a year ago, but things are certainly moving in the right direction - a week ago we were 22% down and at the beginning of November these were 30% lower year-on-year.
The USDA currently project EU-28 all wheat exports to decline 8.2% in 2015/16.
Looking at the old crop/new crop premiums, there's not a lot of change on a week ago. In London the Jan 16/Nov 16 differential is GBP12.05/tonne tonight, or 10.71%, versus GBP11.55/tonne, or 10.25%, a week ago. In Paris the Jan 16/Dec 16 differential is EUR12.00/tonne, or 6.8%, versus EUR11.75/tonne, or 6.7%, a week ago.
In other news, Ukraine said that it had finally finished it's 2015 grain harvest, bringing in a crop of 61.1 MMT, down 5% from 64.37 MMT a year ago. The corn harvest this year finished up at 23.25 MMT (USDA: 23.00 MMT this year and 28.45 MMT in 2014).
The Russian Ag Ministry said that winter grain plantings there (mostly wheat) had been completed on 16.3 million ha, some 0.5 million below a year ago, and that 1.8 million ha of that had yet to emerge.
FranceAgrMer did not release updated weekly crop condition ratings and/or a progress report today.
A week ago they reported French winter wheat and barley crop conditions at 98% and 97% good to very good as of Nov 30. They had 57% of the French winter wheat crop at the early tillering stage versus 55% a year ago. Winter barley was 77% tillering, also 2 points ahead of a year ago.
Tunisia said that it's 2015 grain harvest had fallen 44%, with wheat output down 40% at 913 TMT, and a barley crop 53% lower at 364 TMT. That could mean total grain imports in 2015/16 rising to around 3.5 MMT, up 20% on last season and 15% above the seasonal average. France will be well positioned to service that increased requirement.
Jordan said that it had bought 100,000 MT of optional origin milling wheat and immediately tendered for a similar volume for Apr/May shipment. Morocco are said to be in the market for 360 TMT of milling wheat and 315 TMT of durum wheat, both of US origin, in an inter-governmental deal between the two countries.
Currency fluctuations will play a large part in where grain prices go in 2016. Now that the Fed have broken ranks and become the first of the major central banks to start increasing interest rates, most pundits have the dollar down to firm in the year ahead - albeit by varying degrees.
Analysts are more split on prospects for the pound and euro across the next 12 moths though - and the further forward you go the more diverse those predictions get.
With the year end looming, Deutsche Bank today became the latest to release their thoughts. They see significant GBP/USD weakness ahead, predicting a fall back to the 1.35-1.40 range in 2016/17. The pound closed the week around 1.49 versus the US dollar for an 8-month low. That's a decline of around 6-9.5% versus tonight's close.
The Deutsche Bank's EUR/USD rate outlook meanwhile has been revised upwards from 0.90 to 0.95 - but still some 12% lower when compared to a close at around 1.08 this evening.
Many other analysts are predicting similar scenarios ahead in 2016 - dollar strength, a weaker pound topped only by an even weaker euro, although the downside for the latter is now being reigned in somewhat.
That would point to wheat prices doing pretty much the same across the next 6 months as they have in the last, with Paris performing the best of the wheat markets - if not exactly setting the world on fire.
Versus the May 2015 lows Paris wheat is currently up by around 13%, with London wheat 6.5% higher and Chicago wheat only 2% firmer.
17/12/15 -- Soycomplex: Beans have turned around lower overnight trade to trade higher heading into the close. The USDA said that private exporters reported export sales of 424,000 MTs of US soybeans for delivery to China during the 2015/16 marketing year under the daily reporting system. The USDA reported weekly soybean export sales of 887,800 MT for 2015/16, down 39 percent from the previous week and 31 percent from the prior 4-week average. Trade estimates were for sales of 900,000 MT to 1.3 MMT. China as usual was the largest home taking 438,600 MT of that total. Exports of 1,554,400 MT were down 5 percent from the previous week and 19 percent from the prior 4-week average, but still pretty good nevertheless. The primary destination was China (910,500 MT). Informa forecast US soybean plantings for 2016 at 84.54 million acres versus a previous 85.3 million and the recent USDA prediction of 82.0 million. Jan 16 Soybeans settled at $8.77, up 14 1/2 cents; Mar 16 Soybeans settled at $8.77 3/4, up 14 1/2 cents; Jan 16 Soybean Meal settled at $275.90, up $6.00; Jan 16 Soybean Oil settled at 30.07, down 30 points.
Corn: The corn market was also trading near the highs of the day heading towards the close. Argentina announced it would allow the peso to float starting today. Weekly export sales of 579,400 MT for 2015/16 were down 44 percent from the previous week and 47 percent from the prior 4-week average. Trade estimates were for sales of 700,000 MT to 1.0 MMT. There were also net sales of 98,200 MT for 2016/17 reported for Japan (97,200 MT) and Nicaragua (1,000 MT). Weekly exports of 495,000 MT were up 2 percent from the previous week and 11 percent from the prior 4-week average. Informa forecast US 2016 corn plantings at 88.93 million acres versus a previous estimate of 90.1 million and the recent USDA baseline figure of 90.5 million. Strategie Grains estimated the EU-28 2016 corn production at 64.9 MMT, a 13% rise on this year as yields return closer to normal levels after this year's disaster. Talk of China introducing anti-dumping legislation to stem the flow of cheap DDGS imports from the US is mounting. Mar 16 Corn settled at $3.74 1/4, up 4 1/2 cents; May 16 Corn settled at $3.80 1/4, up 5 cents.
Wheat: The wheat market attempted it's own mid-session turnaround but was mostly lower heading into the close. Weekly export inspections of 320,200 MT for delivery in marketing year 2015/16 were up 42 percent from the previous week, but down 22 percent from the prior 4-week average. That was in line with modest trade forecasts for sales of 250,000 to 400,000 MT. Exports of 332,300 MT were up 55 percent from the previous week and 9 percent from the prior 4-week average. Informa estimated that 39.4 million acres of US winter wheat got planted, up from their previous forecast of 38.7 million. French consultant Strategie Grains pegged EU 2016 wheat production at 143.6 MMT in it's first estimate for next year. Production this year was 150.0 MMT, they say. They also increased EU-28 soft wheat exports in 2015/16 by 800,000 MT to 27.6 MMT versus 32.5 MMT in 2014/15. Carryover stocks at the end of 205/16 at a still "very substantial" 18.4 MMT though, they predict. May 16 CBOT Wheat settled at $4.91, up 1 cent; May 16 KCBT Wheat settled at $4.91, down 1/2 cent; May 16 MGEX Wheat settled at $5.17 1/2, up 2 cents.
17/12/15 -- EU grains traded mostly lower, despite a stronger US dollar following the first US interest rate rise in almost 9 years last night.
At the finish, Jan 16 London wheat was down GBP0.75/tonne at GBP110.75/tonne, Mar 16 Paris wheat was unchanged at EUR175.00/tonne, Jan 16 Paris corn was down EUR0.75/tonne lower at EUR158.75/tonne, whilst Feb 16 Paris rapeseed was flat at EUR367.75/tonne.
Defra released their final UK 2015 crop production estimates today, pegging the wheat crop here at 16.4 MMT, up from the 16.13 MMT predicted a couple of months ago, although marginally below output of 16.45 MMT in 2014.
"While the wheat area was down by 5% year-on-year, production has only shown a decline of 1%, with record yields the driving force behind the second consecutive +16 MMT crop," said the HGCA.
"Final yields have been reported at 9.0 MT/ha, the highest on record, with the UK average yield enhanced by increases in all but one region (East England), compared with 2014," they added.
The size of the 2015 UK barley crop was revised 94 TMT higher than that forecast in October to 7.38 MMT, and the UK OSR harvest was pegged 221 TMT higher than previously taking 2015 production to 2.54 MMT.
"Today’s report suggests further bearish sentiments in an already price-pressured market; the impact of the final statistics will be incorporated in the updated UK cereals balance sheets in the New Year," the HGCA noted.
Strategie Grains meanwhile increased their forecast for EU-28 soft wheat exports this season by 800,000 MT from previously to 27.6 MMT. That's a 15% decline year-on-year versus sales of 32.5 MMT in 2014/15. With exports currently down 22% versus 12 months ago, these are clearly expected to pick up a little as we enter the second half of the season.
There's nothing particularly unusual there, EU exports would normally increase later in the campaign once the bulk of the glut of cheap Black Sea shipments are out of the way. The outlook for a weaker euro in 2016 should also provide further assistance.
Looking ahead to production prospects for 2016, Strategie Grains put the EU-28 soft wheat crop at 143.6 MMT, a 6.4 MMT decline compared to this year and the first annual drop in output since 2012.
This is largely down to an anticipated return to "normal" yields of 6.0 MT/ha versus this year's bumper 6.2 MT/ha result, as plantings are seen little changed compared with 12 months ago at 24 million ha.
Still, EU-28 soft wheat carryover stocks at the end of 205/16 at a still "very substantial" 18.4 MMT.
16/12/15 -- General: The Fed raised US interest rates a touch as expected. Argentina is thought likely to possibly be looking to devaluate the peso by the end of the week. Neither are friendly for US grains prices. The weather in Brazil looks little changed. "The weather in Brazil is like a broken record - lighter than normal rainfall in central and northeastern Brazil and heavier than normal in southern Brazil. It has been this way since the growing season started and it looks like it will continue that way at least for this week," said Dr Cordonnier.
Soycomplex: Beans, meal and oil all closed lower. In the southern Brazilian state of Parana the soybean crop is 94% planted and the crop is rated 93% in good condition and 7% in average condition, Dr Cordonnier says. In parts of Mato Grosso though "it has been 30 days since the last significant rainfall. At the same time, the temperatures have been very hot due to lack of cloud cover and rainfall," he notes. "Officials from the Soybean and Corn Producers Association of Mato Grosso (Aprosoja) estimate that in the hardest hit areas of the state, 80% of the soybeans are rated in poor to very poor condition and 20% of the soybeans are rated in good to very good condition," he points out. The Mato Grosso Institute of Agricultural Economics (Imea) lowered their estimate of the state's soybean production in their latest weekly report published earlier this week by 1 MMT to 28.3 MMT, he indicates. That's one hell of a north/south divide 20% good up north and 93% good down south! Trade estimates for tomorrow's weekly export sales report for beans are around 900,000 MT to 1.3 MMT. Jan 16 Soybeans settled at $8.62 1/2, down 4 3/4 cents; Mar 16 Soybeans settled at $8.63 1/4, down 4 1/2 cents; Jan 16 Soybean Meal settled at $269.90, down $1.90; Jan 16 Soybean Oil settled at 30.37, down 33 points.
Corn: The corn market closed around 7 cents lower. Dollar strength and renewed export interest from Argentina is bearish for US corn as well as beans. Friendly news came from the US Energy Dept reporting that weekly US ethanol production averaged 1 million barrels per day for the second time in four weeks last week. That was up 7,000 barrels per day from the previous week and close to the record high set immediately prior to that. Talk of some soybeans in Brazil's Mato Grosso having to be replanted might prove to mean reduced safrinha corn plantings/acreage there somewhere down the line. Israel were said to have bought 80,000 MT of optional origin corn (probably Black Sea material) from Nidera for Mar/May shipment, but passed on a tender for 20,000 MT of optional origin sorghum. As China struggles under the sheer volume of it's huge domestic corn surplus, there's now talk of an import duty of up to 20% on DDGS amidst anti-dumping measures. The Chinese government were already talking of dropping support prices for corn, reducing plantings next year by around 10%. Trade estimates for tomorrow's weekly export sales report range from 700,000 MT to 1.0 MMT. Mar 16 Corn settled at $3.69 3/4, down 7 1/2 cents; May 16 Corn settled at $3.75 1/4, down 7 cents.
Wheat: The wheat market closed lower. A firmer US dollar is really the very last thing that the US wheat market needs right now as their exports continue to struggle. Japan are tendering for 123,000 MT of US and Canadian food grade wheat, with results expected tomorrow. This is nothing more than routine business though. All eyes will be on tomorrow's weekly export sales report, maybe more in hope than in expectation. For wheat these are expected to be in the range of a pretty modest 250,000 to 400,000 MT. South Africa's CEC cut their forecast for this year's wheat crop there to 1.5 MMT - the lowest since 2011 - on adverse weather conditions. Australia's wheat harvest is now said to be 90% complete. Tunisia's wheat harvest this year is seen down 40% on heat/dryness, with imports expected to rise 19% to 3.54 MMT. They're currently in the market for 100,000 MT of optional origin soft wheat for Feb/Mar shipment. Ukraine said that their winter wheat planting campaign is over at 5.68 million ha, or 91% of the originally planned area. Barley plantings are also finished at 913k ha, or 87% of the initial government forecast. The Ukraine Ministry say that 12% of these winter grain plantings have yet to emerge, and that 29% of what has is in poor condition. May 16 CBOT Wheat settled at $4.90, down 10 1/4 cents; May 16 KCBT Wheat settled at $4.91 1/2, down 10 1/2 cents; May 16 MGEX Wheat settled at $5.15 1/2, down 7 cents.
16/12/15 -- EU grains closed mixed, but generally a little lower, despite dollar strength ahead of an anticipated US interest rate rise this evening. The market got what it expected on that score - with the Fed tweaking up its benchmark interest rate to between 0.25%-0.5%, from the previous range of 0%-0.25%. That confirmation came after EU grain markets closed however.
At the close of EU trading hours, Jan 16 London wheat was down GBP0.70/tonne at GBP111.50/tonne. In Paris, Mar 16 wheat was down EUR3.75/tonne to EUR175.00/tonne, Jan 16 corn rose EUR0.25/tonne to EUR159.50/tonne and Feb 16 rapeseed fell EUR3.50/tonne to EUR367.75/tonne.
The pound closed at 1.50 versus the US dollar tonight, within half a cent of its lowest finish against the greenback in around 8-months.
In theory a weaker pound (and euro) should support UK/French grains, but there are plenty of willing sellers out there - and in some cases some other currencies that are even weaker against the US dollar than our own.
The pound is down 4.3% versus the US currency in the last 12 month. The euro has declined 11.7% in the same period. The Russian rouble is down by 27% during this time, and the Ukraine hryvnia has slumped 33.6% in the past year.
Competition for export homes thus remains fierce, with Ukraine saying that the nation's seaports exported 32.92 MMT in the first 11 months of the 2015 calendar year, a 13.8% increase versus the same period in 2014.
Russia might end up exporting a record volume of grains (21.09 MMT) in the first half of the current season, said Rusagrotrans yesterday.
Argentine farmers meanwhile are also now said to be looking at world wheat prices in a new light, facing a peso devaluation and following the agreed withdrawal of the export tax on wheat.
UK interest rates are expected to begin to rise in the new year sometime, which should also then start to firm sterling too, although the exact timing of this event is far from clear. UniCredit today forecast the first UK rate rise to come next May, co-inciding with inflation here hitting 1%.
Current prices have flushed out some international buyers, but they are spoilt for choice who to give their business too. Tunisia are today reported to have booked 100,000 MT of milling wheat and 50,000 MT of feed barley, both of optional origin, for Feb/Mar shipment.
That adds to recent interest from Jordan, Syria, Ethiopia, Algeria etc. Israeli private buyers today also booked 80,000 MT of optional origin corn, but passed on their tender for 20,000 MT of sorghum.
Ukraine said that winter wheat plantings there are complete. Only 91% of the originally intended winter wheat area got sown (5.68 million ha), along with 87% of the expected winter barley area (913k ha) and 79% of winter OSR (649k ha).
The Ukraine Ministry say that 12% of these plantings have yet to emerge, and that 29% of what has is in poor condition (although that's down from 33% a month ago it's still a high proportion).
15/12/15 -- Soycomplex: Beans closed lower. The NOPA crush for November came in below expectations, totalling 156.1 million bu (161.7 million expected) and down from 158.9 million in October. This was said to be the smallest November crush in four years. The USDA’s total crush number for the season being 17 million bu higher than last year is now becoming suspect, said Benson Quinn. Excessive wetness in parts of South America remain an issue, whilst dryness is a problem in some other areas. The USDA reported 120,000 MT of US beans were sold to China for 2015/16 delivery under the daily reporting system. Ukraine said that they'd already exported 91% of their rapeseed surplus from this year's depleted crop by the end of November. Reduced rapeseed crushings in Europe this season could lead to increased demand for soybeans. Jan 16 Soybeans settled at $8.67 1/4, down 7 cents; Mar 16 Soybeans settled at $8.67 3/4, down 8 1/4 cents; Jan 16 Soybean Meal settled at $271.80, down $3.70; Jan 16 Soybean Oil settled at 30.70, down 42 points.
Corn: The corn market closed around a cent or two lower. Argentine corn offers are said to be sharpening up now that new President Macri is in charge and apparently sticking to his promises to cut export taxes on grains. There's still talk of a late surge in Argentine corn plantings taking 2015/16 production up to around 27-28 MMT. US dollar strength ahead of tomorrow's anticipated Fed interest rate increase was another negative today. Rusagrotrans said that Russia would export 450,000 MT of corn this month, taking Jul 1 - Dec 31 (first half 2015/16) exports to 1.77 MMT, up 59% versus 1.11 MMT a year previously. There's continued talk of China sharply reducing domestic support prices for corn, which might cut acreage by 10% next year. "At face value, taking the internal corn price from $9.25 to $6 per bushel and reducing acreage 10% should significantly stimulate the nearby demand side of the equation. Question is what is the quality of all the corn in reserve storage?" asked Benson Quinn. Certainly some of these government-owned stocks will be 3-4 years old, and some probably more than that. Mar 16 Corn settled at $3.77 1/4, down 1 3/4 cents; May 16 Corn settled at $3.82 1/4, down 2 cents.
Wheat: The wheat market closed with small gains. Current prices seem to be stimualting global demand, but how many will end up buying US wheat is questionable. Algeria were said likely to have ended up buying 800,000 MT in last week's purchase originally reported at 500-600,000 MT. It's being mooted that as many as three cargoes of that may have been Argentine origin material, not the usual clean sweep for the French. Ethiopia are also said to be in the market for 70,000 MT wheat. Jordan are looking for 100,000 MT of hard wheat and Syria for 200,000 MT of soft milling wheat. Meanwhile Japan are tendering for their regular 123,275 MT consignment of what this week is only US and Canadian wheat for Jan/Mar shipment. Lanworth forecast next year's Russian wheat crop at 58.5 MMT. The Russian Ag Ministry estimated this year's grain crop at 103.4 MMT in clean weight, including 61.2 MMT of wheat. They see grain production at 104 MMT and wheat output at 60.4 MMT next year. May 16 CBOT Wheat settled at $5.00 1/4, up 1 cent; May 16 KCBT Wheat settled at $5.02, up 3 3/4 cents; May 16 MGEX Wheat settled at $5.22 1/2, up 2 1/4 cents.
15/12/15 -- EU grains closed mixed, but mostly lower. Dollar strength - on the day before the Fed is fairly widely expected to begin raising US interest rates - may have helped provide a bit of support for Paris wheat today with eurozone wheat set to potentially pick up extra export business on the back of a firmer greenback.
At the finish, Jan 16 London wheat was down GBP0.20/tonne at GBP112.20/tonne, Mar 16 Paris wheat was up EUR3.25/tonne to EUR178.75/tonne, Jan 16 corn was EUR4.25/tonne lower at EUR165.00/tonne and Feb 16 rapeseed was also EUR4.25/tonne lower to EUR371.75/tonne.
The latest figures from HMRC show that UK wheat exports topped those of imports for the first time this season in October - albeit not by a huge amount. Exports of 195.3 TMT in October were also the largest of the season so far, beating imports of 137.4 TMT.
That;'s probably not that much to write home about, season to date exports are 518 TMT - similar to the level of a year previously. The top buyer so far this season is Spain (181.5 TMT), followed by the Netherlands (169.6 TMT) and Portugal (104.3 TMT).
UK barley exports in October topped 100 TMT, taking the season to date total to close on that for wheat at 498 TMT.
Algeria's recent purchase of optional origin wheat, originally reported as 500-600 TMT, was perhaps more like 800 TMT traders said. It's also being suggested that at least one or two cargoes of that may have been of Argentine origin, although the bulk was probably French.
Rusagrotrans said that Russia would export 3.4 MMT of grains this month, up 14% from a year ago. That will include 2.6 MMT of wheat (76.5% of total grain shipments), 300 TMT of barley and 450 TMT of corn, they suggest.
If correct, that would take exports for the first half of the 2015/16 season (Jul/Dec) to a new record 21.09 MMT, just beating last year's total of 20.91 MMT for the same period.
Wheat exports Jul/Dec might therefore total 16.22 MMT, or 76.9% of all grain shipments, down a little from 16.36 MMT a year ago. Barley exports are seen totalling 2.98 MMT against 3.23 MMT a year ago. Corn exports could rise to 1.77 MMT from 1.11 MMT in Dec 2014.
The Russian Ag Ministry today raised their estimate for this season's final grain production to 103.4 MMT in clean weight from 101.5 MMT previously, but still down marginally from last year's record 105.3 MMT.
They forecast Russia's 2016/17 grain production at 104 MMT, of which 60.4 MMT will be wheat.
Lanworth Inc estimated Russia's 2016/17 wheat crop at 58.5 MMT.
Ukraine said that they'd shipped out 1.28 MMT of rapeseed in the Jul/Nov period, or 91% of their entire exportable surplus. The EU took 79% of those exports, with France (448.2 TMT) the top home here followed by Belgium (254.3 TMT) and Portugal (186.9 TMT).
14/12/15 -- Soycomplex: Beans closed with small gains. The USDA reported weekly export inspections of 1.344 MMT, down 22% from the week before but still fairly decent. The cumulative season-to-date pace lags last year's record by almost 10%. The NOPA crush for November is due out tomorrow, with the average trade guess for that lining up at 161.7 million bushels. New Argentine president Macri stood be his promises and trimmed 5% off the soybean export tax as expected. The Argentine Ag Ministry reported that growers there are 77.3% sold on their old crop beans versus 71.94% done a year ago. On new crop they are said to be 4.1% committed against 3.9% a year ago. The USDA have pencilled in a 2016 US soybean acreage of 82 million, down 1.2 million from their previous forecast. The preliminary yield estimate for next year is 46.7 bu/acre. Jan 16 Soybeans settled at $8.74 1/4, up 3 1/2 cents; Mar 16 Soybeans settled at $8.76, up 2 1/4 cents; Dec 15 Soybean Meal settled at $277.80, up $5.60; Dec 15 Soybean Oil settled at 31.30, up 22 points.
Corn: The corn market closed generally around 4 cents higher, save for expiring front month Dec 14 which finished up 8 3/4 cents. Weekly export inspections of 566,835 MT for the week ending last Thursday, were up 13% from the previous week. On a season so far basis though cumulative inspections are down 23% on this time last year. Argentine president Macri said that he would today sign a decree abolishing the current export tax on corn. The Argentine Ag Ministry reported that growers there are 84.9% sold on their old crop corn versus 90.8% done a year ago. On new crop they are said to be 7.4% committed against 12.6% a year ago. Israel are said to be tendering for 80,000 MT of optional origin corn and 20,000 MT of sorghum for Mar/May shipment. The USDA suggested US 2016 corn acres of 90.5 million, up 0.5 million from previously, and 2 million above this year. Early ideas on yields are 168.1 bu/acre. Ukraine seaports were said to have shipped out 459.6 TMT worth of corn last week (or 55.5% of all grain exports). Russian seaports shipped out 100.2 TMT of corn, or 15.8% of all grain exports. Ukraine said that their corn harvest is now over at just shy of 23 MMT. Dec 15 Corn settled at $3.81 3/4, up 8 3/4 cents; Mar 16 Corn settled at $3.79, up 3 3/4 cents.
Wheat: The wheat market closed around 2-5 cents firmer. Weekly export sales of 434,676 MT were a lot better than last week's miserable effort. So far this season though cumulative exports still lag a year ago by 14.5%. Argentine also cut their wheat export tax to zero today, giving rise to the notion that they will be a bit more of a threat going forward. The Argentine Ag Ministry reported that growers there are 9.5% sold on their new crop wheat versus 90.8% done a year ago. There are reports of heat and dryness delaying winter grain planting in India, with 44.23 million ha sown so far, down 4.43 million ha on a year ago. Wheat plantings are currently down 16.5% at 20.2 million ha versus 24.2 million a year ago. The USDA predict US wheat plantings at only 53 million ha next year, the lowest in 43 years. Taiwan bought 87,000 MT of US wheat in a tender for Jan/Feb shipment. Russia said that they'd exported 17.8 MMT of grains so far this season (down 6% on a year ago) and that 75% of that (13.39 MMT) was wheat. Ukraine said that they'd shipped out 18.71 MMT of grains so far, or which 50% (9.34 MMT) was wheat. Ukraine winter wheat is said to be planted on 92% of the original government target at 5.68 million ha, with around 67.5% of the crop in good to satisfactory condition. Mar 16 CBOT Wheat settled at $4.93 1/2, up 3 cents; Mar 16 KCBT Wheat settled at $4.88, up 5 1/2 cents; Mar 16 MGEX Wheat settled at $5.10 1/2, up 2 3/4 cents.
14/12/15 -- EU grains began the week mostly lower. Global commodity and equity markets remain nervous, keeping grains on the back foot. The FTSE 100 closed at a 10-week low on Friday and topped that with a 3-year closing low tonight, weighed on by slumping crude oil and ahead of an expected US Fed interest rate rise on Wednesday.
At the close, Jan 16 London wheat was down GBP0.30/tonne at GBP112.40/tonne, Mar 16 Paris wheat fell EUR0.75/tonne to EUR175.50/tonne, Jan 16 Paris corn was EUR1.00/tonne lower at EUR163.50/tonne, whilst Feb 16 Paris rapeseed was up EUR3.00/tonne to EUR375.50/tonne.
Ukraine said that their 2015 grain harvest is 99% complete at 60.84 MMT, including nearly 23 MMT of corn. APK Inform said that Ukraine's seaports had raised their exports efforts significantly last week, up from 322.2 TMT the previous week to 828.5 TMT, including 255.3 TMT of wheat, 459.6 TMT of corn and 113.6 TMT of barley.
The Ukraine Ag Ministry said that the nation had exported 18.71 MMT of grains so far this season (Jul 1 to Dec 11), including 9.34 MMT of wheat, 5.4 MMT of corn and 3.95 MMT of barley.
They forecast full season exports in 2015/16 at a record 36.8 MMT, up 6.4% versus a year ago. Total wheat exports last season were 11.23 MMT, with those for corn at 18.84 MMT and barley at 4.46 MMT.
Ukraine's winter planting works for the 2016 harvest are complete on 6.74 million ha, or 91% of the planned area. That includes 5.68 million ha (92%) of wheat and 913k ha (87%) of the originally intended winter barley area.
Winter grain emergence in Ukraine is said to be running at 86% (or 5.8 million ha), and of that 67% is said to be in good to satisfactory condition and 33% weak/thinned.
In addition a similar proportion of winter OSR has emerged (88%, or 570.8k ha), with 67.5% rated good to satisfactory and 32.5% weak/thinned.
Russia's seaports meanwhile increased their exports last week to 635.9 TMT from 370.2 TMT the previous week. That included 496 TMT of wheat, 100.2 TMT of corn and 36.7 TMT of barley.
Russia's total season to date grain exports (to Dec 9) are 17.80 MMT, down 6% on a year ago. That includes 13.39 MMT of wheat, 1.44 MMT of corn and 2.82 MMT of barley.
The EU Commission's MARS unit said that: "Temperatures since the end of November have been significantly higher than average in large areas of central (Czech Republic, Germany), eastern (Romania, Bulgaria, Ukraine, Russia and Belarus) and northern Europe (Denmark, Poland Sweden, Finland and the Baltic countries).
"Winter crops were prevented from gaining frost tolerance due to the mild temperatures in these regions, and are now potentially exposed to frost kill if temperatures abruptly move to seasonal values - even though this is not forecast for the coming days.
"In the United Kingdom and Ireland, overly wet conditions have persisted since November and will continue in the coming week, according to the weather forecast," they added.
11/12/15 -- Soycomplex: Beans, meal and oil all closed lower on the day and for the week. CONAB raised their Brazilian soybean production estimate by 0.5 MMT to 102.5 MMT, now some 2.5 MMT above what the USDA gave us on Wednesday, and 6.5% above the 96.2 MMT record of a year ago. The fact that they appear to be exporting these large volumes of beans without too many logistical hiccups - something that was almost unimaginable a few years ago - suggests that there is no reason to believe that they can't do it again in the new season ahead. Brazil's 2015/16 soybean exports were estimated at 57.5 MMT, up from 55 MMT previously. Plantings this year are still a bit retarded though. The Mato Grosso Institute of Agricultural Economics (Imea) report that 97.4% of the crop in Brazil's largest soybean state has been planted. AgRural pegged soybean plantings at 93% complete nationally compared to last week’s 88% and the long term average of 98% done at this time. A Bloomberg survey into trader sentiment on beans found things fairly evenly split, with 7 Bullish, 8 Bearish and 6 Neutral. Jan 16 Soybeans settled at $8.70 3/4, down 7 1/2 cents; Mar 16 Soybeans settled at $8.73 3/4, down 7 1/2 cents; Dec 15 Soybean Meal settled at $272.20, down $2.00; Dec 15 Soybean Oil settled at 31.08, down 43 points. For the week nearby beans ended with losses of 37 1/4 cents, meal was down $12.90 and oil fell 72 points.
Corn: The corn market closed lower on the day and for the week. CONAB raised their Brazilian 2015/16 corn production estimate a little to 82 MMT, some 0.5 MMT more than the USDA predicted on Wednesday, but still down from 84.7 MMT a year ago. The Buenos Aires Grain Exchange said that corn plantings are about 50% done in Argentina. Argentina’s new Finance Minister suggested that the country will begin lowering export taxes on ag products such as corn and wheat next week. Coceral said that EU corn production this year is seen 22% lower at 58.5 MMT. Russia said that it's 2015 corn harvest was limping along at 12.9 MMT off 91.4% of the planned area. APK Inform lowered their estimate for the Ukraine 2015 corn harvest to 22 MMT, down 23% on 28.5 MMT a year ago. They see 2015/16 Ukraine corn exports down 30% year-on-year at only 13.6 MMT. Brussels issued 383,667 MT worth of EU corn import licences last week, up 24% from a week ago, and that takes the season so far total to 5.1 MMT. A Bloomberg survey into trader sentiment on corn found things fairly evenly split, with 7 Bullish, 6 Bearish and 8 Neutral. Dec 15 Corn settled at $3.73, down 4 1/4 cents; Mar 16 Corn settled at $3.75 1/4, down 4 cents. For the week, Dec 15 corn was down 3 1/4 cents and Mar 16 fell 6 1/4 cents.
Wheat: The wheat market closed mixed on the day and for the week. EU wheat exports continue to zig and zag, but are generally making up some early season lost ground. The outlook for more euro weakness and dollar strength ahead in 2016 doesn't augur too well for US wheat export hopes. Russia said that their 2015 grain harvest is still not quite over yet, at 99.1% complete for a crop of 108.7 MMT in bunker weight so far. That includes 64 MMT of wheat and 18.3 MMT of barley. Winter plantings for the 2016 Russian harvest are stalled at 16.3 million ha, some 500,000 ha than this time last year and a touch over 95$ of the original government forecast. Continued weakness in crude oil values is weighing on the Russian rouble, meaning that the current export duty on wheat does kick in, albeit at only a relatively modest level of around $3/tonne, which shouldn't hurt Russian exporters too much. The Russian authorities estimate the area of winter crops in poor condition at around 1.8 million ha. Rusagrotrans estimate that maybe 0.8-1.2 million ha could be lost to winter-kill, down from 1.65 million a year ago. Coceral released their latest EU crop production forecasts, placing the soft wheat crop there at a record 150.3 MMT, up 1.2% from 148.5 MMT a year ago. A Bloomberg survey into trader sentiment on wheat was slanted in favour of the bulls, with 10 Bullish, 5 Bearish and 6 Neutral. Dec 15 CBOT Wheat settled at $4.82 3/4, down 1 3/4 cents; Dec 15 KCBT Wheat settled at $4.68 1/4, down 7 1/2 cents; Dec 15 MGEX Wheat settled at $4.98 1/4, up 4 3/4 cents. For the week that puts Chicago wheat up 11 1/2 cents, with Kansas up 19 cents and Minneapolis down 30 cents.
11/12/15 -- EU grains closed little changed on the day and for the week, with Wednesday's WASDE report from the USDA proving to be a bit of a non-event.
At the close, Jan 16 London wheat was up GBP0.15/tonne at GBP112.70/tonne. In Paris, Mar 16 wheat was down EUR1.25/tonne to EUR176.25/tonne, Jan 16 corn was EUR0.50/tonne lower at EUR164.50/tonne and Feb 16 rapeseed had fallen EUR1.25/tonne to EUR379.25/tonne.
For the week that puts London wheat a pound higher, with Paris wheat up EUR3.25/tonne, corn down EUR0.75/tonne and rapeseed EUR1.75/tonne easier.
It is probably prudent at this stage to start monitoring the old crop/new crop premiums on a weekly basis too. In London the Jan 16/Nov 16 differential is GBP11.55/tonight, or 10.25%. In Paris the Jan 16/Dec 16 differential is EUR11.75/tonne, or 6.67%.
Brussels confirmed 563 TMT worth of soft wheat export licences this past week, down sharply (-46%) from just over 1 MMT a week ago - although that was the best week of the season. The USDA revised down their expectation for EU wheat exports this season on Wednesday, so it will be important to keep an eye on these from hereon in.
Cumulative soft wheat exports so far this season are now 10.3 MMT, some 22% below where there were this time a year ago. Less than a month ago though season to date exports were running more than 30% down compared with 12 months previously, so things are improving. Even with this week's lower figure factored in though the USDA still only see exports down 8.2% year-on-year at the end of the current season.
France accounted for 35% of this past week's exports versus 46% the previous week. Corn import licences meanwhile were 383 667 MT last week, up 24% from a week ago, and now total 5.1 MMT for the season so far.
Talk that an expanding bird flu outbreak in France could be starting to harm feed demand leans a bit bearish too. Five regions of the country are now known to have the disease - the first confirmed ones in 8 years.
FranceAgriMer reported French winter wheat and barley crop conditions at 98% and 97% good to very good respectively today. High numbers, although unchanged on a week ago. They have 57% of the French winter wheat crop at the early tillering stage versus 44% last week and 55% a year ago. Winter barley is 77% tillering versus 66% last week and 75% a year ago.
Coceral released their latest EU crop production forecasts, placing the soft wheat crop here at a record 150.3 MMT, up 1.2% from 148.5 MMT a year ago. They see barley output at 61.1 MMT, up marginally on 60.2 MMT in 2014/15. Corn production is seen 22% lower at 58.5 MMT, and the OSR crop is estimated down 12% at 21.5 MMT.
In the UK specifically, they put the wheat crop at 16.17 MMT versus 16.55 MMT a year ago. Barley output is forecast at 7.28 MMT versus 7.01 MMT and rapeseed production estimated at 2.32 MMT against 2.51 MMT 12 months ago.
The bottom line is that the EU needs to pick up more wheat export business - and quickly - if it wants to avoid another season of large carryover stocks heading into what (at this stage) looks like another bumper production year based on current plantings and robust crop condition estima.
Algeria were said to have bought around 500-600,000 MT of optional origin wheat, at least some of which should herald from France, although there's also talk of Argentine origin material maybe standing the chance of a look-in now that they are looking to clear some of their carryover stocks following the recent change in leadership there.
Oil World estimate EU-28 rapeseed imports at 3.2 MMT in 2015/16, up nearly 25% on a year ago, due to lower domestic production. Australia is seen being the top supplier with 1.4 MMT of that total.
10/12/15 -- Soycomplex: Beans closed with small gains on the day that new Argentine president Macri took office. Weekly export sales of sales of 1,453,500 MT for 2015/16 were up 66 percent from the previous week and 13 percent from the prior 4-week average. They also easily topped trade expectations of 800 TMT to 1 MMT. China (1,340,600 MT) as usual was the featured buyer. Exports of 1,628,700 MT were however down 19 percent from the previous week and 25 percent from the prior 4-week average. China took more than 1 MMT of those. Separately, private exporters reported 120,000 MT of US soybeans were sold to unknown destinations for 2015/16 delivery. MDA CropCast cut their forecast for the global 2015/16 soybean crop by 0.67 MMT. Brazil was raised 0.5 MMT to 100.4 MMT, but India was lowered 1.16 MMT to 8.41 MMT. Jan 16 Soybeans settled at $8.78 1/4, up 1 1/2 cents; Mar 16 Soybeans settled at $8.81 1/4, up 1 1/2 cents; Dec 15 Soybean Meal settled at $274.20, down $4.60; Dec 15 Soybean Oil settled at 31.51, up 65 points.
Corn: The corn market closed around 5 cents higher. Weekly export sales of 1,095,300 MT for 2015/16 were up noticeably from the previous week and 11 percent above the prior 4-week average. That was around double trade expectations of only around 550,000 MT and versus 499,400 MT the previous week. Exports of 549,800 MT were up 47 percent from the previous week and 41 percent from the prior 4-week average and the largest since the first week of October. MDA CropCast raised their forecast for the global 2015/16 corn crop by 1.44 MMT - essentially due to Brazil who's crop was increased 1.62 MMT to 81.2 MMT. Russia said that it's 2015 corn harvest was 91.3% complete at 12.9 MMT. FranceAgriMer raised it's forecast for French 2015/16 corn carryout from 2.3 MMT previously to 2.8 MMT. Dec 15 Corn settled at $3.77 1/4, up 5 1/2 cents; Mar 16 Corn settled at $3.79 1/4, up 5 1/2 cents.
Wheat: The wheat market closed around 6-8 cents firmer. Weekly export sales of were poor however at 225,100 MT for delivery in marketing year 2015/16, being down 43 percent from the previous week and 45 percent from the prior 4-week average. Trade forecasts for those were around 400 TMT. MDA CropCast raised their estimate for the global 2016/17 wheat crop by 0.71 MMT due to increases for the EU. Ethiopia tendered for 70,000 MT of wheat. Jordan bought 50,000 MT of optional origin barley in a tender for 100,000 MT for April shipment. Japan bought 119,165 MT of US, Canadian and Australian wheat in its regular weekly tender. Algeria tendered for wheat, at least some of which will probably end up coming from France. FranceAgriMer said that French wheat stocks at the end of this season will probably be around double the norm at 5.2 MMT. Ukraine said that winter grain plantings are 91% complete and that 83 % of these have germinated. Out of what has emerged, 66% is said to be in good to satisfactory condition and 34% weak/thinned. Dec 15 CBOT Wheat settled at $4.84 1/2, up 6 1/2 cents; Dec 15 KCBT Wheat settled at $4.75 3/4, up 8 1/2 cents; Dec 15 MGEX Wheat settled at $5.29, up 6 1/4 cents.