06/02/15 -- Soycomplex: Beans closed lower on the day, but higher for the week. The market seems to be trying to balance the impending record large South American soybean crop, with the hitherto record large demand that's been seen so far this season for US soybeans. The Brazilian crop is big, but maybe not as large as some were/are expecting. The Argentine crop seems to be getting larger though. The prospect for record large US soybean planting this spring is hardly bullish either, although the market has been talking these same stories now for the last 2 or 3 years. The very strong US dollar, and the outlook for that to remain so throughout 2015, is a negative. We also have the new element of weakness in crude oil values. Although WTI crude closed higher tonight and is now more than 16% up off the recent lows, it is still more than 50% lower than the highs of last summer. Soyoil posted decent gains, up 6%, this week on the back of resurgent palm oil prices. That has meal on the back foot for a change, making it the weakest leg of the three this week. Mar 15 Soybeans closed at $9.73 1/2, down 7 3/4 cents; May 15 Soybeans closed at $9.80, down 7 3/4 cents; Mar 15 Soybean Meal closed at $329.40, down $2.00; Mar 15 Soybean Oil closed at 31.82, up 11 points. For the week Mar 15 beans were up 12 1/2 cents, with meal down 50 cents and oil up 182 points.
Corn: The corn market closed with fractional gains on the day, but with decent advances for the week. Crude oil was firmer, which helped. US gasoline prices are now said to be at a small premium to ethanol levels, which won't do any harm either. The weak oil price is helping freight rates, with the Baltic Dry Index now within a few points of being at its lowest level since 1986. This is said to be helping demand for US corn. China still seems to prefer US sorghum however. CNGOIC said China bought more than 900,000 MT of US sorghum in January and estimated China’s 2014/15 sorghum imports at a record 6.2 MMT. Societe Generale forecast US 2015 corn plantings at a surprisingly high 90 million acres, down only 600,000 acres on last year. The USDA will release some initial planting projections at their Outlook Forum later this month, before the more "official" prospective plantings report comes out at the end of March. Next week's WASDE report, due Tuesday, isn't expected to throw up any major surprises for the corn market. Conab are due out next Thursday with their latest Brazilian crop production estimates. They had the Brazilian corn crop at a high looking 79.1 MMT last time versus the USDA's figure of 75 MMT. Mar 15 Corn closed at $3.85 3/4, up 1/2 cent; May 15 Corn closed at $3.94, up 3/4 cent. For the week, Mar 15 corn ended with gains of 15 3/4 cents, or more than 4%.
Wheat: The wheat market closed mixed, a little higher in Chicago, and a bit lower in Kansas and Minneapolis. An early attempt at a rally ran out of steam, possibly due to the firmer US dollar. All three markets still managed to end the week with gains of more than 20 cents however. There's some talk of US winter wheat being a bit vulnerable in places. "Temperatures are set warm up in the Central Great Plains, increasing concerns about already dry wheat fields. Mean temperatures are expected to exceed 41 F in the upcoming week, the threshold for wheat growth and development. This would be the 4th successive week of warming temperatures in hard red winter wheat areas. Wheat could lose its winter hardiness and begin breaking dormancy. This increases the risk for a potentially damaging freeze later on, when wheat development is more advanced," said Martell Crop Projections. "Declining topsoil moisture in Kansas is also worrisome, where the uppermost inch of the soil is very dry," they added. IKAR estimated Russia's 2014/15 grain exports at 28.7 MMT, and forecast those for next season at a wide ranging 20-30 MMT. The market still seems generally relaxed about widespread talk of winter crop damage and a lack of cash to fund spring plantings and fertiliser purchases in Russia. More relaxed than it should be I'd say. Mar 15 CBOT Wheat closed at $5.27, up 1 1/4 cents; Mar 15 KCBT Wheat closed at $5.61 3/4, down 2 1/4 cents; Mar 15 MGEX Wheat closed at $5.77, down 2 cents. For the week, Chicago wheat put on 24 1/4 cents, with Kansas adding 21 1/2 cents and Minneapolis gaining 20 1/4 cents.
06/02/15 -- EU grains posted mostly small gains on the day, and with modest advances for the week, as the pace of exports remains brisk.
At the finish, Mar 15 London wheat was up GBP0.10/tonne to GBP123.75/tonne; Mar 15 Paris wheat was EUR1.25/tonne higher at EUR188.25/tonne; Mar 15 Paris corn was EUR0.25/tonne firmer at EUR155.75/tonne; May 15 Paris rapeseed was down EUR1.00/tonne to EUR356.75/tonne.
For the week on a front month basis, London wheat gained GBP1.65/tonne, with Paris wheat up EUR2.75/tonne, Paris corn EUR2.00/tonne higher and Paris rapeseed adding EUR6.50/tonne.
Brussels announced that it had issued a record 1.67 MMT of soft wheat export licences this past week, taking the season to date total back up above last year's record pace at 18.4 MMT.
You will recall that the EU Commission raised their forecast for EU soft wheat exports by 2 MMT to 30 MMT earlier in the week, which would just top last season's record 29.989 MMT. This week also brought another 300 TMT clean sweep for Europe in the latest Egyptian tender from GASC.
The alarm bells have continued to ring this week relating to the state of winter grains in Russia, with one analyst saying that 21% of the crop is in poor condition nationally, and 29% is poor in the normally most productive areas in the Central and Southern regions.
There have also been experts voicing concern about the weak Russian rouble and Ukraine hryvnia, and raging inflation in both countries, combined with the generally lack of access to credit and how this will affect farmers' ability to carry out their normal spring activities.
The Ukraine Minister of Farm Policy told us this week that the cost of the spring planting campaign there is up by 150% versus a year ago.
SovEcon forecast the 2015 Russian grain crop at 86 MMT versus 104 MMT last year earlier in the week. IKAR today estimated production this year at 85-95 MMT. One other analysts view I saw said that output could fall as low as 65 MMT, in a worst case scenario, if yields fall to the low levels of 2003.
Clearly opinion for prospects this year is already widely divided. Nobody is forecasting higher production though, that's for sure, it's more of a case of how low could it go?
Next week brings the February WASDE report from the USDA, which may provide some direction, although as far as 2015/16 goes they don't usually start to issue production forecasts for the coming season until May.
At home there's still a large exportable surplus of wheat in the farmers' hands, despite news that UK millers’ usage of wheat (including starch and bioethanol) in December was a record 674 TMT. Demand from the bioethanol sector for the remainder of the season now looks questionable though.
The pound closed at its highest level against the euro since January 2008 tonight, which won't help the UK export effort. The euro meanwhile remains close to a 12-year low of 1.12 against the US dollar set in late January, which helps explain why the success being achieved on the export front is mostly coming from the Continent.
05/02/15 -- Soycomplex: Beans closed with near 10 cent gains. Weekly export sales of 489,700 MT for 2014/15 were down 35 percent from the previous week, but still at the top end of trade estimates. Meal sales of 296,300 MT also topped expectations. News that Indonesia is to boost its biodiesel subsidies substantially saw palm oil futures jump 5% overnight, which had a knock-on effect for soyoil and beans. MDA CropCast raised their outlook for Argentina's soybean crop by 500 TMT to 56 MMT. They were unchanged on Brazil at 93.5 MMT. The FAO raised their forecast for the global soybean crop by 4 MMT to a new record 313 MMT. They also upped ending stocks to 42 MMT, a 40% increase on a year ago. Informa estimated the world 2015/16 soybean crop at 312.3 MMT versus a previous estimate of 313.7 MMT and their 2014/15 estimate of 314.7 MMT. The Buenos Aires Grain Exchange were unchanged on their estimate for soybean plantings in Argentina at 20.4 million hectares. Their first production estimate of the year was released at a record 57 MMT, "if the current favourable weather conditions persist", they said. Mar 15 Soybeans closed at $9.81 1/4, up 9 1/4 cents; May 15 Soybeans closed at $9.87 3/4, up 9 cents; Mar 15 Soybean Meal closed at $331.40, down $1.30; Mar 15 Soybean Oil closed at 31.71, up 112 points.
Corn: The corn market closed with small gains. Weekly export sales of 844,900 MT for 2014/15 were in line with expectations. Crude oil continued with the recent erratic trade, rallying back up above $50/barrel today, adding spillover support to corn. The FAO estimated the global corn crop at 1020 MMT, unchanged from their previous forecast. They did however trim ending stocks back by 4 MMT to 208 MMT. "In Brazil, conditions are mostly favourable for the first crop however there is some concern over a delay in development due to the lack of rains in main producing areas and planting of the second crop has begun. In Argentina, planting is mostly complete and conditions remain generally favourable," they said. The Buenos Aires Grain Exchange estimated that corn planting in Argentina was now past 99% complete. They haven't yet issued a production forecast. Informa have the 2015/16 global corn crop estimated at 967.9 MMT, up from a previous estimate of 965.6 MMT, but below their 2014/15 crop estimate of 985.8 MMT. The USDA's FAS in Russia estimated the country's corn exports at 2.4 MMT this season. "Of note, today was the Ukrainian currency, which broke 34% against the USD after the Ukrainian Central Bank reported it would no longer be able to support it through monetary policy. A break of this magnitude will likely increase the rate of export sales out of the Black Sea," noted Benson Quinn. Mar 15 Corn closed at $3.85 1/4, up 1 3/4 cents; May 15 Corn closed at $3.93 1/4, up 1 3/4 cents.
Wheat: The wheat market closed with double digit gains across the three exchanges. Weekly export sales of 397,600 MT were in line with expectations. There's talk of Egypt buying 4-6 cargoes of US SRW wheat due to a special $100 million credit line extended to them by the US. The FAO trimmed 1 MMT off the world 2014/15 wheat crop to 724 MMT and knocked a similar amount off global ending stocks to 192 MMT. "In the southern hemisphere the harvest is complete and conditions at the end of the season were mixed in Australia and Argentina. In the northern hemisphere winter wheat is mostly dormant. In the EU, US, China, Ukraine and Canada the crop is dormant and progressing without any major concern. In Russia, conditions for the dormant crop are generally favourable except in the southern regions where there is some concern over limited protective snow cover and warmer than usual weather. In India, conditions are favourable," they said. Informa estimated the world 2015/16 wheat crop at 720.3 MMT, up from a previous forecast of 718.2 MMT, although down on their figure for 2014/15 of 722.5 MMT. They see improved prospects for Canada (up from 28 MMT to 29.5 MMT) and China (up from 122.5 MMT to 125 MMT). They cut their outlook for US wheat from 60 MMT to 58.5 MMT however. Mar 15 CBOT Wheat closed at $5.25 3/4, up 14 3/4 cents; Mar 15 KCBT Wheat closed at $5.64, up 11 1/4 cents; Mar 15 MGEX Wheat closed at $5.77 1/4, up 11 1/4 cents.
05/02/15 -- EU grains closed mixed, with little in the way of fresh news to get your teeth into ahead of next Tuesday's USDA WASDE report.
At the close, Mar 15 London wheat was GBP0.20/tonne firmer at GBP123.65/tonne, Mar 15 Paris wheat was EUR0.50/tonne higher at EUR187.00/tonne, Mar 15 Paris corn was up EUR1.00/tonne at EUR155.50/tonne and May 15 Paris rapeseed rose EUR5.50/tonne to EUR357.75/tonne.
The FAO lowered their forecast for the global wheat crop in 2014/15 by 1 MMT to 724 MMT, and cut ending stocks a similar amount to 192 MMT. World corn production was unchanged at 1020 MMT and ending stocks were reduced by 4 MMT to 208 MMT.
The Russian Ag Minister said that the country would export "no more than 28 MMT" of grains this season. Exports to Jan 28 were said to be 22.7 MMT.
The USDA's FAS in Russia estimated exports this year at 27.4 MMT, down from a previous forecast of 30 MMT. Wheat will account for 19.5 MMT of that total versus the 22 MMT that they estimated previously. Barley exports will total 4.4 MMT and corn exports 2.4 MMT, they added.
One Russian official said that 21% of the nation's winter grains were in poor condition, including 29% of crops in the main central and southern regions.
Russian AN prices are said to have risen 30% between September and December, due to raging inflation and the plunging rouble.
Mind you, inflation of "only" 11.4% at the end of December would be a dream if you were farming in Ukraine. Inflation there is now running at 24.9%, said Agritel.
Farmers in both countries will struggle to afford to purchase their spring inputs this year more than ever before.
Informa Economics forecast the 2015 Russian wheat crop at 55 MMT, down 8.3% on last year. Ukraine's wheat output will fall 12.5% to 21 MMT, they also said.
Strategie Grains estimated the EU-28 rapeseed crop at 21.5 MMT later this year, a drop of 11% compared with 2014.
04/02/15 -- Soycomplex: Beans and meal closed lower, giving up a fair chunk of yesterday's gains. Soybean production estimates in Brazil are getting trimmed a little, and starting to centre around the 93 MMT mark versus the USDA's January estimate of 95.5 MMT. However in Argentina, forecasts are rising, with some now seeing their crop at around 57 MMT versus only 55 MMT from the USDA last month. Either way, both numbers would be a record volume. The USDA will update us with their February forecasts next Tuesday. Also due next Thursday are the latest estimates from Brazil's Conab. Trade estimates for tomorrow's weekly export sales report for beans are only around 200-400 TMT, with the market expecting that demand for US beans is finally showing some sign of slowing up as interest switches to Brazil. Meal sales are expected to be around 120-150 TMT. Mar 15 Soybeans closed at $9.72, down 15 cents; May 15 Soybeans closed at $9.78 3/4, down 14 1/4 cents; Mar 15 Soybean Meal closed at $332.70, down $7.90; Mar 15 Soybean Oil closed at 30.59, down 21 points.
Corn: The corn market closed around a couple of cents lower, which wasn't too bad considering that crude oil crashed back below $50/barrel having closed at over $53/barrel last night. The US Energy Dept reported weekly ethanol production down 7,000 barrels/day to 972,000 bpd. US crude oil stocks were pegged at the highest level for this time of year in at least 80 years, which is hardly bullish. A US oil refinery workers strike, said to be the largest since 1980, should soon start to cut into those stocks though. Brazil said that it had exported 3.2 MMT of corn in January versus 2.9 MMT in January 2014. "Everything else being considered, corn was able to defend its current price level relatively well," said Benson Quinn. Trade estimates for tomorrow's weekly export sales report are around 800,000 MT to 1 MMT. As with soybeans, the market is thinking that the USDA might be a little high with their current Brazilian corn crop estimate, and maybe a bit low on Argentina. Mar 15 Corn closed at $3.83 1/2, down 2 1/4 cents; May 15 Corn closed at $3.91 1/2, down 2 1/4 cents.
Wheat: The wheat market closed lower across the three exchanges, with Minneapolis suffering the largest losses. There's talk that Egypt may be in the market to buy specifically US wheat soon, using a $100 million grant given to it by, appropriately, the US. Given that they've been booking significant quantities of French wheat lately, it may be that they are also looking for some US wheat to up the quality a little. Stats Canada estimated Canadian Dec 31 all wheat stocks at 24.82 MMT, slightly below the average trade guess of 25 MMT, and down from 28.68 MMT a year previously. South Korea's CJ reportedly bought 50,000 MT of Australian wheat for June shipment. "Field moisture has improved with generous rain and snow this winter" across Kansas, Texas and Washington - three of the leading US bread wheat states, although Oklahoma remains dry, said Martell Crop Projections. Libya failed to make a purchase in their 50,000 MT wheat tender, apparently due to payment issues. Tomorrow's weekly export sales report is expected to come in at around 300-500 TMT. Mar 15 CBOT Wheat closed at $5.11, down 2 3/4 cents; Mar 15 KCBT Wheat closed at $5.52 3/4, down 6 1/4 cents; Mar 15 MGEX Wheat closed at $5.66, down 10 cents.
04/02/15 -- EU grains stumbled mostly lower, failing to add to yesterday's decent gains. Fresh news was generally lacking.
At the close, Mar 15 London wheat was down GBP0.60/tonne at GBP123.45/tonne, Mar 15 Paris wheat was unchanged at EUR186.50/tonne, Mar 15 Paris corn was up EUR0.50/tonne at EUR154.50/tonne and May 15 Paris rapeseed was EUR2.00/tonne lower to EUR352.25/tonne.
The President of the Russian Grain Union forecast the country's Feb wheat exports at 150-200 TMT due to the new export duty, substantially less than the 500-600 TMT predicted by Rusagrotrans yesterday.
The Russian Ag Ministry have said that they are likely to make adjustments to the new export duty in the next week or two, without indicating what that might entail.
The aim would appear to be to encourage more farmer sales to the state intervention fund, which has been woefully under-subscribed to of late. Since purchasing began in September the government have only picked up around 350 TMT of grains at intervention out of a stated target of around 2.5 MMT.
Concerns over the state of Russia's winter wheat remain high, despite official assurances that all is reasonably well with the crop.
SovEcon estimated Russia’s 2015 grain crop at 86.0 MMT, down 17.3% versus 104 MMT last year.
Meanwhile in Ukraine, the Minister of Farm Policy said that the cost of the spring planting campaign is up by 150% versus a year ago. There are "serious issues" facing cash-strapped producers in funding the purchase of seeds and other inputs, he said.
Libya made no purchase in their tender for 50,000 MT of optional origin milling wheat due to payment issues, according to Reuters.
Turning wheat into bioethanol hasn't turned out to be quite such a lucrative idea as some would have hoped. ABF have announced a GBP98 million write-down in value of its Vivergo joint venture with BP and DuPont due to falling crude oil prices and the weak euro. Up the coast from Vivergo, the UK's other major bioethanol plant, Ensus, has now temporarily closed.
03/02/15 -- Soycomplex: Beans and meal closed with good gains on the back of a "risk on" mentality across the whole of the grains sector, helped by a suddenly resurgent crude oil market. Today's rise in prices may have triggered some short-covering amongst the fund community who are sitting on an unusually large short in beans. Dr Cordonnier estimated the Brazilian bean crop at 93.0 MMT, unchanged from previous estimate, still a record volume although 2.5 MMT less than the USDA's January estimate. He goes for 56 MMT in Argentina, also a record, and in this case 1 MMT more than the USDA said a month ago. Crop conditions in Argentina generally look very good where soybeans are flowering and beginning to set pods, said Martell Crop Projections. A Brazil crop tour estimated Brazil’s soybean crop at 93.2 MMT versus a previous estimate of 96.1 MMT. The USDA attaché in Brazil estimated the Brazilian bean crop at 93.0 MMT, with exports at 47 MMT (versus the USDA's own official forecast of 46 MMT). Informa estimated the Brazilian bean crop at 93.5 MMT (unchanged) and went for 57 MMT in Argentina versus 55.5 MMT previously. Mar 15 Soybeans closed at $9.87, up 27 1/2 cents; May 15 Soybeans closed at $9.93, up 26 3/4 cents; Mar 15 Soybean Meal closed at $340.60, up $12.70; Mar 15 Soybean Oil closed at 30.80, up 39 points.
Corn: The corn market closed with strong gains, helped by soaring crude oil values, which have now gained 19% in the past 3 sessions, closing above $53/barrel tonight. Dr Cordonnier estimated this year's Brazilian corn crop at 74.0 MMT, unchanged from his previous estimate and 1 MMT below the USDA. He increased his Argentine corn crop forecast to 22.0 MMT versus a previous estimate of 21.0 MMT, and now matches the USDA figure. Informa now has the Brazilian corn crop estimated at 72.8 MMT versus a previous estimate of 72.25 MMT. In Argentina they go 23.0 MMT versus a previous estimate of 22.0 MMT. They have the South African corn crop estimated at 13.0 MMT, down from a previous estimate of 13.5 MMT. In Argentina, "the majority of corn has already pollinated under favourable wet weather conditions, locking in a favourable yield," said Martell Crop Projections. Agritel forecast Russia's 2014/15 corn exports at around 3 MMT versus 1.2 MMT currently. "The EIA will be out with their weekly ethanol report tomorrow, it should be interesting to see how ethanol plants have reacted to a tight margin environment," said Benson Quinn. Last week's production was 979,000 barrels/day, up 1,000 bpd from the previous week. ADM estimated 2015 US ethanol exports at around 800 million gallons, which is similar to last year. Mar 15 Corn closed at $3.85 3/4, up 16 cents; May 15 Corn closed at $3.93 3/4, up 16 cents.
Wheat: The wheat market took off on short-covering triggered by reduced US winter wheat crop ratings from the USDA. They cut the proportion of Kansas wheat rated good to excellent from 49% at the end of December to 46%, raising poor/very poor from 9% to 13%. Oklahoma good to excellent fell from 54% to 41%, and poor/very poor was up from 12% to 13%. Egypt's GASC bought two cargoes of French wheat and three of Romanian origin in their tender. US wheat didn't figure, but the market didn't seem to care about that today. Current low levels seem to have flushed out quite a few other buyers. Iraq seek 50,000 MT of optional origin wheat. Jordan are in the market for 100,000 MT of hard wheat for Aug/Sep shipment. Japan are tendering for 112,920 MT of US and Canadian wheat for March-April shipment. South Korea's NOFI seek 55,000 MT of optional origin feed wheat for June shipment. Turkey are in the market for 60,000 MT of durum wheat. Saudi Arabia bought 690,000 MT of optional origin wheat over the weekend too. Stats Canada are due out with their Dec 31 stocks estimates tomorrow. The average trade guess for all wheat is 25 MMT, down 17% on a year ago. Canadian barley stocks are estimated at 4.9 MMT, down 27% on a year ago. There's already some talk of the Russian Ag Ministry making adjustments to their newly introduced wheat export duty in the next couple of weeks. Agritel consider Russian wheat exports more or less finished for the season, but Russagrotrans forecast these at 500-600,000 MT this month. Mar 15 CBOT Wheat closed at $5.13 3/4, up 21 cents; Mar 15 KCBT Wheat closed at $5.59, up 24 1/2 cents; Mar 15 MGEX Wheat closed at $5.76, up 22 cents.
03/02/15 -- EU grains posted some decent gains for once, aided by increased export hopes and another clean sweep for Europe in Egypt's latest tender.
At the finish, Mar 15 London wheat was up GBP3.30/tonne to GBP124.05/tonne; Mar 15 Paris wheat was EUR3.50/tonne higher at EUR186.50/tonne; Mar 15 Paris corn was EUR2.25/tonne firmer at EUR154.00/tonne; May 15 Paris rapeseed was up EUR5.50/tonne to EUR354.25/tonne.
Egypt's GASC bought 300,000 MT of wheat for Mar 1-10 shipment in their latest tender, comprising of 120,000 MT of French and 180,000 MT of Romanian origin.
The EU Commission raised their forecast for EU soft wheat exports by 2 MMT to 30 MMT, which would just top last season's record 29.989 MMT. All wheat exports are now seen at 31 MMT, which is 1 MMT higher than the USDA's January forecast.
Turkey are tendering for 60,000 MT of durum wheat. Jordan are in the market for 100,000 MT each of hard wheat and feed barley.
France are reportedly currently loading 60,000 MT of feed wheat bound for Bangladesh, the largest such consignment in around 14 years. The UK are also said to be loading 50,000 MT of feed barley in Portbury destined for Japan.
Agritel estimated Russia's 2014/15 wheat exports at around 18 MMT. They'd already shipped out 17.3 MMT by Jan 21, so if they are correct then that would indicate that very little wheat will now be exported from Russia between now and the end of the season. Their new punitive export duty kicked in on Feb 1 you will recall.
Agritel see Russia now starting to major on corn exports, shipping out around 3 MMT by the end of the season versus only 1.2 MMT currently.
Rusagrotrans on the other hand forecast that Russia will export 1.1-1.2 MMT of grains in February, about half of which will be wheat.
Russia's intervention purchase programme struggles along quietly, picking up less than 20,000 MT of grain today, despite the new wheat export duty.
The USDA's FAS in Australia estimated this year's wheat crop there at 23.2 MMT, down 14% on a year ago and 800,000 MT below the current official Washington figure. They pegged this year's Australian barley crop at 7.3 MMT, which is 7% below a year ago. They forecast wheat exports at 17 MMT, an 8% decline versus 2013/14, with barley shipments at 4.5 MMT, a 30% drop on a year ago.
03/02/15 -- The overnight grains trade higher this morning, with Globex beans currently up 7-8 cents, and with corn and wheat 2-4 cents firmer.
London wheat has opened around GBP0.50-1.00/tonne higher, with Paris wheat up EUR1.00-2.00/tonne.
Egypt are said to have imported 11.76 MMT of grains so far this season, including 6.9 MMT of wheat and 4.9 MMT of corn. They are in the market again today, with GASC tendering for wheat for Mar 1-10 shipment, with the results expected this afternoon.
Jordan are also in the market, tendering for 100,000 TMT each of hard wheat and barley.
Despite the new export duty, Russia picked up less than 20,000 MT of grain in today's latest round of intervention purchases.
The Russian Ag Ministry say that the prospect of the Feb 1 export duty spurred shippers on to export 1.7 MMT of grains in January, a record for that particular month. Jul 1 - Jan 28 exports were 22.7 MMT, a 31% rise on a year ago.
Rusagrotrans say that the country will export 1.1-1.2 MMT of grains in February, around the same as the 1.14 MMT shipped out a year ago. That total will include around 500-600,000 MT of wheat versus 680,000 MT in Feb 14, they estimate.
Officials say that winter crops in Russia's Stavropol region are 99% emerged, with 42% in good condition, almost 50% satisfactory and a little over 8% poorly established. That's similar to last year.
Not that I believe a word they say like. I'll be waiting for the results of Mike Lee's crop tour to find out what winter crop conditions in Russia and Ukraine are really like. You can find out more on Mike's blog here: Put my name down for that
France are said to currently be loading 60,000 MT of feed wheat for Bangladesh, the largest such shipment since 2000/01.
Canada's all wheat stocks as of Dec 31 are estimated at 25 MMT, down 17% on a year previously but still the second largest since 1996. Canola stocks are said to be 10.7 MMT, down 14% on a year ago but also the second largest ever.
02/02/15 -- Soycomplex: Beans closed slightly lower, despite another strong week of export inspections, which came in at close to 1.7 MMT. That was 10% up on a week ago and 42% above this week last year. Cumulative year to date exports are now 19% up on a year ago. The Brazilian weather outlook is improving. "Mato Grosso soybeans received heavy rainfall last week 50-100 millimeters in the key center-west area. This was the heaviest weekly rainfall in more than a month. The forecast this week calls for near average rainfall in Mato Grosso and throughout the tropics, the areas that were intensely dry in January. The large ridge of high pressure that prevailed last month has broken down, encouraging more normal rainfall in early February," said Martell Crop Projections. "February rainfall, if it continues generous, would stabilize soybeans in Mato Grosso and the tropics at large. However, significant damage has already been done, as intensifying drought in January coincided with the key pod filling stage," they added. Mar 15 Soybeans closed at $9.59 1/2, down 1 1/2 cents; May 15 Soybeans closed at $9.66 1/4, down 1 1/2 cents; Mar 15 Soybean Meal closed at $327.90, down $2.00; Mar 15 Soybean Oil closed at 30.41, up 41 points.
Corn: The corn market closed with fractional losses. The USDA reported the sale of 132,600 MT of US corn to Mexico, split 121,550 MT for delivery during the 2014/15 marketing year and 11,050 MT for delivery during the 2015/16 marketing year. Weekly export inspections came in at 661,675 MT, which was a bit below expectations and last week's total of 887,000 MT. Crude oil bounced from lower overnight trade to close higher, and is now up more than $5/barrel, an 11.3% rise, in the last two trading sessions. Reports of a US refinery strike, and news that more than 90 US oil rigs were idled last week - the largest weekly fall in more than 30 years - was supportive. That saw the crude oil market rebound from oversold territory. Brazil formally approved plans to raise the ethanol blend in gasoline to 27% from the current 25%. Russia said that it had shipped out 1.2 MMT of corn so far this season (to Jan 21). Ukraine seaports exported 198.2 TMT of corn last week, which was 71% of all grain exports, down from 455.7 MMT and 86% the previous week. Heavy snow across much of the Midwest is seen hampering the movement of corn, and thus supporting the cash market. Mar 15 Corn closed at $3.69 3/4, down 1/4 cent; May 15 Corn closed at $3.77 3/4, down 3/4 cent.
Wheat: The wheat market closed lower across the three exchanges. Wheat in Chicago closed below $5/bushel for the first time in nearly 4 months. Canada reported that they had exported 7.95 MMT of wheat (excluding durum) so far this season, a 6% rise on a year ago. Canadian durum exports are up 21% at 2.66 MMT. Saudi Arabia bought 690,000 MT of optional EU, North American, South American, Australian 12.5% milling wheat over the weekend. Tunisia bought 117,000 MT of optional origin milling wheat and 50,000 MT of feed barley, and Ethiopia purchased 70,000 MT of milling wheat. Weekly US export inspections were 394,000 MT, which was higher than last week and also above the total reported during the same week last year, despite the firm US dollar. Competition for US wheat on the export front remains fierce though. Russia's new wheat export duty is now in force, and their shipments should now drop off significantly. They'd already started to do this in January, although the strong pace of early season exports still means that they've shipped out 17.3 MMT of wheat so far this season. US winter wheat conditions have an improved weather outlook, with rain on the Southern Plains and heavy snow in the Midwest. Egypt are back in the market tendering for wheat for Mar 1-10 shipment. Mar 15 CBOT Wheat closed at $4.92 3/4, down 10 cents; Mar 15 KCBT Wheat closed at $5.34 1/2, down 5 3/4 cents; Mar 15 MGEX Wheat closed at $5.54, down 2 3/4 cents.
02/02/15 -- EU grains traded mostly lower to begin February, with the week and new month beginning pretty much where the old one left off.
At the close, Mar 15 London wheat was GBP1.35/tonne easier at GBP120.75/tonne, Mar 15 Paris wheat was EUR2.50/tonne lower at EUR183.00/tonne, Mar 15 Paris corn was down EUR2.00/tonne at EUR151.75/tonne and new front month May 15 Paris rapeseed was down EUR0.75/tonne at EUR348.75/tonne.
The market continues to slide, helped on its way by a variety of outside influences. Bearish Chinese economic data today added to the general global macroeconomic woes. After a little month-end upward blip on Friday, presumably linked to profit-taking, crude oil was back on the slippery slope again today too.
Meanwhile the Baltic Dry Index, a measure of what it costs to ship raw materials around the world, and often said to be a barometer for general global economic health, closed at a 28-year low on Friday - below even the lows of 2008 when it fell 90% in value in just a few months.
Yet for all this there are certainly one or two skeletons lurking in the closet that could come back to haunt this market yet. At the head of those are probably Russia and Ukraine, yet these issues continue to be getting largely ignored.
There was further violence in Eastern Ukraine again over the weekend, where "the financial situation is becoming more and more difficult" and various agro companies "face issues regarding the delivery of nitrogen fertiliser," said Agritel.
The Ukraine Ministry reported winter crop conditions unchanged from a week ago at 18% weak/thinned, which is the equivalent of 1.4 million hectares.
Ukraine's grain exports via seaports dropped off sharply last week, down to 279.3 TMT versus 529.9 TMT the week previously. Corn accounted for 71% of last week's exports (198.2 TMT), down from 86% the previous week.
Things weren't much different in Russia last month, where the leading grain hub port of Novorossisk exported 484.3 MMT of grains in January, down 57.4% versus December and 10.5% below exports in January 2014. Wheat exports accounted for 86% of the Jan 2015 total, with Egypt the top home.
The Russian rouble hit new lows against the US dollar on Friday after their Central Bank cut interest rates 2 points, and remains close to those levels today. Russian food inflation is now said to be running at 17%, up from 15.4% at the end of 2014, and could hit 22-23% by the summer, one leading analyst forecast.
To add to Russia's economic woes, Bloomberg say that almost 25% of corporate foreign currency debt in the country matures in February. That could further pressure the RUB/USD rate with more than $10 billion in dollars required to repay that debt this month, they said.
Meanwhile Russian weather conditions across the autumn and winter so far were described as "abominable" for crop production potential, and worse even than they were in late 2009.
On the tender front, Tunisia bought 117 TMT of milling wheat and 50 TMT of feed barley over the weekend. Ethiopia were said to have bought 70 TMT of milling wheat. Saudi Arabia also struck for 690 TMT of EU, North American, South American or Australian 12.5% milling wheat in their weekend tender.
He's planning on organising a 4,000km spring crop tour of the main growing regions of winter crops in both countries. My first thought was "feck, the findings of that will be very interesting indeed",
Surely if anything is going to make this market drag itself out of the bearish doldrums it currently finds itself in then it will be linked to Russian and Ukraine crop conditions in the spring/summer. Remember 2010? And 2012?
My second thought was "feck, sooner him than me".
This morning I read of one Russian analyst describing autumn/winter conditions for 2015 crop production as "abominable", whilst the Ukraine Ministry say that 18% of winter crops there are in a poor state.
Of course, we can't necessarily believe everything that the officials say can we - 18% could mean 8% or 28%, depending on what sort of spin the Ministry fancy putting on things, but we could believe Mike if he was saying it.
Meanwhile we have the ongoing military situation in Eastern Ukraine (more violence at the weekend), both the rouble and hryvnia dropping like stones, and surely some very serious question marks hanging over farmers' ability to fund spring inputs.
Imagine having the opportunity to go over there and see all this for yourself. You don't fancy it do you? Not with tanks running around all over the place, the state of the roads, the shitty food and crappy accommodation, roadblocks, police, army, red tape, paperwork etc. And I don't blame you.
But imagine having some other serf who's over there already doing it all for you, reporting back to you on a daily basis whilst you sleep comfy and warm in your nice little centrally heated house? Now you're talking.
Mike and his team are looking for sponsors to help fund the trip, with the feedback from it going exclusively to those people. This info won't be all over the internet for any old minge bag (you know who you are!) to go and view for free. Sponsors will get will receive an emailed end of tour report summarising all the information recorded including comments, opinion and observation with photographs and access to videos. There's even talk of the use of drones (which reiterates exactly why I don't want to be in the travelling party when the military come around to enquire exactly what the hell you are doing).
I've signed up already. You can find out more on Mike's blog here: Where do I sign?
30/01/15 -- Soycomplex: Beans and meal closed lower on the day, and lower for the week and the month. "Fund selling and Brazilian producer selling swamped the market," said Benson Quinn. Safras e Mercado trimmed their estimate on Brazilian soybean production this year by 0.88 MMT to 95.02 MMT. That's 0.5 MMT below the USDA's current estimate, although still easily a record and 8.3 MMT more (or the best part of 10% higher) than last year. The trade chose to concentrate on the latter element rather than the reduction itself. With every day that passes we also get closer to this huge crop being a reality, rather than a forecast. "The value of the Real to the US dollar neared 2.7:1 today which, with the Brazilian producing selling his beans at US dollar values but being paid in local currency, is the best exchange rate for the Brazilian producer in several years," Benson Quinn noted. Funds were estimated as being net sellers of around 7,000 lots on the day, and are thought to now likely be holding close to a record short position. Allendale forecast Nov 15 bean futures falling close to $8/bushel - a level not seen on a front month since late 2008. About the only bullish thing in the market right now is the seasonal tendency for beans to put in a first half of the year bottom around now. This has happened in 3 of the last 4 years. Mar 15 Soybeans closed at $9.61, down 7 1/4 cents; May 15 Soybeans closed at $9.67 3/4, down 7 cents; Mar 15 Soybean Meal closed at $329.90, down $8.00; Mar 15 Soybean Oil closed at 30.00, up 46 points. For the week that puts Mar 15 beans down 11 3/4 cents, with meal down $1.60 and oil losing 160 points. For the month, on a front month basis, beans were down 41 1/2 cents, with meal shedding $26.60 and oil losing 195 points.
Corn: The corn market closed around 1-2 cents easier on the day. It too was also lower for the week and the month. Safras e Mercado cut 1 MMT off it's Brazilian corn production forecast to 74.7 MMT. The USDA are a bit higher than that at 75 MMT, and production last year was 79.3 MMT. The Brazilian weather outlook continues with the recent theme. "Temperatures next week would continue hot in Mato Grosso and the tropics at large, while cooler temperatures would prevail in South Brazil. This would perpetuate the pattern of the past 4 weeks," said Martell Crop Projections. Allendale, in contrast to their prediction on soybeans, said that although an early summer lull could take corn prices down to around $3.50/bushel, the Dec 15 lot could hit more than $4.50/bushel on a summer rally. They see US corn plantings this year falling to a 5-year low of 88.35 million acres, down from 90.6 million last year and below the recent US Congressional Budget Office estimate of 89 million. Informa currently estimate corn plantings a bit higher than Allendale to at 88.6 million acres. Current low prices and the higher cost of inputs associated with corn will ultimately mean that fewer acres will get planted, Allendale seem to think. The USDA will stage it's regular Outlook Forum around 3 weeks from now, which will give us their first tentative forecast for US plantings this spring. For the record, last year's Forum projection was for 2014 US corn plantings of 92 million acres, so they ultimately proved to be around 1.4 million too high versus what finally did make it into the ground. Mar 15 Corn closed at $3.70, down 1 1/2 cents; May 15 Corn closed at $3.78 1/2, down 1 1/2 cents. For the week Mar 15 corn was 16 3/4 cents lower, and for the moth of January it was 25 3/4 cents lower.
Wheat: The wheat market closed lower across the three exchanges. That's a sentence that I seem to have used rather a lot this month. It will not surprise anybody then that wheat was also lower for the week and the month in all three locations. The strong dollar and weak euro remain a thorn in the side for US wheat export hopes, even if yesterday's weekly export sales total of 544,392 MT was the highest for 17 weeks. Chicago wheat fell below $5/bushel at one point, but did manage to close above that level at the close of play. It seems likely that a probe below that level again next week is on the cards though. The US weather forecast is calling for decent rains in the Southern Plains over the weekend and snow for Midwest winter wheat. Both are seen as being beneficial. Monthly crop ratings are scheduled to be updated in various key states on Monday night. In other news, several vessels loaded with Russian wheat bound for Egypt are said to be stuck at Black Sea ports waiting for clearance to leave, just 24 hours before the new export duty kicks in. Russia dropped their interest rates 2 percentage points to 15% today, further weakening the rouble which fell to a new low of 72 against the U dollar. Credit Suisse predicted that the rouble will decline to 82 versus the US dollar within the next three month. That would continue to batter the Russian economy, and could have implications for spring plantings and the ability of Russian farmers to purchase inputs. South Korea's KFA cancelled a tender for 30,000 MT of optional origin feed wheat. Egypt's GASC are widely expected to be back in the market for wheat next week. India are expected to announce a decision on whether or not they are to attempt to offload 0.5-1.0 MMT of their surplus wheat stocks next week. They are now only a couple of months away from beginning their 2015 harvest. Mar 15 CBOT Wheat closed at $5.02 3/4, down 5 cents; Mar 15 KCBT Wheat closed at $5.40 1/4, down 3 3/4 cents; Mar 15 MGEX Wheat closed at $5.56 3/4, down 2 1/2 cents. For the week Chicago wheat was down 27 1/4 cents, with Kansas losing 23 3/4 cents and Minneapolis falling 19 1/4 cents. For the month they were down 78 1/2 cents, 76 3/4 cents and 54 1/4 cents respectively.
30/01/15 -- EU grains traded mixed on the day, but all significantly lower across the board for the week.
At the close Mar 15 London wheat was down GBP1.15/tonne at GBP122.10/tonne, Mar 15 Paris wheat was EUR2.25/tonne easier at EUR185.50/tonne, Mar 15 Paris corn was up EUR0.75/tonne at EUR153.75/tonne and Feb 15 Paris rapeseed went off the board EUR4.25/tonne higher to EUR350.25/tonne.
For the week, Mar 15 London wheat fell GBP6.20/tonne, Paris wheat lost EUR10.00/tonne, corn dropped EUR5.50/tonne and rapeseed was down EUR6.25/tonne.
For the month of January, on a front month basis, London wheat shed GBP9.60/tonne. In Paris, wheat fell EUR9.50/tonne, corn slipped EUR3.00 and rapeseed actually rose EUR2.50/tonne.
There hasn't really been anything especially bearish out this week, it's just that there seems to be plenty of everything around, and what buying interest there is out there is being fiercely fought over.
Brussels confirmed that they'd issued 661 TMT worth of soft wheat export licences this past week, taking the season to date total to 16.7 MMT, a modest 3.5% fall on where we were this time a year ago. As a reminder the USDA currently sees EU all wheat exports down 6% in 2014/15, so we are on track to beat that total, if not get close to matching last season's record full campaign volume of 31.925 MMT.
Brussels also granted 329 TMT worth of barley exports, taking the seasonal total so far to 5.1 MMT, which is more than 6% up compared with this time a year ago. That's not a bad effort, even if the USDA estimate is for EU barley exports to jump 36% in 2014/15 to 6.7 MMT, at least we are past three quarters of the way towards achieving that target.
The EU also granted 76 TMT worth of corn import licences this past week. That takes the season to date total to 5.2 MMT, down almost 27% on this time last year. The EU are expected to import 7 MMT of corn this season, which is less than half the near 16 MMT shipped in in 2013/14.
In a surprise move, Russia trimmed 2 percentage points off interest rates today, down from 17% to 15%, because it says that inflation is stabilising. The Russian Economic Ministry forecast recently that inflation wouldn't peak until March or April, and coincidentally at around 15-17% versus 11.4% at the end of 2014.
The Russian Central Bank confirmed that capital outflow in 2014 was greater even than during the 2008 financial crisis, and up 250% versus 2013.
The rouble fell to new lows versus the US dollar and euro on the news. That's unlikely to encourage Russian farmers to be keener sellers now than they were previously, as they sit on their remaining grain stocks as a hedge against the falling domestic currency.
Weekend reports suggest that several vessels loaded with wheat are "stuck" at Russian Black Sea ports awaiting customs clearance in what looks like a deliberate ruse on behalf of the government to delay their departure long enough so that exporters have to pay the new Feb 1 export (or should that be extort?) duty.
Neither the exporters, nor the Egyptian buyers, are likely to be too happy about that.
Ukraine said that they'd exported 21.543 MMT of grains so far this season, including 8.58 MMT of wheat, 8.93 MMT of corn and 3.80 MMT of barley.