31/07/15 -- Soycomplex: Beans closed lower, following a USDA announcement that China had cancelled 200,000 MT of US old crop soybean purchases. Not that that should really make much difference, US exporters have already shipped more than the USDA's current target for the season anyway. China's appetite for specifically US beans for 2015/16 delivery is a different matter, and that is what the trade is most concerned about right now. New crop soybean sales are off to the slowest start in six years, down 50% on where they were a year ago, according to Reuters. Concerns over the state of the Chinese economy have been to the fore this week. The Shanghai Composite Index ended the month 15% lower than it began it, the largest monthly fall since August 2009, according to Bloomberg. Weakness of the Brazilian real and Argentine peso mean that what beans China does buy for 2015/16 delivery will be more likely to be of South American origin. With another record Brazilian crop expected to be planted later this year, and at least a near record Argentine crop being forecast, the pressure will be on US beans to compete. Of course the Chinese won't put all their business that way, there are quality and logistical considerations to take into account. Some US purchases will be a useful hedge against potential problems like strikes, shipping delays etc, and we are still talking about a crop that isn't even in the ground yet in Latin America. It remains a fact though that Chinese soybean imports in the first half of this year included more beans from South America and less from the US than they did in 2014. Two successive years of bumper production will keep Brazil and Argentina in the export market for much longer this year than might normally be the case. A serious weather problem in South America later in the year could change all that of course, but forecasts for a continued El Nino weather pattern to remain in place lean away from that at the moment. Aug 15 Soybeans closed at $9.80 3/4, down 9 1/2 cents; Nov 15 Soybeans closed at $9.40 1/4, down 9 3/4 cents; Aug 15 Soybean Meal closed at $354.60, down $2.50; Aug 15 Soybean Oil closed at 29.98, down 30 points. For the week that puts nearby beans 10 1/2 cents lower, with meal down just 20 cents and oil 30 points easier. A Bloomberg survey into trader/analyst sentiment was very even split, finding 8 bulls, 9 bears and 8 neutral on soybean prices.
Corn: The corn market closed a couple of cents or so lower on the day, but well down on the week. The trade seems to be coming to the conclusion that talk of severe crop damage due to excessive wetness a month or two back was just that, talk. Trade belief that the old adage "rain makes grain" will prove to come true again this year seems to be growing. July is the crucial month for US corn, and this one has proven to be relatively benign temperature-wise. The immediate outlook is for that to continue through until the middle of August. Various crop tours are lined up for next month, so we should have more information on potential yields to go on then. The USDA give us their latest take on production prospects on Aug 12. Prior to that we will get the usual rash of predictions from the likes of Informa, FCStone and Lanworth next week. The USDA announced 108,204 MT of US old crop corn sold to Mexico today. That's just routine business. South Korea seeks 195,000 MT of optional origin corn. FranceAgriMer cut French corn good to very good ratings by 3 points from a week ago to 59% - making for a 22 points decline in the past 4 weeks. This time last year 84% of the crop was rated in the top two categories. The proportion of the crop rated poor to very poor is 16%, which is four times what it was a year ago. The French authorities have now put water restrictions in place in 67 of the country’s 96 mainland departments due to drought, say Bloomberg. "31 departments had restrictions at crisis level, meaning that the authorities had implemented the most severe level of curbs including a ban on the use of water for agriculture," they said. Although the outlook for the French corn crop has been the one that has deteriorated the most in July, they are not alone. Rainfall in Hungary has been almost 30 percent below normal in the past three months, according to a separate Bloomberg report. The EU Commission today trimmed their forecast for this year's EU corn crop by 4.3% from their June estimate to 65.49 MMT. A Bloomberg survey earlier in the week provisionally came up with an average trade estimate of only 63.3 MMT. In Brazil, IMEA said that the safrinha corn crop in the leading producing state of Mato Grosso is 65% complete, up 15 points for the week, although still 3 points behind a year ago. They forecast this year's second crop for the state at 20.3 MMT. They said that the weak Brazilian real means though that production costs are up around 13% with regards to plantings for 2015/16, which may have a negative impact on output next year. Sep 15 Corn closed at $3.71, down 2 1/4 cents; Dec 15 Corn closed at $3.81 1/4, down 2 1/2 cents. For the week, both contracts shed 21 1/2 cents. The Bloomberg survey into trader/analyst sentiment on corn prices found 6 bulls, 13 bears and 6 neutral.
Wheat: The wheat market closed mixed on the day, but lower for the week. Support from yesterday's better than expected weekly export sales total was only fleeting. At just under 700 TMT, apart from the "technical" first week of the new 2015/16 marketing year when the books are switched around, these were amazingly the best outright sales total for 44 weeks! The strong US dollar continues to hamper export sales in general, and the hint this week that a US interest rate rise is on the cards later this year looks likely to see that trend continue. Meanwhile the respective currencies in competing exporting nations, such as Europe, Russia and Ukraine are all weak. US wheat therefore appears caught between a rock and a hard place. The EU has issued 1.6 MMT of soft wheat export licences in the first four weeks of the new marketing year. That's an increase of 23% on the same point last year, when as we all know exports went on to break all previous records. The heat and dryness issues that appear to be a problem for EU corn this year seem to have come just a little too late to be too detrimental for the wheat crop. FranceAgriMer said today that this year's French wheat crop was 70% harvested as of Monday, 5 points ahead of this time last year. The winter barley crop is already fully harvested and the spring crop is 75% done compared to 59% complete this time last year. Quality is said to be pretty good, in the case of wheat certainly better than last year's extremely variable crop that required the rule book concerning futures specifications to be re-written. The wheat harvest is slowly underway in Germany, and production could fall 15% from last year's record 27.75 MMT to 23.58 MMT, according to the government's Stats Office. Russia said that their 2015 grain harvest is 23.5% complete on 11.0 million ha, producing a crop of 37 MMT to date. Wheat accounts for 29.4 MMT of that total and barley a further 4.3 MMT. Ukraine said that their early grains harvest is 78% complete on 8.0 million ha producing a crop of 27.3 MMT to date. That includes 19.8 MMT of wheat and 6.9 MMT of barley. The Ukraine Meteorological Office forecast this year's grain crop at 59 MMT, which is 1.5 MMT below their previous estimate. The Ukraine Ag Ministry predict output at 60 MMT and exports in 2015/16 of a record 37 MMT. Sep 15 CBOT Wheat closed at $4.99 1/4, up 2 3/4 cents; Sep 15 KCBT Wheat closed at $4.92 1/4, up 1 1/4 cents; Sep 15 MGEX Wheat closed at $5.23 1/2, down 3 1/4 cents. For the week that puts Chicago wheat 12 1/2 cents, with the Kansas market down 15 cents and Minneapolis losing 21 1/2 cents. The Bloomberg survey into trader/analyst sentiment on US wheat prices found only 5 bulls, 11 who were bearish and 9 that were neutral.
At the close Nov 15 London wheat was down GBP0.65/tonne at GBP119.85/tonne, Sep 15 Paris wheat was EUR1.00/tonne weaker at EUR180.50/tonne, Aug 15 Paris corn was up EUR0.25/tonne to EUR174.25/tonne, whilst Nov 15 Paris rapeseed was EUR3.50/tonne lower at EUR377.25/tonne.
For the week that puts London wheat down GBP3.45/tonne, with the Paris market EUR5.25/tonne lower. Paris corn fell EUR4.25/tonne versus last Friday and new front month Nov 15 rapeseed ended the week EUR7.00/tonne lower than it began it.
Losses for the month were GBP12.15/tonne in London wheat, EUR20.75/tonne for Paris wheat, EUR12.50/tonne for corn and EUR24.25/tonne for rapeseed.
Harvest pressure, and in many cases better than expected yields and quality, along with the general commodity malaise that we've seen lately are the main reasons for the decline.
At home, the HGCA say that the 2015 UK harvest is off to a slow start, with an estimated 30% of the national winter barley crop cut so far (compared to 85% a year ago at this time). Things are being led by the Eastern region which is said to be 70% done, followed by the South East/South West at approaching 50% complete each.
Yields this year are varying anywhere from 5.7 MT/ha to up to 10.5 MT/ha for some of the hybrid 6-row varieties, they say. Overall they forecast them averaging 7.0-7.2 MT/ha versus the 10-year average of 6.5 MT/ha.
The winter OSR harvest is said to be around 15% complete (it was already 75% done this time last year) with yields between 2.3 MT/ha and 5.1 MT/ha, with the best ones on heavier land that was better able to withstand June heat/dryness, they say. Again the harvest in he Eastern region is furthest advanced at 40% complete.
They are currently predicting an average national yield of 3.5-3.7 MT/ha, up from the 10-year average of 3.4 MT/ha.
In France, harvest activity is advanced, and appears to be confirming that the heat/dryness experienced in May and June has only had minimal negative impact on wheat/barley yields, say Agritel. It could of course yet prove to be different for corn.
FranceAgriMer say that the French winter wheat harvest was 70% complete as of Monday, up from 60% done a week ago and 5 points ahead of this time last year. The French winter barley crop is already 100% in the barn, along with 75% of the spring crop, the latter being up from 47% a week ago and 59% this time last year.
Germany's DBV said that despite earlier extreme heat and dryness causing premature ripening of winter crops, they are estimating the winter barley crop there at 9.1 MMT. That's only 0.34 MMT less than last year and up 0.5 MMT on their June forecast.
A 6% drop in final average German winter barley yields to 7.2 MT/ha is partially compensated for by increased plantings, they said.
There's been some winter wheat harvest activity in the south of the country, with yields estimated to be down 10-15% on last year's bumper ones. An increase of around 3% in plantings will also offset some of the reduction, they add.
Bloomberg report that the French export hub of Rouen increased grain shipments by 64% in the past week to 201,905 MT, with Algeria the largest home taking 124,915 MT of soft wheat - the most to that destination since May 2014. They also shipped out another 77,000 MT of feed barley to China.
Brussels announced that they'd released 324 TMT worth of soft wheat export licences taking the season total so far to 1.6 MMT, up 23% on 1.3 MMT this time last year. They've also now issued 1.4 MMT worth of barley export licences.
Ukraine's wheat harvest is said to be 79% complete on 5.4 million ha producing a crop of 19.8 MMT so far. Agritel say that they expect "no more" than 50% of this year's crop to make milling standard. That potentially leaves a lot of cheap feed wheat on the Black Sea looking for a home this year. They've been actively marketing that into Asia of late.
The Ukraine Ag Ministry currently estimate the nation's grain harvest at 60 MMT, with 2015/16 exports expected to beat last season's record 34.6 MMT at 37 MMT.
Russia said that it's 2015 wheat harvest was 32% complete on 8.3 million ha producing a crop of 29.4 MMT so far. As the harvest has progressed away from southern areas yields have started to drop. The national average is now 3.56 MT/ha versus 3.63 MT/ha this time last year.
30/07/15 -- Soycomplex: Beans closed higher, helped by strong export sales. The USDA announced old crop soybean sales of 416,700 MT, along with those for new crop of 898,100 MT versus trade expectations of around 500 TMT to 1 MMT for both marketing years combined. The old crop supply side is already tight as we know. Exports of 195,500 MT this week were up 41 percent from the previous week and 11 percent above the prior 4-week average too. That takes total shipments so far this season to 48.47 MMT. That's now above the USDA target for the season of 48.3 MMT and there's still 2.62 MMT worth of outstanding sales on the books, taking total commitments to almost 106% of the USDA's current 2014/15 estimate. The USDA also announced 140,000 MT of US beans sold to unknown for 2015/16 delivery under the daily reporting system. Conflictingly, Reuters carried a report saying that South American soybeans would dominate sales into China for much longer than normal this year "thanks to back-to-back record crops in Brazil and huge stocks in Argentina." Chinese customs data shows that the country imported 35.2 MMT of soybeans in the first half of 2015, up 3% from a year ago. They imported more Brazilian and Argentine material and less from the US. Weakness of the Brazilian real and Argentine peso will continue to aid South American exports, the article said. The IGC were unchanged on their forecast for world soybean production in 2015/16 at 316 MMT, but raised trade and consumption levels, lowering ending stocks by 4 MMT to 48 MMT. "Nevertheless, this would still be a new high, and is linked to an expected 16% increase in major exporters’ stocks," they said. "World trade in rapeseed/canola in 2015/16 is projected to be 13% lower y/y. While shipments to the EU are likely to expand due a heavy fall in local output, deliveries to Asia are expected to drop as buyers shift to attractively priced alternatives." The latter presumably referring to soybeans as well as other oilseeds. Aug 15 Soybeans closed at $9.90 1/4, up 7 1/4 cents; Nov 15 Soybeans closed at $9.50, up 6 3/4 cents; Aug 15 Soybean Meal closed at $357.10, up $7.10; Aug 15 Soybean Oil closed at 30.28, up 7 points.
Corn: The corn market managed to regain most of yesterday's 7 cent or so losses. Weekly export sales of 364,900 MT of old crop and 443,300 MT of new crop were at the top end of trade estimates. The old crop sales were also up 63 percent from the previous week. Actual shipments held steady at just over the 1 MMT mark, which is where they have been hovering for just about every week since the end of February. Total shipments so far plus outstanding sales have now hit the USDA's target for the season. The IGC cut their EU corn crop estimate from 67.6 MMT to 67.9 MMT. A Bloomberg survey provisionally pegged it even lower at 63.3 MMT. Coceral were at 65.7 MMT last month versus 2014 production of a record 73.8 MMT. The IGC raised EU corn imports from 12.0 MMT to 12.7 MMT, which is up 40% versus 2014/15. For corn that's about as much positive news as there is really. Net sales of 107,200 MT of sorghum for 2014/15 were reported for China, along with sales of 108,000 MT for 2015/16 split between China and unknown. The IGC raised their forecast for the global crop in 2015/16 by 3 MMT and hiked carryover stocks by 7 MMT. In with all that was a 5 MMT increase for China's corn crop this year, now pegging that at an all time high 225 MMT. China already holds massive corn reserves, and are attempting to auction off 5.3 MMT of these today and tomorrow. Recent auctions haven't been greeted with huge amounts of enthusiasm. There are reports circulating that another 2-3 Brazilian corn cargoes have been sold for shipment into the US for Oct-Nov delivery in the past day or two - right when the US should be awash with their own new crop corn they are importing from South America! South Korea bought 136,000 MT of optional origin corn in a tender. Reuters reported that Asia has been booking large volumes of cheap Black Sea feed wheat in the past few months for delivery July right through to December, directly displacing (mostly South American) corn in the rations. The Buenos Aires Grain Exchange said that the 2014/15 corn harvest in Argentina is now 78.9% complete, up 5.5 points versus a week ago. They raised their production estimate from 25 MMT to 26 MMT due to better yields from late planted corn than anticipated. The USDA were at 25 MMT earlier this month. The market now goes back to trading the weather, and currently the US forecast for August is looking relatively benign. Normal temps are expected occur across the Midwest until Monday, after that things turn a bit cooler than normal for most - apart from the western fringes of the Dakotas, Nebraska and Kansas. Sep 15 Corn closed at $3.73 1/4, up 5 1/2 cents; Dec 15 Corn closed at $3.83 3/4, up 5 1/2 cents.
Wheat: The wheat market closed mostly lower. Weekly export sales of 699,400 MT were a bit better than expected, being up 39 percent from the previous week and 86 percent above the prior 4-week average. The previous 4 weeks have been very modest affairs though, to put that statement into perspective. Exports of 366,700 MT were down 37 percent from the previous week and 2 percent below the prior-4 week average. The IGC lowered their 2015/16 global wheat crop estimate by 1 MMT to 710 MMT, but increased ending stocks by 5 MMT to 201 MMT. On the production side they cut output in Europe by 0.3 MMT to 148.5 MMT, took 2 MMT off Canada to 28 MMT and added 0.3 MMT to the US to 58.5 MMT. Tunisia bought 84,000 MT of optional origin milling wheat for Sep/Nov shipment. South Korea's CJ bought 50,000 MT of Australian wheat for Dec/Jan shipment, and the country's KFMC are tendering 43,100 MT of Australian wheat for December shipment. Reports suggest that Mexico finished up buying Russian wheat this week, having booked French material the previous week, snubbing wheat from next door neighbour the US both times. Russia said that their 2015 grain harvest was 21.9% complete on 10.2 million ha producing a crop of 35.4 MMT to date. That includes 28.4 MMT of wheat and 4.1 MMT of barley, for which the harvests are 29.2% and 14.9% complete respectively. Both are somewhat behind last year's pace. Yields are a bit better than a year ago so far, but are falling as things move on and look like ending up lower at the finish. Reuters said that the Philippines has been buying Ukraine feed wheat for Sep/Oct shipment in preference to Brazilian corn. South Korean and Thai buyers have also been booking feed wheat cargoes from the Black Sea for delivery between now and the end of the year, they added. MDA CropCast raised their world wheat production estimate by 1.07 MMT from last week to 707.4 MMT. Conditions are improving in the US, Canada and Argentina they say. The US spring wheat crop was raised 0.65 MMT to 19.1 MMT, up 10% on a year ago. Day Two of the US Wheat Quality Council’s spring wheat tour produced a yield estimate of 47.3 bu/acre, down from the record Day One estimate of 51.1 bu/acre. Their final average yield estimate is 49.9 bu/acre, up from the 2014 yield of 48.6 bu/acre, and the five year average of 45.2 bu/acre. The Buenos Aires Grain Exchange trimmed back their forecast for Argentine wheat plantings this year from 3.75 million ha to 3.70 million, and down almost 16% on 4.40 million a year ago. Planting of that is 97.9% complete, they added. Sep 15 CBOT Wheat closed at $4.96 1/2, up 1/4 cent; Sep 15 KCBT Wheat closed at $4.91, down 4 1/4 cents; Sep 15 MGEX Wheat closed at $5.26 3/4, down 2 3/4 cents.
30/07/15 -- EU grains closed mostly higher, consolidating somewhat following the recent rout.
Nov 15 London wheat closed GBP0.10/tonne easier at GBP120.5/tonne, Sep 15 Paris wheat was EUR1.75/tonne firmer at EUR181.50/tonne, Aug 15 Paris corn was EUR0.25/tonne higher at EUR174.00/tonne, whilst Aug 15 Paris rapeseed ended up EUR5.00/tonne at EUR373.0/tonne.
The London and Paris wheat markets had fallen more than 8% in the past three weeks as of last night's close, whilst Paris rapeseed had fallen by over 5% in the same period. Paris corn meanwhile was down more than 10% over the past four weeks.
You can't call today's action a reversal, but it may be safe to say that some consolidation was overdue, even if the trend still appears to be lower on harvest pressure and the usual stiff competition from the Black Sea that we generally see at this time of year.
The latter continue to be aided by their respective weak domestic currencies. The Russian rouble is down by 6.7% against the US dollar so far this month, with the Ukraine hrvynia falling by 5.4% versus the US currency in the same period.
Reuters report that cheap Black Sea feed wheat is "flooding" into the Asian market, knocking Brazilian corn out of feed rations.
The Philippines, South Korea and Thailand thought to have bought around 3 MMT of Black Sea feed what for Jul/Dec shipment recently, they say.
The former most recently booked 100 TMT of Ukraine feed wheat for Sep/Oct delivery at prices said to be around $210-220 including freight. Knocking off the freight and converting that back to sterling that's roughly the equivalent of where the London feed wheat future currently trades, but on the basis of already loaded onto a boat in Odessa.
The Russian grain harvest is 21.9% complete on 10.2 million ha, which is 22% behind last year's pace. That's produced a crop of 35.4 MMT to date. Average yields at 3.47 MT/ha are still ahead of this time last year (3.43 MT/a), but now only just.
There are clear signs that, as the pace picks up away from the more productive areas in the south of the country, that we will start to see this average slip to below last year's levels.
The Russian wheat harvest is said to be 29.3% complete on 7.8 million ha, which is 23.5% down on this time last year. That's produced a crop of 28.4 MMT so far, with national yields at 3.66 MT/ha versus 3.63 MT/ha a year ago.
A Bloomberg survey provisionally pegged the EU-28 corn harvest at 63.3 MMT this year, with the French harvest at 14 MMT, Italy at 7.5 MMT and Romania at 10.7 MMT.
That's lower than last month's Coceral forecast, reflecting recent heat and dryness. They were at 65.7 MMT in June versus 73.8 MMT a year ago. That included a French estimate of 15.5 MMT, which appears to be where the worst of the losses are thought to most likely have occurred.
MDA CropCast today cut their EU-28 corn production forecast by 0.95 MMT on a week ago. They now only see this year's crop at 59 MMT.
On the international tender front, Tunisia are said to have bought 84,000 MT of optional origin soft milling wheat in a tender for 134,000 MT.
29/07/15 -- Soycomplex: Beans closed mixed, higher on the nears and lower on new crop. After a 10% fall over the last 2 days the Shanghai Composite Index was up 3.4% today. Argentina's Ag Ministry said that the country had crushed a record 18.5 MMT of soybeans in the first half of 2015. They also said that Argentine growers are 59.5% sold on their 2014/15 soybean crop versus 49.2% committed this time a year ago. South Korea tendered for 60,000 MT of US/South American soy meal for November delivery. The GFS weather model is giving wetter than normal for the western corn belt, and generally drier than normal in the eastern half for the period through to Aug 13. Temperatures are forecast to be normal to cooler than normal everywhere but the southeast of the US. Cool August temperatures would normally be regarded as beneficial for crops, particularly beans as August is regarded as the critical yield determining month. New crop beans and meal should get a demand boost from a much tighter global rapeseed S&D situation in 2015/16. The Canadian Ag Ministry forecast a 2015 canola crop there of 14.3 MMT, down 1.7 MMT on their previous forecast and 1.3 MMT less than last year. They trimmed 0.8 MMT off their 2015/16 Canadian canola export forecast, taking that down to 7.6 MMT, which would be 1.6 MMT below 2014/15. Trade estimates for tomorrow's weekly export sales report are between 500 TMT to 1 MMT for both marketing years combined. Aug 15 Soybeans closed at $9.83, up 8 1/4 cents; Nov 15 Soybeans closed at $9.43 1/4, down 1 1/2 cents; Aug 15 Soybean Meal closed at $350.00, up $4.80; Aug 15 Soybean Oil closed at 30.21, down 45 points.
Corn: The corn market closed around 7 cents lower. The US Energy Dept had weekly US ethanol production down 8,000 barrels per day from the previous week to 965,000 bpd. The Argentine Ag Ministry said that growers there are 62.4% sold on their 2014/15 corn crop versus 53.5% committed this time a year ago. As well as being wetter than normal. July temperatures in the Midwest have also largely been cooler than average for the month. "The time worn adage is that 'rain makes grain' boosting corn yields in the critical July pollination period. However, the 2014 summer growing season proved that coolness may be more influential for corn for boosting yields. Midwest temperatures in July 2014 were 4 F below average, leading ultimately to a record harvest. The national average corn yield finished with 171 bushels per acre, 7% above trend. This was a surprising result, since rainfall was below average during the critical July pollination stage," said Martell Crop Projections. "A record corn yield was achieved in 2009 also, 9% above trend, bolstered by record cool July temperatures. Another “super cool” July in 1992 promoted favourable corn yields also 8.3% above trend (average). July coolness has been proven to be beneficial for corn yields, as the cooler temperatures reduce evaporation from the soil surface. This helps to conserve ground moisture in corn during the critical pollination stage," they add. Could this ultimately also prove to be true in 2015? The market seems to think that it might. Trade estimates for tomorrow's weekly export sales report are around 500-800 TMT. Sep 15 Corn closed at $3.67 3/4, down 7 1/4 cents; Dec 15 Corn closed at $3.78 1/4, down 7 1/4 cents.
Wheat: The wheat market closed lower across the board. The Wheat Quality Council's spring wheat crop tour is underway, and said to be reporting some of the best potential wheat yields in years. The official tour estimate is expected to be out on Thursday. The day one yield of 51.1 bushels/acre, was up from the 2014 figure of 48.3 bu/acre, and the five year average of 43.4 bu/acre. It was also the highest in a tour history going back to 1994. This comes at a time when demand for US wheat is already slack, and right in the middle of the wheat harvest in the Black Sea region. Ukraine said that it had harvested 18.3 MMT of wheat so far and that yields were a bit better than last year. Russia said that it had harvested 27.7 MMT of wheat to date, and that its yields were also up a little compared to 12 months ago. The Argentine Ag Ministry said that growers there are 87.8% sold on their 2014/15 wheat crop versus 64.0% committed this time a year ago. Colombia are said to be in the market seeking wheat. Japan are tendering for 120,000 MT of feed wheat and 200,000 MT of feed barley for November shipment. Tunisia are looking for 134,000 MT of optional origin milling wheat. Morocco said that it had/would produce a record wheat harvest in 2015, and that it's import needs would therefore be reduced. Egypt’s Supply Minister said that the country has enough wheat stocks bought to last it for the next six months. These sort of statements are routine, and don't rule them out of tendering again in the market very soon, especially on this latest break in prices. Trade estimates for tomorrow's weekly export sales report are 350-600 TMT. A figure below this level would be another nail in the coffin for US wheat. Sep 15 CBOT Wheat closed at $4.96 1/4, down 14 1/2 cents; Sep 15 KCBT Wheat closed at $4.95 1/4, down 9 1/2 cents; Sep 15 MGEX Wheat closed at $5.29 1/2, down 10 3/4 cents.
29/07/15 -- EU grains closed generally lower, as the bearish run in the sector continues.
At the close of play, Nov 15 London wheat was down GBP1.40/tonne to GBP120.60/tonne, Sep 15 Paris wheat fell a EUR2.50/tonne to EUR179.75/tonne, Aug 15 Paris corn was down EUR2.75/tonne to EUR173.75/tonne, whilst Aug 15 Paris rapeseed was EUR1.50/tonne lower at EUR368.00/tonne.
The harvest in the UK, France, Germany and Italy has stalled on rain, although there's a drier forecast ahead for the next few days through to Saturday. After that though rains return for much of Western Europe, in the forecast lasting through to Aug 13, with Spain particularly wet - set to receive 4-8 times its normal rainfall for the time of year.
That may help struggling corn crops in the region. In Germany Deutsches Maiskomitee say that the variation in this year's corn crop is "enormous" with plants ranging from waist high to exceeding 2m in height.
That makes predicting the size of this year's crop particularly difficult, they say.
Morocco estimated it's 2015 grain crop at a record 11.5 MMT due to increased plantings and higher than normal rainfall. Wheat (excluding durum) production will come in at a record high 5.6 MMT, which beats the previous 2013 record by 0.5 MMT.
The country said that it will also harvest 2.4 MMT of durum and 3.5 MMT of barley this year, meaning that its grain import requirements will fall in 2015/16.
Russia's 2015 grain harvest now stands at 34.5 MMT so far off 9.8 million ha, which equates to 21.1% complete. Yields are said to have averaged 3.51 MT/ha versus 3.44 MT/ha a year ago.
Of the total Russian harvest so far, wheat is said to be 28.1% complete producing a crop of 27.7 MMT to date.
That's not quite the full story though, there's a sharp difference between yields this year and last when looking at the advanced harvest in the most productive south of the country and the drier areas further north.
Russia's Southern District is 61% harvested on 4.8 million ha, with production at 18.9 MMT and yields averaging 3.93 MT/ha versus 3.69 MT/ha a year ago. The North Caucasus region is 74.3% harvested on 2.2 million ha producing a crop of 8.3 MMT so far, with yields at 3.78 MT/ha compared to 3.66 MT/ha a year ago.
Further north though, the harvest in the Central region is only 7.8% complete so far and yields here are only averaging 1.67 MT/ha against 2.12 MT/ha a year ago. In the Far Eastern region, where the harvest is only just getting going, early yields are 1.34 MT/ha versus 2.31 MT/ha in 2014.
That suggests that final national average yields could be dragged down below last year's levels as the harvest becomes more advanced in these less productive areas.
In Ukraine, the early grain harvest is 73% complete producing 18.3 MMT of wheat, 6.6 MMT of barley and 1.5 MMT of rapeseed to date. Yields of wheat and barley are said to be a bit higher than last year.
Tunisia are tendering in the market for 134 TMT of optional origin milling wheat, with French material probably the favourite to win the business.
28/07/15 -- Soycomplex: Beans closed higher, in a Turnaround Tuesday style of sorts. The recovery was only a partial one of what was lost yesterday though. The USDA didn't raise good to excellent crop ratings in last night's report, which was contrary to general expectations. They said that 71% of the crop is blooming, one point behind the 5-year average and that the proportion of the crop setting pods is 34%, double that of a week ago and 3 points ahead of the 5-year average. The Chinese stock market was down another 1.5% today, making for a 2-day loss of 10%. They are of course far and away the world's largest soybean buyer, being expected to account for almost two-thirds of global soybean trade in 2015/16, according to current USDA forecasts. Oil World said that due to sharply lower EU and world rapeseed/canola production this year the oilseed's premium over soybeans will continue to widen. Rapeseed oil should trade higher than soybean oil throughout most of 2015/16, they said. That also suggests that the relationship between rapeseed meal and soybean meal could stay skewed outside of what might be considered to be the "traditional" range. Oil World see EU soybean imports seen rising 4.5% to 14.5 MMT in 2015/16, with soybean meal imports up 3.9% to 21.5 MMT, reported Bloomberg. EU rapeseed imports are estimated up 8.6% to 2.64 MMT in 2015/16, they added. Ukraine, typically a large exporter to Europe, is 81% complete on it's 2015/16 rapeseed harvest producing a crop of 1.4 MMT to date, suggesting final output of around 1.7 MMT versus 1.8 MMT currently from the USDA and down 23% on a year ago. Aug 15 Soybeans closed at $9.74 3/4, up 13 1/2 cents; Nov 15 Soybeans closed at $9.44 3/4, up 11 1/2 cents; Aug 15 Soybean Meal closed at $345.20, up $1.00; Aug 15 Soybean Oil closed at 30.66, up 55 points.
Corn: The corn market staged a modest couple of cent recovery following yesterday's rout. Unlike with soybeans, the USDA did raise corn crop ratings in line with trade ideas - up one point to 70% good to excellent. They said that 78% of the crop is silking, up from 55% a week ago and versus 77% typically at this time. In addition 14% of the crop is at the dough stage versus 17% on average for this week. The ten and thirty year average for this week in the crop year (week 30) in the good to excellent category is 61% and 64% respectively, say Benson Quinn. All in all things are pretty good then really. Crop conditions were 5 points better than this a year ago and that harvest went on to break all previous records by the proverbial country mile. "Last year, it was Iowa farmland that flooded in June with 10 inches of rainfall. However, while flooding set back corn development, the final result was surprisingly good. Iowa corn yields averaged 178 bushels per acre, and 2% above average (trend). Iowa corn gradually recovered last season with exceptional July coolness and below average rainfall. How do current weather conditions compare? Temperatures this summer have been moderately cool in July, though not nearly as cool as last year in the Midwest," noted Martell Crop Projections. Ukraine remain busy exporting corn, with 831 TMT of the grain already shipped out this month. The Ukraine Ag Ministry are forecasting the country to export a new record grain volume in 2015/16, with corn shipments at around 19.8-21 MMT. The USDA currently only estimate these at 16 MMT, down 2 MMT from 18 MMT in 2014/15. South Korea's MFG bought 139,000 MT of optional origin corn for Dec-Jan shipment in a tender. The USDA reported 120,000 MT of sorghum sold to China, with delivery split between both crop years. There remains talk of Beijing looking to do something to restrict sorghum imports in favour of shifting some of their own huge domestic corn stocks. Sep 15 Corn closed at $3.75, up 2 cents; Dec 15 Corn closed at $3.85 1/2, up 2 cents.
Wheat: The wheat market closed higher, recovering most of yesterday's losses. The USDA now have the 2015 US winter wheat harvest at 85% complete, up 5 points on the 5-year average. The spring wheat harvest is 2% done, which is 3 points behind the average for this time. Spring wheat crop conditions were up one point in the good to excellent category. A Wheat Quality Council’s spring wheat tour started today and ends on Thursday. Scouts are surveying fields in the Dakotas and Minnesota. "The first leg of the wheat tour notes yield potential above a year ago with one potential exception being a leg of the tour that went through Northern SD, but still recorded a yield in the neighborhood of 55 bpa vs. 65 bpa the prior year. The reports I have seen do not indicate that disease pressure is anything more than routine," said Benson Quinn's Brian Henry. India are said to have imposed a 10% import duty on wheat, the first such move in 8 years. The hope/aim is encourage local millers to use more of the government's stocks, the quality of which is usually questionable at best, and that's in a good year. This year's harvest was hit by rain and hail just before it started, cutting quality and leading to a rash of early season imports of mostly Australian wheat to blend in with their own inferior crop. The USDA's FAS raised their estimate for the Russian 2015 grain crop to 97 MMT, down 6% on a year ago. That includes 56 MMT of wheat, which is 3 MMT less than a year ago. They see grain exports in 2015/16 at 29 MMT, of which 21 MMT will be wheat. The Russian Ag Ministry said grain production could exceed 101 MMT this year. UkrAgroConsult estimated the Russian grain crop at 98 MMT, down 2 MMT from previously. That includes 57.5 MMT of wheat. They trimmed their 2015/16 Russian grain export forecast from 30 MMT to 28 MMT, of which 20 MMT will be wheat (down from 20.5 MMT previously). Sep 15 CBOT Wheat closed at $5.10 3/4, up 8 1/4 cents; Sep 15 KCBT Wheat closed at $5.04 3/4, up 5 1/2 cents; Sep 15 MGEX Wheat closed at $5.40 1/4, up 3 1/4 cents.
28/07/15 -- EU grains bounced mostly higher today, recovering some (but by no means all) of yesterday's losses.
At the close Nov 15 London wheat was up GBP0.50/tonne at GBP122.00/tonne, Sep 15 Paris wheat was EUR0.75/tonne higher at EUR182.25/tonne, Aug 15 Paris corn was down EUR0.75/tonne to EUR176.00/tonne, whilst Aug 15 Paris rapeseed was EUR4.25/tonne lower at EUR369.50/tonne.
The EU Commission's MARS unit appeared to confirm yesterday what the trade was already thinking - that the recent heat and dryness in Europe will ultimately prove to be more of a problem for corn at the pollination stage than for more mature wheat or barley, for which the threat came generally just a little too late.
They did trim their estimates for EU-28 average yields for wheat, barley and OSR from a month ago, but not by much. Yields will however still be down on last year's bumper levels.
Wheat yields in the bloc are now seen averaging 5.57 MT/ha versus 5.62 MT/ha a month go, and down 5.6% on a year ago. Barley yields were pared back from 4.65 MT/ha to 4.61 MT/ha, down 7.1% compared to 2014. OSR yields were estimated at 3.23 MT/ha versus 3.28 MT/ha a month ago, down 10.8% versus last year.
For corn however this month's drop was more severe, with yields cut from a previous 7.22 MT/ha to 6.71 MT/ha, now down 16.9% on a year ago.
In France, wheat yields were estimated at 7.25 MT/ha (versus 7.41 MT/ha in June and 7.36 MT/ha in 2014), in Germany it was 7.66 MT/ha (versus 7.77 MT/ha and 8.63 MT/ha respectively) and in the UK it was 8.07 MT/ha (versus 8.14 MT/ha and 8.58 MT/ha).
For the record UK barley yields were estimated at 6.09 MT/ha from 6.12 MT/ha previously and 6.4 MT/ha in 2014. UK OSR yields were pegged at 3.73 MT/ha, up from 3.70 MT/ha last month and also last year.
French corn yields were cut from 9.39 MT/ha in June to 8.63 MT/ha this time round, a fall of 13.9% compared to 2014.
The harvest in the FSU meanwhile is advancing, and competition from the region remains fierce.
In Ukraine the early grain harvest is now 69% complete on more than 7 million ha producing a crop of 23.66 MMT to date, with yields at 3.36 MT/ha versus 3.33 MT/ha in 2014. Wheat accounts for 16.93 MMT of that total (with harvesting 68% complete).
The Ukraine Ag Ministry said that the country had now exported 1.87 MMT of grains so far in this new season, of which 492 TMT was wheat, 831 TMT corn and 548 TMT barley. There's a further 319 TMT already loaded waiting to leave, so total exports should top 2 MMT this month.
A senior Ukraine Ag Minister said that he expects the country to export a record 37 MMT this season, up from 34.6 MMT in 2014/15.
The USDA FAS in Russia increased their estimate for this season's grain crop to 97 MMT, which is 6% down on last year.
They see exports this season at 29 MMT versus 30.9 MMT in 2014/15, including 21 MMT of wheat.
Predictably the Russian Ag Ministry are a bit more bullish, saying that production could exceed 101 MMT this year (105.3 MMT in 2014).
Agritel report that the recent slump in value of the Russian rouble, linked to falling global oil prices, means that domestic wheat prices are now above the level where anything other than a nominal RUB50/tonne export duty kicks in. Based on current prices a duty of around $3.50/tonne is payable by the exporter, they calculate.
That could increase further if more rouble depreciation lies ahead of course.
27/07/15 -- Soycomplex: Beans began the week with heavy losses losses. Concerns about the Chinese economy drove the Shanghai Composite to post it's largest one day fall in more than 7 years today, prompting a wholesale commodity sell off. Fund money seems to be caught on the wrong side of this one, they were net long around 90,000 soybeans contracts in Friday's commitment of traders report. An improved US weather outlook adds to the bearish tone. "Drier weather forecasts are just what the doctor ordered for the rain saturated eastern Midwest corn and soybean crops. This week will be warmer with normal to below rainfall," said Benson Quinn. The trade is thinking that the USDA might increase soybean good to excellent crop ratings later today. Pakistan are said to have bought 126,000 MT of soybeans of South American origin overnight. At the close Aug 15 Soybeans finished at $9.61 1/4, down 30 cents; Nov 15 Soybeans closed at $9.33 1/4, down 31 3/4 cents; Aug 15 Soybean Meal closed at $344.20, down $10.60; Aug 15 Soybean Oil closed at 30.11, down 37 points.
Corn: The corn market also trades with double digit losses. Fund money has come off particularly badly in this break in corn prices, they were revealed to have added almost 77,000 contracts to their net long position in Friday's commitment of traders report, and are now net long to the tune of almost 280,000 lots. Ouch! South Korea are tendering for 70,000 MT of optional origin corn. The EU Commission's MARS unit cut their forecast for EU-28 corn yields from 7.22 MT/ha to 6.71 MT/ha today. That's now down sharply on 8.07 MT/ha a year ago and below the 5-year average of 7.02 MT/ha. "Prolonged and intense heat waves in July affected important cropland areas in northern Italy, France, Germany, Poland, the Czech Republic, Austria and Hungary. Maximum temperatures often exceeded 35°C and locally reached 40°C, hitting spring and winter crops during grain filling and maize while flowering," they said. The USDA are thought likely to increase good to excellent corn ratings by one or two points later today. Sep 15 Corn closed at $3.73, down 19 1/2 cents; Dec 15 Corn closed at $3.83 1/2, down 19 1/4 cents.
Wheat: The wheat market trades around 4-5 cents lower. MARS trimmed EU soft wheat yields a little, down from 5.85 MT/ha a month ago to 5.80 MT/ha. Ukraine said that their 2015 early grain harvest was 69% complete on 7 million ha, with yields averaging 3.36 MT/ha. That includes 4.7 million ha of wheat, producing a crop of 16.9 MMT so far. The Ukraine barley harvest is 76% complete at 6.25 MMT. Jordan tendered for 100,000 MT each of optional origin wheat and barley for Nov/Dec delivery. The Mexican wheat crop this year will come in at around 3.7 MMT, similar to a year ago, according to the USDA's FAS. Domestic consumption will rise from 6.85 MMT to 7 MMT in 2015/16, they say. Despite that imports will fall from 4.5 MMT to 4.4 MMT, they predict. Canada said that they'd exported 16.8 MMT of wheat (excluding durum) in the first 50 weeks of 2014/15, a similar level to a year ago. Durum exports were 4.5 MMT versus 4.7 MMT a year ago, and barley exports were 1.4 MMT against 1.3 MMT in 2013/14. Sep 15 CBOT Wheat closed at $5.02 1/2, down 9 1/4 cents; Sep 15 KCBT Wheat closed at $4.99 1/4, down 8 cents; Sep 15 MGEX Wheat closed at $5.37, down 8 cents.
27/07/15 -- Even before EU markets opened, the overnight US grains were trading heavily into the red following an 8.5% fall in the Chinese stock market - the largest one day drop since 2007 - on renewed concerns over the economy there.
With Europe now in the middle of harvesting, that was all it needed to see London and Paris grains begin the week in defensive mode.
At the close Nov 15 London wheat was GBP1.80/tonne lower at GBP121.50/tonne, Sep 15 Paris wheat was EUR4.25/tonne easier at EUR181.50/tonne, Aug 15 Paris corn was EUR1.75/tonne lower at EUR176.75/tonne and Aug 15 Paris rapeseed slumped EUR10.50/tonne at GBP373.75/tonne.
Reuters say that the 2015 French wheat crop should come in at, or up to 1MMT above, last year's 37.5 MMT harvest despite recent dryness.
French wheat yields in the north are surprisingly good, as too are hagberg levels - unlike last year. Proteins are mixed however.
FranceAgriMer said on Friday that the French wheat harvest was 60% done as of last Monday, it's probably about 75% complete now.
The German wheat harvest is gathering pace, but with only an average crop expected, compared to last year's bumper harvest. There's "no clear picture yet" on quality, Reuters say. Agritel estimate production down 10% at 24.9 MMT.
The Polish wheat harvest is underway, but slowed by recent rain. Widespread harvesting won't begin until August though. That could come in at around 10.6 MMT, down 15% on last year, say Sparks Polska.
The UK wheat harvest is estimated around 14.5-15.5 MMT versus 16.6 MMT last year, but above the 5 year average of 14.4 MMT, Reuters say.
The UK barley harvest has now progressed north of the M62 judged by my weekend observations.
Ukraine said that it had exported 1.74 MMT of grains already this season, with a further 207,000 MT loaded and waiting to go.
24/07/15 -- Soycomplex: Beans closed lower on the day and for the week. An improved US weather outlook and stiff competition from South America weigh on the market, with beans now back below $10/bushel. ABOIVE estimated that Brazil will export 50.3 MMT of soybeans this season, well above the USDA's 46.8 MMT forecast. "Drier weather recently has been a welcome reprieve from flooding previously in Illinois, Missouri, Indiana and Ohio. Flooded crops are gradually recovering. Increased sunshine has also been beneficial for Midwest crop development. Midwest weather conditions are expected to trend warmer in the week ahead with near- to above average rainfall. The new forecast calls for temperatures 3-5 F above normal, the Upper Midwest even hotter in Minnesota and Wisconsin," said Martell Crop Projections. The trade is expecting the USDA to possibly raise good to excellent crop ratings for soybeans on Monday. The crop was rated 62% good to excellent last week, something like 63-64% could be on the cards on Monday. The USDA reported China bought 220,000 MT of new crop US soybeans today under the daily reporting system. They are said to have been active buyers of South American material these past few weeks. Aug 15 Soybeans closed at $9.91 1/4, down 18 3/4 cents; Nov 15 Soybeans closed at $9.65, down 15 1/2 cents; Aug 15 Soybean Meal closed at $354.80, down $4.20; Aug 15 Soybean Oil closed at 30.48, down 71 points. For the week Aug 15 beans were down 23 1/2 cents, meal was $1.20 lower and oil fell 130 points.
Corn: The corn market closed with double digit losses. As with beans an improved US weather outlook weighs on the market, driving prices back below the psychologically important $4/bushel level. The trade is expecting the USDA to report the US corn crop to maybe be in a bit better shape in Monday night's crop condition report. The crop was rated 69% good to excellent last week, with "silking" one point behind the 5-year average. "US corn pollination may have advanced to 70% complete, up from 55% a week ago. This is the most sensitive period for the corn yield. Generous rainfall promotes favourable yields. However, with severe drought, kernels are not successfully pollinated. This leads to blank spaces on the ear that would shrink the yield. Producers are not worried about drought this year. Midwest soil moisture runs from ample to surplus," said Martell Crop Projections. The USDA reported that Mexico bought 231,000 MT of US corn overnight, 168,000 MT of which was new crop. They also reported export sales of 116,000 MT of sorghum for delivery to unknown destinations, almost certainly China. Of that total 58,000 MT is for delivery during the 2014/15 marketing year and 58,000 MT for delivery during the 2015/16 marketing year. The Ukrainian Hydrometeorological Centre upped their forecast for corn yields there this year from 6.0 MT/ha to 6.2 MT/ha, increasing production from a previous forecast of 25.3 MMT to 26.5 MMT. The crop there is in generally excellent condition, they said. Sep 15 Corn closed at $3.92 1/2, down 10 3/4 cents; Dec 15 Corn closed at $4.02 3/4, down 11 cents. For the week Sep 15 corn was 12 1/2 cents lower, with Dec 15 down 13 1/4 cents.
Wheat: The wheat market was unable to buck the trend set by both beans and corn, closing lower on the day and for the week. The USDA announced export sales of 104,350 MT of US wheat for delivery to Taiwan during the 2015/016 marketing year. Of that total, 56,550 MT is hard red spring wheat, 36,550 MT is hard red winter wheat and 11,250 MT is white wheat. That isn't enough to set the market alight though. The Buenos Aires Grain Exchange said that winter wheat planting in Argentina is 93.8% complete on 3.517 million ha. They left their final area estimate unchanged at 3.75 million ha, down sharply from 4.4 million ha a year ago. The CWB crop tour pegged Canadian spring wheat production at 18.1 MMT and the durum crop at 4.2 MMT, with an all wheat crop of around 25 MMT. The USDA had the crop at 27.5 MMT earlier this month. FranceAgriMer left French wheat crop conditions unchanged at 76% good to very good. They said that 60% of the crop had already been harvested as of Monday night, up from 38% a week ago and almost double the 33% done from this time last year as the warm and dry conditions allow the combines to make rapid progress. Russia said that it's 2015 wheat harvest was 21.9% complete on 5.8 million ha, producing a crop of 22.5 MMT to date. Yields so far are said to be averaging 3.86 MT/ha versus 3.60 MT/ha a year ago. That is expected to drop off however as the harvest advances into less productive and drier areas such as the Centre, Volga and Siberian regions. Sep 15 CBOT Wheat closed at $5.11 3/4, down 9 3/4 cents; Sep 15 KCBT Wheat closed at $5.07 1/4, down 9 3/4 cents; Sep 15 MGEX Wheat closed at $5.45, down 7 3/4 cents. For the week that puts Chicago wheat 42 1/4 cents lower, with the Kansas market down 39 1/4 cents and Minneapolis 29 1/4 cents lower.