14/08/15 -- EU grains closed lower on the day and for the week.
At the close, Nov 15 London wheat was down GBP0.40/tonne to GBP117.85/tonne, Sep 15 Paris wheat was EUR1.50/tonne easier at EUR176.00/tonne, Nov 15 Paris corn was down EUR2.50/tonne to EUR178.75/tonne, whilst Nov 15 Paris rapeseed was EUR4.00/tonne lower at EUR371.25/tonne.
For the week that puts London wheat GBP2.05/tonne lower, whilst in Paris wheat was EUR3.75/tonne weaker, corn fell EUR4.75/tonne and rapeseed slumped EUR12.75/tonne.
Corn was easier despite another drop in ratings for the French crop. FranceAgriMer cut 3 points off the proportion of that rated good to very good, taking that down to 55%. A year ago that was 86%. Only 7% of the crop is rated in the top category compared to 20% of it this time last year.
The heat and dryness that's plagued this year's corn crop across Europe, appears to have largely come too late to adversely affect wheat though. FranceAgriMer today estimated the French soft wheat crop at an all time high 40.4 MMT, up 7.8% on a year ago.
They said that harvesting of that was 99% complete as of Monday. They said that the average yield this year was seen at 7.83 MT/ha, compared with the 5-year average of 7.26 MT/ha. Protein levels were similar to 2014, generally between 10.5% and 11.5%, and specific weights of around 80kg/hl were among the highest seen in the last 20 years. Durum wheat production was estimated at a further 1.8 MMT, talking the all wheat crop up to an all-time high 42.2 MMT.
This year's French winter barley crop was estimated at 9.6 MMT, up more than 14% on a year ago, as it also escaped the worst of the weather. The spring barley crop didn't do quite so well, with production forecast 9% lower at 2.9 MMT.
Similar comments apply to the French rapeseed crop, estimated to be 7% lower at 5.1 MMT.
At home the HGCA said that an impressive 40% of the UK winter barley crop had been harvested in the past week, with 90% of this year's harvest now complete. The combines have been busy with the winter OSR crop too, with harvesting of that up from 35% complete a week ago to 80% done this time round.
The UK 2015 winter wheat harvest is about 10% done, they said.
As far as yields go, results so far have been impressive, with winter barley averaging 7.3-7.5 MT/ha versus a 10-year average of 6.5 MT/ha. Winter OSR yields are seen at 3.6-3.8 MT/ha, not the highest on record, but above the 10-year average of 3.5 MT/ha.
It's still early days on wheat, but early yields for that are said to be averaging 7.9-8.1 MT/ha, up from 7.7 MT/ha averaged over the last 10 years.
The results of yesterday's Egyptian wheat tender also weighed on the market today. The best French wheat offer in that was more expensive on an FOB basis than the winning Russian and Ukraine bids were including freight.
It's noteworthy though that the one winning Russian bid was priced at $184.39/tonne FOB. With the rouble having fallen 2% this week versus the US dollar (and it's down 12% in the past month against the US currency), that's the equivalent of around RUB12,000 which is well above the level at which the current much-criticised floating export duty on wheat kicks in.
That is being blamed for the slow start to Russia's 2015 export campaign.
EU wheat and barley exports meanwhile have got off to a brisk start in the 2015/16 marketing year, with Brussels having granted 2.3 MMT worth of soft wheat export licences, along with a further 1.9 MMT worth approved for barley.
That's ahead of where things were this time a year ago, say the HGCA. Note that the EU Commission currently estimate the bloc's soft wheat exports this season at 27.6 MMT, down 15% on the 2014/15 record of 32.5 MMT. Barley exports are also predicted to be lower at 9.0 MMT versus 12.5 MMT in 2014/15.
In other news, Russia said that it had harvested 55.5 MMT of grains so far this season off almost 40% of the planned area. Average yields are 2.97 MT/ha versus 3.19 MT/ha a year ago.
That total includes 41.4 MMT of wheat off nearly 47% of the expected area with yields averaging 3.29 MT/ha, an 8% fall compared to 2014.
Ukraine's 2015/16 grain exports have hit the ground running, with almost 3.8 MMT already shipped out 6 1/2 weeks into the new season. That includes almost 1.5 MMT of wheat, 1.1 MMT of corn and 1.2 MMT of barley. There's a further 427 TMT of grains already loaded onto vessels waiting to sail, say the Ag Ministry.
13/08/15 -- Soycomplex: Beans closed with good gains, at least partially reversing some of Wednesday's steep losses. Weekly export sales came in at 96,300 MT on old crop and 660,500 MT on news crop - the latter being primarily for China and unknown destinations. Actual exports themselves were only 178,100 MT, down 16 percent from the previous week and 14 percent below the prior 4-week average. Cumulative shipments are now 48.86 MMT, with a further 1.88 MMT worth of outstanding sales. The USDA had full season exports at 49.67 MMT in yesterday's WASDE report, meaning that 0.81 MMT of the outstanding sales need to be shipped by the end of the month to hit that target. MDA CropCast increased their world soybean production estimate by 1.01 MMT from a week ago, thanks to increased potential in the US. They now have output there at 102.18 MMT. The USDA were 106.59 MMT yesterday. Safras e Mercado estimated Brazil’s 2015/16 soybean exports at 52.3 MMT, pegging ending stocks at 6.27 MMT, up 54% versus 2014/15. Pakistani importers were reported to have booked 66,000 MT of soybeans from Brazil for May 2016 shipment. Expiring tomorrow Aug 15 Soybeans closed at $9.93, up 42 cents; Nov 15 Soybeans closed at $9.27, up 17 cents; Aug 15 Soybean Meal closed at $344.10, down $1.90; Aug 15 Soybean Oil closed at 28.91, down 12 points.
Corn: The corn market closed around 6-7 cents higher. Weekly export sales of 29,200 MT for delivery in 2014/15 were down noticeably from previous week and 87 percent below the prior 4-week average. New crop sales were 501,900 MT. Exports of 840,600 MT were down 16 percent from the previous week and 23 percent below the prior 4-week average. In sorghum there were net sales reductions of 61,900 MT for 2014/15 and sales of 166,500 MT for 2015/16 for China (114,000 MT) and unknown destinations (52,500 MT). MDA CropCast raised their world corn production estimated by 2.46 MMT to 950.1 MMT. They added 4.62 MMT to Brazil, taking their crop up to 79.4 MMT and increased US production by 0.38 MMT to 344.8 MMT. Ukraine's crop was lowered 1.52 MMT to 23.2 MMT and Europe's was reduced by 0.4 MMT from a week ago to 56.8 MMT. Germany's DRV sliced their estimate for corn production there this year to only 3.91 MMT, down from the 4.64 MMT predicted in July and the 5.14 MMT produced in 2014. German corn was “suffering greatly” from heat and drought, and a significant yield decline is expected, they said. Russia's Ag Ministry said that the country should produce 100 MMT of grains this year, and possibly up to 2-3 MMT more than that. That's not far away from last year's 105.3 MMT harvest, and should include a record corn crop this year. Argentine farmers said that they will stage a commercial strike lasting 5 days from Aug 24. Sep 15 Corn closed at $3.63 3/4, up 6 1/2 cents; Dec 15 Corn closed at $3.75 1/4, up 7 1/4 cents.
Wheat: The wheat market posted fairly decent gains, although not enough to entirely reverse yesterday's losses. Weekly export sales of 421,600 MT for delivery in the 2015/16 marketing year were down 50 percent from the previous week's impressive total and 28 percent below the prior 4-week average. There were also net sales of 600 MT for 2016/17 reported for Italy. Exports of 399,500 MT were up 27 percent from the previous week. The Kazakh Ag Ministry reported Aug 1 grain stocks of 4.5 MMT including more than 4 MMT of wheat. The Rosario Grain Exchange estimated Argentine wheat plantings at only 3.4 million ha, down from 3.5 million previously and 300,000 less than the Buenos Aires Exchange say got planted. MDA CropCast added 5.73 MMT To their world wheat production estimate, taking that up to 715.2 MMT. Russia got an extra 1.76 MMT, taking their crop to 58 MMT. Ukraine got an additional 1.46 MMT, taking production there up to 24.5 MMT and Kazakhstan's output was increased by 1.33 MMT to 13.8 MMT. The world barley crop was raised 1.31 MMT to 137.6 MMT, largely thanks to a 1.25 MMT increase for Ukraine where production is now pegged at 7.6 MMT. Egypt bought three cargoes of wheat in their tender - two of Ukraine origin and one from Russia. Jordan extended the deadline in a tender to buy 100,000 MT of wheat to Aug 25 from Aug 19. They are also in the market for 100,000 MT of barley for Dec/Jan shipment. Brussels said that they'd issued 349,073 MT of soft wheat export licences this past week, down 6% on a week ago. Barley export licences slumped 58% to 161,105 MT. Sep 15 CBOT Wheat is at $5.08 3/4, up 11 3/4 cents; Sep 15 KCBT Wheat is at $5.06 3/4, up 10 1/4 cents; Dec 15 MGEX Wheat is at $5.34, up 8 1/4 cents.
13/08/15 -- EU grains closed mostly higher, escaping the worst of the fall out from last night's slump in the Chicago markets - led by a 6.2% plunge in soybeans following a bearish USDA WASDE report.
At the close, Nov 15 London wheat was up GBP0.65/tonne to GBP118.25/tonne, Sep 15 Paris wheat was EUR1.25/tonne higher at EUR177.50/tonne, Nov 15 Paris corn was up EUR1.00/tonne to EUR181.25/tonne, whilst Nov 15 Paris rapeseed was EUR1.50/tonne firmer at EUR375.275/tonne.
The USDA estimated the EU-28 wheat crop little changed from last month at 147.82 MMT, tweaking their area estimate a little lower, and upping average yields slightly.
EU 2015/16 corn production fared worse, with output forecast at 62.3 MMT, which was 3.5 MMT below last month and 12.9 MMT below last year’s record crop of 75.0 MMT, although not as low as some other estimates that are out there. Average yields were forecast at 6.58 MT/ha, 5.2% below last month, 17% below last year and 6.2% behind the 5-year average.
"After targeting western Europe during June, unfavorable conditions migrated east in July, most notably in south-central and southeastern Europe. A punishing heatwave with daily temperatures above 35°C (95°F) was accompanied by increased dryness. July is a critical period for corn in Europe because the plant is typically silking and tasseling. High temperatures (>35°C) during this sensitive period can cause severe pollination problems. In addition, a lack of summer precipitation in southern Europe resulted in very low soil moisture levels, limiting grainfill and reducing kernel size," they said.
The corn crop in France, Europe's largest producer, will tumble to 14 MMT this year they said. That's in line with the average trade estimate in a recent Bloomberg survey, although not as low as the French Ag Ministry's forecast of 13.5 MMT released on Monday.
There was little change to their forecast for EU-28 barley production this year, but another 300,000 MT was trimmed off the rapeseed crop here, taking that down to 21.1 MMT, a 13.4% fall compared to 2014.
French Analysts Strategie Grains raised their EU-28 soft wheat production forecast by 3.1 MMT to 144 MMT today, although that's still 5 MMT down on last year's record crop. Durum wheat production was unchanged from a month ago at 7.6 MMT, giving us a total EU all wheat crop of 151.6 MMT, considerably higher than the USDA's estimate from last night.
They slashed their corn production forecast to 59.6 MMT, down more than 21% compared to last year.
At home, Defra said that the English wheat area for the 2015 harvest was down 5.8% on a year ago at 1.7 million ha, a much larger decline seen in an earlier HGCA survey for the whole of Great Britain. In contrast OSR plantings only fell 2.9% to 613k ha (although that's still the smallest area since 2010 and a lower area than previously for the third year running) versus ideas of a GB decline in area of 7% reported by the HGCA in July. Winter OSR plantings were only down 1.9% according to Defra.
The total English barley area for 2015 increased 6%. Winter barley increased by 3.9% to 377 thousand hectares and spring barley increased by 8.3% to 374 thousand hectares, they said.
"The decrease in wheat area has been seen across all of the English regions ranging from a 3.8% decrease in the North West & Merseyside to a 7.7% decrease in the West Midlands. However the Eastern region and the East Midlands still grow almost half of the wheat in the country, accounting for 28% and 20% of the total area respectively. These proportions are unchanged since 2014," they added.
The HGCA are due to update us on harvest progress tomorrow. A week ago they said that this year's barley crop was 50% cut, so I guess that should be up to around 70-75% done now. They estimated the UK winter OSR harvest to be 35% complete last week, certainly good progress has been made with that locally this week.
12/08/15 -- Soycomplex: Beans closed with steep losses, caught off guard by a bearish USDA report that the majority of the trade didn't see coming - especially fund money which finds itself left holding the baby again - long and wrong. The first USDA surprise was a 0.9 bu/acre hike in US soybean yields this year to 46.9 bu/acre. The trade was expecting them to be lowered to somewhere in the 44-45 bu/acre region. If the USDA are correct then yields are now less than a bushel/acre off last season's record. Plantings were reduced, but at 800k acres not by as much as the 1.2-2.0 million that the majority of the trade thought likely. US production was pegged at 3.916 billion bushels, up from 3.885 billion in July. The average trade guess was for a fall to 3.724 billion. The next big shock for the trade was new crop ending stocks rising to 470 million bushels, up from 425 million bushels the previous month and contrary to trade expectations for a drop to around 300-325 million. Global new-crop stocks fell to 86.88 MMT, down from 91.80 MMT previously, but up from 80.6 MMT in 2014/15. Production in Brazil (97 MMT) and Argentina (57 MMT) in 2015/16 was held steady. China's import needs were raised 1.5 MMT to a new high 79 MMT. Following yesterday's shock Chinese currency devaluation the shaky soybean market desperately needed a bullish USDA report to provide some support today. It didn't get it and hence the market quickly turned into what looked like the opening sequences from Saving Private Ryan. The trade may well ultimately prove to have been correct with their forecasts, but it was probably unrealistic to expect the USDA to go along with them as early as August. Trade ideas for tomorrow's weekly export sales report from beans are in the 550,000 and 1,250,000 MT region. Aug 15 Soybeans closed at $9.51, down 63 cents; Nov 15 Soybeans closed at $9.10, down 61 1/2 cents; Aug 15 Soybean Meal closed at $335.90, down $12.00; Aug 15 Soybean Oil closed at 29.03, down 105 points and the lowest close for a front month since late 2008.
Corn: The market closed the best part of 20 cents easier. The USDA stunned the trade with a 2 bu/acre hike in potential US corn yields this year. The market was anticipating these being lowered to around 164.5 bu/acre but instead got a figure of 168.8 bu/acre. That took production up to 13.686 billion bushels from 13.530 billion previously and above the average guess of 13.332 billion bushels in a recent Bloomberg survey. New crop ending stocks increased by 114 million bushels from last month, coming in at 1.713 billion, well above the average trade estimate of 1.424 billion. US corn exported were revised down 1.0 MMT to 47.0 MMT on strong competition from South America. Brazil's exports were increased 1.5 MMT to 28 MMT and Argentina's raised 0.5 MMT to 15.5 MMT. Brazil's 2015/16 crop was hiked 2 MMT to 79 MMT, Ukraine's was increased 1 MMT to 27 MMT and Russia's was increased 0.5 MMT to a new record 13.5 MMT. Global ending stocks went from 190 MMT to 195 MMT versus trade expectations of 187.91 MMT. In other news, The US Energy Dept had US ethanol production for the week ending August 7 at 965,000 barrels/day, up 4,000 barrels/day from the week before. Bloomberg reported that Chinese importers of barley, sorghum, tapioca, dried distillers’ grains will have to apply for import permits for those products from Sep 1. The Chinese government have reportedly been concerned by the large rise in sorghum imports in particular, and are rumoured to be looking for ways to restrict these in favour of shifting some of their own massive corn stockpiles. Trade forecasts for tomorrow's weekly export sales report are around 250,000 and 850,000 MT. Kazakhstan's Ag Ministry estimated the nation's 2015/16 grain exports at 8.0 MMT versus a previous estimate of 7.0 MMT and up from 6.4 MMT in 2014/15. Their 2015 harvest is said to be 5.5% complete on 817k ha, producing a crop of 1.34 MMT so far. Agritel said that Ukraine's corn production potential this year is 26 MMT, although they note than recent 35C+ temperatures have come during grain fill time, which may take the shine off final yields. Sep 15 Corn closed at $3.57 1/4, down 19 1/4 cents; Dec 15 Corn closed at $3.68, down 19 1/2 cents.
Wheat: The market closed around 10-15 cents lower across the three exchanges. The USDA pegged 2015 US all wheat production at 2.136 billion bushels, down 12 million from July and 17 million below the average trade guess. They lowered US exports this season from 26.25 MMT to 25 MMT. "Global production in 2015/16 is raised to a record as larger crops in Kazakhstan, Russia, Turkey, and Ukraine more than offset lower production in Argentina, Canada, and the United States. Global trade is down slightly, highlighted by smaller imports for Iran and Libya, which more than offset increases for Morocco and Turkey. Exports are raised for Russia and Ukraine but cut for the United States and Canada," they said. The global wheat crop was raised from 722 MMT to 726.5 MMT, which now beats last year's record by more than 1 MMT. World ending stocks were upped from 219.8 MMT to 221.5 MMT. Russian wheat production was raised 3 MMT to 60 MMT, and their exports increased 1 MMT to a new record 23 MMT. Forecasts for tomorrow's weekly export sales are between 300,000 and 725,000 MT. Egypt tendered for wheat for late September shipment, with the results expected tomorrow. It will be interesting to see where Black Sea and EU offers line up, especially those out of Russia given the existing uncertainty over the current export duty on wheat. It will also be interesting to see what volume they buy. Despite prices being at their lowest in years in their last tender they only finished up buying a couple of cargoes. Whether that's because the feel that the market is coming lower, or due to lack of cash is unclear. In Ukraine, where the early grain harvest (which excludes corn) is already just about over, they've produced a crop of 35.7 MMT so far out of a anticipated final harvest estimate of 60 MMT from the Ag Ministry. Russia's Deputy PM said that the country will harvest 100 MMT "or more" grain this year, pegging export potential at 25-27 MMT. He said that there were no plans to introduce a limit on exports. Sep 15 CBOT Wheat closed at $4.92 1/4, down 15 cents; Sep 15 KCBT Wheat closed at $4.75 1/4, down 12 3/4 cents; Sep 15 MGEX Wheat closed at $5.09 1/2, down 9 3/4 cents.
In that they raised world wheat production from the 722 MMT predicted a month ago to 726.5 MMT, helped by a 3 MMT hike to 60 MMT in output in Russia this year.
Ukraine's 2015 wheat crop estimate was also raised by 1.5 MMT to 25.5 MMT, and Kazahstan's was increased 0.5 MMT to 14 MMT.
"Once again, Black Sea countries’ (Kazakhstan, Russia, and Ukraine) wheat exports are projected at a record in 2015/16. Russia accounts for the lion’s share of trade and is forecast at a record, while Ukraine’s exports are the second highest ever. Kazakhstan is up slightly from last year," they said.
"For 2015/16, production in the Middle East and several countries in North Africa is expected to rebound significantly from last year and import demand is projected to fall as a result. This will likely shift lower-priced Black Sea wheat into other markets," they added.
Russia's 2015/16 wheat exports were raised from 22 MMT to 23 MMT. Ukraine's were increased from 12.5 MMT to 13 MMT and Kazakhstan's were held at 6 MMT.
Global wheat trade was lowered more than 1 MMT to 156.8 MMT, with the US losing market share - their exports were cut from 26.25 MMT to 25.5 MMT.
The USDA's 2015 wheat production estimate for the EU was virtually unchanged at 147.8 MMT, so too were 2015/16 exports at 31 MMT.
Whilst EU ending stocks were cut from 14.1 MMT to 11.7 MMT, global carryout was increased from 219.8 MMT to 221.5 MMT.
The EU corn crop was cut by 3.5 MMT to 62.5 MMT, which was in line with expectations.
"World corn production in 2015/16 is down marginally as smaller crops in China and EU more than offset gains in Brazil, Russia, Ukraine, and the United States. At the global level, trade is up, led by higher EU import demand. Exporters are shuffled, with higher projections for Argentina, Brazil, Russia, and Ukraine more than offsetting reduced forecasts for EU and Serbia," they said.
Barley production in the EU-28 was seen little changed at 57.2 MMT, although ending stocks were reduced by a little over 0.5 MMT to just under 5 MMT. EU exports in 2015/16 were projected 0.5 MMT lower than last month at 7 MMT, which is 2 MMT down on last season.
In other news, SovEcon raised their view on this year's Russian wheat crop from 57.5 MMT to 59.5 MMT.
Jordan tendered for 100 TMT of wheat for Nov/Dec shipment.
The EU Commission said that it expects the EU 2015 rapeseed crop to fall 14.7% from last year’s record crop to 20.73 MMT (the USDA were 21.1 MMT today).
Oil World estimated EU 2015/16 soymeal imports at 21.7 MMT versus 2014/15 imports of 20.8 MMT, likely due to anticipated tighter rapemeal availability.
Nov 15 London wheat closed GBP1.65/tonne lower at GBP117.6/tonne. Sep 15 Paris wheat was down EUR2.25/tonne at EUR176.25/tonne, Nov 15 Paris corn was EUR4.75/tonne easier at EUR180.25/tonne, whilst Aug 15 Paris rapeseed was down EUR8.75/tonne at EUR373.75/tonne.
12/08/15 -- EU grains trade mostly lower, with the market nervously awaiting this afternoon's USDA WASDE report.
At noon, the sole green on the board comes from Nov 15 London wheat which is GBP0.25/tonne higher at GBP119.50/tonne. Sep 15 Paris wheat is down EUR0.50/tonne at EUR178.00/tonne, Nov 15 Paris corn is EUR1.50/tonne easier at EUR183.50/tonne, whilst Aug 15 Paris rapeseed is down EUR2.50/tonne at EUR380.00/tonne.
The euro is up on news of (another) Greek bailout deal having been agreed in principal.
Russia's Deputy PM said that the country will harvest 100 MMT "or more" grain this year, pegging export potential at 25-27 MMT.
He said that there were no plans to introduce a limit on exports, but that the government are considering altering the way that the current duty on wheat is calculated. That could speed up exports, which for wheat were down more than half year-on-year in July at only 1.28 MMT. The harvest there is currently around 40% complete.
In Ukraine, where the early grain harvest (which excludes corn) is already just about over, they've produced a crop of 35.7 MMT so far out of a anticipated final harvest estimate of 60 MMT from the Ag Ministry.
With domestic consumption forecast at the level of 24 MMT, that leaves 36 MMT left over for export or as free stock. Carryover levels from 2014/15 were already pretty high, so most if not all of that should bet exported, which would beat even last season's record volume.
Agritel forecast Ukraine's corn production potential this year is 26 MMT, although they note than recent 35C+ temperatures have come during grain fill time, which may take the shine off final yields.
In Kazakhstan the 2015 harvest is only just getting going, at 5.5% complete on 817k ha, producing a crop of 1.34 MMT to date.
Fine weather across much of the UK these past few days means that many should have made good progress with the domestic harvest. Where to store it all is the problem that many will now be facing, especially those still carrying stock from last year as well.
Current ex farm prices don't look too tempting that's for sure, but that doesn't mean that they won't and can't go even lower.
Rain is back in the forecast for much of the UK by the weekend, and indeed for most of the continent too. The 15-day forecast is wetter than normal for pretty much the whole of Europe. Yes it is mid-August. Dryness will return as soon as the kids go back to school I am reliably informed.
After the USDA report tonight, tomorrow brings the final English planting area estimates from Defra. Right in the middle of the harvest they are finally going to tell us how much got planted last autumn. Nice one, Defra. Meanwhile Russia and Ukraine can tell us how advanced the harvest is, what's been produced so far, what the average yield is and what he tractor driver's name was (it was Yuri by the way) on a daily basis.
OK, they are sometimes just making it up, but that's not the point.
So, just for Defra, here is a late football score just in: England 4 West Germany 2.
Some people are on the pitch, they think it's all over....
11/08/15 -- Soycomplex: Beans closed lower, giving up almost all of yesterday's gains. News of a Chinese currency devaluation, aimed at boosting their exports (but hampering imports) hit all commodities in general. Brazil's Conab estimated this year's soybean crop there at a record 96.2 MMT, unchanged on previously but up sharply on 86.1 MMT a year ago. The weak Brazilian real means that exports are flooding out of the country, up about 35 percent in the past three months, according to Oil World. Brazil's 2014/15 soybean exports are estimated at 49.1 MMT versus 2013/14 exports of 45.7 MMT. In Argentina the June soybean crush was said to be 4.516 MMT, up 7.9% from a year ago, leaving plenty of meal to export. They are of course the world's leading exporter of meal. All of yesterday's confidence seems to have evaporated in just 24 hours. The market will now be nervous heading into tomorrow's USDA report. The trade is expecting the USDA to cut 2015 US plantings by more than 1 million acres, and lower yields from 46 bu/acre to somewhere between 44-45 bu/acre. It also expects 2015/16 ending stocks to fall from 425 million bushels to close to 300 million. Aug 15 Soybeans closed at $10.14, down 30 3/4 cents; Nov 15 Soybeans closed at $9.71 1/2, down 23 cents; Aug 15 Soybean Meal closed at $347.90, down $14.60; Aug 15 Soybean Oil closed at 30.08, down 33 points.
Corn: The corn market closed around 13 cents lower, also giving up most of Monday's advances in a fairly spectacular "Turnaround Tuesday" style. The fund money that was a featured buyer must be going home to give the cat a right good kicking tonight. Once a magical talisman that could do no wrong, "managed money" at the moment it would seem simply can't get on the right side of the market. The trade is looking for the USDA to cut 2015 US corn yields to around 164.5 bu/acre, down from 166.8 bu/acre a month ago, in tomorrow's report. It is also expecting acres and therefore production to be reduced, with the latter coming in at an average 13.332 billion bushels in a recent Bloomberg survey, down versus 13.530 billion from the USDA in July and 6.2% below the record 14.216 produced in 2014. Conab forecast the Brazilian corn crop at 84.3 MMT versus 81.8 MMT a year ago. Exports are seen rising sharply to 26.4 MMT from 20.9 MMT a year ago, aided by bumper production and the weak Brazilian real. The country's exports exports last month were more than double those of a year ago. Rusagrotrans forecast a record Russian corn crop of 12.3 MMT this year, with 2015/16 exports rising to 3.5 MMT. Ukraine's Ag Ministry forecast a 2015 corn crop there of 26.5 MMT, saying that recent heat and dryness hasn't done too much damage. APK Inform estimated Ukraine's 2015/16 domestic corn consumption at 9.1 MMT, down 8.5% on a year ago. Europe's corn crop remains "fried" and production there could fall to 60 MMT, say Strategie Grains, almost 6 MMT below the USDA's July estimate. They get a chance to correct that tomorrow. Sep 15 Corn closed at $3.76 1/2, down 13 3/4 cents; Dec 15 Corn closed at $3.87 1/2, down 13 1/2 cents.
Wheat: It was never going to take much to get the wheat market, a reluctant follower of corn and beans yesterday, to end lower. And so it proved to be the case today. The Russian wheat harvest has advanced to 45% complete, producing a crop of 40.2 MMT to date. Rusagrotrans estimated total grain production there at 100-102 MMT, including 57.3 MMT of wheat (down from 59.7 MMT a year ago) and 17.4 MMT of barley (20.4 MMT in 2014). All those forecasts are higher than their earlier estimates though. Glencore estimated Russia's 2015 wheat crop at 58.5 MMT, with 2015/16 export potential of 22.1 MMT. Kazakhstan said that their 2015 harvest is 5.3% complete on 788k ha, producing a crop of 1.31 MMT to date. Yields are up from 1.22 MT/ha in 2014 to 1.66 MT/ha. Belarus said that their 2015 grain harvest is 75% complete on 1.69 million ha, producing 6.36 MMT so far with yields averaging 3.76 MT/ha versus 3.96 MT/ha a year ago. The USDA's FAS in Bangladesh estimated the country's 2015/16 wheat imports down from 3.8 MMT to 3.6 MMT. Conab estimated Brazil's 2015 wheat crop at 7.00 MMT. A Manitoba weekly crop progress report said that winter wheat yields are ranging from 55-90 bu/acre, with good quality. "A return to warmer and drier weather conditions is welcome to aid in ripening of spring crops," they added. In tomorrow's USDA report US all wheat production is estimated at 2.153 billion bushels, from within a range of estimates of 2.075–2.210 billion. The USDA July estimate was 2.148 billion and US 2014/15 all wheat production was 2.026 billion. US ending stocks in 2015/16 are seen at 858 million bushels, from a range of estimates of 742-913 million and the USDA July estimate of 842 million. Sep 15 CBOT Wheat closed at $5.07 1/4, down 18 1/4 cents; Sep 15 KCBT Wheat closed at $4.88, down 16 1/2 cents; Sep 15 MGEX Wheat closed at $5.19 1/4, down 15 cents.
11/08/15 -- EU grains pretty much staged a complete reversal of yesterday, apart from corn giving up all of Monday's gains and then some. Whilst the latter was down, it still remains the only one of the quartet to be a net gainer on the week so far.
At the close, Nov 15 London wheat was down GBP2.60/tonne to GBP119.25/tonne, Sep 15 Paris wheat was EUR4.50/tonne lower at EUR178.50/tonne, Nov 15 Paris corn fell EUR3.25/tonne to EUR185.00/tonne, whilst Nov 15 Paris rapeseed was EUR4.25/tonne easier at EUR382.50/tonne.
The big news of the day, ahead of tomorrow's all-important USDA report, was the Chinese devaluation of their currency. That hit commodity prices in general, with NYMEX crude oil falling to a new low of $43/barrel.
Wholesale downgrades to the size of this year's French corn crop mean that prices for that are still running at an unusual premium to milling wheat, although any origin corn is around a GBP15.00/tonne discount to imported French material into the East Coast of the UK, the HGCA note.
"As long as corn from other origins resists price rises, UK feed wheat may find itself held back too," they said.
Talk of bumper UK yields of barley and rapeseed this year are giving rise to the notion that wheat, the harvest of which is only just starting, could perform likelwise. That comes at a time when there's already an unusually large volume of old crop wheat being carried into the new season.
New crop feed wheat prices now aren't much better than GBP100/tonne off the combine in the South East, and barley is making little more than GBP90/tonne for immediate movement.
The market could therefore really do without a bearish surprise from the USDA tomorrow, although I fear it might get one.
Warm and dry weather now means that the pace of the 2015 Russian wheat harvest has overtaken that of a year ago.
On top of that, Rusagrotrans said that this year's corn crop there could beat last season's output by 1 MMT at 12.3 MMT, allowing for exports of around 3.5 MMT in 2015/16 versus 3.0 MMT in 2014/15.
They forecast a Russian total grain crop of 100-102 MMT this year, down only marginally on a harvest of 105.3 MMT in 2014.
Exports have been slow so far this new season though, held back by the new duty on wheat which is linked to the value of the rouble.
ProZerno said that Russia only exported 2 MMT of grain in July, down 34% versus the same month in 2014. Of that, only 1.28 MMT was wheat, down sharply on 2.67 MMT a year ago and over 2 MMT in 2013.
The top wheat buyer last month was Iran (192 TMT) followed by Turkey (175 TMT) and then Egypt (175 TMT).
Russian wheat exports should pick up if and when the government make changes to the export duty, moves to do that are in the offing.
Other news out of Russia today was that the government there are to delay the start of this season's intervention purchasing programme (which was scheduled to start today) by a week. No explanation was given as to why this was the case.
Regardless, the prices on offer are pretty poor, so sales into the fund for the time being are likely to be minimal.
APK Inform estimated Ukraine's grain consumption to fall 5% this season to 27.3 MMT. Domestic wheat usage will drop 0.5% to 12 MMT, with barley and corn consumption both down 8.5% to 4.4 MMT and 9.1 MMT respectively.
The country is estimated to produce around 26 MMT of wheat, over 8 MMT of barley and 24 MMT of corn this year, leaving plenty left over for export.
10/08/15 -- Soycomplex: Beans closed with large gains to start the week, ending at the best levels on a front month in four weeks as weather forecasts pencilled in a hotter and drier look for the 7-10 day period. August is of course long-regarded as the key yield-determining month for beans. The trade is also getting excited ahead of Wednesday's USDA report, with a Reuters survey estimating that they could cut 1.2 million acres off this year's planted area, and drop yields from last month's 46 bu/acre to 44.7 bu/acre. Roach Ag Marketing estimated plantings 2 million acres below the USDA's current 85.1 million. Meanwhile, demand from China remains very strong. Chinese customs data shows that the country imported a record 9.50 MMT of beans in July, up 17.4% from a month previously and up 27% from a year ago. That takes Jan/Jul imports to 44.66 MMT, up 7.1% from a year ago. CNGOIC estimated China’s Aug/Sep soybean imports at 13.0 MMT versus 11.06 MMT in the same period in 2014. Most of that is coming/will come from South America though. South Korea's NOFI bought 55,000 MT of South American soymeal for December shipment, and the country's KFA bought 52,000 MT of similar for January shipment. Weekly US export inspections came in at 152,000 MT. None of that was destined for China. Still, total marketing year shipments to all destinations are up 14% from the previous year. The USDA left crop ratings unchanged on a week ago at 63% good to excellent, with a small one point move from the former into the latter. They have 88% of the crop blooming versus 91% on average and 69% setting pods versus 66% on average. Aug 15 Soybeans closed at $10.44 3/4, up 35 3/4 cents; Nov 15 Soybeans closed at $9.94 1/2, up 31 1/4 cents; Aug 15 Soybean Meal closed at $362.50, up $9.90; Aug 15 Soybean Oil closed at 30.41, up 38 points. A very strong close like this leaves the market ripe for some "Turnaround Tuesday" trade tomorrow. I'd expect the South American producer to view this as a selling opportunity even if their North American counterpart doesn't concur.
Corn: The corn market closed around 17 cents higher, and ended pretty much on session highs. The same reasons that beans posted strong gains are behind the corn move, even if it is widely acknowledged that August is more important a month for beans than corn. "Midwest growing conditions were favourable for corn and soybean development in July, but weather conditions have become hotter and drier in August. The Great Lakes region has received sub-par rainfall in the past 3 weeks, that along with hotter temperatures is stressing corn and soybeans. Illinois, the 2nd leading corn state, has grown steadily drier, along with Indiana, Ohio, Michigan and Wisconsin," said Martell Crop Projections. The trade is expecting some friendlier numbers from the USDA on Wednesday, with reduced US corn acres and yields. Roach Ag Marketing estimated plantings at 88.2 million acres versus the USDA’s forecast of 88.897 million in June. A Bloomberg survey has yields at an average 164.7 bu/acre versus 166.8 bu/acre a month ago. A Reuters survey came in slightly lower at 164.5 bu/acre. Fund money will have been a featured buyer today, but their recent track record on anticipating which way the market moves next has been pretty poor of late, will they live to regret today's purchases again on Wednesday night? Weekly export inspections came in at 804,981 MT, down 12.5% from the previous week. After the close the USDA left corn crop ratings unchanged at 70% good to excellent, where a one point drop was anticipated according to a Bloomberg survey. Silking was at 96%, in line with normal. They said that 50% of the crop was at the dough stage, one point ahead of normal. Elsewhere, the crop in Europe remains in trouble with various analysts queuing up to slash production forecasts. One today was Strategie Grains who cut their estimate to 60 MMT versus the USDA's July forecast of 65.8 MMT. The French Ag Ministry released their first forecast for corn production there this year, pegging the (corn grown for grain) crop at only 13.5 MMT, down 28% year-on-year. There's a school of thought that it could end up even lower than that if French farmers decide what was intended for grain isn't really up to the job, and anticipating a forage shortage this year, go for the whole crop silage option. Israel tendered for up to 110 TMT of optional origin corn for Oct/Dec shipment. Sep 15 Corn closed at $3.90 1/4, up 17 1/2 cents; Dec 15 Corn closed at $4.01, up 17 1/4 cents.
Wheat: The wheat market closed with fairly decent (some would say reluctant) gains, being given a leg up by corn and beans. Weekly export inspections of 365,986 MT were up 15% on a week ago, but 33% down on the same week in 2014. Saudi Arabia bought 505,000 MT of EU, North American, South American, Australian and/or Canadian hard wheat for Sep/Nov shipment. Jordan are in the market for 100,000 MT of hard wheat of optional origin. The USDA said that the 2015 US winter wheat harvest is now 97% done versus 90% on average at this time. Spring wheat harvesting is 28% done versus 20% on average. Spring wheat crop conditions were cut one point to 69% good to excellent. Unchanged at 70% is what the market was expecting. Unlike corn, the French wheat harvest looks like being record high this year, with the Ag Ministry there increasing their forecast from the 37.9 MMT estimated in June to a record 39.3 MMT, up 4.7% on a year ago. Ukraine said that their 2015 wheat harvest was 97% complete producing a crop of 25.8 MMT in bunker weight so far. The USDA currently have that forecast at 24 MMT in clean weight. Russia say that they've harvested 44% of their 2015 wheat crop producing 39.6 MMT to date. Average yields are said to be down 7% at 3.34 MT/ha. Whilst yields in the well-advanced southern areas are up, further north they are considerably lower versus a year ago. Grain yields in the Volga are down nearly 15% and the Central region is seeing yields 17.5% below year ago levels. Russia's grain exports are well below those of a year ago so far, down nearly 40% at 2.29 MMT according to data from the Ag Ministry. That may change as and when they make changes to the new floating export duty on wheat. A recent renewed bout of rouble weakness has seen this rise from only "token" levels to around $7.50/tonne. The Russian PM Dmitry Medvedev is said to have given ministers and agricultural leaders until Sep 10 to come up with some revised proposals, according to a report on Bloomberg. Unlike corn and beans, the trade is thinking that the USDA will raise US 2015/16 production and carryout estimates in Wednesday's report. For all wheat production the average estimate is 2.153 billion bushels, from within a range of estimates of 2.075–2.210 billion. The USDA July estimate was 2.148 billion and US 2014/15 all wheat production was 2.026 billion. US ending stocks in 2015/16 are seen at 858 million bushels, from a range of estimates of 742-913 million and the USDA July estimate of 842 million. Sep 15 CBOT Wheat closed at $5.25 1/2, up 15 cents; Sep 15 KCBT Wheat closed at $5.04 1/2, up 11 1/2 cents; Sep 15 MGEX Wheat closed at $5.34 1/4, up 9 1/4 cents.
Comment: All I can say is that the trade better not be disappointed that Wednesday's USDA report isn't as friendly as it hopes. If it is that could spark a rout, with fund money left holding the baby again. I'm not saying that final US corn and soybean production won't end up where the trade thinks it will, I just don't see them doing anything too drastic - not in August. That isn't their normal style. As mentioned last week the USDA are frequently behind the pace when it comes to either increased, or decreased, yield potential. This time last year, for all the talk then of 170+ bu/acre yields (which we now know was correct talk) the USDA only raised potential from 165.3 bu/acre in July to 167.4 bu/acre in Aug.
10/08/15 -- EU grains closed higher to start the week, helped by sharply higher US markets in afternoon trade.
At the close, Nov 15 London wheat was up GBP1.90/tonne to GBP121.85/tonne, Sep 15 Paris wheat was EUR3.25/tonne higher at EUR183.00/tonne, Nov 15 Paris corn was up EUR4.75/tonne to EUR188.25/tonne, whilst Nov 15 Paris rapeseed was EUR2.75/tonne firmer at EUR386.75/tonne.
The market is expecting the USDA to show reduced US corn and soybean yield potential this year, along with a downwards revision to their original planting estimates due to early season wetness in Wednesday's upcoming WASDE report. That equates to lower production numbers, and tighter US ending stocks than the numbers given last month.
Personally, I don't expect the data to be as supportive for prices as the market seems to currently think. Only time will tell...
Late in the day the French Ag Ministry estimated this year's troubled corn crop there at only 13.5 MMT, a drop of 28% on a year ago, in their first forecast of the season for the crop. That's a result of plantings down 10.2% and yields falling 19.6% due to heat and dryness.
In stark contrast they predicted a 4.7% rise in soft wheat production to a record 39.3 MMT, which was also up from the 37.9 MMT previously estimated. Barley output will rise 3.6% to 12.2 MMT, which was 500,000 MT more than previously though, they also said.
The French OSR crop will decline 8.9% to 5.0 MMT, and sunflower output was sen 17% lower at 1.3 MMT, they added.
In the leading French port of Rouen, silo operator Socomac are reported to have announced that they are suspending the intake of wheat due to lack of space and slack exports. There are only two approved delivery points against the French wheat futures contract in the port, and this is one of them. The other is run by Senalia, and they made a similar announcement earlier last week.
That's a problem if you were intending to make delivery against a Sep 15 futures sale, following what is now expected to have been a record French soft wheat harvest this year.
The southern half of the country got rain over the weekend, which may alleviate the deteriorating French corn crop conditions a little.
Spanish analysts AgroInfoMarket said that the country produced 5.25 MMT of soft wheat this year, up from a previous estimate of 5.07 MMT, but down 6% on 5.59 MMT a year ago.
They were unchanged from previously on their forecast for Spanish soft wheat imports at 3.88 MMT, a near 8% reduction compared to 2014/15 despite the lower output.
Spanish barley production was forecast at 6.77 MMT, little changed from either a month or a year ago. Imports were raised from 650 TMT to 680 TMT, up almost 50% on last season.
They cut their view on this year's Spanish corn crop from 4.22 MMT to 4.11 MMT, now down 8% on last year, with imports seen unchanged at 6.25 MMT, a near 7% increase versus 2014/15.
The latest EU weather forecast forecast predicts temperatures that are mostly warmer than normal through to Thursday, then cooler in the west, but warmer to much warmer than normal in the east through to Aug 25.
Precipitation totals are seen wetter than normal for most areas (UK, France, Germany, Spain, Italy) through the next 15 days, but a bit drier than average from Poland eastwards.
In other news, Saudi Arabia announced that they bought 505,000 MT of 12.5% hard wheat over the weekend, in a tender for 495,000 MT.
The accepted origins of purchase are said to be US, EU, Canadian, South American and/or Australian wheat and the prices reportedly paid were between $220.50 and $227.84 on a cost and freight basis. Delivery is set to be between September and November.
APK Inform said that grain exports from both Russian and Ukraine seaports fell last week.
For the first week of the month Russia's seaports exported 315.9 TMT of grains, down from 328.5 TMT the previous week. That included 236.6 TMT of wheat, 42.1 TMT of barley and 7.2 TMT of corn.
Ukraine's exports via seaports meanwhile dropped from 707.6 TMT in the last week of July to 522.7 TMT in the first week of August. That consisted of 380.7 TMT of wheat and 142 TMT of barley. Corn exports last week were interestingly zero.
Separately, the Russian Ag Ministry said that the country's grain exports so far this season (Jul 1 - Aug 5) were down 40% on a year ago at 2.29 MMT. That included 1.44 MMT of wheat, 687 TMT of barley and 153 TMT of corn.
The Russian harvest is picking up pace, at 36% done on 17 million ha producing a crop of 51.6 MMT to date. Yields are slipping away, now averaging 3.04 MT/ha, which is down almost 6% versus 3.23 MT/ha a year ago.