EU Rapemeal Prices
13/03/12 -- Rapemeal prices on the continent remain fully steady, for nearby in particular with March not offered and the remaining old crop positions EUR6.00/tonne higher.
Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:
| Mar12 | unq | n/a |
| Apr12 | 215.00 | +6.00 |
| May/Jul12 | 202.00 | +6.00 |
| Aug/Oct12 | 177.00 | +2.00 |
| Nov12/Jan13 | 179.00 | +1.00 |
| Feb/Apr13 | 181.00 | +1.00 |
| May/Jul13 | 178.00 | -1.00 |
| Aug/Oct13 | 162.00 | -2.00 |
The Early Buzz
13/03/12 -- The market has an interesting feel to it at the moment. Grains are fully steady, there are plenty of reports of China buying corn and/or having substantially lower stocks than the official numbers suggest. (The Chinese lying? I couldn't possibly believe that one).
Are we about to see wide scale Chinese buying? Have they already been buying heavily under the table? We can all guess what would happen if that proves to be the case.
The Argies are reckoned to have already sold 5 MMT of their new crop soybeans, with the vast majority of that (4.5 MMT) being Chinese business. They are also said to have sold 7 MMT of their yet to be harvested corn to unconfirmed destinations.
Chinese corn prices on the Dalian Exchange are said to be pushing the equivalent of USD10/bushel. Agrimoney report this morning that domestic cash prices "have topped 2,500 yuan (USD400) a tonne, compared with USD325 a tonne for imports from the US, freight included."
World corn stocks are said to be around 125 MMT, with a little bit less than half of that total supposed to be in China. It does therefore seem more than a little odd that domestic prices are so high in the country that holds almost half the corn stocks in the world does it not?
With almost 60 MMT on their hands you'd have thought that whoever is sitting on it (the government can't own much of it or they'd be auctioning it off) would be tempted by the highest corn prices in the world wouldn't you? I mean at the end of the day it's "only" corn.
It would seem that it's "only" corn that the Chinese haven't got though. Still, never mind they've no doubt got another record crop on the way this year, just like they always do.
Whilst we're on the subject does anyone else find it just a bit odd how despite having a monster consumption figure of 191 MMT in 2011/12, the USDA just managed to top that with a Chinese production figure a squeak higher at 191.75 MMT? Consumption in 2010/11 was "only" 176 MMT. Guess what production was? That's right 177 MMT!
You may be feeling rather bullish right now, but we haven't started discussing Europe yet...
CBOT Closing Comments - Monday
12/03/12 -- Soybeans: Mar 12 Soybeans closed at USD13.30 1/2, down 1 1/4 cent; Nov 12 Soybeans closed at USD12.99 1/2,down 5 3/4 cents; Mar 12 Soybean Meal closed at USD358.40, down USD0.20; Mar 12 Soybean Oil closed at USD53.63, down 32 points. Funds sold an estimated 3,000 of their heavily overbought soybean position on the day. China unveiled it's largest trade deficit in at least a decade last month, which didn't help ease fears of slumping growth hurting demand for crude. To add to the jitters customs data shows that China imported 3.83 MMT of soybeans in February, down 17% from the 4.61 MMT brought in in January.
Corn: Mar 12 Corn closed at USD6.71 1/2, up 17 1/2 cents; Dec 12 Corn closed at USD5.68 1/2, up 6 cents. Corn made up some lost ground on soybeans as funds came in for an estimated 13,000 lots on the day. Persistent rumours that China has bought several cargoes of US corn in the past few days, and that their corn stocks are in fact significantly lower than official levels encouraged buying. Domestic prices there are said to be far higher than they are in the US, pushing the equivalent of USD10/bu. export inspections of 36,246 million bushels were well above trade expectations.
Wheat: Mar 12 CBOT Wheat closed at USD6.52 3/4, up 14 cents; Mar 12 KCBT Wheat closed at USD6.91, up 12 cents; Mar 12 MGEX Wheat closed at USD8.10 3/4, up 9 cents. Corn and the size of the spec short in Chicago supported wheat today as did reports that France may have lost almost 2 MMT to winterkill. Russia has exported 21.5 MMT of grains so far this marketing year, and will probably not ship more than 26 MMT this season say IKAR. Oklahoma got some useful rains over the weekend but most of Kansas largely missed out.
EU Wheat Closing Comments
12/03/12 -- EU grains finished mostly higher with front month Mar 12 London wheat up GBP0.25/tonne to GBP166.25/tonne, with other months adding GBP2.20-2.40/tonne. Mar 12 Paris wheat expired down EUR2.50/tonne to EUR217.50/tonne, new front month May 12 was however EUR3.00/tonne higher at EUR211.75/tonne.
Fresh news was pretty thin on the ground. US corn continues to find support from reports of Chinese buying (as yet unconfirmed) and the tightness in supply of old crop.
New crop US corn is less steady with likely the highest plantings for 75 years in the wings and sharply higher than normal temperatures in the Midwest looking like getting spring plantings off to a very timely start.
"Oklahoma wheat growing areas benefited from heavy soaking rainfall last week, but the top US wheat state Kansas mostly missed out," say Martell Crop Projections.
"Rainfall in the US bread-basket has been much higher than last year, due to a more active subtropical jet stream across the Southern Great Plains. Another wave of showers is predicted later in the week in the Southern Great Plains, though the moisture would be rather light, .25 to .40 inch amounts with scattered coverage," they add.
EU wheat is emerging from winter dormancy in pretty good shape in many places, although Agritel suggest that 1.9 MMT may have been wiped off France's production potential this year due to winterkill.
Early Call On Chicago
12/03/12 -- Predictably, before the ink is even dry, Friday's USDA report is fish & chip wrappings and we are now all waiting to see what they have to say about prospective plantings at the end of the month.
With prices where they currently are US growers are spoilt for choice. Much of the US will experience temperatures well above normal during the next two weeks with highs in the low 80's on the cards by midweek.
Farmers will be itching to get their crops in nice and early by the looks of it. That should maximise spring crops yield potential unless Mother Nature turns nasty with an April frost. A scenario not unknown.
The overnights finished mostly a tad lower with the exception of nearby corn which was 2 1/2 cents firmer. Crude is down sharply with Brent losing around USD1.60/barrel and NYMEX falling almost USD2.00/barrel as tensions between Iran and the West ease a little.
News that China has just unveiled it's largest trade deficit in at least a decade last month hasn't helped ease fears of slumping growth hurting demand for crude.
As yet there has been no confirmation of the rumoured Chinese buying of US corn that dragged the market higher on Friday despite a bearish slant to the USDA numbers for corn.
Customs data shows that China imported 3.83 MMT of soybeans in February, down 17% from the 4.61 MMT brought in in January.
Early calls for this afternoon's CBOT session: Beans flat to down 2 cents, corn mixed up 2 to down 3 cents and wheat flat to down 2 cents.
EU Rapemeal Prices
12/03/12 -- Rapemeal prices on the continent show little change today, but remain fully steady despite losses in Chicago soymeal on Friday night.
Guide prices, basis FOB Lower Rhine in euros/metric tonne, with change from previous day:
| Mar12 | unq | n/a |
| Apr12 | 209.00 | +1.00 |
| May/Jul12 | 196.00 | -1.00 |
| Aug/Oct12 | 175.00 | unch |
| Nov12/Jan13 | 178.00 | -1.00 |
| Feb/Apr13 | 180.00 | unch |
| May/Jul13 | 179.00 | +1.00 |
| Aug/Oct13 | 164.00 | unch |
Winterkill
12/03/12 -- French analysts Agritel estimate that 1.9 MMT may have been wiped off this year's wheat harvest there due to winterkill losses in the recent deep freeze (although with the sun blazing in you could be forgiven for thinking it was months ago).
This information is based on a survey of over two thousand French farmers, so it's bound to be kosher. Spring barley is likely to be the main beneficiary, they say.
In other news from across the Channel the French government announced yesterday that it has raised its terror alert level from "Run" to "Hide". The only two higher levels are "Collaborate" and "Surrender."
The Early Vibe
12/03/12 -- The overnight market isn't doing a lot thus far. Crude is a bit easier as tensions between Iran and the West ease a little.
China has revealed a USD31.5 billion trade deficit in February, the largest in at least a decade, as demand for it's goods wanes in Europe.
Rain for US hard red winter wheat areas over the weekend will be beneficial, although more is needed.
What a lovely weekend we had here in North Yorkshire, it was hard to imagine walking the dog in shirt sleeves (me not him) yesterday that it was snowing last Sunday! There's not much rain in the forecast this side of the weekend, but it's far too early to start using the D word just yet.
Russia has exported 21.5 MMT of grains so far this marketing year, according to IKAR.
If you only read one thing today make it this: There will be contagion
I for one certainly don't believe that last week's Greek "deal" will be the end of the matter, far from it.
I think that all that has been done is to dampen down the forest fire a little.
Germany's Finance Minister is quoted as saying over the weekend "nobody can now exclude that Greece at a single moment may need a third bailout."
Indeed, when it finally gets it's EUR130 billion "pay day loan" it immediately has to pay back EUR100 billion of that to private lenders.
Look for more sideways trade in the UK wheat market this week. Interesting to note that last week was the fourth week in a row that front month London wheat posted a net change of GBP1.00/tonne or less.
Also note that March Paris wheat goes off the board today so that could do anything.
