EU Wheat Drifts Lower
EU wheat futures continued their slide Friday, weighed down by large production numbers, lack of export demand and the delay to the proposed rescue package in the States.
November Paris milling wheat closed down EUR3.00 at EUR165.75/tonne. November London feed wheat ended down GBP2.75 at GBP103.00/tonne.
EU farm union Copa-Cogeca said Friday that EU 2008/09 soft wheat production was expected to rise by about 23 percent to 136.86 million tonnes, while this year's maize crop was likely to increase by 31 percent to 63.37 million tonnes.
Toepfer this week pegged the EU soft wheat crop even higher at 139.4mmt.
"We simply don't seem to be able to price ourselves into any volume of export business at the moment, with most homes that we could supply being filled by much cheaper wheat from Black Sea origins," said Frontier in their latest market report.
In the UK reports indicate that late-cut wheat has certainly suffered both in quality and bushel weight which will continue to widen the differential between feed amd milling wheats.
EU Wheat Crop Seen Up 20 Percent
EU farmers should see a sharp upswing in their cereals crops for 2008/09 and turn out an overall 306.74 million tonnes of grain, up by 20 percent from last year, EU farm union Copa-Cogeca said on Friday.
Soft wheat production was expected to rise by about 23 percent to 136.86 million tonnes, while this year's maize crop was likely to increase by 31 percent to 63.37 million tonnes.
Oilseeds harvests are seen at 26.43 million tonnes, a rise of around 6 percent from 2007/08, Copa-Cogeca said.
CBOT Closing Comments
CORN
Corn futures closed lower in all contracts with nearby declining the most. Investors and traders remain nervous on an unstable financial market with politicians stall the passage rescue plan, presidential election politics are rumored to be behind the delay. Prices broke through some key resistance earlier in the week but failed to test on Friday some view the break through bullish, even though prices have declined some 20 cents since. Funds sold an estimated 5,000 CBOT contracts on Friday. Weather is friendly short term; however, more moisture is expected beyond the next 7 days possibly delaying harvest further. Farmers remain skeptical about production until they actually begin to get into fields to better assess yields. Dec -15c at 5.43.
SOYBEANS
Soybeans and other CBOT soy products finished lower Friday with meal receiving the most pressure. Freshly harvested beans widen basis, but fundamentals do have slight bullish tone not allowing beans to fall out of bed. Funds were net sellers of 2,000 beans, 1,000 meal, and 1,000 bean oil contracts. Weather is benefiting late maturing beans, allowing some harvest to take place. Crude oil was down about $1.30 also weighing in on prices. Nov -19 at 11.64 Oct Meal -8.40 at 315.00 Oct BO -37 at 47.40
WHEAT
Wheat futures lost double digit gains at the three different exchanges Friday. Wheat had spillover selling pressure from corn and soybeans, and was also effected by Congress delaying approval of their bailout plan as consumers and traders become uneasy prices may turn volatile next week. Funds were sellers of an estimated 3,000 CBOT contracts. Southern plains will be mostly dry with above normal temps, but some northern regions where winter wheat plantings are still underway may be delayed by scattered rains next week. Exports were disappointing for last week; with an increasing global supply export sales will be crucial for wheat prices in upcoming months. Dec CHI -20c at 7.16; KC -19c at 7.45; MLPS -16 at 7.89.
Western Australia Gets Promised Rain
A slow moving cold front has dropped temperatures more than 10 degrees through southwest WA and brought the best rain in months.
Perth recorded 21mm to 9am this morning plus another 12mm today, their best rain in 2 months.
Albany, on the southern coast has recorded 10mm in the same period. They also recorded a maximum today of just 13 degrees, 4 below average and a massive 14 degrees less than the 27 degrees they recorded on Wednesday. Perth reached just 17 today, more than 8 degrees less than the 25 degrees recorded yesterday.
Rainfall totals southwest of about Geraldton to Albany were the best since July, with widespread falls of 15 to 30mm.
Further rain is expected tonight, with another 10 to 20mm likely in some areas by Friday afternoon. Rain will also spread inland to the Central Wheat Belt, most of which has so far only seen small totals of less than 5mm.
Dollar Rises As Rescue Talks Breakdown
The dollar is firmer across the board Friday as news emerges that just when a final deal was within reach, US lawmakers fell short of securing agreement on the Treasury Department’s $700 billion rescue plan to shore up the financial markets.
Congressional leaders worked late into the night with Treasury Secretary Henry Paulson to finalize provisions only to have efforts dashed by Republican members of the House of Representatives who said the plan would mean too much of a commitment of taxpayers’ money and too great of an intrusion into private enterprise.
The dissenters circulated an alternative proposal, whereby the government would insure unstable financial institutions rather than outright buying their holdings of problematic assets.
A White House summit of key Congressional leaders, presidential nominees McCain and Obama, and representatives of the Bush administration called to show bipartisan effort to stave off catastrophe reportedly ended in a “shouting match”.
A partial deal had been agreed to in principle earlier this morning whereby the administration would get approval for half of the $700 billion it requested, with the rest subject to a Congressional veto.
At 7.45am BST the dollar was $1.8390 against the pound and $1.4639 against the euro.
Rescue Plan Stalls
Talks in Washington have so far failed to reach agreement on a massive $700bn (£380bn) government proposal to bail out the troubled US finance sector.
After several hours of talks with President George W Bush, Republican members of Congress remained sceptical.
The proposal would see the government buy bad debts from US banks.
A group of House Republicans led by Eric Cantor of Virginia said they wouldn't back a plan based on the approach outlined by Treasury Secretary Henry Paulson and backed by President George W. Bush and Democratic leaders.
Congressional leaders are to meet again on Friday morning to try to hammer out an agreement.
CBOT Closing Comments
CORN
Corn futures closed lower Thursday as little fresh news fed bulls and many traders have been had their hands in their pockets throughout the financial crisis anxiously awaiting a Congressional resolution plan. Funds were sellers of an estimated 2,000 contracts with renewed forecasts stating unlikelihood of damaging frosts in the next week or so and expectations of more clear and dry weather add pressure. USDA released export sales this morning of 547,800 tonnes which was slightly higher than trade guesses. Strength in the US Dollar Index also weighed in on futures as exports become less attractive. Dec -4c at 5.58.
SOYBEANS
Soybeans traded higher for much of Thursday but finished slightly lower in nearby November. Funds sold an estimated 1,000 bean contracts, 1,000 meal, and 1,000 Bean oil contracts. Meal was pushed lower with census data indicated a build up in meal supply. Census soy crush was a tad higher than trade estimates but pegged it pretty close, crushing 128.65 MB in August. USDA export sales totaled 612,500 tonnes which was within trade estimates. Weather remains favorable for later maturing beans for the next week and beneficial for harvesting. Nov -4 at 11.83 Oct Meal -4.20 at 323.40 Oct BO +7 at 47.77
WHEAT
Wheat futures closed mixed at the three exchanges in today�s trade. CBOT prices were softer despite funds buying 1,000 contracts. US wheat exporters were bypassed again as Egypt opted to buy 120,000 tonnes of Russian wheat. Export sales were below trade estimates at 294,400 tonnes, traders were expecting sales between 400,000 and 600,000. Dec CHI -2c at 7.27; KC +0 at 7.59; MLPS +1c at 7.98.
