CBOT Closing Comments
Soybeans
August soybeans closed at $11.84 ½, up 14 cents, November soybeans closed at $10.38 ½, up 7 cents. Yesterday's export sales of almost 3 MMT were impressive, in fact the second highest on record. Weather conditions remain conducive to producing a very good 2009/10 crop, but it is going to be a little bit late, and until we get there we are going to have a very tight old crop supply situation. The average trade estimates ahead of Wednesday’s USDA crop production report for 2009 soybean production and yield are 3.219 billion bushels and 42.13 bushels per acre.
Corn
September corn finished at $3.22, down 10 ½ cents, and December corn finished at $3.26 ½, down 13 ¾ cents. Weather forecasts for this weekend and next week over much of the Corn Belt call for hotter temperatures, scattered showers and then turning drier with normal to above-normal temperatures which will hasten crop development. The average trade estimates ahead of Wednesday’s USDA crop production report for 2009 corn acreage, production and yield are 86.333 million acres, 12.49 billion bushels and 157.295 bushels per acre.
Wheat
September wheat settled at $4.89 ½, down 10 ¾ cents. Weather forecasts over much of the Plains seen conducive to remaining winter wheat harvest, and developing spring wheat crops, which added pressure to futures. A sharply higher US dollar index gave additional pressure. The average trade estimates ahead of Wednesday’s USDA crop production report for 2009 all wheat and winter wheat production are 2.151 billion bushels and 1.5315 Bbu.
EU Wheat Ends Mixed
EU wheat futures closed mixed, with London down but off session lows in a quiet end to the week Friday.
Paris November milling wheat closed up EUR0.50 at EUR130.50/tonne, and London November feed wheat closed down GBP0.25 at GBP98.25/tonne.
Wet weather is delaying the UK harvest, with the domestic winter barley crop around 60% cut, according to ADAS, well behind the 6 year average of 90% harvested at this stage.
It is still very early days for winter wheat, although harvesting in East Anglia appears to be turning out some decent yields and proteins, according to some reports.
The weather at home seems to have dried up since I returned to these shores, maybe I brought it back with me? Around 60% of the OSR crop has also been cut according to ADAS.
Yields are generally better than originally anticipated across western Europe, with the association of German farm cooperatives (DRV), now estimating the 2009 German wheat crop at 26.6 MMT.
Sugar Surges To New All-Time High
London white sugar futures surged to a fresh all-time high Friday morning, with front month October hitting USD528.50/tonne, USD9.60 up on last night's close.
Monsoon rains continue to elude northern India, where much of the country's sugar cane is grown, whilst the Brazilian crop is being dogged by too much rain.
Increased demand from Mexico, who has also had weather problems with it's own crop, is seen further increasing the global sugar deficit this year.
India's monsoon rains were the lowest in over eighty years in June, although near normal rains in most areas in July gave rise to hopes that the worst was over. However, in the week to August 5th rains were 64% below normal, according to official weather data. Inadequate rains are forecast for the week ahead too, in a country where 60% of the land under cultivation relies entirely on natural rainfall.
Situations Vacant: GAFTA President
A high ranking GASC official, and another employee of the state-owned wheat buyer were arrested, and subsequently released on bail this week, as part of the ongoing investigation into the import of Russian wheat into Egypt.
The public prosecutor apparently also ordered the arrest of Ashraf El Attal, chairman of the trading company Egyptian Traders Co. Attal was of course the head honcho at GAFTA, although he apparently resigned from this post late last month amidst a fanfare of understated non-publicity.
Egyptian Traders Co are said to be under investigation from the Egyptian prosecutor's office and embroiled in a complicated GAFTA-arbitration case with the original Russian exporter of the wheat, Rosinteragroservis (RIAS).
The GASC employees arrested include the chief administrator of imports and contracts.
Funnily enough, there doesn't seem to be any mention of this on the GAFTA website, and Googling for it doesn't help a lot either so here's the link:
GAFTA head quits amid Egyptian Traders case
CBOT Closing Comments
Soybeans
September soybeans closed down 4 1/2 cents at $11.70 1/2 a bushel, and November soybeans finished 15 cents easier at $10.30. The dollar was firmer and crude oil weaker, which created a negative tone, but the fall could probably be largely attributed to a correction from recent gains. Export sales were strong yet again, with the USDA saying almost three million tonnes of US beans were sold last week. weather forecasts are a little mixed for August, as is the interpretation of whether a bit of heat will be stressful or beneficial.
Corn
September corn ended down 14 1/2 cents at $3.32 1/2 per bushel and December corn ended down 16 3/4 cents at $3.40 1/4. As with soybeans, today's price action may largely be a partial reversal of some of the recent gains. Weekly export sales were above the high end of trade guesses at 1.152 MMT. There seems to be some debate whether the anticipated warm-up next week will be harmful or helpful for corn development. The USDA are to announce a revised acreage estimate for US corn plantings next week, which is also keeping the market nervous.
Wheat
September wheat closed down 28 1/2 cents at $5.00 1/4 a bushel. Egypt bought mostly French wheat, and a little Russian, in a tender which was obviously seen as bearish for US wheat. Export sales were 552,800 MT and above the high end of trade guesses of 500,000 MT, which at least indicates that exports are picking up a little. The last few week's export totals have all been above or towards the upper end of trade estimates. A firmer dollar and increased harvest activity in the northern hemisphere were the overriding bearish influences today.
EU Wheat Closes Sharply Lower As Harvest Advances
EU wheat futures closed sharply lower Thursday, with London wheat crashing into double figures for the first time this year as harvesting advances across Europe.
Paris November milling wheat futures closed down EUR4.00 at EUR130.00/tonne, and London November feed wheat ended down GBP3.00 at GBP98.50/tonne.
The magnitude of the drop of London wheat was maybe a tad surprising given that the pound fell out of bed after the BoE announced more QE measures.
The BoE appear to be giving out some mixed signals, and not really maintaining an air of confidence that they genuinely know what they are doing. Last month QE was on hold and this month it's back on. Hardly inspiring.
EU weather has improved somewhat this week, allowing for further harvest advancement, and yields are generally a little better than expected in many places, according to reports.
US markets were also under pressure all day, which added to the negative tone for Europe, even though Egypt heavily favoured French wheat in a tender today.
State-owned GASC booked 210,000 MT of wheat in a tender today with 180,000 MT of it French wheat and only 30,000 MT Russian wheat, despite the Black Sea origin being around $3/tonne cheaper.
CBOT Closing Comments
Soybeans
November soybeans ended up 13 1/2 cents at $10.45 a bushel. Weather conditions are good for continued crop development. Export sales are estimated at a whopping 2.2 to 2.5 MMT for tomorrow with China being in the market this past week for a known 1.8 MMT of soybeans. The recent Chinese soybean auctions have not gone well, less than 5,000 MT has been booked out of offers of 1.5 MMT the past three weeks. Informa estimates the US soybean yield at 41.6 bushels/acre. That figure is a little lower than F C Stone's 42.4 bushels/acre and Doane's 42 bu/acre.
Corn
September corn ended down 7 1/2 cents to $3.47, and December corn ended down 8 3/4 cents to $3.57. Informa was out today stating their impression that the USDA will have a yield estimate of 157.1 bushels of corn to the acre. F C Stone are using a corn yield of 160 bushels/acre, whilst Doane come in significantly lower at 155.6 bu/acre.
Wheat
September wheat closed down 13 1/2 cents at $5.28 3/4 a bushel. Trade estimates for export sales to be released tomorrow are between 350,000 to 550,000 MT. The French grain analyst Agritel expects France’s soft wheat crop to rise to more than 38 MMT, adding to existing stocks.
EU Wheat Resumes Downwards Trend
EU wheat futures resumed their downwards trend Wednesday after a few days of brief respite. November Paris milling wheat ended down EUR3.00 at EUR134.00.tonne, and London November feed wheat closed down GBP2.50 at GBP101.50/tonne.
A weak dollar contributed towards losses on EU wheat, with the pound close to a 11-month high set yesterday.
Egypt is tendering to buy wheat again tomorrow, which may provide some support if they go for French wheat, as has been the pattern recently.
US futures also fell after posting strong gains Tuesday, which added to the bearish tone.
Recent rains in Argentina appear to have arrested the startling decline in wheat production there, although that is still expected to come in at the lowest in a hundred years.
Patchy rains across much of northern Europe are hampering harvest activity, although no major yield losses are anticipated there could be quality implications.
