Chicago Close
27/05/11 -- Soybeans: Jul 11 soybeans closed at USD13.79 3/4, down 5 cents; Nov 11 Soybeans closed at USD13.68 1/2, down 4 cents; Jul 11 soybean meal closed at USD355.60, down USD4.70; Jul 11 soybean oil closed at 58.61, down 9 points. Beans closed a little lower in a light volume pre-holiday session. China's CNGOIC lowered it's 2010/11 soybean import estimate to 53 MMT, some 1.5 MMT lower than the USDA's latest estimate. The Chinese government also announced plans to sell 2 MMT of state-owned reserves to five favoured crushers at 13% below the market to enable them to meet soyoil price caps. That seems set to keep them out of the volume import market for a wee while yet. US markets are closed for Memorial Day on Monday, so the USDA will report on planting progress after the close on Tuesday May 31st.
Corn: Jul 11 corn closed at USD7.58 1/2, up 13 cents; Dec 11 corn closed at USD6.84, up 7 3/4 cents. July corn was down a cent on the week whilst new crop Dec was 17 1/2 cents higher. Private exporters announced the sale of 168,000 MT of new crop corn to Mexico. Funds bought an estimated 7,000 contracts on the day. They were long more than 350,000 contracts as of May 23rd, that's over 44.5 MMT. Things are finally set to improve weathewise in the Eastern Corn Belt which should aid corn planting. "The Midwest is forecast to warm up Sunday and Memorial Day. It's not perfect weather as showers also are in the forecast. On Monday highs over 90 F are predicted in Illinois, Indiana, Ohio and Michigan which are much needed to dry out fields. An upper-air blocking pattern is starting to evolve. Improved warm weather in the Eastern Midwest early next week is a reflection of this change," say Martell Crop Projections.
Wheat: Jul 11 CBOT wheat closed at USD8.19 3/4, up 5 1/4 cents; Jul 11 KCBT wheat closed at USD9.43, up 1/4 cent; Jul 11 MGEX wheat closed at USD10.56 1/4, up 10 1/2 cents. On the week as a whole CBOT wheat was up 13 1/4 cents, KCBT rose 9 3/4c and MGEX jumped 56 1/2c. Minneapolis raced to well over 20 cents higher in early trade but gave up half of those gains by the close of what could be a long weekend in a variety of different ways. Some newswires are suggesting that a decision on whether Russia will lift it's grain export embargo is due on Tuesday. If so that would come out before the daytime US grains futures next trade. Northern spring wheat farms are still too wet to plant, and more heavy rain fell again Friday. "More normal weather may finally develop over North America continent by the middle of next week. That's when the blocking pattern is expected to completely resolve," say Martell Crop Projections.
EU Grains Close
27/05/11 -- EU wheat futures closed mostly lower with Jul London wheat up a nominal GBP0.50/tonne to GBP196.50/tonne and with new crop Nov falling GBP1.50/tonne to GBP197.00/tonne. Nov Paris wheat was down EUR1.75/tonne to EUR249.25/tonne whilst May12 declined EUR2.25/tonne to EUR249.00/tonne.
On the week as a whole Nov London wheat rose GBP2.50/tonne and Nov Paris wheat was up EUR4.50/tonne.
The UK picked up some decent rains this week, particularly in the north and west. Even the parched south east managed to get something, although opinions on how much good it will have done and what eventual production numbers might be vary wildly.
Front month August Paris rapeseed closed EUR3.50/tonne higher, having closed to the upside every day since May 12th as concerns mount over EU production this year.
French analysts Offre et Demande Agricole forecast the Ukraine rapeseed harvest rising to 1.95 MMT this year, up by a third from 1.47 MMT last year as rising yields more than offset a drop in planted area, according to FCStone.
That would allow Ukraine to export 1.8 MMT of rapeseed in 2011/12, they add. The EU look like needing all of that and more with French and German output set to fall sharply.
The balance of exporting power certainly seems to be switching back to the Black Sea for 2011/12. Ukraine may also export 11.5-12.0 MMT of wheat next season, up around 225-250% on 2010/11, according to a report on Bloomberg.
Calling All My Chums In The South East
27/05/11 -- Hope you all have a lovely soaking wet, BBQ-flooded out, cricket cancelled, kids crying, mopping out the kitchen, putting the sandbags out sort of a weekend. Personally I will be taking shelter in the pub. Enjoy!
EU Rapemeal Prices
27/05/11 -- Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:
| May11 | unq | - |
| Jun11 | 197.00 | +4.00 |
| Jul11 | 197.00 | unch |
| Aug/Oct11 | 203.00 | +7.00 |
| Nov11/Jan12 | 205.00 | +4.00 |
| Feb/Apr12 | 209.00 | +5.00 |
| May/Jul12 | 207.00 | +4.00 |
| Aug/Oct12 | 186.00 | unch |
The Early Vibe
27/05/11 -- The overnights are mostly green, although not by that much with wheat around 3c firmer, corn up 2c and beans 2-4c higher. Crude is a little higher and the dollar weaker, with the pound rising to around 1.6450 against the greenback.
China's CNGOIC has lowered it's 2010/11 soybean import estimate to 53 MMT, now 1.5 MMT lower than the USDA's latest estimate. The Chinese government have announced plans to sell 2 MMT of state-owned reserves at knock down prices to domestic crushers in exchange for them keeping soyoil prices low.
The upshot of that is that China's purchases from the US and South America may continue to run at unusually spartan levels, especially whilst there's still an estimated 6 MMT of soybean stocks in private hands sitting at port side in China.
The dollar is under pressure on ideas that another round of monetary easing may be on the cards if employment data due next Friday disappoints.
Locally to Nogger Towers we got 11.4 mm of rain yesterday, our biggest one day total since at least February, bringing our monthly total to 42.9 mm, more than ten times what we got in the whole of April.
LOCAL SHOPKEEPERS WHINE AS OUT OF TOWN MEGASTORE PREPARES TO OPEN
We may be set for a disappoint harvest in Europe and America, but look at it this way all we are doing is avoiding the frustration of not being able to sell a bumper crop because the Black Sea are nicking all the business.
Surely it's not too difficult to recall the days when Russia, Ukraine and Kazakhstan were there to undercut any offer in the market? Those days are about to be thrust upon us again I feel as the balance of power switches back to the Black Sea.
Speaking at the 4th International GAFTA Conference in Kiev the director of Noble Resources Ukraine said yesterday that the wheat harvest there could hit 20 MMT this year, giving them the potential to export 11.5-12.0 MMT, according to my chums at Bloomberg.
That places exports up around 225-250% on this season, and 3.0-3.5 MMT more than the USDA currently estimate.
Total grain exports could hit 24 MMT in 2011/12, he said, which is significantly higher even than the government's own estimate of 19-20 MMT.
A local British shopkeeper said "They come over here with their cheap wheat, and urinate all over the place. It's a blim bloomin disgrace, that's what it is. I'm going to write a stiff note to the council."
A local Egyptian man said "Well, of course I'm going to pop up there on the park and ride and have a bit of a look round like, I'd be stupid not to, innit. I hear that they're virtually givin it away and there's a McDonald's as well. Happy days. We can take the kids and make it a nice family day out. Come on Chantelle, Beyonce, Nectarine..."
Chicago Close
26/05/11 -- Soybeans: Jul 11 Soybeans closed at USD13.84 3/4, up 7 3/4 cents; Nov 11 soybeans closed at USD13.72 1/2, up 11 1/2 cents; Jul 11 soybean meal closed at USD360.30, up USD2.00; Jul 11 soybean oil closed at 58.70, up 74 points. Even another week, or should that be weak, of disappointing export sales at 163,200 MT couldn't keep the bulls at bay. Funds bought an estimated 5,000 bean contracts in spillover support from corn and wheat. The April crush data from the US Census Bureau was also below estimates of 129.3 million bushels at 127.98 million, the lowest April total in seven years. So if demand isn't doing anything for the bulls, then they'll chose to concentrate on supply concerns. Even those are on fairly shaky ground with the weather forecast for warmer and drier next week, there's still plenty of time to get those beans in.
Corn: Jul 11 corn closed at USD7.45 1/2, up 3 1/4 cents; Dec 11 corn closed at USD6.76 1/4, up 5 1/2 cents. Fund money was back with a vengeance buying an estimated 10,000 contracts on the day fuelled by late planting concerns, particularly in Indiana and Ohio. Even so forecasts for next week are looking brighter for planting progress, even for those states. Weekly export sales for corn was bang in the middle of the anticipated trade estimates at 779,600 MT (est: 500-900,000 MT). In amongst that was a 116,800 MT corn sale to China, switched from unknown. Private exporters also announced the sale of 168,000 MT of new crop corn to Mexico.
Wheat: Jul 11 CBOT wheat closed at USD8.14 1/2, up 18 cents; Jul 11 KCBT wheat closed at USD9.42 3/4, up 14 cents; Jul 11 MGEX wheat closed at USD10.45 3/4, up 25 3/4 cents. Minneapolis wheat led the way on sluggish planting progress of spring wheat on the northern Plains and Canadian Prairies. July MGEX wheat hit the highest for a front month in three years. Weekly export sales came in at a combined 432,300 MT - towards the low end of expectations of 400-700,000 MT. EU weather concerns are ssen likely to cut production there, although opinions on by how much vary quite widely. The IGC trimmed 3 MMT off it's April projection to 141 MMT, but other estimates in a Bloomberg survey range from 128.6 - 135.8 MMT. Funds bought an estimated 5,000 CBOT contracts on the day.
EU Wheat Close
26/05/11 -- EU grains closed sharply higher with July London wheat up GBP2.25 at GBP196.00/tonne and with new crop Nov closing GBP5.25 higher at GBP198.50/tonne. Nov Paris wheat rose EUR8.00/tonne to EUR2452.75/tonne whilst May12 was up EUR6.25/tonne lower to EUR251.25/tonne.
The bulls certainly had it today, with Paris wheat setting contract highs and Nov London wheat setting a contract lifetime high close, and getting within GBP0.25/tonne of last week's all-time high.
New crop London wheat traded at a premium to old crop for the first time this season.
Paris wheat was supported by the euro falling to 1.16 against the pound for the first time since Mar 11.
Minneapolis wheat meanwhile raced to it's highest in three years on continued spring wheat planting delays in the Dakotas and Canadian Prairies.
Brussels granted export licenses for another 230,000 MT of soft wheat this week, bringing the 2010/11 year to date total to 17.4 MMT.
The ICG came out with an inexplicably optimistic EU-27 wheat production estimate, cutting just 3 MMT off last month's prediction to 141.1 MMT. That still represents a 4.2% increase on last season. That included French production at 39.0 MMT and UK output at 15.7 MMT.
A Bloomberg survey out today however seemed much more realistic. The median estimate of seven analysts and traders surveyed by them pegged the EU wheat crop at around 131 MMT.
The most bearish assessment came from Offre et Demande Agricole who placed production this year at just 128.6 MMT, a 10 MMT reduction on the USDA's estimate earlier this month.
EU production of soft wheat is forecast at 122.3 MMT, based on the median estimate of five analysts and traders, the report said.
The ICG's EU-27 Grain Production Numbers
26/05/11 -- The IGC are out today with a raft of production numbers on the global grains front. Here's a little sampler of how they see things currently.
Their EU-27 wheat production estimate was lowered 3 MMT from last month to 141.1 MMT, which amazingly still represents a 4.2% increase on last season. France will still manage to produce a 39 MMT crop (up 2% on 2010), with Germany chipping in with 24.5 MMT (also up 2%) and the UK with 15.7 MMT (up 4%), they say.
Do you want to go on? Barley output is seen at 54.3 MMT, 2% up on last year. France will produce 10.0 MMT of that (down 2%), Germany 9.5 MMT (down 9%) and the UK 5.3 MMT (up 2%).
Do you still want to go on? Nah there's not much point is there? They're about as much use an a ejector seat in a helicopter that lot.
