Chicago Close - Friday
23/12/11 -- Soybeans: beans were higher for the seventh session in a row, even if only marginally on this occasion. It was a predictably thin day with Jan 12 beans ending 3/4 cent higher at USD11.63/bushel for a gain of 33 cents, or almost 3%, on the week. Jan 12 meal closed USD1.40 lower at USD297.00 and Jan 12 oil closed at 50.96, up 51 points. South American dryness supports as does a weaker US dollar, although how long either will continue like that is unknown.
Corn: March corn ended up 2 cents at USD6.19 1/2 a bushel; May corn ended up 1 3/4 cents at USD6.28 a bushel. March corn was up 36 1/2 cents, or 6%, on the week. Hot and dry weather in southern Brazil and Argentina is seen as more damaging for corn than wheat at this stage. Some reports of abandoned corn are already filtering through. In Argentina an estimated 40% of the crop is at the maximum water usage tasseling stage.
Wheat: Mar 12 CBOT Wheat closed at USD6.22, up 1/4 cent; Mar 12 KCBT Wheat finished at USD6.75, up 2 1/1 cents; Mar 12 MGEX Wheat was up 3/4 cent at USD8.44 1/2. On the week overall Chicago wheat gained 38 1/4 cents, or 6.6%, curiously more than corn despite South American weather posing only a minimal threat to the wheat crop in the region. The large fund short in wheat is probably the explanation for that. The USDA reported the sale of 120,000 MT of hard red winter wheat to Nigeria.
Best wishes to all.
EU Wheat: Is The Glass Half Full Or Half Empty
23/12/11 -- EU grains ended a holiday-shortened session with Jan 12 London wheat up GBP1.25/tonne to GBP147.00/tonne and Jan 12 Paris wheat down EUR0.25/tonne to EUR195.00/tonne.
For the week as a whole London wheat gained GBP5.00/tonne and Paris wheat EUR11.50/tonne. It was a predictably low volume day with very little of note to report.
So as we near the end of what has been another volatile year in which London wheat has fallen over a quarter since the end of 2010, and by almost a third from the highs of the year set in April, I thought that a quick flick back through the record books might be of interest.
Despite the temptation to kick the cat because the price of wheat doesn't begin with a two any more, it is worth considering that it's only ever been higher than today's close on Christmas Eve twice before, according to my records which go back to 1984.
Those years were of course last year when it closed at GBP197.50/tonne and in 2007 when it was GBP166.25/tonne on the day before Christmas.
Once we get into 2012 the immediate market direction may depend on the longevity of the South American weather story versus the inevitable market refocus on the European debt issues.
Best wishes for Christmas to you all.
Chicago Close
22/12/11 -- Soybeans: Beans closed 7-9 cents higher, with meal around USD0.50 lower and oil 100 points or so higher. Weekly export sales were 653,400 MT for 2011/12 and 75,000 MT for 2012/13 - significantly better the anticipated 400-600,000 MT. Exports of 934,200 MT were primarily to China (599,400 MT). This was the sixth session in a row that beans have closed higher on the back of hot and dry conditions in South America. The outlook remains dry if somewhat cooler next week.
Corn: Corn closed with little change, a cent or so higher nearby and 4 cents weaker on new crop. Weekly export sales were robust at 715,000 MT for 2011/12 plus a further 238,000 MT for delivery in 2012/13 compared to the expected 450-650,000 MT. In addition weekly shipments of 1,300,800 MT were a marketing-year high. The trade is starting to factor in lower production numbers for Argentina, normally the world's second largest shipper of corn after the US. The USDA currently estimate that they will produce 29 MMT in 2012, the trade is now thinking more like 25 MMT.
Wheat: Chicago wheat was 3-5 cents higher with Kansas up 1-2 cents and Minneapolis mixed 2 cents up to 2 cents down. Weekly export sales of 362,300 MT were in line with the expected 300-450,000 MT. Funds continue to whittle away at their Chicago short position, covering in an estimated 2,000 contracts on the day. Weekly shipments want watching closely. They need to be 427,400 MT/week to reach the USDA's 2011/12 export target of 24.5 MMT, but they've only managed that three times in the past eleven weeks.
EU Wheat Close
22/12/11 -- EU grains ended with Jan 12 London wheat up GBP1.25/tonne to GBP145.75/tonne and Jan 12 Paris wheat EUR1.50/tonne higher at EUR195.25/tonne.
Defra issued it's final estimate of the 2011 UK wheat harvest which came in at 15.3MMT, an increase of 2.5% on 2010.
The highest domestic yields came in at 8.1 MT/ha from the North East and Yorkshire and the Humber. The lowest were 6.5 MT/ha from the North West and Merseyside. The Eastern region was the only one to see a decreased yield between 2010 and 2011, they added.
Barley production was pegged at 5.5 MMT, up 4.8% on last year and OSR output was said to be a record 2.8 MMT, a whopping 24% increase on 2010.
"On a regional basis, the highest yields for barley were in Yorkshire and the Humber with an average of 6.3 MT/ha. The lowest yield of 4.4 MT/ha was in the Eastern region, highlighting that the spring drought has had more of an impact on this region. Dry soils in the East of England earlier in the year led to poor tillering and delayed nitrogen uptake resulting in lower barley yields as barley has less ability to compensate for reduced tiller numbers later on in the season," they said.
"In England OSR production increased from 2.1 million tonnes in 2010 to 2.6 million tonnes in 2011. Winter sown production increased by 24% and spring sown increased by 35%. Winter oilseed crops established well in autumn 2010 and disease control continues to improve. Prices have also proved attractive for growers with an increased demand for biodiesel. Early indications from autumn 2011 plantings indicate this upward trend in oilseed production is set to continue," they added.
Early Call On Chicago
22/12/11 -- The overnight grains were little changed in a dull lifeless session with beans around 2 cents firmer, corn mixed and wheat unchanged to slightly lower. Crude oil and the dollar are also barely changed.
There was some overnight rain for Argentina, with more expected today, although the amounts involved aren't huge.
Bangladesh has bought Ukraine wheat, Japan has booked some Australian wheat and Jordan has bought 100,000 MT of wheat of unspecified origin - most likely from the Black Sea.
The USDA's weekly export sales and shipments were bullish for corn and soybeans and neutral to slightly negative for wheat.
Fresh news is thin on the ground. After several days of moving higher we may be in for a small consolidation day, but big moves either way today/tomorrow look unlikely.
Chicago operates normal trading hours tomorrow, is closed Monday and re-opens again Tuesday afternoon.
Early calls for this afternoon: beans up 2-4 cents, corn up 1-3 cents, wheat mixed.
EU Rapemeal Prices
22/12/11 -- Guide prices for EU rapemeal, basis FOB Lower Rhine in euros/metric tonne, with change from previous day:
| Jan12 | 181.00 | +1.00 |
| Feb12 | 172.00 | -1.00 |
| Feb/Apr12 | 167.00 | unch |
| May/Jul12 | 164.00 | -1.00 |
| Aug/Oct12 | 147.00 | unch |
| Nov12/Jan13 | 150.00 | -1.00 |
| Feb/Apr13 | 152.00 | -1.00 |
USDA Weekly Export Sales
22/12/11 -- The USDA's weekly export sales came in better than expected for corn and beans and in line with trade estimates for wheat.
Corn sales were 715,000 MT for 2011/12 plus a further 238,000 MT for delivery in 2012/13 compared to the expected 450-650,000 MT. There was one sale to China in amongst the 2011/12 volume. In addition weekly shipments of 1,300,800 MT were a marketing-year high.
Soybean sales were 653,400 MT for 2011/12 and 75,000 MT for 2012/13 against the anticipated 400-600,000 MT. Exports of 934,200 MT were primarily to China (599,400 MT).
Wheat sales of 362,300 MT were in line with the expected 300-450,000 MT. Shipments were only 399,900 MT - down 26 percent from the previous week. Exports need to be 427,400 MT/week to reach the USDA's 2011/12 export target of 24.5 MMT.
Chicago Close
21/12/11 -- Soybeans: Beans closed around 9 cents higher with meal up USD3-4 and oil up 5-7 points. This was five straight up days in a row for beans with funds buying an estimated 6,000 contracts on the day. A wetter forecast for Argentina saw the market open negative but a revised drier call later on saw the board turn green. Estimates for tomorrow's weekly export sales report for beans are 400-600,000 MT.
Corn: Corn closed around 9 cents firmer with funds buying an estimated 9,000 contracts on the day. Dryness concerns in southern Brazil and Argentina were the catalyst for the fourth day of gains in a row. Estimates for tomorrow's USDA weekly export sales report are 450-650,000 MT. A weaker dollar and firmer crude oil added support for corn.
Wheat: CBOT wheat closed with gains of 8-9 cents, with Kansas up 2-3 cents and Minneapolis mixed either side. Funds were said to have bought around 3,000 CBOT contracts on the day, buoyed by spillover support from corn and South American weather concerns. Weekly export sales for tomorrow are estimated at 300-450,000 MT.
