Trading Times Over Easter - And How Things Looked 12 Months Ago
06/04/12 -- As per usual there's no rest for the wicked with a heavy work schedule lined up for yours truly over the "holiday" weekend. I will spend that catching up on writing market reports, updating my charts, building Mrs N#3 an outdoor stand to accommodate all her seedlings which are starting to make the kitchen & utility room look like the summer house at Kew Gardens. Oh, and there's a couple of websites to produce too.
Meanwhile you lot will no doubt all be putting your feet up and stuffing your fat faces with Easter eggs.
No doubt bored shitless one or two of you will stumble inevitably towards the PC at home to check on what's happening, in an effort to prise yourself away from Aunty Beryl and her embarrassing stories about the time you stuck a lego brick up your nose when you were three.
Today the answer is that nothing is happening, it's Good Friday and everything is shut. Monday however is a different bain marie full of halibut. There's an overnight market Sunday night/Monday morning, and Chicago will operate a full normal trading session on Monday afternoon whilst London and Paris grains remain closed.
Monday night the USDA will release their weekly crop progress report, which will reveal how much corn and spring wheat has gone into the ground in the past week.
Tuesday everything returns to normal with London and Paris back open. Tuesday afternoon the USDA will issue their April WASDE and stocks report, so there could be some firework potential there. Suffice to say that by the time we finish our next trading session on Tuesday night there's the potential for prices to be fairly dramatically different to where they finished Thursday night.
Checking back to what was going on at Easter last year, Chicago closed Easter Monday with soybeans up 9 cents at USD13.89, corn was 25 1/4 cents higher at USD7.62 1/2 and CBOT wheat was ending the day with gains of 26 1/2 cents at USD8.26.
The day back after Easter saw May 11 London wheat close at GBP212.00/tonne with new crop Nov 11 at GBP180.00/tonne. May 11 Paris wheat was ended the session at EUR253.50/tonne.
As you can see, aside for soybeans, everything was a lot higher back then compared to where we currently reside.
Last Easter we were also concerned about UK and European drought (and it was three weeks later than it is this year). Spring wheat plantings in the US on Easter Sunday were only 6% done (they're already 8% complete as of last weekend).
It's early days. Downside potential still exists, particularly for wheat IMHO, and also of course for new crop corn. Soybeans and OSR could be another matter though...
Chicago Soybeans Hit Fresh 7-Month Highs
05/04/12 -- Soybeans: May 12 Soybeans closed at USD14.34, up 14 1/2 cents; Nov 12 Soybeans closed at USD13.81 1/2, up 6 cents; May 12 Soybean Meal closed at USD391.90, up USD3.70; May 12 Soybean Oil closed at 56.64, up 62 points. It's been a short week on which May 12 beans have added 31 cents, and new crop Nov 12 gaining 23 1/2 cents. Meal ends the week just USD2.20 higher than it began it whilst oil has added 154 points. Beans only closed higher than this on four days in the whole of 2011, the last one being seven months ago. They are also now within 15 cents of the 2011 closing highs. Weekly soybean export sales of 406,900 MT of old crop and 706,000 MT for delivery in the 2012/13 beat analysts expectations of a combined 600-850 TMT. China took 257,200 MT of old crop and 525,500 MT of the new crop.
Corn: May 12 Corn closed at USD6.58 1/4, up 1 1/2 cents; Dec 12 Corn closed at USD5.50 1/4, up 6 cents. For the week overall May 12 corn was 14 1/4 cents higher and new crop Dec 12 was 10 cents firmer despite the outlook for sharply higher US plantings this spring. Weekly export sales of 937,600 MT of old crop and 185,100 MT new crop corn also beat trade guesses for combined sales of 400-700 TMT. Catching trader's eyes was China taking 394,000 MT of the old crop. US weather remains generally favourable for early corn planting, although night-time temperatures could dip to freezing across the next couple of nights. The USDA will report on planting progress after the close on Monday (plantings were 3% done as of last Sunday), and will issue revised world supply & demand estimates Tuesday.
Wheat: May 12 CBOT Wheat closed at USD6.38 1/2, down 3/4 cent; May 12 KCBT Wheat closed at USD6.62, down 7 1/2 cents; May 12 MGEX Wheat closed at USD8.46, up 1/4 cent. On the week as a whole May 12 Chicago wheat fell 22 1/4 cents, with Kansas wheat down 35 1/2 cents and Minneapolis falling 8 1/2 cents. Weekly export sales for wheat of 408,300 MT for old crop wheat and 103,400 MT for new crop just about beat expectations for combined sales of 300-500 TMT. In amongst the old crop sales was a surprise 38,000 MT to China. US wheat won a 115,000 MT Egyptian tender today, apparently confirming that US wheat is amongst the cheapest origins around. Including freight French wheat was beaten by around USD20.00/tonne.
EU Wheat Rises, Paris Rapeseed Closes At 14-Month High
05/04/12 -- EU grains finished higher, with the exception of malting barley futures. May 12 London wheat ended GBP2.25/tonne higher at GBP171.75/tonne, whilst new crop months were GBP0.55/tonne steadier. May 12 Paris wheat ended EUR2.00/tonne higher at EUR211.25/tonne, Nov 12 was EUR2.25/tonne firmer at EUR204.75/tonne.
For the holiday shortened week as a whole May 12 London wheat closed GBP3.00/tonne lower with May 12 Paris wheat EUR1.50/tonne easier. At these levels May 12 London feed wheat is little more than a EUR3.00/tonne discount to Paris milling wheat.
European wheat as a whole remains too expensive on the international stage. Egypt bought 115,000 MT of US wheat in a tender today at USD259.75/tonne plus freight, that was more than USD30.00/tonne cheaper than French wheat. The freight differential between shipment from the US and France is currently only around USD10.00/tonne.
Further highlighting Europe's lack of a competitive edge is news that Brussels issued soft wheat export licences to the tune of 251 TMT this past week, bringing the marketing year-to-date total to 10.7 MMT - 5 MMT, or 32%, behind last season's pace 40 weeks into the campaign.
London wheat's strength on the day was all the more mystifying given that the pound closed at 1.2125 against the euro, it's best closing level on the weekly chart since August 2010.
The US winter wheat harvest will soon be upon us in southern States, Informa Economics estimated production at 1.631 billion bushels this week (44.4 MMT) - up 9.2% on last year.
Meanwhile harvesting in Pakistan is already underway and India are expected to begin harvesting an all-time high record crop of their own next week. With plentiful carryover stocks left over from last year India sold wheat to Bangladesh this week.
Meanwhile, the continued firmness in the world soybean market saw Paris rapeseed close the week at EUR504.00/tonne, up EUR13.75/tonne on the week and the highest closing price for a front month in 14 months.
Opinions as to how much damage has been done to the 2012/13 EU-27 rapeseed crop vary quite widely. The EU Commission currently forecast output in the coming year at 20.4 MMT, 1.1 MMT up on 2011/12. Coceral are less optimistic forecasting a crop of 19.1 MMT, Copa Cogenca are even more bearish giving us a figure of just 18.3 MMT.
Whichever way you look at it production looks likely to be well below usage, which the Commission peg at 22.9 MMT.
Early Call On Chicago
05/04/12 -- The overnight grains see beans 3-4 cents higher, wheat a cent higher to 2 cents lower and corn around 1-2 cents easier. Crude is slightly higher and so too is the dollar.
The USDA reveals weekly export sales of 408,300 MT for old crop wheat and 103,400 MT for new crop, compared to expectations of 300-500 TMT. In amongst the old crop sales was 38,000 MT for China. Exports of 404,700 MT were in line with recent weekly totals.
Soybean sales of 406,900 MT of old crop and 706,000 MT for delivery in the 2012/13 beat analysts expectations of 600-850 TMT. Once again China took the lion's share accounting for 257,200 MT of old crop and 525,500 MT of the new crop.
Corn sales of 937,600 MT old crop and 185,100 MT new crop also beat trade guesses of combined sales of 400-700 TMT. What will catch trader's eyes is China taking 394,000 MT of the old crop.
China present in the weekly export sales for all three of the main protagonists has to be something of a first for quite some time. That may support the market tonight, particularly old crop corn.
As we head into a long weekend nearby beans are up 19 3/4 cents on the week so far, with corn down 11 3/4 cents and wheat falling 20 1/4 cents, including the overnights.
South American soybean production estimates keep falling.
Midwest weather forecasts seem mostly favourable, although there's a light frost on the cards for some places little damage is expected with only 3% of the corn crop in the ground as of last Sunday.
The results of today's Egyptian wheat tender will be out mid-session.
Early calls for this afternoon's CBOT session: soybeans up 3-4 cents; wheat up 1-2 cents; old crop corn up 2-3 cents, new crop corn down 1-3 cents.
EU Rapemeal Prices
05/04/12 -- Rapemeal prices on the continent are mixed today, with little trade expected as the trade winds down for the long Easter weekend. Front month Paris rapeseed futures closed at their highest in more than twelve months last night.
Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:
| Apr12 | 241.00 | -1.00 |
| May/Jul12 | 237.00 | -1.00 |
| Aug/Oct12 | 207.00 | +1.00 |
| Nov12/Jan13 | 209.00 | +3.00 |
| Feb/Apr13 | 211.00 | +2.00 |
| May/Jul13 | 203.00 | -2.00 |
| Aug/Oct13 | 178.00 | unch |
| Nov13/Jan14 | 187.00 | unch |
The Morning Vibe
05/04/12 -- It's the last day of trading ahead of the long weekend, with soybeans and rapeseed continuing to rise. May 12 Paris rapeseed closed at EUR500.00/tonne last night, the first close starting with the magical "5" for a front month since the last day of January 2011.
May 12 soybeans are 7 1/4 cents firmer overnight at USD14.26 3/4, closing in on the 2011 high of USD14.51 set in early February of last year.
With oilseed prices this high the market will surely turn round at some point and bite itself on the arse, but when? If the USDA's 73.9 million acres figure is correct, or even if it turns out to be the 75 million that the market was expecting, given that soybean losses in South America that are already irreversible there's a long old wait for South American growers to have another shot at milking the soybean cow.
That hasn't stopped Informa Economics having a long range stab at production prospects for next season though. It's very early days yet, but they forecast that Brazil's 2012/13 harvest will come in at 78.5 MMT and that Argentina's will achieve 60.0 MMT.
In the case of Brazil that's and 18% increase on this season's still being harvested crop and for Argentina it's up by a third on what they haven't even started on yet, or 27 MMT of extra production between the two of them.
If rapeseed prices also continue to rise it will not go unnoticed by European growers when planting time comes along again.
The only problem is that the fruits of that particular harvest are so long away. Meanwhile we are stuck with the hand that Mother Nature has dealt us for 2012.
Chicago Close - Beans Up, Corn And Wheat Lower
04/04/12 -- Soybeans: May 12 Soybeans closed at USD14.19 1/2, up 2 3/4 cents; Nov 12 Soybeans closed at USD13.75 1/2, down 3 1/4 cents; May 12 Soybean Meal closed at USD388.20, up USD1.70; May 12 Soybean Oil closed at 56.02, up 12 points. Funds bought an estimated 6,000 soybean contracts on the day. Informa Economics cut it's Argentine soybean crop estimate to 45 MMT and it's Brazilian number to 66.5 MMT. That's 1.5 MMT and 2 MMT respectively below the USDA's March estimate, and Informa - like the USDA - have a reputation for erring on the high side. The USDA will issue revised world S&D numbers next Tuesday. Trade estimates for tomorrow's weekly export sales are 600-850 TMT for soybeans.
Corn: May 12 Corn closed at USD6.56 3/4, down 1 1/2 cents; Dec 12 Corn closed at USD5.44 1/4, down 1 1/4 cents. Informa Economics said that Brazilian corn production this year will come in at 62 MMT, and Argentina's will amount to 22 MMT. Both estimates are down 0.5 MMT on last month, but in line with the USDA. Some private firms are now forecasting the Argentine crop to fall below 20 MMT. Funds were said to have sold 2-3,000 contracts on the day. Trade estimates for tomorrow's weekly export sales are 400-700 TMT.
Wheat: May 12 CBOT Wheat closed at USD6.39 1/4, down 18 3/4 cents; May 12 KCBT Wheat closed at USD6.69 1/2, down 20 1/2 cents; May 12 MGEX Wheat closed at USD8.45 3/4, down 4 1/2 cents. US wheat is competitively priced versus European wheat but still faces competition from Australia, Canada and Argentine. Australia exported 2.42 MMT of wheat in February, almost a third more than in the same month last year and believed to be the largest monthly total in nine years. The results of upcoming Egyptian and Iraqi tenders will be of interest. Egypt's last tender was split 50:50 between US and Argentine wheat, whilst Iraq recently passed on US origin to buy 300,000 MT from Canada. Trade estimates for tomorrow's weekly export sales are 300-500 TMT.
EU Wheat Falls On Rain And US Price Declines
04/04/12 -- EU grains finished mostly lower with May 12 London wheat falling GBP2.50/tonne at GBP169.50/tonne - the first time it has closed below GBP170.00/tonne in three weeks. New crop months were GBP3.50/tonne lower and May 12 Paris wheat fell EUR2.25/tonne to EUR209.25/tonne.
The market followed US wheat lower, knowing that EU prices are already at uncompetitive levels relative to American origin. Based on last night's closing levels May 12 Chicago wheat was the equivalent of USD242.00/tonne, compared to USD273.50/tonne for London wheat and USD279.00/tonne for Paris wheat.
Widespread rain (and snow) across much of the UK, and some parts of France and Germany too, will have eased drought fears.
The EU Commission forecast EU-27 wheat production in 2012/13 at 139.9 MMT, 3 MMT higher than last year, and more than recent estimates from Copa Cogenca (137.2 MMT) and Coceral (134.6 MMT).
The Commission see a 2 MMT cut in animal feed usage in the coming season. Demand from the bioethanol industry is only seen rising 0.2 MMT following Abengoa Rotterdam's switch to using corn as a feedstock as opposed to wheat.
EU-27 2012/13 wheat ending stocks are seen rising by a third to 13.9 MMT.
They are also relatively bullish on rapeseed production prospects compared to Copa Cogenca and Coceral, estimating the 2012/13 crop at 20.4 MMT - although that is still 2.5 MMT below domestic usage.
In international news Jordan bought 50,000 MT of wheat of unspecified origin in a tender today. Iraq is tendering for a minimum of 50,000 MT wheat, although it usually buys more, last time round Canadian wheat got the nod.
