CBOT Closing Comments
Soybeans
March soybean futures closed the day at USD9.74, down 10 cents, March soymeal futures at USD291.70, up USD1.30, and March soy oil futures at 37.53, down 100 points. Beans closed 48 cents lower for the week. China say that they will import around 4.5 MMT of soybeans in January, not quite as much as December but a pretty impressive number nonetheless. Record large production from just about every corner of South America looms.
Corn
March corn futures closed at USD3.71 ½, down 9 ½ cents, and May corn futures USD3.82 ½, down 9 ¼ cents. Corn closed 52 cents lower for the week after the USDA surprisingly increased their US corn production estimate Tuesday. Weak outside markets added to corn's woes, prices have closed lower every day this week. Thursday's export sales were sluggish at 327,300 MT. Now that index fund rebalancing is over, what is going to support corn next week?
Wheat
March CBOT wheat futures closed at USD5.10, down 17 ¾ cents, March KCBT wheat futures at USD5.12, down 15 cents, and March MGEX wheat futures at USD5.20 ½, down 16 ¼ cents. on the week as a whole CBOT futures were down a whopping 59 cents. US export sales continue to lag, and stocks consequently are building, with the US stocks to usage is now pushing 50%.
EU Wheat Ends Lower Again
EU wheat futures closed lower again Friday with Paris March milling wheat ending down EUR1.25 at EUR127.25/tonne, and London March feed wheat closing down GBP1.70 at GBP104.00/tonne.
It's been a torrid week for wheat, with March London ending GBP5.20/tonne lower than last Monday's close, after the USDA issued some pretty damning numbers on Tuesday.
As the trade slowly comes to terms with the size of US and global stocks, there has been precious little in the way of demand news to help buoy the market.
Defra increased their estimate on the size of the 2009 UK wheat crop by 200,000 MT to 14.4 MMT this week. Egypt passed on US and French wheat in their latest tender, buying Russian/Kazakh grain, and a GASC visitation to France to try and reach some common ground re new strict importation regulations appeared to end in stalemate.
Sterling strength, or more accurately dollar and euro weakness, added to the woes of London wheat sending futures prices to their lowest levels since early October.
eCBOT Close, Early Call
The overnight grains closed flat to a tad lower, with beans around unchanged, corn 2 cents or so lower and wheat down 3-4 cents.
Crude oil is a bit easier, as it has been every day this week, just under USD79/barrel. The dollar is flat, bang on 1.63 against the pound.
Index funds are said to have bought almost 20,000 corn contracts in the last five minutes of trading last night, and nobody scarcely noticed.
More scary is the news that their "rebalancing act" is now just about over, heavily overshadowed by some stunningly bearish USDA pontifications.
Jan soybeans expired last night at USD9.68 ½, 44 ½ cents down since last Friday. March corn closed last night at USD3.81, 42 cents lower on the week and March wheat ended last night's session at USD5.27 ¾, down 40 ¾ on the week so far.
Have you spotted the trend yet?
China say that they will import around 4.5 MMT of soybeans in January, not quite as much as December but a pretty impressive number nonetheless. This could be a bit of a last chance saloon for the US, as the shops are about to open in South America very, very soon. And boy, are they going to have the Mother of all sales, Gucci handbags for a fiver with a free cargo of soybeans thrown in.
Early calls for this afternoon's CBOT session: corn called 1 to 2 lower; soybeans called 1 to 2 higher; wheat called 2 to 3 lower.
EU 2010 Rapeseed Output Seen Slightly Higher
Oil World say that the EU-27 will produced 21.5 MMT of rapeseed in 2010, a 300,000 MT, or 1.4%, increase on the 21.2 MMT output of 2009.
Early reports suggest that UK plantings will increase from just over 570,000 hectares to around 610-630,000 ha. That potentially gives us a crop of around 2.1 MMT this summer (from 1.9 MMT in 2009).
The German Statistical Office said yesterday that winter rapeseed plantings there were 1.6% higher for 2010 at 1.5 million hectares.
That reaffirms Germany as potentially Europe's largest producer of the seed, as FranceAgriMer peg winter plantings there down slightly - 0.4% lower at 1.47 million ha.
Canadian production will increase slightly, to 12-12.5 MMT from 11.8 MMT in 2009, say Oil World.
The State committee of Statistics of Ukraine says that farmers there planted 1.4 million hectares of winter rapeseed for 2010, down 19,800 ha, or 1.9%. Despite plantings being down UkrAgroConsult estimate that Ukraine will produce 2.1 MMT of rapeseed in 2010, a 17% increase on 2009 due to better yields and fewer crop losses.
GB Feed Production Latest
Latest figures from Defra show that GB animal feed production was up 3.6% in November 20009 year-on-year. That takes output for the current marketing year to date (starting July 1st) just marginally higher, up 0.6%.
For the crop year so far cattle & calf feed production is up 1.6%, and poultry feed output up 0.2%. Pig and sheep feed production are down by 2.9% and 4.6% respectively.
Just over 1.14 MMT of wheat and 300,000 MT of barley has been incorporated into compound feed during the Jul/Nov period, that's a 0.9% reduction in wheat usage and a 3.1% increase for barley inclusion.
It is interesting to note that wheat usage in September was 1.2% higher year-on-year, but fell back sharply to be 9-10% lower in both October and November. Barley usage meanwhile went the other way, from -2% in September to +29% by November.
Usage of wheatfeed was down by 7% in September and 9% in October, but increased significantly in November, although still 0.3% down on a year ago, as compounders took advantage of cheap October prices and switched formulations to incorporate more of the cereal substitute.
View the full report here.
China: Do They Depend On Us, Or Do We Depend On Them?
China is set to import around 42 MMT of soybeans in 2010, according to an article in the Chinese National Business Daily. That would be only marginally less than the 42.55 MMT imported during 2009 Chinese customs data shows.
The article says that China's edible oil consumption has grown by an average of 5-6 percent year on year, but that domestic oilseed production fails to meet such an increasing demand.
At 42 MMT, China will account for more than half of the world's entire soybean trade.
It's not just soybeans that China has a seemingly insatiable appetite for, rapeseed consumption is set to increase by 27% to 14.5 MMT in 2009/10 from just two years ago, according to the USDA.
This means that China's edible oil production has international dependence of more than 70 percent, the article notes.
That's a big number, which beggars the question do they depend on us, or do we depend on them? It seems that the answer is both, but in times of plenty they can expect to pick up some bargains along the way when they go shopping.
Record output from all the usual suspects in 2010 certainly could lead to some aggressive marketing once South America gets into full flow shortly.
Brazilian Soy Harvest Underway
Although planting of soybeans has only just been completed in some parts of Brazil, the harvest is already underway in other areas.
Farmers in Mato Grosso planted twice as many early varieties of soybeans this year, and the state is expected to have harvested around 4 MMT by the end of January.
Some of the new super early varieties reach full maturity within 100 days from planting, and the benefits from growing them are significant.
Old crop carryover stocks are negligible, after Brazil campaigned aggressively to sell last season's production at the front-end of the marketing year. Processors will therefore pay a reasonable premium for early beans.
These varieties understandably yield less than their slower growing relations, typically around 52-54 sacks per hectare, compared to around 60 sacks per hectare from later maturing soybeans.
Harvesting now however also brings other benefits that outweigh lower yields such as giving growers the option to plant a second crop of corn or cotton, and keeping agrochemical expenditure down to a minimum.
CBOT Closing Comments
Soybeans
January soybean futures expired today at USD9.68 ½, down 15 cents, with March beans closing at USD9.84, down 8 ½ cents. January soymeal futures expired at USD299.00, down USD1.50 and January soy oil futures expired at 37.80, down 83 points. The NOPA December soybean crush was above expectations at 164.4 million bushels. Weekly export sales came in in line with expectations at 754,100 MT, with China once again the leading protagonist taking 528,100 MT of that. Shipments were 1,623,100 MT up 27% from the four week average.
Corn
March corn futures closed at USD3.81, down 3 cents, and May corn futures at USD3.91 ¾, down 3 1/4 cents. Weekly corn sales were a bit disappointing at 327,300 MT, export commitments are still large enough to meet or beat the USDA's projections, but the pace of shipments is lagging. South Korea bought 110,000 MT of either US or South American corn overnight. Talk of fund buying/rebalancing helped keep futures from falling too much further today.
Wheat
March CBOT wheat futures closed at USD5.27 ¾, down 9 ¼ cents, March KCBT wheat futures ended at USD5.27, down 9 ½ cents, and March MGEX wheat futures at USD5.36 ¾, down 7 1/4 cents. Wheat weekly export sales of 181,900 MT were poor. World stocks are increasing and the US keeps missing out on any competitive export tenders. Japan booked 91,000 MT of wheat in its usual weekly tender today with 70,000 MT of that US origin, but apart from that the US is struggling to meet it's export target for 2009/10.
EU Wheat Closing Comments
EU wheat futures closed lower with Paris March milling wheat ending down EUR0.25 at EUR128.50/tonne, and London May feed wheat closing down GBP0.80 at GBP108.20/tonne.
It was another day of fallout from some very bearish USDA numbers released Tuesday.
German farmers have planted 3% more winter wheat for the 2010 harvest than they did for 2009, said the German Statistics Office. that's the largest area given over to wheat since German unification.
French wheat plantings are also up 3% to 4.89 million hectares say FranceAgriMer, whilst here in the UK farmers have reluctantly planted around 10% more of the crop, boosting sowings to around 2 million hectares.
Defra boosted the size of the UK 2009 wheat crop by 200,000 MT to 14.4 MMT today also.
As you can see we are struggling to find some bullish news here. Egypt passed on EU and US wheat to buy 180,000 MT of Russian/Kazakh wheat in yesterday's tender, and Jordan also joined the fray booking 100,000 MT of Black Sea origin wheat overnight.
Nope, there's no bullish news round here Mister. Rafa Benitez took one step closer to the sack by losing at home to Reading last night, but that probably won't make too much difference to the global wheat supply and demand balance sheet said one UK broker.
"Frontier are a gang of gay girls who can't fight their way out of a paper bag," added another, who surprisingly refused to be identified.
eCBOT Close, Early Call
The overnights closed lower with beans down 2-3 cents, wheat 3-4 cents off and corn 4-5 cents easier.
The dollar and crude oil are both showing little change for once.
The NOPA December soybean crush was above expectations at 164.4 million bushels.
Soybean weekly export sales came in in line with expectations at 754,100 MT, with China once again the leading protagonist taking 528,100 MT of that.
Weekly corn sales were a bit disappointing at 327,300 MT as too were wheat sales (again) at 181,900 MT.
Actual export shipments for beans were strong at 1,623,100 MT, with almost a million of that going to China.
Japan booked 91,000 MT of wheat in its usual weekly tender today with 70,000 MT of that US origin. Jordan booked 100,000 MT of Black Sea origin wheat overnight. Bangladesh is also in the market for wheat.
South Korea bought 110,000 MT of either US or South American corn, plus 55,000 MT of South American origin soymeal.
US weekly unemployment benefit claims numbers were out this afternoon. The figures showed a 11,000 increase, a more modest rise of 3,000 was expected.
Any talk of a US recovery will also be tempered by the news that a record 2.8 million US households were threatened with foreclosure in 2009.
The ECB kept interest rates in the eurozone unchanged as was widely expected.
Early calls for this afternoon's CBOT session: corn called 3 to 5 lower; soybeans called 2 to 3 lower; wheat called 3 to 4 lower.
Wheatfeed Getting Tight
Word is reaching Nogger Towers of a spate of last minute cancellations on wheatfeed fixings at several mills across the country.
A sudden drop in demand for flour is being blamed.
Flour demand normally dips off in January, but this year offtake held up during the first week of the month, as consumers stocked up on supplies of basic essentials such as bread due to widespread snowstorms across the country.
It seems that the nation's freezers are now full, and flour consumption has suddenly fallen.
So who wants a couple of spot loads out of Corby then??
EU Rapemeal Prices
Guide prices basis FOB Lower Rhine in euros/tonne:
Jan unq
Feb 166,00 +2,00
Mch/Apr 157,00 +1,00
May/1st h Jly 127,00 -1,00
Aug/Oct 10 123,00 +1,00
Nov/Jan 11 131,00 +1,00
Nov/Apr 11 132,00 +1,00
Feb/Apr 11 133,00 +1,00
Brazil Reduces Ethanol Mandate
In an effort to curb surging ethanol prices the Brazilian government have temporarily reduced the maximum amount of the biofuel allowed in gasoline from 25% to 20%. The reduction will run from Feb 1st until April 30th.
Ethanol is in short supply in Brazil after processors there switched to producing more sugar (and less ethanol) following the recent surge in prices of the sweetener. In addition the heavy rains that disrupted the harvest in Brazil in late 2009, also reduced the sucrose content of the cane.
ABF Sees Q1 Earings Up
Associated British Foods report a 17% increase in revenue during Q1, helped by the weakness of the pound, particularly against the euro and the Australian dollar, which it says contributed to this increase.
Profits were boosted by sugar revenues (excluding results for Azucarera which was only acquired in April 2009), 23% ahead of last year. Including Azucarera revenues were ahead by 68%, they report.
ABF say that "The (sugar) UK business is having an excellent campaign with high beet yield per hectare and high sugar content in the beet giving rise to an estimated sugar production of some 1.3m tonnes. Profit benefited from higher volumes, better factory efficiencies and lower energy costs together with a strengthening of the euro."
"In Agriculture, UK feed revenues were ahead in all sectors except sugar beet feed which was affected by lower prices. Growth in speciality feeds exceeded expectations, enzyme sales were encouraging and a new feed mill was commissioned in China. Grain trading activity at Frontier was behind last year’s exceptional level, with less volatility in the market," they add.
Primark chipped in with first quarter sales 19% ahead of last year.
German Farmers Plant More Wheat
German farmers, like their fellow European chums (stop mentioning the war will you, we're all mates together now), have planted 3% more winter wheat for the 2010 harvest than they did for 2009, say the German Statistics Office.
Overall 3.27 million hectares of the stuff has gone into the ground they say, that's 90,000 more than last time, and the largest area given over to wheat since German unification.
Given the rate that German barley is pouring into intervention, it's no huge surprise that farmers there are coming to the same conclusion as their French and British brethren. Wheat is the lesser of two evils.
French wheat plantings are also up 3% to 4.89 million hectares say FranceAgriMer, whilst here in the UK farmers have reluctantly planted around 10% more of the crop, boosting sowings to around 2 million hectares.
Students And Grain Dinners
Students with nothing better to do from the Academy of Fashion and Design in Saskatoon, Saskatchewan have created a selection of dresses covered in peas, lentils, chickpeas and beans as part of the Sygenta sponsored annual Crop Production Week.
What's the point of that, you lazy, workshy buggers? Go out and get yourself a proper job. There's nothing original about adorning your clothing with food, as anyone who's ever been to a grain dinner will testify to.
I recall going to the LACAM Dinner with Bridgey one year, this is perfectly true I hasten to add, when it was held at the Prince of Wales Hotel in Southport. I use the word "hotel" in it's loosest sense.
The POW camp as we called it had conscripted the usual motley crew of spotty student-types in to serve on, as they do at these things. Unfortunately the young girl serving Bridgey either had a severe case of Parkinson's or was slowly emerging from a drink/drug-fueled coma. I couldn't quite tell which.
Upon serving the soup, poor old Bridgey had it liberally spattered by said Neanderthal zombie all down the left lapel of his dinner jacket. Those that know Bridgey will be unsurprised to hear that he laughed it off with his considerable good nature.
Worse was to come however when the gravy arrived to go with the main course, with which Shakin' Stevens decided to approach poor Bridgey from the opposite side, not wishing to herself be smeared in Mulligatawny I assume. The fact that she'd already deposited the first course down Bridgey's left clearly unsettled her. So there's Bridgey with soup down one lapel and now gravy all down the other, just starting to wonder if this is some sort of set-up.
Not content with leaving it at that, for afters we had ice cream accompanied with a hot cherry sauce. She duly managed to complete her own individual Mrs Overall style hat-trick by dripping scaldingly hot cherry sauce right on Bridgey's bald patch resulting in a very nasty boil!
Still, Bridgey did win the speech sweep that year as I recall, so every cloud eh?
Dithering
Crude oil can't seem to make it's mind up which side of 80 dollars it wants to be. The US Energy Information Administration said yesterday that crude stocks rose last week by 3.7 million barrels despite the cold spell gripping America. That was more than double what the market had been expecting. Inventories of distillates rose by 1.4 million barrels, instead of falling as forecast. China continuing to tighten monetary policy might also impact on demand. Optimism that the US economy is improving, leading to a pick-up in demand form the world's largest consumer seems to be preventing a slide too far into the USD70's though.
The pound is also looking like Mavis Riley confronted by a naked Peter Andre this morning. Shall I or shan't I go through 1.63 against the dollar, oh I don't really know Rita? The New York Fed President said yesterday that US interest rates could stay close to zero for another two years. But on the other hand we've got one-eyed Gordon Brown and puffy Alistair Darling to guide our ship through troubled waters. I wouldn't like to be tied to the mast on that particular vessel, would you? "Roger the cabin boy, Darling" "Aye, aye, capt'n - as soon as I've finished with this one."
Are The USDA Numbers Overstated?
The highest corn yield ever by a country mile, and record production estimates for both beans and corn might not paint quite such an accurate picture as the USDA would like to make out.
Whilst very few people (except the odd deranged conspiracy theorist) would argue that US farmers have largely had anything other than some bloody good crops this year, many think that the USDA may be overestimating just how good things have been.
They did however issue a "rider" with Tuesdays numbers, saying that further surveys in states where the harvest was delayed may lead to these figures being amended in March.
So what are the real numbers? Respected private firm Lanworth Inc., who use perhaps a more sophisticated combination of satellite imagery, field surveys and ground data from the top producing states (as opposed to the USDA's approach of one Spectrum ZX, some crayons and a pack of cards) say 12.318 billion bushels for corn and 3.081 billion bushels for soybeans.
Still some pretty weighty numbers, but 6.3% lower than the USDA on corn, and 8.3% lower in the case of beans.
Which also beggars the question, if the USDA can't accurately tell us what size the crops are that have already been harvested, the how far out are their planting intentions likely to be in the spring? We've now got to wait until March 31st to get the USDA's first stab at getting those right for corn & beans. And whilst we're on the subject, what about their winter wheat area which came in lower than the lowest trade estimate, and almost 4 million below the average trade guess of 40.916 million acres?
CBOT Closing Comments
Soybeans
January soybean futures closed at USD9.83 ½, up 14 cents, January soymeal futures ended at USD300.50 up 5.10 points, and January soy oil futures at 38.63, up 37 points. It was a very volatile session, as the trade continues to digest yesterday's USDA numbers. Exactly how the trade can come to any sort of bullish scenario is beyond me. Surely record output from the US, Brazil, Argentina and probably Paraguay & Uruguay must be bearish? Estimates for tomorrow's US weekly export sales range from 750,000 to 850,000 MT.
Corn
March corn futures closed at USD3.84, down 8 ½ cents, and May corn futures at USD3.95, down 8 cents. The USDA say that they will re-survey farmers February through March to get a more accurate production output for the 2009/10 corn crop. Futures were well off their lows after yesterday's very bearish production numbers. Crude oil was lower which also weighed on corn, as did carryover weakness from Tuesday's bearish USDA production numbers. Estimates for tomorrows export sales range from between 350,000 and 650,000 MT.
Wheat
March CBOT wheat futures finished at USD5.37, up 1 ¼ cents, March KCBT wheat futures at USD5.36 ½, up 2 ½ cents, and March MGEX wheat futures at USD5.59 ¾, up 2 cents, The market continues to adjust between sharply lower planted area for next season, and hugely higher ending stocks and reduced export sales for 2009/10. Weekly wheat export sales for tomorrow are estimated between 225,000 and 275,000 MT.
EU Wheat Ends Lower
EU wheat futures closed lower Wednesday, although things could have been much worse in the aftermath of Tuesday's bearish USDA production and stocks numbers.
EU wheat closed down, but well off the lows, with London March feed wheat down GBP1.10 at GBP106.40/tonne, and Paris March milling wheat down EUR0.75 at EUR128.75/tonne.
In some ways I guess that you could conclude that EU wheat got off quite lightly, certainly the USDA stocks and global production numbers were very bearish.
Egypt underlined just how uncompetitive EU (and US) wheat was, by buying 180,000 MT of Russian/Kazakh wheat "just for a laugh".
Surely somebody must want our wheat?
Erm, no, not really. But those nice bioethanol lads might take it off your hands if you ask them nicely like.
EU Soymeal/Pellet Prices
Guide prices basis CIF Rotterdam/Amsterdam in USD/tonne, unless otherwise stated:
Brazil pellets 48%
Afloat 420,00 -10,00
Jan 420,00 -9,00
Feb 418,00 -7,00
March 389,00 -7,00
Apr 355,00 -6,00
May/Sep 342,00 -6,00
Argentine pellets 44/45%
Afloat 406,00 -5,00
Jan 406,00 -5,00
Jan/March unq
May/Sep 335,00 -6,00
Dutch Hipro 49% profat FOB
Jan 430,00 -17,00
Feb 430,00 -12,00
March 428,00 -7,00
Apr 411,00 -6,00
May/Jul 363,00 -7,00
May/Oct 367,00 -5,00
Argentine Hipro 49% profat
Afloat 420,00 -13,00
Jan 420,00 -8,00
Feb 420,00 -8,00
March 396,00 -14,00
Apr 361,00 -9,00
May/Sep 347,00 -9,00
Oct/Dec 357,00 -7,00
EU Rapemeal Prices
Guide prices basis FOB Lower Rhine in euros/tonne:
Jan 174,00 -1,00
Feb 164,00 -4,00
Mch/Apr 156,00 -1,00
May/1st h Jly 128,00 -2,00
Aug/Oct 10 122,00 -4,00
Nov/Jan 11 130,00 -3,00
Nov/Apr 11 131,00 -2,00
Feb/Apr 11 132,00 unq
South American Soybean Prospects Improving
It's not just the big two of Brazil and Argentina likely to weigh in with record soybean production in South America in 2010.
Minnows like Paraguay and even Uruguay could also see output boosted to all-time highs following increased plantings and beneficial rainfall.
The USDA yesterday left their production estimate for Paraguay unchanged at 6.7 MMT, just below 2007/08's record output of 6.9 MMT, but some analysts think that the crop there could reach 7 MMT. "Very high yields may be obtained in the region of Alto Paraná," say Oil World.
As in Argentina, last year's Paraguayan soybean crop was badly affected by drought, slashing production to just 3.9 MMT. Output this year could see an 80% increase on that.
“2009 was a lost year for agriculture but results for 2010 could be very promising," says Paraguayan agronomist Hector Cristaldo.
Oil World predict that even little Uruguay could chip in with a record 1.7 MMT of soybeans this year, up almost 50% from 1.16 MMT last year.
Sound familiar? High prices equal big plantings as every pauper and his dog look to cash in, throw in some decent El Nino-influenced rains and lo and behold we have record production all over the place. Just like wheat in 2008.
It's All Gone Pear-Shaped
Things look like they've gone the shape of a small soft edible fruit this morning in the aftermath to the USDA's barrage of bearish data yesterday afternoon.
Corn has followed through from it's locked-in limit down close, trading around 16-18 cents lower on the overnight eCBOT market. That has dragged wheat and beans further into the mire, with those two trading around 7 cents and 5 cents easier respectively.
The Bank of China has thrown another spanner in the works for the second week running overnight, raising the minimum reserves of the nation's banks. That might have a negative impact on demand for crude oil and soybeans.
Crude is currently flirting either side of USD80/barrel, despite a weak dollar, ahead of stocks data from the US Energy Dept due later today. The report, due at 15:30 GMT, is expected to show US crude inventories grew by 1.4 million barrels last week.
The dollar is weaker across the board, with the pound pushing up to 1.6240, close to the upper limits of its recent range. This, and follow through from last night's weak close, look set to weight on London wheat futures again today which have opened around GBP1/tonne easier.
Record yields, record production, multi-year high ending stocks and multi year low exports.
Bullish this isn't. Unless you are a delusionist. Over to you, Eric.
CBOT Closing Comments
Corn
Corn futures closed locked in limit down with March corn futures at USD3.92 ½, down 30 cents, and May corn futures at USD4.03, also down 30 cents. The USDA surprised the market pegging US 2009 production at a record 13.2 billion bushels, with a yield of 165.2bu/acre that beat the previous record my a country mile. The much touted fund buying turned into fund selling, with an estimated 8,000 contracts ditched during the session.
Soybeans
January soybean futures closed sharply lower at USD9.69 ½, down 32 ¼ cents, January soymeal closed at USD295.40, down 9.30 points, and January soy oil futures at 38.26 cents, down 93 points. As with corn, records fell like confetti for soybeans. The USDA now estimate the 2009 crop at an all-time high 3.361 billion bushels, up 13% from the 2008 soybean crop. Harvested acres are also record at 76.4 million acres. Production out of Brazil was raised 2 MMT to a record 65 MMT and Argentine output was left unchanged at 53 MMT - but yes, that too is a record.
Wheat
March CBOT wheat futures ended sharply lower at USD5.35 ¾, down 36 ¾ cents, March KCBT wheat futures at USD5.34, down 32 cents, and March MGEX wheat futures at USD5.40 ¾, down 37 ¼ cents. All the USDA's wheat stocks data was bearish. US ending stocks were raised to 976 million bushels from 900 million in last months report, the largest ending stocks number since 1988. US exports were cut from 875 to 825 million bushels, the lowest figure since 1971-72. Domestic feed and residual usage was cut from 190 million to 170 million bushels. World wheat production increased 2.27 MMT and ending stocks increased by 4.69 MMT to 195.6 MMT, a 62% increase in just two years.
EU Wheat Futures Dive Following USDA Numbers
EU wheat futures closed sharply lower Tuesday following bearish stocks and production data from the USDA.
London Mar feed wheat ended down GBP1.65/tonne at GBP107.50/tonne and Paris March milling wheat was EUR4/tonne lower at EUR131.50/tonne.
Recent reports from the USDA have highlighted how US stocks have more than trebled since 2007/08, including the addition of a further 2 MMT to those stocks this month alone, now pegging 2009/10 carryout at 26.55 MMT, compared to 8.32 MMT just two seasons ago. That equates to the largest ending stocks number since 1988.
To add insult to injury they also dropped world consumption by more than 2 MMT in January, taking global ending stocks to 195.6 MMT, a 62% increase in just two years.
The USDA also cut its estimate for US wheat exports in the current 2009-10 marketing year to 825 million bushels, the lowest figure since 1971-72.
Despite a significant quantity of corn still standing unharvested in US fields, the USDA also increased the size of the US 2009/10 crop to an all-time record 334 MMT on the back of yields averaging an eye-popping 165.2 bu/acre, 4.8 bu/acre more than the previous record.
The report highlights the burdensome nature of current US and global stocks, and the fact that America is struggling to compete internationally on the wheat export market. It highlighted this last month too when it referred to US wheat being at a “competitive disadvantage” to other global exporters, citing freight and other logistical differences.
Bullish planting statistics for winter wheat in the US got swept away by a tide of bearish stocks sentiment.
EU wheat moved sharply lower once the US markets opened, but didn't really have time to fully reflect what turned out to be a 32-36 cent loss in wheat futures across all three US exchanges. The could well be some follow-through in the morning.
Egypt are tendering to two cargoes of wheat, saying that they are looking for 60,000 MT of US/Canadian wheat plus a further 60,000 MT from the usual suspects. It will be interesting to see if they do buy US wheat and if so at what premium to Black Sea/EU wheat it comes.
Oh My Gawd Missus
CBOT staged perhaps a long-overdue crash following the release of the USDA numbers Tuesday, with beans and wheat closing heavily lower and corn down the daily limit.
Technically wheat should have been the strongest of the three, with the only bullish item of note in today's reports being the sharply reduced winter wheat plantings.
Things didn't quite pan out that way and the trade instead focused on the raising of US and global carryout, reflecting in part the slow pace of US wheat exports. Spillover weakness from corn was also bound to have been a feature.
Where was all the fund buying? One report I read mid-trade suggested that there were 85,000 unfulfilled sell orders on corn at one stage, more than enough to satisfy any misguided fund buying!
London and Paris wheat closed lower, and there will undoubtedly be some follow-through in the morning after this too.
USDA Report - Corn
This is where the biggest shock came from, the USDA increasing US production to 13.151 billion bushels, above even the highest trade estimate and 230 million up on last month, when almost everyone had been anticipating a reduction.
Yields were the culprit, coming in at 165.2 bu/acre, from 162.9 bu/acre last month and 0.7 bu/acre above the highest trade estimate.
US carryover was raised to 1.764 billion bushels, well above estimates for 1.613 billion.
The increased US production and an extra 1 MMT of output from Argentina will help push global carryover up from 132.3 MMT estimated last month to 136.2 MMT now, the USDA said.
USDA Report - Soybeans
The USDA raised 2009 US production by 42 million bushels to 3.361 million, a tad higher than the average trade guess of 3.337 million, but fairly central within the range of trade estimates so there was no great shock there.
Yields were upped from 43.3 bu/acre last month to 44 bu/acre, a little higher than guesstimates of 43.4 bu/acre.
Ending stocks were dropped 10 million to 245 million bushels, but that was less than the 18 million bushels that the trade had been expecting.
World carryover was raised from 57.09 MMT to 59.8 MMT and Brazilian production increased by 2 MMT to 65 MMT.
USDA Report - Wheat
The USDA pegged the US all winter wheat acreage at 37.097 million acres, comfortably lower than the lowest pre-report estimate and almost 4 million below the average trade guess of 40.916 million acres. HRW wheat area accounts for 27.8 million of that, with SRW area 5.9 million acres.
That's where the bullish news ends. With the slow pace of US exports 2009/10 carryout was raised from last month's estimate of 900 million bushels to 976 million, 71 million above analyst's estimates.
World carryover was also increased from 190.9 MMT last month to 195.6 MMT this time round. Production numbers were left unchanged amongst most of the major players with the exception of Russia, where output was upped from 59.5 MMT to 61.7 MMT.
Report Reaction, Early Call
The much-awaited USDA report threw up a few surprises today. US corn production was actually raised despite almost universal anticipation of a drop due to the volume of corn left standing in the fields.
US soybean output was also increased, this time as was expected, with a further 2 MMT added to the Brazilian crop estimate, now forecast at a record 65 MMT, although this only brings the USDA into line with the likes of Conab.
Ending stocks for corn, beans and wheat all came in higher than anticipated. Global wheat ending stocks were also raised.
The only bullish surprise was US winter wheat sowings down more than 14% to 37.1 million acres, over 6 million down on last year and almost 3 million below what was expected.
Wheat will still have a hard job swimming against a bearish corn and bean tide this afternoon.
Early calls: corn down 15-20, beans down 20-25, wheat steady.
USDA Numbers
Soybeans
US 2009 soybean production was raised from 3.319 billion bushels last month to 3.361 billion. That's a bit higher than the average trade estimate, which was for an increase to 3.337 billion bushels. Carryout was pegged at 245 million bushels, 10 million more than anticipated. Brazil production was raised 2 MMT to 65MMT, and output in Argentina left unchanged at 53 MMT.
Corn
US 2009 corn production was surprisingly raised from 12.920 billion bushels to 13.151 billion. The trade had been expecting a cut to 12.821 billion bushels of the wet harvest that left some corn in the field. Carryout was pegged at 1.764 billion bushels, much higher than trade expectations of 1.587 billion.
Wheat
US 2009 all wheat production was lowered slightly to 2.216 billion bushels from 2.220 billion. Wheat carryout was 976 million bushels, against expectations of 914 million bushels. US winter wheat seedings of 37.1 million acres are 14% down on 43.3 million last year and well below expectations of 40.9 million.
EU Soymeal Prices
Guide prices basis CIF Rotterdam/Amsterdam unless otherwise stated in USD/tonne:
Brazil pellets 48%
Afloat 430,00 -2,00
Jan 429,00 -1,00
Feb 425,00 -1,00
March 396,00 unch
Apr 361,00 -4,00
May/Sep 348,00 -5,00
Argentine pellets 44/45%
Afloat 411,00 +1,00
Jan 411,00 +1,00
Jan/March unq
May/Sep 341,00 -2,00
Dutch Hipro 49% FOB
Jan 447,00 +7,00
Feb 442,00 unch
March 435,00 -1,00
Apr 417,00 -2,00
May/Jul 370,00 -5,00
May/Oct 372,00 -5,00
Argentine Hipro 49%
Afloat 433,00 unch
Jan 428,00 -4,00
Feb 428,00 -2,00
March 410,00 -5,00
Apr 370,00 -2,00
May/Sep 356,00 -1,00
Oct/Dec 364,00 -2,00
EU Rapemeal Prices
Guide prices basis FOB Lower Rhine in euros/tonne:
Jan 175,00 +5,00
Feb 168,00 +5,00
Mch/Apr 157,00 +2,00
May/1st h Jly 130,00 -1,00
Aug/Oct 10 126,00 unch
Nov/Jan 11 133,00 unch
Nov/Apr 11 135,00 unch
Jan & Feb up EUR19/tonne in a week!
CBOT Closing Comments
Soybeans
January soybean futures closed at USD10.01 ¾, down 11 ¼ cents, January soymeal futures at USD304.70, down 2.10 points, and January soy oil futures at 39.19cents, down 34 points. Soybeans finished lower for the fourth day in a row in anticipation of an increase in production numbers from the USDA tomorrow. US soybean production will probably be increased to 3.337 billion bushels, from 3.319 billion bushels last month, the trade reckons. Analysts predict ending stocks at 235 million bushels, whilst export inspections were 41 million bushels within trade guesses this morning.
Corn
March corn futures closed at USD4.22 ½, down ½ cent, and May at USD4.33, also down ¼ cent. Analysts are forecasting the USDA will decrease corn production for 2009 because of the wet harvest that left some corn in the field. US output might be cut to 12.821 billion bushels, the trade estimates. Ending stocks will come in at 1.587 billion bushels, analysts say. Today's export inspections were at 20,579,000 bushels, below trade guesses that were between 23 and 28 million.
Wheat
March CBOT wheat futures ended at USD5.72 ½, up 4 cents, March KCBT wheat futures at USD5.66, up 6 cents, and March MGEX wheat futures at USD5.78, up 3 cents. The USDA are seen cutting US winter wheat plantings to 40-41 million acres down from 43.3 million acres a year ago. HRW estimates have acres at 30.414 million, down about 5% from last year with SRW acres at 6.975 million. Analysts are expecting wheat ending stocks to come in at 914 million bushels.
EU Wheat Closing Comments
EU wheat futures closed very narrowly mixed Monday with Paris March milling wheat ending unchanged at EUR133.75/tonne, and January London feed wheat closed up GBP0.25 at GBP107.50/tonne.
It was a quiet inactive day ahead of tomorrow's USDA S&D, plantings and stocks report.
Whilst US winter wheat plantings are expected down by around 3 million acres, global stocks to usage is seen rising to around 30% due to two successively large harvests. World output in 2009 is seen as the second largest in history, surpassed only by 2008.
Production may decline again in 2010, but not by much unless we get a significant crop disaster somewhere. Most analysts only see global plantings down by around 2% for the 2010/11 season.
Cold temperatures seem to be causing some resistance to farmer selling, although a blanket of snow seems to be protecting EU wheat from potential crop losses.
Jordan is looking for 100,00 MT of wheat and a similar quantity of barley in a tender. The Black Sea looks the most likely favourite to win those orders.
In the UK a total of 34,116 MT of barley had been offered into intervention stores by 7 January. With 1,448 MT of this being rejected to date, cumulative net-barley offers stand at 32,668 MT.
That's a bit more significant than what has been getting put up, but things remain well behind the rest of Europe, where almost a million tonnes has already been accepted, and more than a further 1.5 MMT is under offer.
Yellow Millet
Not a product I've ever traded in before, but I have shifted the odd parcel of "non-mainstream stuff" via the blog before today.
Today's slightly unusual offering is 22MT of yellow millet in bulk ex Essex. If that is up anyone's boulevard then drop me an email.
eCBOT Close, Early Call
The overnight grains began the week higher ahead of tomorrow's USDA numbers and a continuation of the widely anticipated fund rebalancing.
Beans closed 1-2 cents higher in company with corn, whilst wheat was around 3 cents firmer.
The dollar is down and crude oil higher, nudging USD84/barrel.
There's a mountain of information out from the USDA tomorrow, the gist of which seems to be bearish production numbers for soybeans, with increases to US and Brazilian (and possibly Argentinean as well) output for 2009/10, and slightly more bullish information likely for corn and wheat.
Corn output in the US is likely to be revised lower, although there may be increases from South America.
Plantings for 2010 are expected to be higher for corn, with US farmers sowing 90 million acres, according to the American Farm Bureau Federation. They see soybean area down half a million to 77 million.
The USDA won't report on 2010 US corn and soybean acreage tomorrow, but they will release their estimate on US winter wheat plantings, cutting their area to 40.5 million acres down from 43.3 million acres a year ago.
The American Farm Bureau Federation meanwhile peg 2010 all wheat acres in the US down 4.1 million to 55.0 million acres.
Jordan is looking for 100,00 MT of wheat and a similar quantity of barley in a tender. It's unlikely that the US will stand a chance with either Russian or Ukraine grain likely to be the favourite candidate.
Early calls for this afternoon's CBOT session: corn called 1 to 2 higher; soybeans called 1 to 2 higher; wheat called 2 to 3 higher. March beans have settled lower in 6 of the past 8 years in the session immediately prior to the January USDA crop report, conversely March wheat has settled higher 6 out of the past 8 years.
Strike Disrupts Activity At French Ports
A strike by militant French dock workers is causing problems today for cargo vessels at Marseille, Le Havre and Saint-Nazaire.
This is second 24 hour walkout by workers complaining over government plans to privatise unloading operations.
Passenger traffic is said to be unaffected.
EU Soymeal/Pellet Arrivals
Vessel Braz MT Arg MT ETL Sailed ETA Dest
Stellar Mermaid 25000+hp 12-15 Jan etd Adam
Global Explorer 30000 13-15 Jan etd Rdam
Ariso 15000 40000 28-Dec 15-Jan Adam
Majestic 19000hp 31-Dec 17-Jan Adam
Rotterdam Trader 25000+hp 30-Dec 17-Jan Rdam
Forestal Pacific 6000 25000 30-Dec 18-Jan Adam
Stellar Jupiter 24000 28-Dec 21-Jan Rdam
Sea Prince 41000+hp 3-Jan 22-Jan Adam
Glorious Sakura 9000 38000 6-Jan 22-Jan Adam
Cristal Pioneer 25000+hp 6-Jan 24-Jan Adam
Mimosa Dream 4000 42000 ldng 25-Jan Adam
Growth Ring 25000 ldng 30-Jan Rdam
Silver Pegasus 28000 13-Jan 2-Feb Rdam
Forestal Esperanza35000+hp 13-Jan 2-Feb Adam
Hamburg 30000 17-Jan 4-Feb Adam
Dyna Voyager 10000 15000 14-Jan 5-Feb Adam
Helena 20000 18-Jan 9-Feb Adam
Eden Maru 28000 22-Jan 14-Feb Rdam
EU Soymeal/Pellet Prices
Guide prices basis CIF Rotterdam/Amsterdam unless otherwise stated in USD/tonne:
Brazil pellets 48%
Afloat 432,00
Jan 430,00
Feb 426,00
March 396,00
Apr 365,00
May/Sep 353,00
Argentine pellets 44/45%
Afloat 410,00
Jan 410,00
Jan/March
May/Sep 343,00
Dutch Hipro 49% profat FOB
Jan 440,00
Feb 442,00
March 436,00
Apr 419,00
May/Jul 375,00
May/Oct 377,00
Argentine Hipro 49% profat
Afloat 433,00
Jan 432,00
Feb 430,00
March 415.00
Apr 372,00
May/Sep 357,00
Oct/Dec 366,00
EU Rapemeal prices
Guide prices basis FOB Lower Rhine in euros/tonne;
Jan 170,00 +5,00
Feb 163,00 +3,00
Mch/Apr 155,00 +2,00
May/1st h Jly 131,00 +3,00
Aug/Oct 10 126,00 +1,00
Nov/Jan 11 133,00 +1,00
Nov/Apr 11 135,00 +1,00
Grimsby Biofuel Plant Plans Back Up And Running?
A report on Reuters suggests that plans to construct another large-scale biofuels plant on the east coast of England are back up and running.
Investment firm Future Capital are looking to raise GBP236 million to help fund the project in partnership with UK firm Vireol.
Deals have been done to sell all the ethanol produced over a 10 year period to an unnamed banking group and a "global animal feeds business" has "made a commitment" to buy all the feed byproduct, the article says.
Full story here.
Vireol's company website isn't exactly awash with information on the deal, or anything else for that matter, simply giving their address and telephone number.
And They're Off For Britain's Sexiest Farmer
The Farmer's Weekly is running a Britain's Sexiest farmer competition.
"The sexy modern farmer is happy, caring, hardworking and honest," they inform us. That whittles it down to a very short short-list I'd have thought. Like looking for a compassionate banker, a macho hairdresser or a sincere estate agent.
Still, healthy heterosexual males like Nogger are pleased to note that in the interests of equality, five ladies are also in the running, so let me "mark your card" as the say in horsey circles:
Normally a solid and reliable jumper, Fiona pulled hard before unseated her rider at Kempton on Boxing Day. She lists making tea as one of her main attributes, I think they mean cups of the stuff rather than big fry-ups. They do however say that you know where you stand with Fiona. Stand? I should be sitting down at the table whilst she's popped to the chippie, next.
The front-running headstrong sort Emma who could be a difficult ride for an amateur, is "the Lara Croft of the modern farming generation" apparently, with "a glowing complexion and the toned figure of the physically fit". Hard ridden second last time out where jockey was fined for excessive use of the whip. She looks like she could jog into town to fetch me a kebab and a crate of lager without breaking sweat, no problem. Stays all day, so could be a bit "demanding" for me however, so let's move on.
Heavily backed favourite, Tori, took a keen hold before refusing at the last last time out. Had previously beaten the well regarded Marianne Fischer Boel in a group event on the continent (although in receipt of a lot of weight). Comes complete with that "just got out of bed" tousled long blonde hair look. Also has an award-winning tup, they say. She looks a bit like Mrs Nogger#1, except she's attractive and doesn't live in my old house with all my furniture. Mrs N#1 also won Tup of the Year three years running, as voted for by the lads at the local rugby club. Too spookily close to home, next.
Now we have Vicki, who refused to race last time out, so they're trying her with the blinkers off and a tongue strap today. She normally jumps for fun although has a nasty habit of coming second, “looks very sexy when she’s greasing the John Deere” they say. Vicki, lovely girl though I'm sure she is, unfortunately has a tad of a resemblance of the slightly deranged bunny boiling Mrs Nogger#2. Check under the bed for knives. Sorry Vicki, next.
And last, but certainly not least, well-bred Anna who likes to come from behind and loves it good/firm with a stiff uphill finish. Lost her chance the last time she was out by sweating up badly in the parade ring in a classy event at Pontefract on New Year's Eve, before subsequently spreading a plate and veering violently left and right. Worth another chance in this company. Anna conveniently lives near me in North Yorkshire and also enjoys a beating and getting stuck in! She gets my vote as she doesn't look like any of my ex wives, and the removal van won't have too far to travel when she moves in. I might as well save time and start packing what she agrees to let me have back of my own stuff into bin bags now.
The girls on the shortlist (I kid you not) all win a sexy pair of Dunlop boots. Resistant to chemicals and manure, with a tear-resistant upper. They'll come in handy I'm sure.
Fill your boots and vote now here.
Market Snippets
Britain might be forced to stump up GBP7 billion to help bailout incompetent Greece, despite not even being in the eurozone, according to this report: You can sod right off
Indian wheat plantings have fallen behind last year's pace, according to official data. The planted area to date is 26.85 million hectares, down from 27.25 million this time last year. Plantings are normally completed by the end of this week, with last season's total area coming in at 27.84 million ha. The Indian government has been hoping for a 2% increase in area this season, but that now seems unlikely.
The Argentine wheat harvest advanced to 92% complete as of last Thursday, yields might be lower than earlier estimates after torrential rains damaged wheat crops as harvesting nears its end and flooded young soy plants, the Agriculture Ministry said. The soy crop is 92% planted and 89% of the corn crop has been sown.
The dollar remains under pressure following Friday's disappointing jobs numbers and the outlook for a prolonged period of very low US interest rates. The ECB are due to announce their latest decision on interest rates on Thursday, with no change expected.
The overnight grains are firmer on the back of the weak dollar, and ahead of tomorrow's USDA revised S&D numbers. US soybean production will probably be increased to 3.337 billion bushels, from 3.319 billion bushels last month, but corn output might be cut to 12.821 billion bushels, the trade estimates. Total US winter wheat plantings are expected at 40.501 million acres down from 43.311 million acres a year ago. Some fund buying in the grains pit was apparently evident very late on on Friday, ideas are that more might be in the offing this week.
Moroccan wheat imports decreased 41% to 2.1 MMT at end-November 2009, compared to 3.57 MMT a year earlier after the country had a much better domestic crop in 2009, Morocco's Exchange Office say.
Crude Oil Hits 15-Month High
Crude oil is at 15-month highs this morning on the back of bullish consumption data from China, a weak dollar and ideas that economic recovery will lead to increases in demand.
China, the world's second largest energy consumer, had a record annual total of oil consumption during 2009 of 204 MMT, new data reveals.
The old chestnut of an improved global economic outlook is also fueling speculation that demand will continue to increase in 2010, and that the current cold snap gripping most of the northern hemisphere will help kick-start consumption.
All eyes will now be on US stocks reports from the API tomorrow and the US Energy Dept Wednesday.
