Chicago Closing Comments
08/07/11 -- Soybeans: Jul 11 soybeans closed at USD13.52, up 6 1/2 cents; Nov 11 soybeans ended at USD13.46 1/2, up 8 3/4 cents; Jul 11 soybean meal closed at USD346.30, up USD3.30; Jul 11 soybean oil closed at 56.20, down 27 points. On the week as a whole July beans were up 24 1/4 cents, meal up USD5.40 and oil up 104 points. Soybean weekly export sales were 305,700 MT old crop and 129,000 MT new crop, towards the low end of combined expectations of 400-700 TMT. Informa Economics estimated this year's US soybean crop at 3.203 billion bushels, down 3.8% on last year's 3.329 billion crop, with yields at 43.1 bushels/acre. Both numbers were down on Informa's June predictions, with production reduced by 73 million bushels and yields cut by a bushel/acre.
Corn: Jul 11 corn closed at USD6.72 1/4, up 22 1/4 cents; Dec 11 corn closed at USD6.37, up 21 1/2 cents. July was up 31 1/2 cents on the week, with Dec gaining 40 1/4 cents. Export sales were large at 621,800 MT old crop and 868,800 MT new crop for a combined total of almost 1.5 MMT versus expectations of 700 TMT to 1.3 MMT with "unknown" a featured buyer. At least some, if not most, of that is likely to be China. The long range weather forecast is calling for warm and dry weather to move into the Midwest, which stimulated some of today's buying. Informa estimated the US corn harvest at 13.759 billion bushels, up 10.5% on last season's 12.447 billion crop, with yields coming in at 162.5 bushels/acre based on a harvested acreage of 84.7 million acres. The yield number is down 1.1 bushels/acre from June, although still almost 10 bushels/acre up on last year.
Wheat: Jul 11 CBOT wheat closed at USD6.50 1/2, up 26 cents; Jul 11 KCBT wheat closed at USD7.07 3/4, up 4 1/4 cents; Jul 11 MGEX wheat closed at USD8.50, down 3 1/4 cents. On the week July CBOT wheat gained 66 cents, Kansas wheat 4 3/4 cents and Minneapolis 19 cents. Wheat export sales came in at 424,200 MT, on the low end of expectations for 450-650 TMT. China popped up as surprise buyer on one 55,000 MT cargo. Informa upped their US all wheat production forecast from 2.058 billion bushels last month to 2.095 billion, although that is still 5.1% down on 2.208 billion last year. Winter wheat production is seen at 1.476 billion bushels, up 26 million from last month but 9 million below last year. Strength in corn added support. CFTC data shows Managed Money decreasing their net short CBOT wheat position by 8,640 contracts this week.
EU Grains Close
08/07/11 -- EU grains finished higher with Nov London wheat up GBP3.10 to GBP164.75/tonne and with May climbing GBP2.00/tonne to GBP170.00/tonne. Nov Paris wheat rose EUR4.25/tonne to EUR195.25/tonne whilst May12 climbed EUR3.75/tonne to EUR200.25/tonne.
On the week as a whole Nov London wheat was up GBP4.25/tonne and Nov Paris wheat up EUR7.50/tonne.
Tunisia bought 100,000 MT of optional origin milling wheat in a tender today at prices reported to be USD264.90-268.74/tonne CIF. That's the equivalent of around GBP165.00-167.50/tonne or EUR186.00-188.50/tonne including freight.
Clearly it's not going to be UK, French or German wheat getting delivered at those sort of numbers. Russian and/or Ukraine wheat are the most likely suspects.
The price paid is broadly equivalent to that paid by Egypt for 180,000 MT of Russian milling wheat earlier in the week. At around USD243.50-244.50/tonne FOB that was the equivalent of just GBP152.00/tonne or EUR171.00/tonne ex port.
These striking price differences between EU and Black Sea wheat help explain why Brussels only granted soft wheat export licences for 110,000 in the first week of the 2011/12 marketing campaign. With 780,000 MT of wheat imports during the same period we've suddenly switched from being an exporter to a net importer.
At home the wheat harvest is still some three or four weeks away, heavy and widespread rains across much of the country in the latter half of this week will have everyone keeping their fingers crossed. Especially after British Gas has just reminded us all how expensive energy, and therefore drying charges, are getting.
A wet finish to the season isn't what we need. The BBC are giving an "unsettled" outlook for next week, although providing hope of "an increased chance of seeing high pressure make a return, especially across more southern parts of the UK," for the second half of the month.
Early Call From Chicago
08/07/11 -- The overnight grains finished mostly a little firmer with corn leading the way around 5-9c higher. Beans and wheat were flat to 3 cents firmer in a dull Globex session.
After that closed though there were some fairly dramatic US jobs numbers released, which saw crude crash from half a dollar or so firmer to two dollars lower in one swift movement.
The data showed unemployment in the US rising to 9.2% after it was revealed that the ailing US economy added only 18,000 jobs in June and the May number was revised down as well. Businesses added the fewest jobs in more than a year and federal, state and local government jobs have been cut by almost a quarter of a million in the past eight months.
Weekly export sales were robust for corn at almost 1.5 MMT, but towards the low end of expectations for wheat and soybeans. China showed up buying one cargo of US wheat.
Corn volume yesterday was the lowest since New Year's Eve and open interest has now declined to it's lowest in a year as fund money has exited over the last three weeks.
Tunisia is tendering for 100,000 MT of optional origin wheat, having just snapped up Egypt's and Jordan's business it will be interesting to see if Russia gets a hat-trick this week.
Early calls are wheat and beans up 1-3 cents and corn up 6-8 cents. All three are up on the week as a whole so we may get some modest selling ahead of the weekend, especially in light of these new jobs numbers.
USDA Weekly Export Sales
08/07/11 -- The USDA's weekly export sales report for the period June 24-30:
Corn sales were large as expected at 621,800 MT old crop and 868,800 MT new crop for a combined total of almost 1.5 MMT versus expectations of 700 TMT to 1.3 MMT. Unknown destinations took the largest volume of both old crop (250,600 MT) and new crop (783,000 MT).
Wheat sales came in at 424,200 MT, on the low end of expectations for 450-650 TMT. China popped up as surprise buyer on one 55,000 MT cargo.
Soybean sales were 305,700 MT old crop and 129,000 MT new crop towards the low end of combined expectations of 400-700 TMT.
EU Rapemeal Prices
08/07/11 -- Guide prices for EU rapemeal, basis FOB Lower Rhine in euros/metric tonne, with change from previous day:
| Jul11 | unq | n/a |
| Aug | 185.00 | unch |
| Aug/Oct11 | 183.00 | -1.00 |
| Nov11/Jan12 | 188.00 | unch |
| Feb/Apr12 | 190.00 | unch |
| May/Jul12 | 186.00 | unch |
| Aug/Oct12 | 165.00 | -1.00 |
Bouncy Bouncy
08/07/11 -- It's been another volatile week, so I thought that a quick summary of where we are on the week so far might be of interest. These changes include this morning's latest movements:
Nov London wheat +GBP2.50/tonne; Nov Paris wheat +EUR4.50/tonne; Jul CBOT soybeans +25 1/4c; Jul CBOT corn +17 1/4c; Jul CBOT wheat +40c.
Ethanol Tax Break Could Be Removed By End Of Month
08/07/11 -- Three high profile US senators have reportedly struck a deal that could see the controversial ethanol blenders 45c/gallon tax break withdrawn by the end of the month. In addition the 54 cent duty on imported ethanol would also be removed, potentially opening up the door for sugarcane-derived ethanol imports from Brazil.
The senators are trying to push the proposal through before Congress adjourns for the August recess. All it needs now is Obama's signature.
The incentive of slashing billions straight off the budget deficit bottom line may seal the deal.
The corn market thus far seems remarkably relaxed about the whole thing considering that 40% of US production now goes to make ethanol. Of course the Renewable Fuel Standard (RFS), otherwise known as the ethanol mandate, still remains in place but with the import duty also removed we could see a significantly larger proportion of this now being taken up by ethanol from international sources.
Chicago Close
07/07/11 -- Soybeans: Jul 11 soybeans closed at USD13.46 1/4, up 15 1/4 cents; Nov 11 soybeans closed at USD13.38 1/4, up 19 3/4 cents; Jul 11 soybean meal closed at USD343.10, up USD1.40; Jul 11 soybean oil closed at 56.40, up 113 points. Trade estimates for tomorrow's one day delayed weekly export sales report range from 400 to 700 thousand MT. Crude was almost USD2/barrel firmer, which added support.
Corn: Jul 11 corn closed at USD6.52, up 3 1/4 cents; Dec 11 Corn closed at USD6.16 1/4, up 7 3/4 cents. The USDA confirmed that China bought 540,000 MT of old crop corn and that there was also the sale of 300,000 MT of new crop corn to "unknown" today. Funds bought an estimated 7,000 contracts on the day. Trade estimates for tomorrows USDA weekly export sales report range from 700 to 1300 thousand MT.
Wheat: Jul 11 CBOT wheat closed at USD6.25, up 13 3/4 cents; Jul 11 KCBT wheat closed at USD7.00 1/2, down 8 1/4 cents; Jul 11 MGEX wheat closed at USD8.52, down 11 3/4 cents. Egypt bought 180,000 MT of Russian wheat, finding that US wheat was way too expensive. Russia also picked up a 150,000 MT Jordanian order yesterday, indicating that French/US wheat is way overpriced. The question now is do they do something about it or remain proud of the market.
EU Grains Close
07/07/11 -- July London wheat expired a thrilling unchanged at GBP173.00/tonne, Nov11 fell GBP1.85/tonne to GBP161.65/tonne and Mar12 declined GBP3.60/tonne to GBP165.15/tonne. Nov Paris wheat was down EUR4.00/tonne to EUR191.00/tonne whilst Mar12 fell EUR4.75/tonne to EUR195.00/tonne.
In Egypt's unspecified tonnage tender, the first to permit Russian wheat for almost a year, they bought three cargoes (180,000 MT) of Russian wheat and passed on all other origins.
French wheat was USD30-40/tonne more expensive than the winning Russian bids, with US wheat priced USD10-20/tonne over, plus the corresponding freight premium. Egypt may still be smarting over being let down by last summer's Russian defaults, but money talks at the end of the day.
Each cargo of French wheat would be around USD2 million more expensive than it's Russian counterpart based on these prices.
The French soft wheat crop looks like coming in around 32 MMT this year based on today's estimates from the Ministry there and recent other forecasts over the last few days. That's around 10% down on last year, disappointing but not as bad as was feared a few months ago.
OSR production also seems to have fared better than was expected, down 6% on year ago levels to 4.53 MMT.
Brussels issued soft wheat export licences for 110,000 MT for the first week of the marketing year to July 5th. That's a sharp reduction on the 245,000 MT approved for export in the corresponding period last season.
EU-27 wheat imports meanwhile were up a stunning thirty fold on those of the opening week of the 2010/11 season at 521,000 MT.
The ECB increased interest rates in the eurozone by a quarter to 1.5% today, whilst the BoE left rates in the UK unchanged at 0.5% for the 28th month in a row. Both decisions were widely expected and consequently moved the currency markets little.
EU Rapemeal Prices
07/07/11 -- Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:
| Jul11 | 189.00 | unch |
| Aug | 185.00 | unch |
| Aug/Oct11 | 184.00 | unch |
| Nov11/Jan12 | 188.00 | +1.00 |
| Feb/Apr12 | 190.00 | +1.00 |
| May/Jul12 | 186.00 | unch |
| Aug/Oct12 | 166.00 | unch |
Morning News
07/07/11 -- Egypt are back in the market tendering for an unspecified quantity of wheat. Unlike their previous tender three weeks ago though Russian grain hasn't been excluded from the bidding.
It will be interesting to see just how cheap Russian wheat is in this tender. I'll put my money on Egypt buying some, but also throwing a sop by booking some more expensive origin wheat too, just for show.
The ECB is widely expected to raise eurozone interest rates to 1.5% today. The euro is steady ahead of the announcement. Concerns over Greek and Portuguese debt remain.
My man in Romania says "Info so far still very anecdotal, in the south farms are struggling to harvest rape. The crop is fit but rain has stopped play the last week and people are starting to stress and crop loss increasing. Rape yields very mixed but generally poor. Wheat not started.
"In the north almost nothing started yet. Rape will start next week but rains and low temperatures are meaning slow ripening. Wheat still green and 3 weeks away from ready and as still green, rains are improving it daily."
The Ukraine Ministry forecast that heavy June rains will cut the percentage of this season's wheat crop as suitable for milling to 40%, from 45% normally. They haven't changed their production forecast for 2011 though, saying that the country will still harvest 45 MMT of grain.
July London wheat expires today. Good riddance I say.
On the weather front it's gone cooler and wetter across much of the country with localised heavy downpours. We picked up 6.1mm here yesterday with more on the cards over the next few days. Metcheck suggest that things will settle down slowly towards the weekend and into the early part of next week. "There are no real signs of any prolonged hot and dry spells affecting the country during the next couple of weeks," they add.
Looks like another stop-start harvest might be coming up. It's the Great Yorkshire Show next week, so we know what that means. Rain. Then the kids break up the following week, so we know what that means....
CBOT Close
06/07/11 -- Soybeans: Jul 11 soybeans closed at USD13.31, down 1 1/4 cents; Nov 11 soybeans closed at USD13.18 1/2, up 1/2 cent; Jul 11 soybean meal closed unchanged at USD341.70; Jul 11 soybean oil closed at 55.27, up 17 points. As my old Mum used to say, this market could make a cat laugh. Which in a nutshell means that no sooner have we got over moaning about excessive moisture and too cold temperatures than we are focusing on "a heat dome" forming. When I say we, I actually mean some of the popular "news services" who, like the tabloid papers, need to sell copy every day.
Corn: Jul 11 corn closed at USD6.48 3/4, down 31 3/4 cents; Dec 11 corn closed at USD6.08 1/2, down 4 cents. Some never say die bulls are suggesting that China bought up to 8 MMT of corn on the recent price dip. Maybe they did, but if so they will be kicking themselves now with front month July down more than 30 cents as funds offloaded a further estimated 6,000 contracts on the day. It cannot be stressed highly enough, if funds want out then the market comes lower. We aren't trading on fundamentals any more, we are trading FUND-a-mentals.
Wheat: Jul 11 CBOT wheat closed at USD6.11 1/4, down 2 1/2 cents; Jul 11 KCBT wheat closed at USD7.08 3/4, down 9 3/4 cents; Jul 11 MGEX wheat closed at USD8.63 3/4, down 5 1/2 cents. Wheat followed corn lower. Jordan was said to have bought 150,000 MT of Russian wheat in an offer it found too good to refuse. Egypt is back in the market and may re-evaluate it's anti-Russian stance according to some reports. As is often the case "drought" frequently means that what wheat is available is of better quality and higher protein. That seems to be the case in France this year.
EU Grains Close
06/07/11 -- EU grains closed mixed with wheat and corn lower and rapeseed and malting barley higher. July London wheat fell GBP2.00 to GBP173.00/tonne and new crop Nov also declined GBP2.00/tonne to GBP163.50/tonne. Nov Paris wheat closed EUR3.00/tonne lower at EUR194.50/tonne whilst May12 fell EUR2.25/tonne to EUR201.00/tonne.
Market volatility continues. Today we had the bearish influence of the credit rating agency Moody's cutting Portugal's rating to "junk" which unsettled the markets in general, and the euro in particular.
We also had China upping interest rates for the third time this year in another attempt to rein in inflation.
The UK barley harvest is limping along slowly, with initial results generally proving to be better than expected.
Harvesting in France so far has proven to be more variable although quality is good.
Offre et Demande Agricole increased their French wheat crop estimate by 1 MMT to 32 MMT as the harvest there progresses. "The further north the harvest goes, the better the crop is," they told Agrimoney.com.
Heavy recent rains in Ukraine may mean more feed wheat and less milling wheat for them. They've harvested 1.8 MMT of grains so far, with yields up 14% on last year.
In Russia around 1 MMT mostly winter barley has been cut so far with yields up 31% on 2010.
Across the pond, spec money continues to desert the corn market despite the widespread dismissal of last week's USDA numbers as rubbish. If ever there was a case to clearly illustrate that spec money really does have an influence on prices then this is surely it.
The bottom line appears to be that if European debt, or Chinese demand or whatever comes along next to spook them makes them continue to take their money off the table then the market goes lower regardless of what the fundamentals say.
Early Call On Chicago
06/07/11 -- The overnight grains closed lower with beans and wheat down around 10 cents and corn easing 5-6 cents.
Global economy fears are back in the limelight with China raising base rates a quarter and Portugal having it's credit rating downgraded to "junk" by Moody's.
The Bank of Moscow has just required biggest bail-out in Russian history after a takeover bid uncovered toxic debts of USD9 billion on its books.
There is still a real danger of European debt sparking off a sub-prime domino effect causing financial meltdown around the world.
As we have painfully discovered before, you could forget the fundamentals of supply and demand in the grain markets if we were to witness a repetition of that.
Spec money continued to pour out of corn last week to the tune of 83,000 contracts, according to CFTC data yesterday. That's over 10 MMT in English, and adds to the similar sized volume of liquidation witnessed in the previous two weeks.
The USDA raised good/excellent crop condition ratings one percentage point for wheat, corn and soybeans last night.
The USDA have announced the sale of 120,000 MT old crop corn to Egypt and 225,000 MT of new crop corn sold to South Korea.
Reports are rife that China has bought more US corn over the past couple of days.
Early calls for this afternoon's CBOT session: wheat down 10-12c, beans down 8-10c, corn down 4-6c.
EU Rapemeal Prices
06/07/11 -- Guide prices for EU rapemeal, basis FOB Lower Rhine in euros/metric tonne, with change from previous day:
| Jul11 | 189.00 | +2.00 |
| Aug | 185.00 | n/a |
| Aug/Oct11 | 184.00 | unch |
| Nov11/Jan12 | 187.00 | unch |
| Feb/Apr12 | 189.00 | unch |
| May/Jul12 | 186.00 | +1.00 |
| Aug/Oct12 | 166.00 | unch |
News Snippets
06/07/11 -- Like a bad smell, eurozone debt problems keep coming back. Today it's Portugal causing all the angst with a surprise downgrade in it's credit rating to "junk" by Moody's.
Who's next? There's a disorderly queue forming, and I'm not sure that Merkel and Sarkozy have deep enough pockets or the stomach to bail out the lot of them. The euro is lower on the back of this news.
China has upped base rates by a quarter in another attempt to stifle inflation. That's the third rise this year.
The Bank of Moscow has been given the biggest bail-out in Russian history after a takeover bid uncovered bad loans to the tune of USD9 billion on its books, say the BBC.
Just imagine how many other little secrets the rest of the global banking sector are hiding, and what would happen if even a fraction of them came to light. "Oh, it gives me the willies," said one fund manager.
The UK barley harvest is bumbling along. Chris Tye at Dalmark reports that they've had their first sample (variety: Carrat) received into the lab today and "it's over 70Kg/hl" bushel weight and a "very nice looking sample" he says. "There's also talk of barley doing 3t/acre near Newmarket," he adds.
Virgin and Lloyds Banking Group have joined Ford, Renault and the Halifax in pulling advertising from the disgraced News of the Screws. Richard Branson doing something right for once shocker.
FSU Harvesting And Get The Beer In Kiev
06/07/11 -- Harvesting in the FSU is behind last season's drought-hurried pace, hampered by recent heavy rains, although yields are well up on year ago levels.
Some reports are suggesting that there may be some crop losses associated with these rains, whilst others suggest that these will be compensated for by providing a boost for spring sown grains - which in the case of Russia accounts for around two thirds of total grain area this year.
Reports coming out of there suggest that around 1 MMT mostly winter barley has been cut so far with yields up 31% on 2010.
In Ukraine 1.8 MMT of grains have been harvested so far, with yields up 14% on last year.
Having supposedly shipped out a million tonnes of grain on day one of the export embargo being lifted it seems inconceivable to me that Russia will only export 15 MMT of grains in the whole of 2011/12 as some estimates suggest. Or did that 1 MMT include 950,000 MT that had already been shipped and was just waiting for a customs stamp?
It would be nice to have some first hand reliable information to go on rather than the total tosh that some of the popular news services carry wouldn't it? So I've decided to fly out there next week and brush shoulders with some of the big knobs. Big cheeses, whatever you want to call them. Big knob cheeses if you like. And get some first hand knowledge of what is really going on over there.
You better stock up with some extra beer Kiev, Nogger is coming...
Chicago Close
05/07/11 -- Soybeans: Jul 11 soybeans closed at USD13.32 1/4, up 10 cents; Nov 11 soybeans closed at USD13.18, up 5 1/2 cents; Jul 11 soybean meal closed at USD341.70, up USD0.80; Jul 11 soybean oil closed at 55.10, down 6 points. Fund money returned to the arena buying an estimated 3,000 soybean contracts ion the day. After the close the USDA pegged good/excellent ratings up one point o last week at 66%. The percentage of the crop emerged is in ine with the five year average at 96%.
Corn: Jul 11 corn closed at USD6.80 1/2, up 39 3/4 cents; Dec 11 corn closed at USD6.12 1/2, up 15 3/4 cents. Reports that China may have bought more US corn along with confirmation that South Korea had were enough to spark a fire under corn that had fallen out of bed for the last two trading sessions. Corn good/excellent conditions improved by one percentage point to 69%, including a leap from 14% to 17% in the excellent category. The USDA Export Inspections report showed 34.588 million bushels inspected for export for the week ending June 30th, better than trade estimates.
Wheat: Jul 11 CBOT wheat closed at USD6.13 3/4, up 29 1/4 cents; Jul 11 KCBT wheat closed at USD7.18 1/2, up 15 1/2 cents; Jul 11 MGEX wheat closed at USD8.69 1/4, up 38 1/4 cents. Funds were said to have bought 4,000 CBOT whet contracts on the day. The USDA export inspections report was solid at 26.12 million bushels. After the close the USDA pegged winter wheat harvesting at 56% done versus 52% normally. Good/excellent improved one point to 36% and spring wheat conditions were also up a point in the top two categories to 70%.
EU Wheat Close
05/07/11 -- EU grains closed firmer with July London wheat up GBP2.00/tonne to GBP175.00/tonne, and new crop Nov GBP3.00/tonne higher at GBP165.50/tonne. Nov Paris wheat closed EUR4.50/tonne higher at EUR197.50/tonne whilst May12 rose EUR4.50/tonne to EUR203.25/tonne.
Extreme volatility continues with July London wheat up GBP20.00/tonne since last Monday, when it was down GBP17.25/tonne from the previous Monday!
Recent price declines have taken the wind out of the bull's sails following a rally that lasted eight months to the February highs for wheat. Despite an improved performance in the past week front month Paris wheat is still EUR81.00/tonne lower than then, with London wheat down GBP42.50/tonne.
The UK barley harvest is moving forward slowly. Reports are also coming in of some early rapeseed being cut in Kent and Essex.
Recent rains have slowed early harvesting in Ukraine and also in the southern Krasnodar/Stavrapol areas of Russia.
Some reports suggest that China has seized upon the recent lull in prices to book some US corn late last week and over the weekend. Whilst the tonnages aren't enormous, the fact that China's name is attached to them rather than say Mexico or Japan always gets the market that bit more excited.
Old crop corn was sharply higher as the European session closed on the conviction that stocks are tight, regardless of what the USDA has to say.
Early Call On Chicago
05/07/11 -- The overnight grains finished stronger after their three day weekend with wheat ending around 20-22c firmer, with corn up 10-16c and beans 12-14c firmer.
It would seem that the market is hopeful rather than confident that downside potential has run it's course. There are a few bargain hunters around it appears after last week's shake out. Firmer crude and gold offer outside support.
Will fund money come flooding back in now that we are into a new month? Have Greek jitters gone away? The ECB is widely expected to raise eurozone interest rates this week, yet S&P's are saying that getting private banks to roll over some Greek bonds would constitute a “selective default” anyway.
China reputedly bought US corn on last week's price break and South Korea are in for more this week. Brazil's corn crop got hit by frost last week and may be in for more of the same in the next few days.
The USDA will report on crop conditions and winter wheat harvest progress after the close tonight.
Russia's Kommersant newspaper says that Gaddafi is starting to contemplate an exit plan as shortages of cash and fuel bite, according to report on Reuters.
Early calls for this afternoon's CBOT session: wheat up 20-22 cents, corn up 14-16 cents, beans up 12-15 cents.
EU Rapemeal Prices
05/07/11 -- Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:
| Jul11 | 187.00 | -6.00 |
| Aug/Oct11 | 184.00 | -2.00 |
| Nov11/Jan12 | 187.00 | -2.00 |
| Feb/Apr12 | 189.00 | -2.00 |
| May/Jul12 | 185.00 | -2.00 |
| Aug/Oct12 | 166.00 | -2.00 |
Tesco To Sell Double Glazing
05/07/11 -- No it's not April Fool's Day, our old mates Tesco are moving into double glazing, according to this report in the Daily Mail. Is there anything left that they haven't got their sticky fat finger into? Apart from in-store sex shops I'm struggling to come up with one.
As they apparently already sell viagra it's only a matter of time before the "ladies things" aisle is adorned with all sorts of other products conveniently located next to the batteries.
It won't be long presumably before the girls on the checkouts are offering "extras" as well? I've already been confused more than once when they've asked me "do you want a hand with your packing" or "a bag for life". I've already shaken off two bags for life I certainly don't want another one thank you.
Talking of which, MrsN#1 once said that she felt that we were growing apart, and should learn to "talk the same language more" to which I said "OK then, moooooooooo!"
Morning Markets
05/07/11 -- The overnight Globex market is trading higher after a three day weekend with wheat up 14-17c, beans up 7-8c and corn around 8-11c firmer. Crude is down a touch.
Open interest in Malaysian palm oil hit an all time high overnight on "heightened investor interest" - or speculation as you and I call it.
The UK barley harvest is moving forward slowly. Reports are also coming in of some rapeseed being cut in Kent and Essex, with Dalmark Grain reporting "lots of rape being swathed around Sleaford over the weekend."
India says that it has all-time high grain stocks of 65.47 MMT, but has yet to decide whether to open up the export doors or continue to let their national food security rot in open storage.
The Russian Ministry have reiterated their 85 MMT grain production target for 2011 and say that carryover stocks from 2010/11 were 18-18.5 MMT, and that the country will export 15-17 MMT in 2011/12. The latter figure sounds a bit on the low side to me, especially if they did indeed export 1 MMT on day one of the embargo being lifted last Friday.
Nov London wheat has opened GBP2.50/tonne higher in early trade with Nov Paris wheat up EUR3.25/tonne.
The USDA are out after the close this evening with their latest crop conditions and harvest progress report. I expect to see corn and soybean good/excellent rating improve a little. Winter wheat harvesting should also be well advanced.
Standard and Poors are reiterating a stance mooted a couple of weeks ago, that getting private banks to roll over some Greek bonds would constitute a “selective default” as far as they are concerned. That would mean a further downgrade in Greece's credit rating from "pants" to "poohed in pants".
EU Wheat Close
04/07/11 -- EU grains finished higher with Nov London wheat up GBP2.00 to GBP162.50/tonne and with May also climbing GBP2.00/tonne to GBP170.00/tonne. Nov Paris wheat rose EUR5.25/tonne to EUR193.00/tonne whilst May12 climbed EUR4.25/tonne to EUR198.75/tonne.
It was a relatively low volume day with US markets closed for the Independence Day holiday.
Recent rains in Ukraine are said to have improved spring grain potential there significantly, although the winter grain harvest has stalled on the back of it.
Russia said that it had exported more than a million tonnes of grain on the first day of the newly reopened export window on Friday. Exporters are also said to have significant volumes lined up for shipment in the coming weeks.
The UK barley harvest advanced over the weekend as the weather remained fine over much of the country. Harvesting in France is ongoing, with results continuing to come in highly variable.
Budget cuts have led to Egypt's new temporary military regime saying that the country will import 2 MMT less wheat than previously expected in 2011/12. Algeria bought 150,000 MT of optional origin feed barley over the weekend.
Copa Cogeca peg the EU-27 soft wheat crop at 122.18 MMT, 2.9% down on last year, with the all wheat crop coming in a fraction under 130 MMT. Maize production is seen up 9% to 60.37 MMT and barley output down 4.4% to 50.41 MMT. Total grain production in the EU-27 is seen falling less than one percentage point to 272 MMT.
News Snippets, And That Branson Muppet
04/07/11 -- America is closed and Andy Murray has confirmed his position as a useless Jock git.
Russia wasted no time in flexing it's export muscles by shipping 1.1 MMT of grain on day one of the new free for all season, according to its Deputy Prime Minister.
Algeria say that they bought 150,000 MT of new crop feed barley at around USD290 CIF over the weekend. Bit expensive that Algeria, they must have seen you coming you muppets.
Talking of which, Richard Branson's long awaited engineer came round this morning. You will be unsurprised to hear that half of the Virgin Media broadband in town went down last Monday. It's a shame then that the Mumbai call centre didn't know about that when they were insisting that there was nothing wrong then wasn't it. Sigh.
Ukraine say that they finished the 2010/11 marketing year exporting around 12 MMT of grains, including 5 MMT of corn, 4 MMT of wheat and 2.7 MMT of barley.
Recent rains there are said to have improved spring crop conditions no end, although they are delaying winter grain harvesting. Only a small quantity of wheat has been cut so far, but yields are said to be up by more than a third on last year.
My chum Mike Lee over there says "crops look much better after the rain of late, sunny weather with occasional showers, may be the Minister of Ag might be right with his bumper crop predictions!"
Large managed funds cut their net CBOT corn longs by 18% last week, and piled out of soybeans to an even greater extent, down 22%, according to CFTC data.
A report on Reuters suggests that getting the G20 to agree on some form of regulation on speculative activity in the commodities markets is like "herding cats".
"Most governments see little benefit in new rules that could harm their financial interests," they say. Our own Minister for Agriculture is quoted as saying: "We are not persuaded that speculation is the fundamental problem". He might change his mind when I get hold of him later in the year.
Did You Know?
04/07/11 -- According to the latest information from the CME Group just over 19 million soybean futures contracts were traded on the Chicago Board of Trade during the first six months of 2011, along with a further near 5.4 million of options trades. All together, in English money, that's the equivalent of 2.6 billion tonnes - ten times the word crop trading in just half the year! It's got nothing to do with speculation though, it's all bona fide hedging that is as any index fund manager will tell you.
