Chicago Close - Friday
23/09/11 -- Soybeans: Nov 11 Soybeans closed at USD12.58, down 25 cents; Jan 12 Soybeans closed at USD12.69, down 25 1/4 cents; Oct 11 Soybean Meal closed at USD326.00, down USD4.90; Oct 11 Soybean Oil closed at 52.40, down 128 points. Nov beans fell almost a dollar on the week, with Oct meal down USD22.70 and Oct oil tumbling a whopping 415 points. Funds sold an estimated 9,000 soybean contracts on the day, making them net sellers of a reputed 31,000 lots over the last three session. As we know when the funds want out the market only goes one way, giving us the lowest close for a front month on soybeans since last November. The USDA reported the sale of 126,000 MT of soybeans to China, adding to the 180,000 MT that they bought yesterday.
Corn: Dec 11 Corn closed at USD6.38 1/2, down 11 1/2 cents; Mar 12 Corn closed at USD6.52, down 11 cents. On the week as a whole both contracts are down 53 1/2 cents. This was the lowest close for a front month since June as spec money pours out of commodities, with crude oil and ethanol futures also tanking this week. Funds sold an estimated 10,000 contracts on the day, bringing their sales over the last three days to 43,000 contracts - around 5.5 MMT. The commitment of traders report shows them shedding 39,000 contracts in the week through to Tuesday with a net long of 203,000 lots. Assuming that the daily estimates for the past three days are correct then that leaves them still long around 140,000 contracts.
Wheat: Dec 11 CBOT Wheat closed at USD6.40 3/4, up 7 cents; Dec 11 KCBT Wheat closed at USD7.31 1/4, up 10 1/4 cents; Dec 11 MGEX Wheat closed at USD8.51, up 31 cents. On the week overall CBOT wheat was down 47 1/2 cents, with Kansas falling 52 3/4 cents and Minneapolis down just 5 1/4 cents. Unlike corn and soybeans funds are short Chicago wheat, with today's commitment of traders report showing that they increased their shorts by 13,000 contract on the week through to Tuesday. Informa Economics pegged US spring wheat production at 444 million bushels, 31 million below the latest USDA estimate. Some modest rainfall occurred this week on the Southern Plains but more is needed to aid winter wheat plantings.
EU Wheat Close
23/09/11 -- EU grains finished mostly lower again with Nov London wheat was down GBP0.05/tonne to GBP156.50/tonne and Nov Paris wheat ending EUR.50/tonne down at EUR191.50/tonne.
It was a topsy-turvy sort of a day that saw wheat try hard to put in some sort of consolidation phase after a week of fairly hefty losses. Whilst the market traded both sides ultimately it was the downside that won again with Nov London wheat finally finishing with losses of GBP5.25/tonne on the week and GBP18.25/tonne on the month so far.
Make no bones about it, risk aversion is what is behind the declines that we've seen this week and this month so far. If you're a grower that may seem terribly unlucky, however it should be remembered that risk appetite is what got us up above GBP200.00/tonne in the first place.
Crude oil has fallen 30% from the 2011 highs set at the end of April, if London wheat was down by a similar amount then today's price would be GBP143.50/tonne and Paris wheat EUR171.00/tonne. On that basis you could almost argue that wheat prices have got off quite lightly across the summer relative to other commodities.
Russia now plans to export 23 MMT of grains in 2011/12, according to their First Deputy Prime Minister, the highest estimate of the season so far. Production, and thus export potential, out of Kazakhstan and Ukraine is also on the rise.
The IGC yesterday upped their 2011/12 world wheat production estimate by 2 MMT, raising carryover stocks by a similar amount. For corn they reduced world output by 4 MMT, but saw usage falling 5 MMT giving us a 1 MMT increase in ending stocks.
An unexpected "Indian Summer" could be on the way for Europe. WxRisk say that a huge high pressure dome is going to form over the heart of Western Europe which will keep all of Spain, France, United Kingdom, Germany, Poland, Austria, Italy and Hungary warm and dry. Temperatures could just reach into the 80s for several days over many areas from next week into early October.
Early Call On Chicago
23/09/11 -- The overnight grains finished a choppy session mixed with wheat slightly firmer, corn down 5-7 cents and soybeans 20-22 cents lower.
Early signs of calm after yesterday's sharp sell-off evaporated late in the Globex session on talk of China's economy slowing. NYMEX crude slumped below USD80/barrel, it hasn't closed below that level in almost a year, and has now lost 10% on the week.
There's a growing feeling this week that US and EU central bank's have just about run out of bullets to halt the unfolding financial crisis.
The USDA confirmed the sale of 126,000 MT of soybeans to China under the daily reporting system, yet it looks like further fund selling will be a feature once again this afternoon.
Whilst managed money is still liquidating longs in corn and beans, it's actually already short on wheat which may prevent the latter from matching downwards strides with the former two this afternoon.
This latest flight to safety is keeping the US dollar firm, which is adding a bit of bearish pressure to grains.
There's an element of harvest pressure too, with weather forecasts mostly favourable for the next two weeks.
Early calls for this afternoon's CBOT session: wheat flat to 2 cents higher, corn down 5-7 cents, beans down 15-20 cents.
The Morning Rant
23/09/11 -- After crashing and burning last night the bottom pickers are out this morning with grains attempting to stage a modest recovery led by Globex wheat.
Based on last night's closes we see CBOT wheat 54 1/2 cents lower on the week, with corn down 42 cents and beans falling 72 1/2 cents.
The weekly export sales from the USDA yesterday had wheat outperforming what was forecast despite the firm US dollar, whilst corn and soybean sales were towards the low end of expectations.
In addition CBOT wheat wasn't saturated with fund length as was the case for soybeans and corn in particular. Corn is bouncing back a little from support at USD6.50/bu this morning, although beans still trade in negative territory.
It looks like we may be in for a bit a pre-weekend consolidation with stock markets in London and on the continent showing modest 0.5% or so gains. For most traders I suspect that the weekend can't come soon enough.
In other news Owen Hargreaves has told the BBC that he felt like a guinea pig at Man Utd (here). Sir Alex says that's rubbish, they treated him well, organic broccoli, fresh straw every day, a new hutch and everything.
Get Your Tin Hats Out
23/09/11 -- "A defunct six-ton satellite is hurtling towards earth and is expected to crash within the next 24 hours, but experts have no idea where it will land," says Sky News here: Nasa Satellite 'To Hit Earth Within Hours'.
Surely this is precisely the reason that experts are employed? What are they experts at if they haven't got a clue where it's going to land this thing the size of a double decker bus? Bunch of idiots the lot of them if you ask me.
Anyway, talking of tin hats what do we make of the market this morning? Buggered if I know and I'm supposed to be an expert!
Back to this satellite thing, I'll plump for Russia, that's where it will land. Big place Russia, which immediately gives me a better chance than picking somewhere like say The Vatican. Likely to cause less disruption if it lands in the Russian Steppes somewhere than on the Vatican too.
Egypt are expected to issue a tender to import defunct satellites next week, which is lucky. The Russians can pop what's left of this one on with the next wheat boat.
On the other hand it could land on British Unfairways head office if there's any justice in this world.
Chicago Closing Comments
23/09/11 -- Soybeans: Nov 11 Soybeans closed at USD12.83, down 37 1/2 cents; Jan 12 Soybeans closed at USD12.94 1/4, down 37 1/4 cents; Oct 11 Soybean Meal closed at USD330.90, down USD9.00; Oct 11 Soybean Oil closed at 53.68, down 136 points. Global economic woes continue to see money pouring out of grains, and soybeans are no exception with fund money dumping an estimated 13,000 lots on the day. The market's disappointment that all the Fed could come up with was "Operation Twist" couldn't have been more emphatic. Weekly export sales of 404,400 MT were within the range of trade estimates of of 350-550 TMT.
Corn: Dec 11 Corn closed at USD6.50, down 35 3/4 cents; Mar 12 Corn closed at USD6.63, down 35 3/4 cents. Corn slumped to close not far off the newly increased 40 cent daily limit move as funds slashed an estimated 28,000 contracts off their overbought positions. The Dow slumped more than 500 points and crude oil fell more than USD5.00/barrel as a broad-based sell-off sent the markets crashing. Weekly export sales were 598,100 MT were towards the low end of estimates of 550-800 thousand MT. China bought 122,800 MT of that total, but even that couldn't get the bulls excited today.
Wheat: Dec 11 CBOT Wheat closed at USD6.33 3/4, down 33 cents; Dec 11 KCBT Wheat closed at USD7.21, down 39 1/2 cents; Dec 11 MGEX Wheat closed at USD8.20, down 20 1/2 cents. Wheat succumbed to the same pressures affecting the rest of the market with funds selling an estimated 6,000 CBOT contracts on the day. Egypt bought Russian wheat again, at substantially lower prices than a week ago. Kazakhstan now say that their 2012 grain harvest will be more than double that of 2011 at 25 MMT. Export sales were 679,500 MT, better than the 400-550 thousand MT expected.
EU Wheat Close
22/09/11 -- EU grains extended recent losses with Nov London wheat down GBP4.20/tonne to GBP156.55/tonne and Nov Paris wheat sliding EUR4.75/tonne lower at EUR192.00/tonne.
London wheat has now fallen GBP18.20/tonne, or more than 10%, since the end of last month, with Paris wheat down EUR19.25/tonne in the same period.
The entire global financial and commodity marketplace suffered another severe bout of the jitters after the US Federal Reserve failed to launch QE3 and issued warnings on the state of the US and world economy and banking sector.
The FTSE100 closed almost 250 points lower on the day, for a near 5% drop. The French and German stock markets fell by a similar amount.
Russia scored another clean sweep in today's tender in which Egypt bought 240,000 MT of wheat at prices in the region of USD261-263/tonne, around USD16/tonne cheaper than the USD277-279/tonne that they paid only a week ago.
All across the FSU production, stocks and export estimates are trending higher, significantly higher.
The Russian Grain Union says that even if Russia increases its grain exports to the maximum they will still end up with ending stocks of 25 MMT at the end of the current marketing year, according to a report on the HGCA website.
Kazakhstan's Ag Ministry today upped their 2011 grain harvest estimate to 25 MMT, more than double last year's effort and 6 MMT more than they reckoned just a month ago.
Ukraine meanwhile increased its grain harvest estimate to 52-53 MMT, up from 50 MMT previously and 39 MMT a year ago.
All of a sudden GBP200.00/tonne wheat seems an awfully long way away.
USDA Weekly Export Sales
22/09/11 -- The USDA weekly export sales report saw net sales of 679,500 MT of wheat for the 2011/12 marketing year, better than the 400-550 thousand MT expected.
Corn sales came in at 598,100 MT versus expectations of 550-800 thousand MT, with soybeans at 404,400 MT compared to forecasts of 350-550 TMT. For corn 122,800 MT was switched from unknown destinations to China.
The Way I See It
22/09/11 -- European stock markets are around 4% lower by mid-morning with the FTSE100 in danger of falling through the 5000 mark after the Fed warns of "significant downside risks to the economic outlook, including strains in global financial markets."
Is this new news? I don't think so - it's been pretty obvious for some time now that the world is fooling itself if it thinks that this financial crisis is anything like over.
Things ARE going to get a whole lot worse before they get better. And that's both sides of the Atlantic.
Certainly short-term that's bearish for grain prices. The question now is how short-term is short-term? And how low will prices go before there's a turnaround, if we get one, and what's likely to cause it?
Not easy questions to answer, particularly in that order, but I think I can answer the last one:
Inflation. And I don't mean monthly increases of 0.1 or 0.2 percent here. I mean rampant bite you on the bum inflation. The sort of inflation you get when governments irresponsibly print money that they haven't got in search of a desperate quick fix.
La Nina might lend a helping hand too.
For now though it looks like the fund managers are packing up and taking their bat and ball and shiny smart money with them. Will they be back? Yes. When? If I told you that I'd have to kill you...
The Morning Vibe
22/09/11 -- The bed restraints are out again today after the Fed failed to throw billions more freshly printed dollar bills into the system. Instead it announced "Operation Twist" accompanied by a very gloomy statement warning of everything from slow economic growth to high unemployment and rising inflation.
If that wasn't bad enough ratings agency Moody's was reported to have cut the debt rating on three leading US banks: the Bank of America, Wells Fargo and Citigroup.
Remember the US debt ceiling, which got a temporary hike at thirty seconds to midnight on the day before the US government ran out of money to pay it's bills? That only lasts until the end of the month.
US Republican rebels and Democrats last night unexpectedly voted down a bill by 195 to 230 to keep the government funded past this deadline.
Across the pond meanwhile the IMF is warning that time is "running out to tackle vulnerabilities" in the European banking system and whilst the Greek government is talking the talk it remains to be seen if it can also walk the walk.
The FTSE100 is 170 points lower in early trade this morning, a fall of more than 3% with the French and Germany stock markets posting similar falls.
This my friends is all starting to look like the tip of a very large iceberg indeed.
The overnight grains aren't impressed with Globex wheat down 12-14 cents, beans down 16 cents and corn 12-16 cents lower with all months now below USD7.00/bushel. NYMEX crude is almost USD3.00/barrel lower.
European grains will also surely open well into the red when trade begins there shortly.
Chicago Closing Comments
21/09/11 -- Soybeans: Nov 11 Soybeans closed at USD13.20 1/2, down 17 1/2 cents; Jan 12 Soybeans closed at USD13.31 1/2, down 17 1/4 cents;
Oct 11 Soybean Meal closed at USD339.90, down USD5.90; Oct 11 Soybean Oil closed at 55.04, down 27 points. Prices slipped away on fears that the Fed wouldn't toss the market the QE lifeline that it was wanting, and so it proved. Funds were said to have sold 9,000 bean contracts as the recent liquidation phase continues. Trade estimates for tomorrow’s weekly export sales report are 350-550 TMT.
Corn: Dec 11 Corn closed at USD6.85 3/4, down 4 1/2 cents; Mar 12 Corn closed at USD6.98 3/4, down 4 1/4 cents. Corn also drifted lower ahead of the Fed announcement which came after the closing bell with funds shedding an estimated 5,000 contracts on the day. The dollar moved higher on anticipation that the Fed were going to disappoint, with crude oil edging lower. South Korea bought 85,000 MT of US corn. Trade estimates for tomorrow’s weekly export sales report are 550-800 thousand MT.
Wheat: Dec 11 CBOT Wheat closed at USD6.66 3/4, down 8 cents; Dec 11 KCBT Wheat closed at USD7.60 1/2, down 4 1/2 cents; Dec 11 MGEX Wheat closed at USD8.40 1/2, down 2 cents. Wheat also fell as the day wore on on nervousness ahead of news from the Fed and spillover weakness from the rest of the sector and a reaction to the firming dollar. Funds sold an estimated 2,000 CBOT contracts on the day. Trade estimates for tomorrow’s weekly export sales report are 400-550 thousand MT.
EU Wheat Close
21/09/11 -- EU grains finished mostly higher with Nov London wheat up GBP1.25/tonne to GBP160.75/tonne and Nov Paris wheat climbing EUR0.75/tonne to EUR196.75/tonne.
It was another monumentally uneventful day really, news that Greece may accelerate the pace of it's austerity cuts helped the euro. The minutes of this month's BoE meeting hinted that more QE could be on the cards.
Once again the market is treading water waiting for some firm conviction on direction. Farmers are reluctant sellers having seen prices fall substantially since their May highs. Consumers however are equally reticent to commit.
Fundamental news for the grain business was scant to say the least. Pakistan has joined India in saying that ample wheat stocks will allow it to begin exports soon.
Rumours, but they are only that, of China recently re-entering the corn import market remain unconfirmed.
The Russian grain harvest is now over 81 MMT with 21% of the planted area still left to be cut. Of that 50.6 MMT is wheat off 79% of the planted area. The corn harvest is only 7% done so far. All this suggests that the existing USDA and Ministry forecasts for the current harvest are significantly underestimated. Ditto Kazakhstan.
Snowed Under
21/09/11 -- I'm not sat here not blogging with my feet up watching daytime TV you know. I'm bloody snowed under. One of the things I've got on my plate this morning is to get a couple of market reports finished for my mates at GrainCo/Tynegrain.
As often happens with these things there's always an odd little space left over that wants filling with a few lines of a news story. Knowing that this is frequently the case they rang me yesterday with one such suitable snippet.
One local farmer up there yesterday brought in a load of spring wheat, yes spring wheat, that tested at 320 hagberg and 13.5% protein!
Chicago Closing Comments
20/09/11 -- Soybeans: Nov 11 Soybeans closed at USD13.38, up 2 cents; Jan 12 Soybeans closed at USD13.48 3/4, up 2 cents; Oct 11 Soybean Meal closed at USD345.80, up USD1.40; Oct 11 Soybean Oil closed at 55.31, down 22 points. Beans managed to end a six session losing run, but not by much at the end of the day having posted double digit gains early on. The USDA announced the sale of 120,000 MT of beans to China, but harvest pressure and EU debt problems weighed.
Corn: Dec 11 Corn closed at USD6.90 1/4, down 2 cents; Mar 12 Corn closed at USD7.03, down 2 cents. As with soybeans prices fell away with Dec having been above USD7.00/bu earlier in the day. Despite good/excellent crop conditions falling last night funds were further net sellers of an estimated 3,000 contracts on the day, adding to their recent liquidation. There was no confirmation of China buying corn, only the news that they are to release 3.7 MMT of state-owned stocks. Argentina say that they will increase corn production to 27.5 MMT in 2012, 5.5 MMT up on this year.
Wheat: Dec 11 CBOT Wheat closed at USD6.74 3/4, up 1 3/4 cents; Dec 11 KCBT Wheat closed at USD7.65, down 3 cents; Dec 11 MGEX Wheat closed at USD8.42 1/2, up 3/4 cent. Wheat also fell away mid-session on a lack of follow-through and a disappointing corn performance. Russia continues to mop up much of the export trade, meanwhile Kazakhstan's crop is increasing and Ukraine stocks are building. The latter two will also join the former as aggressive sellers at some point.
EU Wheat Close
20/09/11 -- EU grains finished slightly higher in a modest correction from recent losses. Nov London wheat was up GBP0.50/tonne to GBP159.50/tonne and Nov Paris wheat ending EUR.50/tonne higher at EUR196.00/tonne.
The market felt like it wanted to attempt to consolidate today, with London wheat having fallen GBP15.75/tonne (and Paris wheat curiously EUR15.75/tonne) since the turn of the month based on last night's closes.
As you can see gains of 50 pence or half a euro are hardly major reversals of the recent trend.
The market remains extremely cautious over the European debt issue, and also whether optimism that the US will extend QE at this week's Fed meeting will prove unfounded. Chicago grains opened around 10 cents higher in mid-afternoon trade, but had started to slip by the time European markets closed.
Fresh fundamental news was thin on the ground, although the Kazakhstan Ministry said that the grain harvest there stands at 18.3 MMT off only 72% of the planned area with yields up a whopping 85% on last year.
That potentially puts them on target for a final output of over 25 MMT, far higher than any estimate that's in the marketplace.
That's a similar story to the one slowly (and very quietly) emerging out of Russia where the Ministry yesterday raised their grain export forecast from "no higher than 20 MMT" to 20-22 MMT.
Early Call On Chicago
20/09/11 -- The overnight grains finished with corn and wheat around 8-11 cents firmer and beans 10-14 cents higher. Corn is back up above USD7.00/bu on vague rumours of Chinese purchases.
The Chinese government have announced the release of 3.7 MMT of state-owned corn onto the market. The trade is struggling to calculate of that is bullish or bearish. It's bearish if it means that this is nearly 4 MMT that locals won't need to import, it's bullish if it means that domestic stocks there are so tight that they're scraping the barrel to release whatever inventories they have left onto the market.
What we do know for sure though is that the USDA has just announced 120,000 MT of US soybeans sold to China. Other Asian nations are now popping up as buyers of corn and wheat on this latest price break.
The market is clearly fancying an up day, but bulls will likely remain cautious with the Fed meeting today/tomorrow and the ongoing European debt problems. Fresh developments from either of those quarters could be a game-changer.
Early calls for this afternoon's CBOT session: pretty much up 10-12 cents on wheat, corn and beans.
EU Rapemeal Prices
20/09/11 -- Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:
| Sep11 | 180.00 | unch |
| Oct11 | 180.00 | unch |
| Nov11/Jan12 | 177.00 | -3.00 |
| Feb/Apr12 | 177.00 | -3.00 |
| May/Jul12 | 176.00 | -2.00 |
| Aug/Oct12 | 156.00 | -1.00 |
| Nov12/Jan13 | 166.00 | -3.00 |
The Morning Vibe
20/09/11 -- The overnight markets are a little firmer after the recent hefty shakeout with beans up 8-9 cents, corn 3-4 cents higher and wheat climbing 3-6 cents. Crude oil is around half a dollar firmer.
The USDA dropped good/excellent crop conditions for corn and beans after the close last night and also pegged winter wheat planting significantly behind schedule. All a bit bullish.
Also floating around we have reports that China may have bought an unspecified volume of corn of an unspecified origin for delivery in an unspecified period. We also have reports that they are to "release" 3.7 MMT of state-owned corn to boost domestic supplies ahead of the corn harvest.
The most important factor in the market though is still the potential collapse of Europe. Standard & Poor's beat Moody's to it and downgraded its rating on Italian debt by one notch last night.
Meanwhile the Greek finance minster, no stranger to the pie counter judged by the look of him last night, seems to have shelved his fighting talk and is now promising to pretty much do anything the EU and IMF ask to get his next tranche of cash. He could probably save several billion euros by going on a diet if you ask me.
The Fed's two day meeting, from which the market is hoping for further QE, starts today. The European crisis seems to have deflected attention away from America, who potentially have an even bigger one of their own coming.
London wheat has is trading around GBP0.50/tonne lower in early trade, with Paris wheat slightly easier too.
Chicago Closing Comments
19/09/11 -- Soybeans: Nov soybeans ended down 19 1/2c at USD13.36/bushel; Dec soymeal closed down USD4.60 at USD348.50; Dec soyoil dropped 102 points to 55.84. Soybean values dropped to their lowest levels in five weeks on risk aversion. Weak crude oil and a stronger US dollar are the result of global economic concerns. After the close the USDA pegged 53% of the crop rated good/excellent, down three points on last week. They also put 33% of the crop as dropping leaves, down from 47% on the five year average.
Corn: Dec corn ended up 1/4c to USD6.92 1/4; Mar corn closed down 1/2c at USD7.05. Corn was 15 cents or so lower early doors but reports that China may be in the market to buy 5 MMT saw values return to around unchanged levels by the close of play. The C word always gets the market excited, although 5 million tonnes is a relatively insignificant amount compared to the 855 MMT that the world produces. In addition, IF they are in the market then they are much more likely to buy from Argentina. Corn good/excellent conditions fell two points to 51% after the close.
Wheat: CBOT Dec wheat ends down 15 1/4c at USD6.73; KCBT Dec wheat ends down 16c to USD7.68; MGEX wheat closed down 14 1/2c to USD8.41 3/4. Funds were said to have sold 3,000 CBOT contracts on the day as outside markets conspire to drive grains lower. The USDA said that 14% of the US winter wheat crop is now in the ground, Oklahoma and Texas notably lag. The spring wheat harvest is 93% complete, one point above average, they add.
EU Wheat Close
19/09/11 -- EU grains finished lower with Nov London wheat down GBP2.75/tonne to GBP159.00/tonne and Nov Paris wheat ending EUR1.50/tonne lower at EUR195.50/tonne.
London wheat slumped below GBP160.00/tonne - a front month has only closed lower than this on two occasions since early October 2010.
Paris wheat fared a little better due to the weak euro declining on heightened Greek debt concerns.
Despite a lot of huffing and puffing over the weekend we don't seem any closer to resolving the Greek issue now than we've ever been.
Paris corn, rapeseed and malting barley also fell in line with broad-based declines in US grains too.
Heavy selling, particularly in US corn which was massively overbought, has seen funds dump an estimated 35,000 Chicago contracts (almost 4.5 MMT) on Thursday/Friday alone last week.
Consumer demand will struggle to cope when liquidation on that scale is going on.
Chicago corn futures prices fell to six week lows, with wheat declining to levels not seen in ten weeks in afternoon trade.
Some demand is filtering through at these levels. Algeria announced that it had bought 450,000 MT of optional origin wheat, probably French, earlier today. Tunisia has also been in the market booking 92,000 MT of soft wheat and 25,000 MT or durum.
It's likely that Egypt will issue another tender later this week too as prices continue to drift, although Russia will almost certainly undercut European wheat once again.
Early Call On Chicago
19/09/11 -- The overnight grains finished lower with wheat, corn and beans all down around 6-8 cents. Crude is more than a dollar lower and the USD is firmer.
Risk aversion is in the driving seat again today, with lots of talk but little action coming out of Europe over the weekend. Greece is squealing as the EU and IMF poke it with a big stick, saying it must do more tidying up if it wants the next raft of money due next month.
"It's your own fault that you threw that big party and smashed all those plates isn't it? Get them tidied up."
Greece is saying that it might have smashed some of the plates but it certainly didn't smash all of them, so it doesn't see why it should be made to pick them all up. France and Germany, where the plates are made, don't know what to do.
Fresh fundamental news is thin on the ground.
Algeria have just bought 450,000 MT of optional origin wheat, probably from it's usual source - France. Tunisia has also been in the market booking 92,000 MT of soft wheat and 25,000 MT or durum.
The US weather outlook has improved a little. Some reports suggest that the USDA's next movement on US corn yields will be to peg them a bit higher.
Funds have been large sellers of late, particularly for corn, and money flows look set to dictate things once again this week.
Early calls for this afternoon's CBOT session: beans down 8-10 cents, corn down 6-8 cents, wheat down 7-9 cents.
EU Rapemeal Prices
19/09/11 -- Guide prices for EU rapemeal, basis FOB Lower Rhine in euros/metric tonne, with change from previous day:
| Sep11 | 180.00 | -1.00 |
| Oct11 | 180.00 | -1.00 |
| Nov11/Jan12 | 180.00 | -1.00 |
| Feb/Apr12 | 180.00 | -3.00 |
| May/Jul12 | 178.00 | -2.00 |
| Aug/Oct12 | 157.00 | -2.00 |
| Nov12/Jan13 | 169.00 | -2.00 |
Same Sh!t, Different Day
19/09/11 -- Nov London wheat has opened GBP1.95/tonne lower in early trade, with the front month contract standing GBP14.95/tonne lower on the month so far.
The pound is back up above 1.15 against the euro as the Greek tragedy rumbles on. The FTSE100 is down over 100 points, or 2%, with the French and Germany stock markets falling around 2.5%.
The tough talking Greek finance minister says that the country has been "blackmailed and humiliated" according to the BBC. You wouldn't think he was desperate for a handout would you?
Meanwhile Greek Prime Minister George Papandreou cancelled a trip to the US to stay at home for cabinet crisis talks over the weekend.
Chancellor Angela Merkel's coalition partners the Free Democrats took a pasting in a regional election in Berlin yesterday in what appears to be German voter "poke in the eye" reaction to the government handing over large quantites of their cash to their reckless neighbours.
Suffice to say then that US Treasury Secretary Timothy Geithner's appeals for European unison on Friday have met with the usual response of just the opposite, against a crescendo of toys being jettisoned from prams.
The Fed stages a two-day meeting tomorrow and Wednesday where the market is hoping that Bernanke will announce further QE. If he does that could be swapping more short-term gain for long-term pain. How very fashionable.
With all this going on it's not surprising that the smart money wants out.
Chicago Close - Friday
16/09/11 -- Soybeans: Nov 11 Soybeans closed at USD13.55 1/2, down 3 1/4 cents; Jan 12 Soybeans closed at USD13.67, down 3 1/4 cents; Oct 11 Soybean Meal closed at USD348.70, down USD0.90; Oct 11 Soybean Oil closed at 56.55, up 33 points. Nov beans posted it's fifth down day in a row, losing 71 cents on the week as fund money exits the market. Falling outside markets were also a negative influence on nervousness ahead of next week's two day Fed meeting.
Corn: Dec 11 Corn closed at USD6.92, down 9 cents; Mar 12 Corn closed at USD7.05 1/2, down 9 1/4 cents. Funds were heavy sellers, dumping an estimated 10,000 contracts on the day to add to the 25,000 disposed of on Thursday. Dec finished the week 44 1/2 cents lower than it started it. This was the first sub-USD7.00/bu close for a front month since 18th August. Falling yields, frost damage, it all goes out of the window when the funds want out.
Wheat: Dec 11 CBOT Wheat closed at USD6.88 1/4, down 7 3/4 cents; Dec 11 KCBT Wheat closed at USD7.84, down 11 1/4 cents; Dec 11 MGEX Wheat closed at USD8.56 1/4, down 14 3/4 cents. Chicago wheat lost 41 1/2 cents on the week, with Kansas down 62 cents and Minneapolis falling 51 cents. Funds sold an estimated 2,000 Chicago contracts on the day. Spillover weakness from corn depressed wheat as did pressure from external markets.
