Chicago Mixed As "Europhoria" Dies Down
28/10/11 -- Soybeans: Nov soybeans ended down 18c to USD12.17 a bushel; Dec soymeal fell USD6.00 to USD317.50; Dec soyoil ends down 34 points to 51.77. At the end of a topsy turvy week as a whole beans gained just 4 3/4 cents, with meal up a dollar and oil rising 52 points. South America is already starting to take centre stage and early crop conditions there are promising. In Brazil's top soybean producing state of Mato Grosso has received generous October rainfall and soybean planting there was reportedly 45% complete earlier in the week compared to only 19% this time last year. In Argentina, waves of showers this month have restored field moisture in La Pampa, Cordoba, Santa Fe and Entre Rios making field conditions favourable for spring planting, say Martell Crop Projections. The USDA currently predict a record area going into soybean production in both Brazil and Argentina this season.
Corn: December corn closed up 3 1/2c at USD6.55/bushel; March corn ends up 3 1/2c at USD6.67/bushel. On the week as a whole Dec was up 5 3/4 cents and Mar up 7 cents. Following the initial impetus that the European debt deal provided next week's price action will be interest as some of the lustre already seems to be wearing off. This week's export sales were poor and there are reports of Taiwan buying Ukraine corn at prices way under US levels. Japan also bought Ukraine corn earlier in the week, with the FSU country expected to ship a record 12 MMT this season, according to the USDA. The Buenos Aires Cereals Exchange says that recent rains there could boost the corn planted area to a record 3.7 million hectares. The USDA forecast a record 27.5 MMT crop there, up 5 MMT on last year and see exports also at a record 19.5 MMT, up 4.5 MMT on last year.
Wheat: CBOT Dec wheat ends up 1/2c to USD6.44 1/2 per bushel; Dec MGEX wheat closes up 2 1/2c at USD9.20 1/2; Dec KCBT wheat ends flat at USD7.38. On the week overall Chicago wheat is up 12 1/2 cents, with Minneapolis gaining 1 1/4 cents and Kansas up 15 cents. Funds bought an estimated 3,000 CBOT contracts on the day but still hold a significant short position, which is underpinning the market despite US wheat looking increasingly expensive on the export stage. The USDA downgraded it's forecast for US wheat exports by 2 MMT this month to 26 MMT, down 10 MMT on last season, but even that is looking increasingly optimistic in the light of bumper production in most of the other major exporting nations. Russia's exports may tail off around Feb/Mar as they approach Putin's suggested comfort zone of 24-25 MMT of foreign grain sales, but Ukraine, Kazakhstan and Australia too will be only to eager to fill the void.
EU Wheat: What's Good For The Goose(d)....
28/10/11 -- EU grains finished mixed but mostly higher with Nov London wheat climbing GBP1.75/tonne to GBP153.00/tonne and Nov Paris wheat flat at EUR186.75/tonne.
On the week as a whole Nov London wheat ended with gains of GBP5.25/tonne whilst Nov Paris wheat fell EUR1.00/tonne on the back of a rising euro.
The market has seemingly been reassured by the news on Europe including a haircut of 50% on Greek debt, although how long the euphoria will last is open to debate. The Fitch agency says that the proposed haircut still constitutes a default and we now need to consider what's good for the goose(d) Greece, now surely by default must also apply to the equally gandered Italy, Spain, Portugal etc.
Meanwhile for wheat the market fundamentals are getting more bearish by the day. Bumper cereal production is now confirmed for Russia, Ukraine and Kazakhstan - frequently the three most aggressive sellers in the market.
The IGC yesterday increased their world wheat production estimate by 5 MMT and their 2011/12 ending stocks figure by 9 MMT to 202 MMT - the first time that they've exceeded 200 MMT since 2001/02. World corn production was also upped 10 MMT from last month and 2011/12 carryout by 4 MMT to 123 MMT.
Russia will export a record 20 MMT of wheat this season, with Ukraine shipping 9 MMT despite a slow start to the season now that export duties have been removed, they added. Both numbers are higher than the current USDA estimates by 2 MMT and 1 MMT respectively.
In amongst all this the IGC also pegged Australia's wheat crop at a near record 26.2 MMT, and increased it's export potential to 18.5 MMT - the most in fifteen years. Hefty old crop carryover stocks of 8.6 MMT mean that wheat inventories at the end of the 2011/12 marketing year will be barely changed despite Australia exporting the second highest volume in it's history.
It maybe isn't a coincidence then that EU soft wheat exports slumped to an eleven week low of just 163,000 MT yesterday. That makes our marketing year-to-date exports 4.51 MMT versus 8.09 MMT a year ago, whilst imports are almost 2 MMT higher than twelve months ago at 2.67 MMT.
Chicago Rises On EU Rescue Plan News
27/10/11 -- Soybeans: Nov 11 Soybeans closed at USD12.35, up 24 1/2 cents; Jan 12 Soybeans closed at USD12.44, up 24 1/4 cents; Dec 11 Soybean Meal closed at USD323.50, up USD6.50; Dec 11 Soybean Oil closed at 52.11, up 122 points. It was a risk on day as EU leaders came up with a last minute plan to save us all from a Greek default. Weekly export sales were poor at 254.6 MT, well below trade estimates of 650-950 TMT and the lowest weekly volume since June. Even that didn't put the funds off today though as they bought an estimated 10,000 soybean contracts on the day.
Corn: Dec 11 Corn closed at USD6.51 1/2, up 14 1/4 cents; Mar 12 Corn closed at USD6.63 1/2, up 14 cents. As with soybeans weekly export sales came in well under the trade estimate of 650-900 TMT at 361.4 TMT, the worst performance since April. Also as with soybeans that didn't deter the funds who bought an estimated 16,000 contracts on the day, buoyed by the news from Europe.
Wheat: Dec 11 CBOT Wheat closed at USD6.44, up 24 1/2 cents; Dec 11 KCBT Wheat closed at USD7.38, up 22 cents; Dec 11 MGEX Wheat closed at USD9.23, up 12 3/4 cents. Funds were net buyers of 4,000 CBOT contracts on the day. Weekly export sales were towards the low end of expectations at 314,800 MT. The IGC increased their 2011/12 world wheat stocks estimate to 202 MMT.
EU Wheat Ends Mixed
27/10/11 -- EU grains ended mixed with Nov London wheat up GBP0.75/tonne to GBP151.75/tonne and Nov Paris wheat climbing EUR0.25/tonne to EUR186.75/tonne.
Relief rather than confidence that European leaders had managed to come up with an eleventh hour rescue plan lent modest support.
Brussels only approved 163,000 MT of soft wheat export licences this week, a fairly dismal total that highlights the sluggish pace of this season's sales in stark contrast to last year.
The news comes just 24 hours after French wheat was priced out of Egypt's latest tender to the tune of USD30.00/tonne.
Chicago Close
26/10/11 -- Soybeans: Nov 11 Soybeans closed at USD12.10 1/2, down 15 cents; Jan 12 Soybeans closed at USD12.19 3/4, down 14 cents; Dec 11 Soybean Meal closed at USD317.00, down USD5.20; Dec 11 Soybean Oil closed at 50.89, down 61 points. Funds sold an estimated 7,000 soybean contracts on the day on lingering concerns over the European debt crisis. Safras e Mercado peg the Brazilian crop at a huge 75.3 MMT. Plantings are at 25% - well ahead of the 9% level of a year ago. Estimates for tomorrow's weekly export sales report are around 650-950 TMT.
Corn: Dec 11 Corn closed at USD6.37 1/4, down 13 1/2 cents; Mar 12 Corn closed at USD6.49 1/2, down 12 3/4 cents. Funds liquidated an estimated 12,000 contracts on the day. Weekly export sales for tomorrow are expected to be around 650-900 TMT, less than half of last week's total. The USDA announced the sale of 100,000 MT to unknown destinations. Ukraine corn is apparently making inroads into the Japanese market despite having a substantial freight disadvantage to US corn.
Wheat: Dec 11 CBOT Wheat closed at USD6.19 1/2, down 16 3/4 cents; Dec 11 KCBT Wheat closed at USD7.16, down 17 1/2 cents; Dec 11 MGEX Wheat closed at USD9.10 1/4, down 6 1/4 cents. Funds sold 4,000 CBOT contracts on the day as Russian wheat steamrollered everything else to win the latest Egyptian tender. Having just brought in a grain crop in excess of 29 MMT in bunker weight Kazakhstan has announced it's intention to export 15 MMT of grain in 2011/12 - over 150% more than in 2010/11.
EU Wheat Priced Out Of Egyptian Tender
26/10/11 -- EU grains finished lower with Nov London wheat down GBP0.40/tonne to GBP150.50/tonne and Nov Paris wheat falling EUR2.75/tonne to EUR186.50/tonne.
Ukraine wheat was offered at USD23.00/tonne cheaper than French grain in Egypt's latest tender, but even that discount wasn't enough to undercut Russian wheat which was more than USD6.00/tonne lower.
At USD243.33/tonne Egypt bought two cargoes of Russian wheat at almost USD30.00/tonne cheaper than the best French offer, highlighting the uncompetitive nature of European grain on the world market.
News that EU leaders had struck some sort of accord on European debt came too late to affect the market on Wednesday, but will doubtless provide a little boost on Thursday morning.
The raising of the bailout fund from EUR440 billion to EUR1 trillion wasn't as high as some had expected however, and in truth all that they have done is bought themselves a little time before the bomb goes off.
Chicago Close
25/10/11 -- Soybeans: Nov 11 Soybeans closed at USD12.25 1/2, down 1 1/4 cents; Jan 12 Soybeans closed at USD12.33 3/4, down 1 1/2 cents; Dec 11 Soybean Meal closed at USD322.20, up USD0.70; Dec 11 Soybean Oil closed at 51.50, down 29 points. There was a dearth of fresh news as the market anxiously awaits the outcome of the EU summit on Wednesday. Firmer crude oil and a weaker US dollar were supportive.
Corn: Dec 11 Corn closed at USD6.50 3/4, down 1/4 cent; Mar 12 Corn closed at USD6.62 1/4, unchanged. As with the soy complex there was little movement ahead of the meeting of European leaders tomorrow. China's normally conservative CNGOIC said that the country will need to import 5 MMT of corn along with 1.5 MMT of wheat and 56-60 MMT of soybeans in 2011/12.
Wheat: Dec 11 CBOT Wheat closed at USD6.36 1/4, down 6 1/4 cents; Dec 11 KCBT Wheat closed at USD7.33 1/2, down 1 1/2 cents; Dec 11 MGEX Wheat closed at USD9.16 1/2, down 3/4 cent. Jordan bought 100,000 MT of Ukraine wheat in a tender, the first such deal since export restrictions were lifted at the weekend. Egypt is tendering for wheat, and Ukraine origin is included, with the results expected tomorrow.
EU Wheat Mostly Higher
25/10/11 -- EU grains finished mostly higher with Nov London wheat up GBP1.40/tonne to GBP150.90/tonne and Nov Paris wheat rising EUR0.50/tonne to EUR189.25/tonne.
Outside markets were supportive with NYMEX crude oil rising to USD94.00/barrel.
China said that it will need to import 5 MMT of corn in 2011/12. That in itself would be a record volume, and China being China the market is automatically guessing that if they say 5 MMT then they really mean 10 MMT.
They are also said to have recently bought significant quantities of Australian wheat of both feed and milling grade.
Tomorrow all eyes will be on European leaders and their abilities to thrash out a credible deal to resolve their debt problems.
Chicago Firms On Outside Influences
24/10/11 -- Soybeans: Nov 11 Soybeans closed at USD12.26 3/4, up 14 1/2 cents; Jan 12 Soybeans closed at USD12.35 1/4, up 14 1/2 cents; Dec 11 Soybean Meal closed at USD$321.50, up USD5.00; Dec 11 Soybean Oil closed at 51.79, up 54 points. Funds bought 8,000 soybean contracts on the day as outside markets firmed on yet another air of optimism regarding European debt. After the close the USDA pegged the US soybean crop at 80% complete, up from 69% last week and 71% on average.
Corn: Dec 11 Corn closed at USD6.51, up 1 3/4 cents; Mar 12 Corn closed at USD6.62 1/4, up 2 1/4 cents. This afternoons USDA Crop Progress report showed 65% harvested compared with 47% last week and 51% normally. The east is lagging with harvesting in IN, OH, and MI only at 42%, 14% and 20% done respectively. Good/excellent crop conditions were up one point to 54%. Outside markets helped, with NYMEX crude oil rising above USD90/barrel for the first time since July.
Wheat: Dec 11 CBOT Wheat closed at USD6.42 1/2, up 10 1/2 cents; Dec 11 KCBT Wheat closed at USD7.35, up 12 cents; Dec 11 MGEX Wheat closed at USD9.17 1/4, down 2 cents. Outside markets firmed the grains in general. The USDA Crop Progress report showed 82% of US winter wheat planted, 2 points below average. Emerged was at 56%, 7 points below average. Crop conditions were at 47% good/excellent, in line with last year.
EU Wheat Rises Despite FSU Crops Getting Bigger
24/10/11 -- EU grains ended higher with Nov London wheat up GBP1.75/tonne to GBP149.50/tonne and Nov Paris wheat climbing EUR1.00/tonne to EUR188.75/tonne.
Optimism of a resolution of sorts to the European debt crisis led to bargain hunting and short-covering,
Crops in the FSU continue to grow with Russia's grain harvest now approaching the 95 MMT mark off 95.3% pf the planted area - more than 55% up on last season.
Kazakhstan meanwile has harvested a grain crop of 28.8 MMT in bunker weight, which suggests a wheat crop of around 22 MMT, which is 3 MMT more than the current USDA estimate.
Ukraine has harvested 47.3 MMT of it's grain crop so far off 90% of the planted area and Egypt has said that it will allow imports of Ukraine wheat for the first time since 2008.
Morning All
24/10/11 -- Morning all, a virtual coconut to anyone who can identify where this picture was taken and where I am going to be spending the week. Just up the coast from Whitby, this my chumkins is the picturesque little seaside town of Staithes - boyhood home of Captain Cook.
I will be here all week, so blogging activity will be restricted but I will be doing some daily updating as it's a perfect excuse to go to the pub to access their wifi.
The overnight grains opened lower, turned sharply higher, but are now easing off those session highs in what looks like being a fairly volatile session. Now that Europe is starting to wake up it will be interesting to see where things end up this afternoon.
There doesn't seem to have been a great deal of progress made over the weekend towards a resolution of the European debt crisis. More like finger pointing and back-stabbing if you ask me.
The US dollar is weak, with the pound almost breaking through 1.60 in early trade and crude oil is around a dollar firmer.
Rabobank have upped their Australian wheat crop estimate to 25.7 MMT, I think that it will prove to be higher than that in the end.
Ukraine's export duties on wheat and corn got lifted over the weekend and Egypt announced that it will resume imports from the Black Sea nation for the first time since 2008 in what is clearly a move to attempt to bring prices down even further.
Egypt's next tender results will be very interesting.
Ukraine meanwhile has brought in a grain harvest of 47.3 MMT so far off 90% of the planted area.
Kazakhstan's harvest has reached 28.8 MMT in bunker weight, implying a clean weight crop of almost 26 MMT which in turn suggests a wheat crop of around 22 MMT.
China says it imported 4.13 MMT of soybeans in September, 11% down on September 2010. Year to date imports are 37.71 MMT, 6% lower on those in the same period in 2010.
