Chicago Soymeal Ends At Highest Levels Since 2009
20/04/12 -- Soybeans: May 12 Soybeans closed at USD14.46 3/4, up 31 cents; Nov 12 Soybeans closed at USD13.56, up 13 1/2 cents; May 12 Soybean Meal closed at USD406.00, up USD14.10; May 12 Soybean Oil closed at 55.83, up 66 points. Despite the sharp rally May 12 beans only finished 10 cents higher on the week, and with Nov 12 actually down 5 3/4 cents. Meal was almost USD10 higher and oil fell 69 points. This was the first time that meal has finished above USD400 since 2009. Today's exaggerated move appears to have a lot to do with the large volume of open interest in May options heading into expiry. Prices surged on rumours that China had bought several cargoes of US soybeans after hearing that Brazil was to slow or halt soybean exports, an idea subsequently dismissed by the Ag Ministry there. Other reports now suggest that the reality of the situation is that the large volume of export business that Brazil already has on the books means that its antiquated infrastructure can't cope with making any more sales for shipment this side of August. With Argentina's soybean crop shrinking by the week - the Agriculture Ministry cut their soybean production estimate there from 44 MMT to 42.9 MMT today - that could see a significant shift in purchases from the likes of China to the US. Rapid corn planting progress in the Midwest may mean that we don't get much of a switch into soybeans after all, that's the way the trade seems to be viewing it. Soybeans really do not need a weather scare this summer if that is the case.
Corn: May 12 Corn closed at USD6.12 1/2, down 8 1/2 cents; Dec 12 Corn closed at USD5.36 3/4, down 5 cents. On the week overall May 12 was 16 3/4 cents lower, with new crop Dec down just a quarter of a cent. Despite all the rhetoric concerning tight old crop stocks the May 12 contract has succumbed to heavy fund selling across the week, and the month. Today they were said to have liquidated around 14,000 contracts on the day, bringing their estimated sales for the month to around 55,000 contracts. Unwinding of old crop/new crop spreads is also putting the nearby month under pressure. Yesterday's disappointing export sales, along with a lack of confirmation of the rumoured Chinese business from the USDA added to the negative sentiment. So too did near perfect sowing weather in many parts as US farmers progress rapidly with early corn plantings. The market will be eager to see some confirmation of the rumoured 1 MMT plus sales to China in the early part of next week, it will also be looking to Monday night's crop progress report to see how much of the intended 75-year high corn acreage is already in the ground.
Wheat: May 12 CBOT Wheat closed at USD6.15 3/4, down 9 cents; May 12 KCBT Wheat closed at USD6.26, down 11 1/2 cents; May 12 MGEX Wheat closed at USD7.91, down 18 1/4 cents. Chicago wheat finished the week with modest losses of 7 3/4 cents, with Kansas down 17 cents and Minneapolis losing 33 1/4 cents. Wheat followed corn lower on the day, lacking a storyline of its own. Funds were said to have been further sellers of around 4,000 Chicago wheat contracts on the day, likely taking their net short position to something in excess of 60,000 contracts. That seems to be a position that they are fairly comfortable to hold, but does continue to leave the market vulnerable to a swift short-covering bounce for little or no reason. The decline in European wheat prospects for the 2012 harvest should have stabilised with recent rains, which are now forecast to last into May. Australia will have a wheat crop of 26.1 MMT in 2012/13, according to the National Australia Bank, noting excellent subsoil moisture in the east. That's 12% down on last year's record harvest, plenty of which will probably get carried into 2012/13.
Old Crop London Wheat Relinquishes Most Of It's Weekly Gains
20/04/12 -- EU grains finished mixed with May 12 London wheat down a GBP2.20/tonne to GBP176.30/tonne, whilst new crop Nov 12 fell GBP0.30/tonne to close at GBP154.70/tonne. May 12 Paris wheat ended EUR0.25/tonne lower at EUR216.50/tonne, Nov 12 was EUR0.75/tonne firmer at EUR203.00/tonne. On the week overall May 12 London gave up most of its gains to close just GBP0.65/tonne higher, Nov 12 was also GBP0.65/tonne higher on the week. May 12 Paris wheat gained EUR7.50/tonne.
Having ended last week at around EUR3.00/tonne premium to Paris wheat, May 12 London wheat closed at around a EUR2.00/tonne discount. Still not very much traditionally.
So has old crop London wheat topped? What we do know is that it did exactly that on this day twelve months ago.
It's rained every day since the Environment Agency announced that the UK drought could last until Christmas. In fact the Telegraph reported on Wednesday that wet weather will continue to the end of this month potentially making it one of the wettest Aprils on record.
The sudden change in conditions is also being replicated on the continent with France and Germany now picking up much needed moisture, and with plenty more in the forecast through into May.
Crop prospects are also said to have improved in Ukraine, where UkrAgroConsult are now forecasting 2012/13 grain exports rising to 22-24 MMT from 19-20 MMT this season. Corn exports will jump to 14-15 MMT next season, making them the world's largest supplier of the grain after America.
The latest data from Brussels has the EU-27 exporting 13 MMT of all wheat & wheat flour 42 weeks into the 2011/12 marketing campaign. That puts us on course to fall short of the USDA's current target for the full marketing year of 17 MMT by around 1 MMT.
Across the pond, old crop Chicago corn closed the week almost 17 cents lower, depressed by the lack of confirmation from the USDA of the widely rumoured volume sales to China. Meanwhile, near ideal Midwest spring planting conditions are seeing corn go into the ground at a rapid pace.
Early Call On Chicago
20/04/12 -- The overnight grains see soybeans 5-7 cents firmer, corn up 4 cents on old crop and flat to a cent higher new crop, wheat is around a cent easier. Crude is a dollar or so higher.
Including overnight action soybeans are around 15 cents weaker on the week so far, with corn down 4 cents and wheat unchanged.
Strong rumours of China's Sinograin buying US corn on the recent dip remain, but there are no confirmations as yet. They have however been confirmed as being in for US soybeans for the past three days.
As the Brazilian harvest winds down, we switch our attention to Argentina where the Buenos Aires Grains Exchange say that the soybean harvest is 37% complete, with 39% of the corn cut.
They are sticking with a soybean crop of 44 MMT and a corn crop of 20.8 MMT, although they acknowledge that early harvest results "are not meeting expectations".
The Rosario Grain Exchange peg soybean output at 43.1 MMT and corn production at 19.7 MMT.
The Argy Agriculture Ministry have cut their soybean production estimate there from 44 MMT to 42.9 MMT, and lowered corn output to 20.3 MMT from 21.2 MMT.
As well as drought earlier in the season, heavy rains and hailstorms have also damaged yields over the past month, they said.
Australia will have a wheat crop of 26.1 MMT in 2012/13, according to the National Australia Bank, noting excellent subsoil moisture in the east. That's 12% down on last year's record harvest. A significant switch into rapeseed sowing, which kicks off around now, is anticipated this year.
US weather remains largely favourable. Heavy rain in Europe, and the prospect for plenty more to come, has eased drought fears putting wheat under a bit of pressure.
Early calls for this afternoon's CBOT session: old crop corn up 3-5 cents, new crop mixed; soybeans up 5-7 cents; wheat mixed.
EU Rapemeal Prices
20/04/12 -- Rapemeal prices on the continent are mostly higher today supported by last night's gains in Chicago soymeal and a strong rapeseed market.
Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:
| May12 | 246.00 | +1.00 |
| Jun/Jul12 | 246.00 | +4.00 |
| Aug/Oct12 | 212.00 | +2.00 |
| Nov12/Jan13 | 213.00 | +1.00 |
| Feb/Apr13 | 215.00 | +2.00 |
| May/Jul13 | 207.00 | +2.00 |
| Aug/Oct13 | 177.00 | unch |
| Nov13/Jan14 | 186.00 | unch |
Chicago Closing Comments - Thursday
19/04/12 -- Soybeans: May 12 Soybeans closed at USD14.15 3/4, up 8 cents; Nov 12 Soybeans closed at USD13.42 1/2, up 4 3/4 cents; May 12 Soybean Meal closed at USD391.90, up USD1.30; May 12 Soybean Oil closed at 55.17, down 2 points. Although beans were higher they finished well off early highs which saw them over 20 cents up at one stage. Weekly export sales of a combined 1.219 MMT beat trade expectations. In addition the USDA also reported the sale of 110,000 MT of new crop beans to China. May options expire tomorrow, with a large open interest remaining at the USD14 strike level in the puts and calls.
Corn: May 12 Corn closed at USD6.21, up 19 1/4 cents; Dec 12 Corn closed at USD5.41 3/4, up 13 cents. Funds were said to have bought 15,000 contracts on the day in a sudden change of heart, having been thought to have been net sellers of around 37,000 lots Monday through to Wednesday. Strong rumours once again of Chinese buying US corn washed over the fact that the weekly export sales were poor at 300,400 MT old crop and net sales reductions of 2,400 MT for new crop versus trade ideas for sales of 600-950 TMT. There was also some talk of Japanese concerns over the quality of European and Ukraine corn, maybe seeing a switch back in favour of US corn.
Wheat: May 12 CBOT Wheat closed at USD6.24 3/4, up 14 cents; May 12 KCBT Wheat closed at USD6.37 1/2, up 11 1/2 cents; May 12 MGEX Wheat closed at USD8.09 1/4, up 9 1/4 cents. Spillover strength from corn supported wheat, although funds were only modest net buyers on the day, reducing their short position by around 3,000 contracts in Chicago it is thought. Weekly export sales of 365,900 MT for old crop wheat and 76,300 MT for new crop were a bit below expectations for sales of 450-650 TMT. Rains returning to Europe should have stabilised crop conditions, although there is widespread talk of some irreversible damage having already been done.
EU Wheat Gains Despite Rain, Supported By US Market
19/04/12 -- EU grains finished higher with May 12 London wheat up GBP0.50/tonne to GBP178.50/tonne but and Nov 12 up GBP2.00/tonne to GBP155.00/tonne lower. May 12 Paris wheat was EUR2.00/tonne higher at EUR209.25/tonne, new crop was EUR1.50 to 1.75/tonne firmer.
Old crop London wheat retains the look of a thin market in which some of the remaining shorts are getting squeezed.
Despite the pound rising to its best levels against the euro in nineteen months, and five month highs versus the dollar, May 12 London wheat managed to post the best closing level for a front month since June 2011.
Widespread rain fell again today across many parts of the UK, France and Western Germany. Western Europe has received generous rainfall in April that eases drought and stabilizes wheat and rapeseed conditions, although crop damage may not be totally irreversible, according to Martell Crop Projections.
Brussels issued 279 TMT of soft wheat export licences this past week, bringing the year to date total to 11.09 MMT, almost a third down on this time last year.
US corn & wheat posted strong gains today, adding spillover support to the EU market, despite the fact that they still remain at a significant discount to European origin grains.
Early Call On Chicago
19/04/12 -- The overnight gains rebounded from last night's losses to pretty much take us back to where we were on Tuesday. Beans finished 14-16 cents higher, with wheat up 8-9 cents and corn 10-13 cents firmer.
The USDA's weekly export sales report gave us 365,900 MT for old crop wheat and 76,300 MT for new crop, a bit below expectations for sales of 450-650 TMT.
Corn sales were poor at 300,400 MT old crop and net sales reductions of 2,400 MT for new crop versus trade ideas for sales of 600-950 TMT.
Soybean sales were strong at 374,300 MT old crop and 845,000 MT new crop. China took 127,200 MT old crop and 615,000 MT new crop. Expectations were for sales of a combined 750 TMT - 1.1 MMT.
In amongst the corn details was a small 15,000 MT sale to China, not the widely rumoured kind of volume that has supposedly been done.
Once again we see soybeans setting themselves up to be the leader. To reinforce that view the USDA have also reported the further sale of 110,000 MT of new crop soybeans to China under the daily reporting system.
Early calls for this afternoon's CBOT session: corn up 10-12 cents, wheat up 8-10 cents, soybeans up 14-16 cents.
The Morning Vibe
19/04/12 -- It's a strange old market. The overnight grains have just about done a carbon copy reverse of last night's losses with corn around 14-15 cents higher, beans up 15-18 cents and wheat 10-12 cents firmer this morning.
Don't ask me why, as I can't find a rational explanation as to why "risk off" Wednesday goes to bed and wakes up having morphed into "risk on" Thursday a few hours later.
Catching my eye this morning is news that Spain is to ask Brussels to file a complaint with the WTO over Argentina's decision to nationalise the Argentine arm of Spanish oil company Repsol. The reason that is of interest is that this is shaping up to be a fully fledged trade war, with Spain looking to get the combined might of Europe behind it if possible.
Spain are already talking of independently banning the import of all things Argy. That would potentially include biodiesel and soybean oil & meal.
Last night's May 12 London wheat close of GBP178.00/tonne was the highest for a front month since last June 15 2011. In stark contrast Chicago wheat and corn both closed at their lowest levels since January last night.
London wheat is up 17% on the year so far, whilst Chicago wheat is more than 6% lower and corn down by almost 7%. So pick the bones out of that!
Chicago Stumbles In Rosk Off Mode
18/04/12 -- Soybeans: May 12 Soybeans closed at USD14.07 3/4, down 18 cents; Nov 12 Soybeans closed at USD13.37 3/4, down 17 3/4 cents; May 12 Soybean Meal closed at USD390.60, down USD3.20; May 12 Soybean Oil closed at 55.19, down 57 points. Funds sold an estimated 6,000 soybean contracts on the day along with 3,000 meal and 4,000 oil in risk off mode. Even the sale of 120,000 MT of new crop beans to China was unable to stop the rot. Trade estimates for tomorrow’s weekly export sales report range from 750,000 – 1,100,000 MT.
Corn: May 12 Corn closed at USD6.01 3/4, down 15 cents; Dec 12 Corn closed at USD5.28 3/4, down 1 cent. Funds were said to have sold 20,000 corn contracts on the day, mostly old crop by the look of it - the May/Dec spread has narrowed from USD1.03 3/4 at the end of March to 73 cents today. Yesterday's planting progress figure of 17%, whilst historically high, was below the 20% or even 25% done estimates that the trade was suggesting. Trade estimates for tomorrow’s export sales report range from 600-950,000 MT.
Wheat: May 12 CBOT Wheat closed at USD6.10 3/4, down 4 3/4 cents; May 12 KCBT Wheat closed at USD6.26, down 6 cents; May 12 MGEX Wheat closed at USD8.00, down 8 1/2 cents. Funds were thought to have added another 3,000 Chicago wheat contracts to their already sizable short position on the day. That would place them as having sold around 10-12,000 on the week so far. The rapid pace of spring plantings weighed on Minneapolis wheat. Trade estimates for tomorrow’s export sales report range from 450-650,000 MT.
EU Wheat Mixed
18/04/12 -- EU grains finished mixed with May 12 London wheat closing GBP1.55/tonne higher at GBP178.00/tonne, but with new crop months GBP0.50-1.50/tonne easier. May 12 Paris wheat rose EUR3.00/tonne to EUR214.75/tonne, new crop months showed only modest gains.
The London old crop/new crop spread continues to widen, with the May/Nov differential now at GBP25.00/tonne it is almost double the GBP13.05/tonne it began the month with. Old crop London wheat also curiously remains at a premium to Paris wheat.
Nearby London wheat rose despite the pound climbing above 1.22 against the euro for the first time since August 2010 after the release of the minutes of the Bank of England's April meeting showed less chance of further QE.
Concern over Spanish debt is also weighing heavily on the Eurozone.
Widespread rains across much of the UK should be easing drought fears. Rain is also on the cards for much of France and Germany today and later this week, bringing relief to crops stressed by winter drought.
The current huge low over Ireland is dominating events and producing plenty of widespread rain all over Europe. When that low finally weakens next week another large one moves in to replace it, keeping things cool and wet for the rest of the month, say WXRisk.com.
Some European crop production forecasts have already being downgraded though.
German farm group DRV today pegged soft wheat production there at 20.9 MMT, 1.8 MMT down on last year and around 1.5 MMT below other trade estimates. They've also reduced their rapeseed production estimate to 4.32 MMT, which again is around half a million under other numbers in the market.
Meanwhile, Spain's agriculture ministry forecasts that the winter grain harvest there will fall by 24.6% this year.
Early Call On Chicago
18/04/12 -- The overnight grains ended with beans around 14 cents weaker, and corn & wheat mixed a cent or so either side. Crude is down 40-50 cents.
Given that Chicago soybean prices have increased by around 30% from the mid-December lows, yet corn is only up 6% and wheat up 7% since then, I guess that if there's any consolidation due then it's more likely to be in soybeans.
That is also where the hefty spec longs are, followed by corn. Any downside for beans may generate some liquidation amongst some of the weaker just along for the ride longs. Fundamentally though the bullish outlook for beans is unchanged.
Insatiable China has bought 120,000 MT of new crop US soybeans overnight, unperturbed by price.
Bangladesh has bought 50,000 MT of optional origin wheat from an Indian trading house, so I guess that there's a good chance they will get Indian wheat.
Concerns seem to be growing that Europe's wheat and rapeseed crops may have suffered more winter losses than originally thought. Following on from Oil World's downgrade to the EU-27 rapeseed crop yesterday, German farm group DRV today pegged rapeseed production there at 4.32 MMT this year, around half a million lower than Coceral's March estimate although up 420,000 MT on last season's drought-ravaged crop.
Soft wheat production in Germany will come in at 20.9 MMT they say, which is 1.5 MMT below the number Coceral gave last month.
The USDA said last night that corn planting was "only" 17% complete, which is actually lower than most of the estimates that were being bandied about.
Winter wheat crop conditions good/excellent improved three points for a second week in succession and now stand at 64% versus 36% a year ago. Maturity is well advanced too with 29% of the crop headed compared to 8% normally.
Early calls for this afternoon's CBOT session: beans 10-15 cents lower, wheat flat to 2 cents higher, corn mixed 2 cents lower to 2 cents higher.
Black Sea Wheat To Get It's Own Futures Market
18/04/12 -- The CME Group are to launch a new Black Sea wheat futures contract on 6th June, subject to regulatory approval, they say. This will be, as they correctly point out "the only futures contract truly correlated with Black Sea milling wheat."
I think it should prove very popular. The contract will be equivalent in size to CBOT wheat's 5,000 bushels at 136 MT. More info here.
Is There A Lamborghini Dealership In Ely?
18/04/12 -- If not then it may be worth considering opening one up, as that's what the farmer of the not too distant future is going to be driving, according to famed investment guru Jim Rogers.
Even then they'd still be moaning though wouldn't they? "Oooh, it's too low down that is, me back, me back. Do you do them in any other colours? John Deere Racing Green I was thinking of. Do you take cash? Or I could do you a straight swap for ten tonnes of wheat, don't worry about what those little black bits in it are. I'll never be able to afford the petrol to fill that rascal. What subsidy do I get on one of them? Knock a couple of grand off and I'll have it, haven't you heard there's a drought on? Quick shut that sunroof it's pissing it down out there. And switch that bloody aircon off, I'm getting winterkill in here. Eeeee, I remember when all this was houses, now look at it, they've gone and ruined it with all these fields. How much? You're having a laugh, I can get it from KW for half that, do you think I'm made of money or something? I'll have three."
EU Rapemeal Prices
18/04/12 -- Rapemeal prices on the continent are mostly a little firmer today on lower EU rapeseed production prospects for 2012. Nearby availability remains tight as crusher activity stays light due to slack demand for the oil.
Guide prices, basis FOB Lower Rhine in euros/metric tonne, with change from previous day:
| Apr12 | 243.00 | unch |
| May/Jul12 | 243.00 | +3.00 |
| Aug/Oct12 | 209.00 | +2.00 |
| Nov12/Jan13 | 210.00 | +2.00 |
| Feb/Apr13 | 212.00 | +2.00 |
| May/Jul13 | 203.00 | -1.00 |
| Aug/Oct13 | 176.00 | +1.00 |
| Nov13/Jan14 | 184.00 | unch |
The Morning Vibe
18/04/12 -- It doesn't look much like this picture round here this morning. Predictably, no sooner do the Environment Agency announce that the drought could last until Christmas than the heavens open and it starts lashing it down.
Did we say "until Christmas?" no, I think you'll find we meant "until the end of the week." Doesn't make such a great headline that though does it? Environment Agency say drought could last until Friday and after that it's going to piss down non stop for the rest of the year.
There's plenty of talk of all sorts of things going wrong with the rape crop this year. Black rot, grey rot, foot rot. VD is about the only thing I haven't heard that it's got yet, but it is going on a stag do to Blackpool at the weekend so it will probably have that too by Monday.
The words "disaster" and "alarming" are being used by the normally level headed Oil World who are now forecasting a European crop at a five year low of 18.58 MMT this year - and that isn't the lowest estimate in the ring, Copa Cogenca go 18.26 MMT.
EU-27 rapeseed consumption is currently running at around 22-23 MMT/year - and the closest we've come to producing that volume was the bumper crop of 2009. In fact we haven't produced more rapeseed than we've consumed in Europe since 2004/05.
It's concerning from an oilseed perspective then that South American soybean production estimates also keep falling on a seemingly weekly basis. Oil World also cut their Brazilian and Argy forecasts yesterday, pegging the latter at 44 MMT but adding that 42-43 MMT could eventually be on the cards. Brazil was cut to 65 MMT.
The USDA were forecasting 52 MMT and 75 MMT respectively back in December when the soybean market bottomed, so in round figures something in the region of 20 MMT has been lopped off production between the two so far in 2012, that's almost 16%. No wonder prices have shot up by almost 30% since mid-December.
South American farmers are already well sold on their 2012 crop and the US crop hasn't even gone into the ground yet. Chinese demand isn't showing any signs of letting up, and we haven't even had the almost inevitable US summer weather scare. Lordy, Lordy.
Chicago Soybeans Up, Corn & Wheat Lower
17/04/12 -- Soybeans: May 12 Soybeans closed at USD14.25 3/4, up 5 3/4 cents; Nov 12 Soybeans closed at USD13.55 1/2, up 5 1/2 cents; May 12 Soybean Meal closed at USD393.80, up USD2.40; May 12 Soybean Oil closed at 55.76, up 10 points. The market rebounded a little from Monday's losses as South American production estimates continue to creep lower. Also supportive was news that private exporters had sold 225,000 MT of soybeans to "unknown" split 110,000 MT old crop and 115,000 MT new crop. China’s Ministry of Commerce estimates April imports at 5.63 MMT versus 3.88 MMT a year ago, an increase of 45%. Funds were said to have bought 3,000 contracts on the day.
Corn: May 12 Corn closed at USD6.16 3/4, down 6 1/2 cents; Dec 12 Corn closed at USD5.29 3/4, up 3 1/2 cents. Rapid progress with spring plantings was at least partially confirmed with the USDA saying sowings were 17% complete, even of that was a little below the 20% that the trade was estimating. That compares with just 5% on the five year average. The weather outlook remains favourable. Funds were said to have been net sellers of around 6,000 contracts on the day.
Wheat: May 12 CBOT Wheat closed at USD6.15 1/2, down 3/4 cent; May 12 KCBT Wheat closed at USD6.32, up 1 1/2 cents; May 12 MGEX Wheat closed at USD8.08 1/2, down 7 cents. Funds sold 1,000 Chicago contracts on the day it is estimated, withj weakness in corn weighing on the market. Winter wheat crop conditions jumped another 3 percentage points this week to 64% good/excellent. Maturity is well ahead of normal at 29% headed compared to just 8% on the five year average. Spring wheat planting is 37% complete versus the five year average of just 9%. Emergence is 10% against 1% normally.
EU Wheat Mixed, Rapeseed Jumps
17/04/12 -- EU grains finished mixed with May 12 London wheat down a whole five pence to GBP176.45/tonne, whilst new crop Nov 12 added GBP0.65/tonne to close at GBP153.50/tonne. May 12 Paris wheat ended EUR2.50/tonne higher at EUR211.75/tonne, Nov 12 was EUR1.25/tonne firmer at EUR200.00/tonne.
UK Customs data reveals wheat exports of 212,700 MT in February, bringing the 2011/12 marketing year to date total to just under 2 MMT, which is almost 12% down on the same time a year ago.
UK barley exports are ahead of last season by 7% at 648,700 MT and rapeseed shipments are more than double where we were a year ago at 643,500 MT.
Spain took 57,400 MT of the February wheat shipments, with the Netherlands receiving 48,000 MT and 47,250 MT going to the US - the fourth such consignment in a row.
Russia have exported 18.5 MMT of wheat by April 15, and will finish the season exporting a total of 20.5 MMT, according to the Russian Institute for Agricultural Market Studies. That matches the current USDA forecast for 2011/12 and would be a record volume.
Rapeseed prices jumped, with May 12 closing within a whisker of the EUR500.00/tonne mark at EUR499.50/tonne as South American soybean production estimates keep getting trimmed. Oil World lowered their Argentine soybean forecast to 44 MMT and cut their Brazilian soybean production estimate to 65 MMT, both are 1 MMT below the USDA's latest figures.
Oil World also cut their forecast for EU-27 rapeseed production this year by 700,000 MT to 18.5 MMT, a reduction of 3% on last season. Various sources are reporting significantly worse than anticipated losses across the winter to drought, winterkill and assorted fungal diseases.
Early Call On Chicago
17/04/12 -- The overnight grains rebounded higher on soybeans which were up 6-8 cents, wheat 2-3 cents higher and corn mixed a cents or so either way. WTI crude is up a dollar, Brent is around unchanged.
The market is bracing itself for a corn planting progress number from the USDA around a record 20% complete. Beneficial moisture has fallen across much of the Midwest with more on the way too to help get the crop off to a good and early start, maximising yield potential. So far so good, although there's a very long way to go yet.
Soybean plantings are expected to be around 5% complete. Spring wheat sowings could be as much as 50% done. Winter wheat good/excellent was 61% last week, a huge improvement on year ago levels.
The USDA have reported the sale of 225,000 MT of soybeans to unknown destinations today, split 110,000 MT old crop and 115,000 MT new crop.
Michael Cordonnier has reduced his Argentine soybean production estimate to 43.5 MMT, 1.5 MMT below the USDA's latest number, as the crop there keeps getting smaller.
Oil World have lowered their Argy forecast to 44 MMT and cut their Brazilian soybean production estimate to 65 MMT, 1 MMT below the USDA's figure.
Russia exported a record 18.5 MMT of wheat between July 1, 2011, and April 15, 2012, and will finish the season exporting a total of 20.5 MMT, according to the Russian Institute for Agricultural Market Studies.
Total grain exports for the 2011/12 marketing year will be a record 25 MMT, according to the Ag Ministry, or even higher at 25.7 MMT according to RusAgroTrans.
Early calls for this afternoon's CBOT session: soybeans up 5-7 cents, wheat up 1-3 cents, corn mixed.
UK Exports
17/04/12 -- The latest export data from HM Customs & Excise reveals that the UK exported 212,700 MT of wheat in February, bringing the 2011/12 marketing year to date total to 1.98 MMT, almost 12% down on the same time a year ago.
Barley exports in the month were 60,500 MT, making the cumulative total 648,700 MT, an increase of 7% on last year. OSR exports in February were 155,100 MT, meaning that at 634,500 MT this season's exports are more than double last year's levels eight months into the campaign.
EU Rapemeal Prices
17/04/12 -- Rapemeal prices on the continent are unchanged to slightly easier today weighed down by last night's losses in Chicago soymeal.
Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:
| Apr12 | 243.00 | -2.00 |
| May/Jul12 | 240.00 | -2.00 |
| Aug/Oct12 | 207.00 | unch |
| Nov12/Jan13 | 208.00 | -1.00 |
| Feb/Apr13 | 210.00 | -1.00 |
| May/Jul13 | 204.00 | unch |
| Aug/Oct13 | 175.00 | unch |
| Nov13/Jan14 | 184.00 | -1.00 |
The Morning Vibe
17/04/12 -- The overnight grains are a bit firmer in a modest "Turnaround Tuesday" style with beans up 6-8 cents, corn flat to 1 1/2 cents higher and wheat up 2-3 cents. Crude is around half a dollar firmer.
May 12 old crop London wheat closed last night at a EUR4.30/tonne premium to May 12 Paris milling wheat. Nov 12 London wheat is the equivalent of around a EUR14.30/tonne discount. Something is clearly amiss.
Friday will be the anniversary of last year's top of the market for London wheat when May 11 traded as high as GBP222.00/tonne and closed at the highest level in history of GBP217.50/tonne. New crop Nov 11 was GBP178.25/tonne that day.
As it turned out both levels proved to be exceptionally inflated. By the end of June old crop Jul 11 was trading at less money than new crop had been back in April and Nov 11 had fallen by more than thirty quid.
Now I'm not saying that there's GBP30.00/tonne downside to Nov 12 London wheat, but there is some potential for wheat prices to work lower from where they currently reside. Especially should the 2012 crop turn out to be somewhat better than current pessimism suggests, much as it did in 2011.
Meanwhile old crop seems to be in the hands of Beelzebub, with the cash market showing around a GBP30.00/tonne premium to new crop let him keep it.
Chicago Eases On Expectations For Rapid Planting Progress
16/04/12 -- Soybeans: May 12 Soybeans closed at USD14.20, down 16 3/4 cents; Nov 12 Soybeans closed at USD13.50, down 11 3/4 cents; May 12 Soybean Meal closed at USD391.40, down USD4.40; May 12 Soybean Oil closed at 55.66, down 86 points. Funds sold an estimated 6,000 soybean contracts on the day, but still remain heavily long. The March NOPA crush figure of 140.5 million bushels was up on last month but -23 million below expectations. The usual Monday night crop progress report is delayed until tomorrow, with soybean plantings expected to be around 5% complete. Celeres estimate the Brazilian soybean harvest at 88% done, three points ahead of normal for this time of year. Farmers there like these prices and are already 72% sold they say, well ahead of 60% normally.
Corn: May 12 Corn closed at USD6.23 1/4, down 6 cents; Dec 12 Corn closed at USD5.26 1/4, down 10 3/4 cents. Funds dumped an estimated 9,000 contracts on the day ahead of what will now be tomorrow's crop progress report. That us expected to show corn plantings in the region of 20% done, which would be a record early pace. Weekend rains and more in the forecast w=for the week ahead are seen getting this crop off to the best possible start. You will recall of course that the USDA estimate the largest corn acreage since 1937 this year, potentially giving us a bin buster if US farmers get anything close to trendline yields. old crop remains tight though, and today's export inspections of 42.875 million bushels was well ahead of trade expectations.
Wheat: May 12 CBOT Wheat closed at USD6.16 1/4, down 7 1/4 cents; May 12 KCBT Wheat closed at USD6.30 1/2, down 12 1/2 cents; May 12 MGEX Wheat closed at USD8.15 1/2, down 8 3/4 cents. Funds were said to have increased their CBOT wheat short by around 3,000 contracts on the day. The rescheduled crop progress report is expected to show spring wheat plantings jumping from 21% done last week to as high as 50% completed now. As with corn weather conditions are seen as favourable for the newly planted crop. The USDA Export Inspections Report was delayed, but did manage to get released, at 25.75 million bushels it leaves wheat exports well off of last year's pace. Wetter weather for Europe over the weekend and throughout the coming week should ease some of the concerns over winter wheat here.
Old Crop EU Wheat Higher, New Crop Lower (Again)
16/04/12 -- EU grains finished mixed but mostly lower. May 12 London wheat rose GBP0.85/tonne to GBP176.50/tonne but new crop months were GBP1.20/tonne to GBP 2.05/tonne lower. May 12 Paris wheat was EUR0.25/tonne higher at EUR209.25/tonne, new crop was EUR2.25 to 2.75/tonne lower.
Old crop London wheat is clearly outperforming, continuing to widen the gap between it and new crop. A week ago the May 12/Nov 12 spread was GBP14.70/tonne and today it's GBP23.65/tonne, almost a GBP9.00/tonne difference in a week.
For the month of April so far May 12 London wheat has gained GBP1.75/tonne whilst Nov 12 has lost GBP8.85/tonne. Based on tonight's close May 12 London wheat is worth around EUR4.30/tonne more than the same position in Paris.
The pound rose to it's highest levels against the euro since September 2010 today on heightened concerns over Spanish debt.
French crop conditions from FranceAgriMer suggest that the winter wheat crop is now rated 62% good/excellent versus 75% last year, winter barley is similarly rated 55% compared to 77% in 2011, whilst the durum crop is in an even worse state at 42% good/excellent against 71% this time last year.
The USDA were due to announce spring planting progress and winter wheat crop conditions tonight, but it seems that this report may be delayed until tomorrow due to a technical problem. The market is expecting corn plantings to have raced to a record 20% done as of Sunday night, with spring wheat sowings progressing to a huge 50% complete. Widespread weekend rains and more of the same is seen boosting early spring crop development.
Russian railway operator Rusagrotrans say that Russian grain exports as of the end of March stood at 22.3 MMT for the current marketing year. Ukraine's stood at 15.3 MMT and Kazakhstan's at 7.7 MMT, they added. Full 2011/12 marketing year (July/June) exports are seen at 25.7 MMT from Russia, with Ukraine at 21.0 MMT and Kazakhstan at 12.5 MMT, they estimate.
Morocco bought 180,000 MT of wheat of unknown origin and Libya bought 30,000 MT of Russian wheat in various weekend tenders.
EU Rapemeal Prices
16/04/12 -- Rapemeal prices on the continent are mostly a little lower today in line with weaker soymeal prices overnight. Nearby availability remains fully tight though.
Guide prices, basis FOB Lower Rhine in euros/metric tonne, with change from previous day:
| Apr12 | 245.00 | unch |
| May/Jul12 | 242.00 | unch |
| Aug/Oct12 | 207.00 | -2.00 |
| Nov12/Jan13 | 209.00 | unch |
| Feb/Apr13 | 211.00 | unch |
| May/Jul13 | 204.00 | +1.00 |
| Aug/Oct13 | 175.00 | n/a |
| Nov13/Jan14 | 185.00 | n/a |
Early Call On Chicago
16/04/12 -- The overnight grains ended with beans 10 cents or so lower, corn down 8-10 cents and wheat 6-7 cents weaker in a general "risk-off" vibe.
Greek woes now seem but a distant memory as Spain gets reluctantly dragged into the limelight. Worries over Chinese growth are also giving the market a few jitters.
Brazil's Safras say that the soybean harvest there is 85% complete, compared to 87% a year ago and 78% normally.
Weekend rain activity provided beneficial moisture to much of the US Plains and Midwest. That may slow plantings a bit, but that isn't a problem at this stage and will certainly do more good than harm.
Wetter weather for Europe over the weekend and throughout the coming week should also be of benefit.
The NOPA March soybean crush was 140.5 million bushels, up more than 4 million from Feb but below trade estimates.
Soy meal open interest is at the highest since December 17th, 2007. Spec soybean longs are running at record levels and length in corn is also significant. For wheat however they hold a hefty short.
The USDA will report after the close on US planting progress and crop conditions. Last week we had spring wheat at 21% complete, corn sowings at 7% planted and winter wheat good/excellent jumping from 58% to 61%, well ahead of the 36% this time a year ago.
Some reports suggest that corn plantings may have jumped to as much as 20% complete now that insurance qualification dates have been met. I don't see the corn number being quite that high personally. Spring wheat sowings may hit 50% done, some suggest.
Early calls for this afternoon's CBOT session: beans down 8-10 cents, corn & wheat 6-8 cents lower.
The Morning Vibe
16/04/12 -- The overnight grains are lower across the board with beans 8-10c easier, corn down 6-7c and wheat falling 5-6c. Brent crude is below USD120 and the pound is up to its highest against the euro since September 2010.
The euro is under pressure on heightened concerns over Spanish debt, and so it should be as details of just how heavily the previous government cooked the books begin to emerge.
Slowing economic growth in China in also grabbing plenty of headlines this morning in what is already shaping up to be a "risk off" kind of a day.
Dark forces seem to be at work in May London feed wheat, which is now around EUR3.50/tonne more expensive than French milling wheat based on Friday's closing levels. On the last trading day of 2011 the differential between May 12 & Nov 12 London wheat was only £4.25/tonne, on Friday it was £21.60/tonne. Déjà vu anybody?
Many parts of the US Plains and Midwest got beneficial "heavy and widespread" rains over the weekend, according to WxRisk.com.
At home, the Environment Agency warn that the UK drought could last until Christmas. Environment Secretary Caroline Spelman says "it is vital that we use less water to protect the public's water supply." Right, I'd better go and drain the moat then, just as soon as I've filled the swimming pool up with petrol and panic bought twenty dozen first class stamps.
