Chicago Closing Comments - Friday
20/07/12 -- Soycomplex: Aug 12 Soybeans closed at USD17.57 1/2, up 23 3/4 cents; Nov 12 Soybeans closed at USD16.86 1/4, up 34 cents; Aug 12 Soybean Meal closed at USD543.00, up USD11.00; Aug 12 Soybean Oil closed at 54.36, down 4 points. Funds were heavy buyers in beans once again, taking an estimated 13,000 contracts. There's a feeling that whilst for corn the damage has already been done, for beans it may be that the worst is still to come. Nov 12 beans were up USD1.34 1/4 on the week. Brazilian analysts Safras e Mercado estimate next year's 2012/13 soybean crop there at a record 82.3 MMT as farmers there ramp up plantings as new crop beans near USD17/bushel. Unfortunately for the market though that crop is still at least six months away from being harvested, and a rapidly diminishing US crop is all that China and the rest of the world has to keep it going.
Corn: Sep 12 Corn closed at USD8.24 1/2, up 16 3/4 cents; Dec 12 Corn closed at USD7.95 3/4, up 17 1/4 cents. New crop Dec 12 corn was up 55 1/2 cents on the week with funds buying an estimated 17,000 on the day. The commitment of traders report has funds adding around 32,500 contracts on the week through to Tuesday. The Commodity Weather Group, a US weather consultancy, cut their forecast for US yields this year to 136bpa, ten bushels lower than last week's USDA forecast that shocked the market. The US National Oceanic and Atmospheric Administration now say that the current drought is the worst since 1956. The US Agriculture Secretary though has refused to bow to pressure to reduce the US ethanol mandate to take some of the pressure off declining stock levels.
Wheat: Sep 12 CBOT Wheat closed at USD9.43 1/4, up 8 1/4 cents; Sep 12 KCBT Wheat closed at USD9.41, up 3 cents; Sep 12 MGEX Wheat closed at USD10.31 1/2, up 9 1/2 cents. Chicago and Kansas wheat were up the best part of a dollar on the week, with Minneapolis rising by around 75 cents. Funds were said to have been net buyers of around 5,000 Chicago wheat contracts on the day. Wheat continues to gain on spillover support from corn and soybeans, and also on much lower production, and therefore reduced export potential, out of the Black Sea this year. Chicago wheat posted the highest close for a front month since 2008 today. Wheat harvesting is underway in France, with early yields and quality both said to be good.
EU Wheat Closing Comments - Friday
20/07/12 -- EU grains finished mostly higher with Nov 12 London wheat up GBP0.50/tonne to GBP194.50/tonne and Nov 12 Paris wheat EUR2.25/tonne firmer at EUR269.50/tonne.
For the week as a whole Nov 12 London wheat was GBP6.50/tonne higher, whilst Nov 12 Paris wheat gained EUR10.75/tonne.
The wheat market continues to press higher after another week of punishment was dished out to US crops that saw both soybeans and corn post record highs.
A sharp fall in wheat production in Russia, Kazakhstan and Ukraine this year should make it easier for EU and US grain to make it into North Africa. The weakness of the euro will also help, with the pound rising above 1.128 against the single currency, a level not seen since 2008.
Not that that will help UK exports, but the market is the market, and it currently says that feed wheat for next Jul 2013 is worth GBP200.50/tonne.
In round figures that's around EUR257.50/tonne, which is not much more than Friday's closing price for May 13 Paris wheat of EUR264.50/tonne - the latter of course being for milling wheat - something that should indeed be in short supply in the UK this year.
Toepfer increased their estimate for the German wheat crop slightly to 23.18 MMT from 22.71 MMT previously due to plenty of rain in the past few months.
Ukraine's wheat production problems, which started with a very dry last autumn, and spread into increased winterkill appear also to have rubbed off on corn production too - with output now no longer expected to top last year's record crop.
Chicago Closing Comments
16/07/12 -- Soycomplex: Aug 12 Soybeans closed at $16.33 3/4, up 39 cents; Nov 12 Soybeans closed at $15.90 1/2, up 38 cents; Aug 12 Soybean Meal closed at USD478.30, up USD13.20; Aug 12 Soybean Oil closed at 54.65, up 95 points. Funds were said to have been net buyers of around 7,000 soybean contracts on the day as temperatures in the Midwest hit triple digits over the weekend. The USDA cut soybean crop ratings sharply once again, with only 34% now good/excellent and 30% now showing as poor/very poor.
Corn: Sep 12 Corn closed at USD7.76 3/4, up 36 1/4 cents,; Dec 12 Corn closed at USD7.72 1/2, up 32 1/4 cents. The USDA cut corn ratings by nine percentage points, with just 31% of the crop now rated good/excellent and 38% now said to be poor/very poor. 71% of the crop is now silking. "A strong ridge of high pressure is expected to shift westward toward the Rocky Mountains this week. This opens the door for cooling in the Great Lakes, but also brings a hot forecast to corn states west of the Mississippi River. Des Moines, Iowa, is expecting highs near 100 F Monday and Tuesday, cooling to 95-97 F Wednesday through Friday. Omaha, Nebraska, will be 98 F, or hotter, all week long capped off with a 100 F on Friday," say Martell Crop Projections.
Wheat: Sep 12 CBOT Wheat closed at USD8.84 1/2, up 36 3/4 cents; Sep 12 KCBT Wheat closed at USD8.84 1/2, up 33 1/2 cents; Sep 12 MGEX Wheat closed at USD9.83, up 33 1/2 cents. Funds were estimated as being net buyers of around 6,000 Chicago wheat contracts on the day. Spillover support from corn boosted wheat, along with further downgrades to Russian production and export hopes. The USDA pegged the US winter wheat harvest at 80% complete and dropped spring wheat good/excellent ratings by one point to 65%. Japan bought US HRS and white wheat over the weekend.
EU Wheat Closing Comments - Monday
16/07/12 -- EU grains closed sharply higher again with Nov 12 London wheat up GBP3.25/tonne to GBP191.25/tonne and Nov 12 Paris wheat EUR6.00/tonne firmer at EUR264.25/tonne.
The situation in the Black Sea is going from bad to worse.
Agritel now forecast wheat production in Ukraine down 41% to 12.90 MMT, with Russia's down 17% to 45.88 MMT and Kazakhstan's seen falling 48% to 11.90 MMT.
Exports are also forecast to slump alarmingly, with Ukraine only expected to ship 3.6 MMT of wheat this season, Russia 11.0 MMT and the Kazakh's 5.6 MMT.
The UK's economic prospects took another hit after the The International Monetary Fund said that growth here will only be 0.2% in 2012, a cut from their previous forecast of 0.8%, substantially worse even that Spain or Italy.
The US remains hot & dry. "Temperatures today and tomorrow are predicted near 100 F (37.8 C) today and tomorrow in the Midwest corn and soybean belt, but sharp cooling is predicted Wednesday and Thursday when the jet stream carves out a trough in the Great Lakes – Eastern Midwest" say Martell Crop Projections.
