Nogger's Blog

EU Wheat Ends Week With Modest Gains

07/09/12 -- EU wheat closed mixed on the day, with Nov 12 London wheat up GBP1.05/tonne to GBP205.95/tonne and Nov 12 Paris wheat climbing EUR3.50/tonne to EUR265.00/tonne.

For the week overall that places Nov 12 London wheat a modest GBP1.10/tonne higher, whilst Nov 12 Paris wheat has added an equally bashful EUR1.25/tonne.

Egypt may not have booked any French/German wheat in either of their tenders this week, but the inclusion of Romanian origin wheat, along with Russian and Ukraine grain, will still require an EU export licence and boost the weekly totals. Brussels issued 318,000 MT worth of soft wheat export certificates this past week, along with similar for 62,000 MT of barley.

For soft wheat, that brings the 2012/13 marketing year-to-date total to 2.12 MMT, and for barley it's an impressive 1.44 MMT - almost double year ago levels.

Export interest in UK wheat is however nonexistent at these levels, Europe has better quality wheat to sell at lower prices than those in the UK. Domestic consumers continue to adopt a "play it by ear" approach as to exactly what their minimum quality standards are, and what allowances they want/need to offer to accept low bushel weight wheat.

One story related to me this week concerned a feed mill that was rejecting 64kg/hl bushel weight wheat outright last Friday, but accepting it (albeit at a hefty allowance) by Monday.

It would seem that this sort of thing will persist until we get closer to the end of the harvest and the trade has a better handle on what is out there. Highly variable seems to be a good way of summing it up at the moment.

Stats Canada estimated wheat stocks there at the end of the 2011/12 marketing year ended July 31st at 5.88 MMT, 18% down on a year previously but 0.87 MMT more than the USDA currently suggest.

Rapeseed stocks were estimated at 0.79 MMT, 54% down on year ago levels, but also considerably higher than the 435 TMT forecast by the USDA.

Rabobank estimated the Australian wheat crop for 2012/13 at 22.79 MMT, almost 23% down on last season's record 29.5 MMT, principally due to drought in Western Australia state.

That's more than 3 MMT less than the USDA currently suggest. Even so, the large carryover from last year's crop may mean that Australian wheat exports don't fall too much from the 23 MMT they are expected to have shipped out in 2011/12.

Chicago Closing Comments - Thursday

06/09/12 -- Soycomplex: Sep 12 Soybeans closed at USD17.44 1/2, down 3 1/2 cents; Nov 12 Soybeans closed at USD17.47, down 1/2 cent; Sep 12 Soybean Meal closed at USD531.80, down USD0.20; Sep 12 Soybean Oil closed at 56.78, down 58 points. Funds finished around even on the day, and so did the soya market. Fresh news was scarce. Conab estimated the 2011/12 Brazilian soybean crop at 66.4 MMT, unchanged from their previous forecast and almost a million tonnes higher than the USDA. Despite that being 12% down on output in the previous marketing year they forecast exports in 2011/12 at 31.25 MMT, which is only a 5% fall on last season's 32.986 MMT. Meal and soyoil exports estimates for 2011/12 were raised to 14.81 MMT and 1.8 MMT respectively. They haven't put a figure on new crop soybean production yet, planting of which begins in just over a week in Mato Grosso. Trade estimates for tomorrow's weekly export sales report are in the range of 700,000-900,000 MT. Informa are due out mid-session Friday with their revised September crop production estimates.

Corn: Sep 12 Corn closed at USD7.97 1/4, up 7 1/2 cents; Dec 12 Corn closed at USD7.98 1/2, up 7 3/4 cents. Funds were said to have been net buyers of around 7,000 corn contracts on the day. The Buenos Aires Grains Exchange estimated Argentina’s 2012/13 corn planted area at 3.4 million hectares versus a previous estimate of 3.1 million on ideas that abundant August rains will encourage higher planting than had previously been thought, although that is still 0.2 million ha below the USDA's current figure. The USDA announced the sale of 184,912 MT of US corn to unknown for 2012/13 delivery, along with a further 32,512 MT to unknown for 2013/14 delivery. Tomorrow's weekly export sales report will be interesting as there has been signs of waning demand at these levels. Brazilian corn exports meanwhile are running at a record pace. South Korea bought 124 TMT of Brazilian corn for December shipment. Conab held their estimate for Brazilian corn production in 2011/12 unchanged at a record 72.7 MMT. Exports were raised 2 MMT to 16 MMT. Estimates for tomorrow's sales report are 200,000 to 350,000 MT for the last week of the 2011/12 marketing year.

Wheat: Sep 12 CBOT Wheat closed at USD8.72, up 26 1/4 cents; Sep 12 KCBT Wheat closed at USD8.87 1/2, up 24 1/2 cents; Sep 12 MGEX Wheat closed at USD9.29 1/4, up 15 3/4 cents. Chicago wheat broke a run of four straight days of declines, with funds buying an estimated 5,000 wheat contracts on the day. Egypt was back in the market for wheat, buying their second decent slug in less than a week. They picked up 300,000 MT from Russia and Romania for October 21-31 delivery and a further 175,000 MT from Ukraine, Russia and Romania for November 1-10 delivery. The fact that Egypt are back and buying in a big way appeared to offer the market more comfort than the fact that the US was again absent from the winning bids, and that Russian wheat was offered for November delivery. IKAR said that Russia may import 2.5 MMT of wheat from Kazakhstan this year. It is also being suggested that the Russian government are prepared to release intervention stocks onto the market in an effort to avoid an outright grain export ban. Trade estimates for tomorrow’s weekly export sales report are 450,000 to 650,000 MT.

EU Grains Mostly Higher, Russian Uncertainty Remains

06/09/12 -- EU grains ended mixed but mostly a little higher with Nov 12 London wheat up GBP1.25/tonne to close at GBP204.90/tonne and with Nov 12 Paris wheat EUR1.50/tonne firmer at EUR261.50/tonne.

Uncertainty remains with regards to the Russian wheat/grain situation. The FAO released their latest estimates, pegging Russian wheat output at 40 MMT this year, which is roughly in the middle of recent estimates of 38-41.3 MMT.

The Russian Ministry said that the grain harvest total there so far stands at 56.5 MMT vs 66 MMT at same date in 2011 and 45 MMT in 2010. They didn't however specifically say off what percentage of the planted area this total comes from, although it is likely to be around the 70% mark.

Of that volume 33.6 MMT is wheat, versus 41 MMT a year ago at this stage.

They also said that they may export up to 14 MMT of grains in the 2012/13 season, of which they've already exported 5.3 MMT between July 1 and September 5.

In addition, a report on Reuters said that Russia will air it's views on grains at an urgent G20 summit on October to convened to discuss "dramatic price rises on global grain markets" after more precise harvest data was available.

Nevertheless the leader of the Russian Grain Union said that, with regards to any possible export embargo,  no action will be taken before the end of the year.

Maybe they don't want to compromise Russian winter grain plantings, which are currently forecast rising more than 4% to 16.8 million hectares this year.

There is now talk of Russia dipping into it's intervention stocks rather than issue an export ban and risk upsetting the WTO so soon after finally gaining membership.

Elsewhere thoughts are also turning to new crop plantings. In Ukraine, leading agronomist Mike Lee says that "new crop rape is going back in to the ground, mainly in to warm moist seedbeds which is very different from this time last year. (This also) bodes well for wheat plantings due to start in about three weeks."

Surface soil moisture amounts in Ukraine are at the highest level in the last eight years, report Agrimoney. They also quote a leading grain marketing economist at a Texas University as saying that the US winter wheat area will rise 2 million acres for the 2013 harvest.

Back to this season, at home the HGCA say that 63% of the combinable crop area is harvested, which is behind the average of 85% for this time of year "due primarily to the late ripening of crops, but exacerbated by recent slow progress."

The wheat harvest has now limped past halfway, at 55% done with yields expected to be below average at 7.1-7.5 MT/ha, with recent results suggesting the lower end of that range, and specific weights also low - generally in the range of 60-72 kg/hl, they add.

EU Rapemeal Prices Down Sharply

06/09/12 -- Rapemeal prices on the continent are down sharply today, following overnight losses in Chicago soymeal market.

Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:

Morning News

06/09/12 -- The overnight electronic market is mixed with beans extended declines from the record highs posted Tuesday, currently 5-10 cents weaker. Corn is 3-4 cents higher and wheat up 10-12 cents.

Wheat appears to be staging a little correction after four straight days of declines, and nine drops in ten.

There seems to be a feeling that a line has been drawn under declining US soybean yields, with FCStone yesterday surprisingly upping their forecast by half a bushel/acre to 36.7 bpa, 0.6 bpa higher than the USDA currently project.

For corn though, they came in at 121.4 bpa, which is 3 bpa lower than the USDA's August estimate. Other forecasts are lower still, around the 117-119 bpa mark. There is also a feeling that the USDA are still too high on their harvested acres estimate.

Linn Group yesterday reportedly estimated the US corn crop below 10 billion bushels at 9.954 billion on a yield of 119.9 bpa, which would suggest a harvested area of around 83 million acres. The USDA is currently using an estimate of 87.36 million acres, almost 4.5 million higher than Linn Group.

For wheat the market is switching it's attention to Argentina and Australia, who accounted for 23.1% of world wheat exports in 2011/12, despite only having 6.4% of the world's production.

Both of those countries have seen a lower wheat area for 2012/13 due to a switch into other crops and/or unfavourable weather conditions at planting time. Heavy August rains completely wiped out Argentina's accumulated rainfall deficit, although parts of Australia, particularly Western Australia state, are still too dry.

Their combined wheat output in 2012/13 is seen falling 7 MMT, or 5.6% of global wheat production, with their exports down 7.5 MMT cutting their share of the world market to 20.1%.

The market is also watching conditions on the US Plains. "Kansas field moisture has improved with increasing showers the past couple of weeks though conditions are still very dry. As of September 2, topsoil moisture was 47% very short, 27% short and 26% adequate," say Martell Crop Projections.

"Kansas wheat planting typically begins in mid September, reaching 25% complete September 22, 55% by October 4 and 75% October 12. Rainfall needs to increase to fully replenish field moisture following a hot, dry summer," they say.

Luckily, it appears that that is exactly what they are going to get: "The 5-day forecast looks wet in the southern Plains. The 0.50 – 3 inches of rain predicted would be ideal for fall wheat planting in Oklahoma, southern Kansas and West Texas. Besides more rain, the new forecast is also cooler in the US heartland and more favourable for conserving field moisture," they add. There's a copy of their 5-day rainfall forecast map: here

Egypt are testing the water, issuing wheat tenders last night for Oct 21-31 and Nov 1-10 delivery. Will Russian wheat win the lion's share again? Will they feel comfortable offering November? And if they do, will Egypt feel OK about buying it? The results should answer a few questions.

Chicago Falls, Wheat Down For Ninth Session In Past Ten

05/09/12 -- Soycomplex: Sep 12 Soybeans closed at USD17.48, down 23 cents; Nov 12 Soybeans closed at USD17.47 1/2, down 20 3/4 cents; Sep 12 Soybean Meal closed at USD532.00, down USD9.40; Sep 12 Soybean Oil closed at 57.36, down 21 points. Profit-taking continued, with funds selling an estimated 7,000 soybean contracts on the day. Maybe the trade is a little nervous of what the USDA might say ion next week's WASDE report in the light of the recent Isaac rains? FCStone were the latest analysts to offer up their estimates ahead of next Wednesday's report, and they actually increased soybean yields by half a bushel/acre from their previous estimate to 36.7 bu/acre, which is 0.6 bu/acre more that the USDA forecast last month. Production was predicted at 2.739 billion bushels versus their previous estimate of 2.730 billion and 2.692 billion from the USDA in August. Celeres estimated Brazil’s 2012/13 soybean crop at a record 78.1 MMT, up 18% from a year ago, although around 3-5 MMT lower than most other trade forecasts. Because of Labor Day, the USDA's weekly export sales report will be delayed until Friday morning. Informa Economics are also due out mid-session Friday with their latest estimates on soybean and corn yields.

Corn: Sep 12 Corn closed at USD7.89 3/4, down 17 1/4 cents; Dec 12 Corn closed at USD7.90 3/4, down 14 1/4 cents. Funds were estimated to have been net sellers of around 9,000 corn contracts on the day. It seems that rival corn crops around the world may be generally a little lower in 2012, but not dramatically so. This will provide competition for US corn on the world export stage, unlike the soybean market which the US more or less has to itself for the remainder of 2012. UkrAgroConsult estimated Ukraine, Russia, Bulgaria, and Romania's 2012 corn crop 37.0 MMT versus 39.7 MMT in 2011. They placed Ukraine’s 2012/13 corn exports at 12.5 MMT versus 15.0 MMT a year ago. SovEcon estimated Russia’s 2012 corn crop at 6.8 MMT versus 7.0 MMT a year ago and more than double the 3.1 MMT harvested in 2010. Mexico's Ag Ministry estimated Mexico’s 2012 corn production at 23.0 MMT versus a previous estimate of 21.8 MMT and 1.5 MMT above the USDA's forecast. Mexico are the world's largest corn importer after Japan, and the USDA already see them buying 24% less corn in 2012/13 than last year. FCStone cut their forecast for US corn yields this year to 121.4 bu/acre versus their previous estimate of 124.3 bu/acre and 123.4 bu/acre from the USDA. US corn production was pegged at 10.607 billion bushels versus a previous estimate of 11.043 billion and 10.779 billion from the USDA in August.

Wheat: Sep 12 CBOT Wheat closed at USD8.45 3/4, down 20 1/4 cents; Sep 12 KCBT Wheat closed at USD8.62, down 19 1/4 cents; Sep 12 MGEX Wheat closed at USD9.17, down 11 3/4 cents. Funds were said to have been net sellers of around 3,000 CBOT wheat contracts on the day. This was the ninth lower close for Chicago wheat in the last ten sessions. The USDA attaché in Moscow estimated the Russian 2012 wheat crop at 41 MMT, with the APK-Inform agency suggesting 41.3 MMT. Whilst both are well down on last year's crop of 56.2 MMT, neither are as low as last week's sub-40 MMT estimates from SovEcon and IKAR. The trade is still none the wiser as to how the Russian government will tackle the current rate of exports. The USDA attaché in Moscow went on to estimate Russia’s 2012/13 grain exports at 11.5 MMT (including 8 MMT of wheat) versus 28.1 MMT in 2011/12. Their total grain crop in 2012 was forecast at 73 MMT versus 94 MMT in 2011, although again a bit higher than SovEcon and IKAR suggest. It is also well above the 61 MMT output that sparked the export ban in 2010. After the close Egypt's GASC issued a tender for wheat for Oct 21-31 and Nov 1-10 delivery. It will be very interesting to see if Russian origin is offered for the November position, as they've reported no export sales past October yet. US wheat was priced out by around USD40/tonne, before freight, in Egypt's last tender at the weekend.

EU Wheat Drfits Lower On Lack Of Fresh News

05/09/12 -- EU grains were mostly lower with Nov 12 London wheat down GBP0.85/tonne to GBP203.65/tonne and Nov 12 Paris wheat falling EUR2.75/tonne to EUR260.00/tonne.

Once again fresh news was thin on the ground, encouraging profit-taking. Whilst none of the markets look particularly bearish, a lower close in Chicago wheat tonight (which is where it is as Europe closes) would be the ninth decline in the last ten sessions.

APK-Inform pegged the Russian wheat crop at 41.3 MMT, with the USDA attache in Moscow estimating the crop at 41.0 MMT. Whilst neither figure is up to much compared to output of 56.2 MMT last year, both are above recent estimates from SovEcon and IKAR last week of 38-39 MMT.

The Russian grain harvest 65% complete at 55 MMT with average yields 27% down at 1.9 MT/ha say Ministry. In Ukraine, the grain harvest is 67% done at 25.8 MMT with average yields down 15% to 2.57 MT/ha say their local Ministry.

An assortment of private analyst's production estimates now seem to be narrowing the range on US soybean and corn yields to around the 34.5-35.0 bu/acre region for the former and 117-119 bu/acre for the latter. Both would be around 4% lower than the USDA said last month.

Recent heavy Midwest rains associated with the leftovers of Hurricane Issac may be too late to help corn or soybeans much, but they are seen boosting soil moisture ahead of winter wheat plantings.

Meanwhile, it's not just the UK that has had a problem with wet and dull growing conditions this summer.

"Statistics Canada anticipates a bumper wheat harvest of near 27 MMT there this season, but crop quality and yields are in jeopardy from extremely wet growing conditions in northern Saskatchewan. Numerous reports of flooding and disease have been issued as grain swathing began the last week of August," report Martell Crop Projections.

"Saskatchewan has been persistently wet all summer in the northern third of the province, where June-August rainfall accumulated to 150-200% of normal. More heavy rain developed again last week ranging from 50- 140 millimetres. Northeastern Saskatchewan producers reported 32% surplus field moisture in the August 21-27 farm report," they report.

"Below-normal yields are anticipated in northwestern, north-central and northeastern Saskatchewan, where producers complained about damage from flooding, winds and hail. Incidence of fungus diseases were also increasing, particularly sclerotina. High vomitoxin also has been reported, another threat to grain quality," they add.

EU Rapemeal Prices

05/09/12 -- Rapemeal prices on the continent are mixed, a bit weaker nearby and a little steadier in the discounted forward positions.

Guide prices, basis FOB Lower Rhine in euros/metric tonne, with change from previous session:

The Morning Vibe

05/09/12 -- The overnight Globex market sees beans 8-10 cents lower, with corn down 4-5 cents and wheat anywhere from 2-6 cents easier.

Last night's crop progress report from the USDA left both soybean and corn good/excellent conditions unchanged from last week at 30% and 22% respectively.

Corn harvesting moved on to 10% done, from 6% a week ago and 3% normally. Not a great advance which was probably due to rains from Hurricane Isaac. Spring wheat harvesting is now 95% done versus 72% normally.

An assortment of private firms are now predicting US soybean yields in the 34.5-35.0 bpa region versus the USDA's August estimate of 36.1 bpa. For corn trade guesses currently seem to be centred around 117-119 bpa, versus the USDA's 123.4 bpa. FCStone are out with their numbers later today and Informa come out on Friday.

With all the doom and gloom in the northern hemisphere, attention is now switching to the southern hemisphere as corn and soybean planting in South America gets underway.

"Argentina field moisture has been completely restored following a serious winter drought, suggesting corn plantings may increase this season. If El Nino takes hold, the yield outlook would be considerably brighter than last year, when severe drought decimated the crop," say Martell Crop Projections.

"The USDA anticipates a 33% increase in Argentina corn production this season, 28 MMT compared to 21 MMT in last season’s drought-ravaged harvest. This would allow for 18.5 MMT of corn for export, 6.7 MMT higher than 2011-12.

"Corn planting is due to start within the next 2-3 weeks, weather permitting. Planting begins in Buenos Aires in the south, finishing in early October in Cordoba and Santa Fe. Soybeans are planted much later than corn, mostly in November-early December," they add.

Brazilian farmers are expected to ramp up their soybean plantings to a record acreage this year. The USDA currently estimate 2012/13 soybean production there at 81 MMT, with most private analysts lining up a little above that in the 81.3-82.23 MMT region. The latter would mean an increase in this year's output of around 25%.

Conab come out with their first 2012/13 Brazilian crop report on Oct 9th.

Elsewhere, Russia's wheat harvest may reach 41.3 MMT, according to the APK-Inform Agency, which is a bit better than the 38-39 MMT estimates released last week by SovEcon and IKAR.

Ukraine's grain harvest is two thirds done producing 25.8 MMT so far with yields averaging 2.57 MT/ha, according to the Ag Ministry there. Yields this time last year were 3.03 MT/ha. The corn harvest is just getting underway at 2% done.

The UN yesterday made another impassioned plea for "swift and co-ordinated" action to stave off rising food prices and fight world hunger. In the firing line are western government's biofuels mandates, along with "panic buying" and an appeal (presumably aimed at the Black Sea region) not to introduce export bans.

A White House spokesman said "well, we'd like to help, but it's an election year." David Cameron said "What's a mandate? That's something that gay men go on isn't it? We can't ban that. There'd be uproar in the House of Lords."

Chicago Soybeans Slip From Record Highs

04/09/12 -- Soycomplex: Sep 12 Soybeans closed at USD17.71, up 6 1/2 cents; Nov 12 Soybeans closed at USD17.68 1/4, up 11 3/4 cents; Sep 12 Soybean Meal closed at USD541.40, down USD5.70; Sep 12 Soybean Oil closed at 57.57, up 115 points. Beans and meal raced to new contract highs in electronic trade, although profit-taking kicked in to pare those gains later in the day. Funds were said to have ended up as net buyers of around 4,000 soybean contracts on the day. The remains of Hurricane Isaac brought drenching weekend rains to the lower Mississippi Valley and eastern Midwest, which will have improved soil moisture, but came too late to help soybeans pod filling, say Martell Crop Projections. Allendale estimated the US soybean yield at 34.9 bpa versus the USDA's August estimate of 36.1 bpa, and place the 2012 US soybean crop at 2.602 billion bushels versus the USDA August estimate of 2.692 billion. Dr Michael Cordonnier came out with a yield estimate of 34.5 bpa, and it is rumoured that satellite technology analysts Lanworth are now saying 35.0 bpa. It would seem therefore that we finally have a fairly narrow and consistent range of trade guesses after a summer of great disparity. FCStone are expected to release their latest production estimates tomorrow afternoon with Informa due on Friday morning ahead of the USDA's own revised numbers are out next Wednesday.

Corn: Sep 12 Corn closed at USD8.07, up 4 1/4 cents; Dec 12 Corn closed at USD8.05, up 5 1/4 cents. Corn also closed well off session highs, although funds were given credit for having been net buyers of around 7,000 contracts on the day. Allendale estimate the 2012 US corn yield at 118.2 bpa versus the USDA's August estimate of 123.4 bpa. This year's US corn crop is estimated at 10.326 billion bushels compared to 10.779 billion from the USDA. Dr Cordonnier came up with an estimate of 119.0 bpa, down 2bpa from his previous estimate of 121.0 bpa. Unconfirmed reports suggest that Lanworth lowered their corn production by 2.5% to 10.195 billion, using a US yield of 116.64 bpa. The USDA announced the sale of 180 TMT of US corn to Japan for 2013/14 delivery. Further evidence of demand rationing, at least for old crop corn, came via the USDA's weekly export inspections report. For corn just 6.37 million bushels were inspected for export this week, compared to 15.061 million last week. Export interest is clearly switching elsewhere. Brazil's Ministry says that the nation exported a record 2.76 MMT of corn in August versus 1.70MTM in July and 1.52 MMT in Aug 2011. Safras e Mercado estimated Brazil’s 2012/13 corn crop at 68.03 MMT, down 6% from a year ago.

Wheat: Sep 12 CBOT Wheat closed at USD8.66, down 4 cents; Sep 12 KCBT Wheat closed at USD8.81 1/4, up 1/2 cent; Sep 12 MGEX Wheat closed at USD9.28 3/4, down 3 cents. Fund activity was said to have been around even on the day for Chicago wheat. US wheat was well priced out of Egypt's weekend tender, the majority of which went to Russian origin grain. Russia’s Ag Ministry said that the grain harvest there is 65% complete with an average yield of 1.89 MT/ha down 27% from a year ago. The average wheat yield is 1.95 MT/ha versus 2.87 MT/ha a year ago. Things are even worse in Kazakhstan where they've harvested 6.4 MMT of grain off 55% of the planted area, with yields at just 0.75 MT/ha, almost half the 1.4 MT/ha level of a year ago. The USDA reported weekly export inspections for wheat of 25.446 million bushels, up almost 35% on the 18.888 million inspected for export last week, and well above the 10-15 million that the trade was expecting. The USDA reported spring wheat harvesting almost over at 95% complete, versus 72% normally. In the southern hemisphere, Australian wheat areas picked up only light showers across the weekend, with coverage of around 25%. Argentine wheat areas continue to see abundant moisture, although farmers there have sown the smallest wheat area in at least 50 years, according to one local Cereals Exchange.

EU Grains Closing Comments

04/09/12 -- EU wheat closed mixed with Nov 12 London wheat unchanged at GBP204.50/tonne and Nov 12 Paris wheat down EUR1.75/tonne to EUR262.75/tonne.

US markets re-opened strongly after their 3-day long weekend, although they'd begun to slip off from the highs by the time Europe was entering the home stretch. Chicago soybeans set fresh all time highs in early trade.

There are reports circulating of an unusual Glencore sale of 60 TMT of barley to Iran loading at the port of Rouen in northwest France this week, which would be the first such sale to Iran for quite a few years. Western sanctions against the Middle Eastern buyer do not include food, of course.

The news is interesting as it comes at a time when EU-27 2012/13 barley sales are already running well ahead of last year's levels. Brussels have issued 1.4 MMT of barley export licences so far in the new marketing year, versus only 757 TMT at this time in 2011.

Whilst EU-27 barley production is forecast steady at 52.85 MMT this year, a modest increase of 2.7% on last year, other producer's output has fallen sharply in 2012. Kazakhstan's crop is down 42%, with Ukraine's falling 27.5% and Russia's output seen declining almost 15% this year, according to the USDA.

That leaves the EU-27 well placed to take advantage of whatever barley export business is around into the Middle East, as we possess a significant freight advantage to other traditional barley exporters such as Australia, Canada and Argentina.

The USDA forecast Kazakhstan's barley exports to fall 75% in 2012/13, with Russia's seen down 37.5% and Ukraine's declining 13%.

The world's largest barley importer is Saudi Arabia, accounting for 42% of all world trade in the grain.

Kazakhstan's Ministry says that the nation has harvested 6.4 MMT of grain off 55% of the planted area, with yields almost half that of those of a year ago at just 0.75 MT/ha.

Russian wheat won the majority of the weekend's Egyptian tender, but there is a feeling around that this may be a good thing, as the sooner they sell whatever their exportable surplus might be this year then the better.

Heading into the close of European trade the USDA reported US wheat export inspections of 25.446 million bushels, up almost 35% on the 18.888 million inspected for export last week. That would seem to indicate that the US is finding steady offtake for it's own wheat even if it is a premium to Black Sea origin grain.

The Late Lunch

04/09/12 -- The overnight electronic market is drifting a little easier after Sep 12 beans made a new historic high overnight of USD17.94 3/4 versus the previous all time high of USD17.80 3/4. Front month Sep 12 is currently "only" 13 3/4 cents higher at USD17.78 1/4. Wheat is up 3-5 cents and corn around 5-7 cents higher.

There's speculation that the ECB will announce measures to boost economy this week, although we've seen/heard that one all before.

CNGOIC estimate China’s soybean imports are starting to slip with Sep and Oct shipments forecast at a combined 7.0 MMT, adding that Aug imports were 4.7 MMT.

Allendale estimate the 2012 US corn yield at 118.2 bpa versus the USDA's August estimate of 123.4 bpa. This year's US corn crop is estimated at 10.326 billion bushels compared to 10.779 billion from the USDA.

They put the US soybean yield at 34.9 bpa versus the USDA's August estimate of 36.1 bpa, and place the 2012 US soybean crop at 2.602 billion bushels versus the USDA August estimate of 2.692 billion.

FCStone are expected to release their latest production estimates tomorrow afternoon with Informa due on Friday morning. The USDA are out next Wednesday.

Martell Crop Projections say that "Hurricane Isaac delivered heavy soaking rain to the lower Mississippi Valley and Eastern Midwest, improving soybean prospects, though the rain came too late in the soybean pod filling stage for the maximum yield benefits."

Brazil's soybean exports are slowing, if that is down to dwindling stocks (as it seems to be), then the US is shaping up to have the export market to itself for the remainder of 2012.

EU Rapemeal Prices

04/09/12 -- Rapemeal prices on the continent are firmer, following overnight gains in the electronic Globex soymeal market.

Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:

The Morning Paper

04/09/12 -- The overnight electronic market is sharply higher, with soybeans closing in on the USD18/bushel mark for the first time ever. Front month Sep 12 has reached USD17.94 3/4 in overnight trade, and currently stands 21 1/2 cents higher at USD17.86/bu. Corn and wheat are both around 7-10 cents higher.

Beans still look like the one with the most upside to me. News out of Brazil is that they only shipped less than 2 MMT of soybeans out in the first four weeks of August, less than half the volume exported in July. Logistics might have something to do with it, but the trade is thinking that this is a clear sign that soybean supplies in South America are already running low.

There's been very little evidence thus far of USD17 beans rationing demand. The USDA's weekly export sales report continues to show robust volumes being sold, at least for soybeans. CNGOIC said today that China's August soybean imports were probably around 4.7 MMT, which is a bit more than the 4.5 MMT previously forecast. That would bring China's imports for the calendar year to date to 33.7 MMT.

Soybean imports this month and next may decline to less than a combined 7 MMT however on poor domestic crush margins, they add. We shall see. The government are doing their best to keep a lid on prices by auctioning off 400 TMT of soybeans every two weeks, with the last two auctions both fully subscribed. It also remains to be seen how long they can keep that up for, and what the quality of the beans on offer is like.

Wheat is up overnight, unperturbed by the revelation that US wheat was USD40/tonne outpriced in Egypt's weekend tender. The feeling there is clearly "let Russia sell all it's cheaper wheat, the more they sell now the quicker they will be out of the market." Not unsound reasoning, there's a hell of a long way to the 2013 crop.

From a UK perspective, if we are going to see wheat go significantly higher from where it is now then it's likely to be in the Apr/Jun 2013 period.  UK on-farm wheat stocks going into 2012/13 were the lowest since 1999/2000, according to the HGCA. Production this year looks like being little more than 14 MMT, Ensus have re-opened and Vivergo should also be operational by then, so stocks should be pretty tight come the last quarter of 2012/13.

Kazakhstan has harvested 6.4 MMT of grain off 55% of the planted area, with yields almost half that of a year ago at just 0.75 MT/ha. That doesn't make things in the UK sound quite so bad after all does it?

In the southern hemisphere, Australian wheat areas picked up only light showers across the weekend, with coverage of around 25%. Only further light relief is in the forecast for the rest of the week and first half of next week. Meanwhile Argentine farmers have planted their smallest wheat area in at least 50 years, according to the Bahia Blanca Cereals Exchange.

EU Wheat Mixed In Thin Trade

03/09/12 -- EU grains ended narrowly mixed with Nov 12 London wheat down GBP0.35/tonne to close at GBP204.50/tonne and with Nov 12 Paris wheat EUR0.75/tonne firmer at EUR264.50/tonne.

With America closed for the Labor Day holiday, fresh news was hard to come by and volume was light in an extremely dull session.

With the kids going back to school this week, the UK weather is predictably finally improving, which should see the wheat harvest move northwards with significant progress expected by the end of the week.

Hopefully quality will improve, even if optimism isn't too high over yields.

The HGCA noted last week that the poor results seen so far are from a survey "biased towards earlier harvested bread milling wheat, so figures can be expected to change when more nabim group 3 and 4 varieties have been harvested."

Ensus are back up and running and taking in wheat I understand.

Meanwhile, UK on-farm wheat stocks at the end of June were the lowest since 1999/2000, report the HGCA.

Saudi Arabia bought 575 TMT of hard wheat over the weekend, split between European, Australian and "north and south American" origin. It is unclear if by "north American" they mean US or Canadian wheat.

Egypt were also in the market, booking 365 TMT of Russian, Ukraine and Romanian wheat in its largest purchase of the season so far. Russia proved that they aren't out of the market just yet, picking up the lion's share of the order by winning four cargoes worth of the business, whilst Ukraine and Romania picked up one apiece. US wheat proved to be around USD40/tonne too expensive, and that's before more expensive freight is added on top.

Ukraine has had a busy start to the new 2012/13 marketing year, exporting 60% more grain than in the same period last year. They shipped out 1.78 MMT of grain in August, bringing the marketing year-to-date total to a fraction under 3 MMT, including 1.3 MMT of wheat, 1.1 MMT of corn and over 550 TMT of barley.

Ukraine's Ag Ministry forecasts 2012/13 grain exports at around 20 MMT, approximately 8% down on the 21.8 MMT shipped in 2011/12.

There's not much on the agenda this week as far as important data releases are concerned. The USDA's usual weekly crop progress report is delayed until tomorrow night. Next week offers a bit more excitement potential though. The USDA's world supply & demand numbers are out on Wednesday September 12.

Also that day, Germany's Constitutional Court is due to rule on whether the European Stability Mechanism (ESM) is lawful under the German constitution. Morgan Stanley apparently rate the chances of a 'No' verdict as high as 40 percent, according to Reuters. If they did vote against it, that would potentially savage the euro.

EU Rapemeal Prices

03/09/12 -- Rapemeal prices on the continent are little changed today with Chicago markets closed for the Labor Day holiday. UK rapemeal is up almost GBP60/tonne in the past 12 weeks, mimicing gains in soymeal which is up by more than GBP100/tonne in the same period.

Guide prices, basis FOB Lower Rhine in euros/metric tonne, with change from previous session:

News Snippets

03/09/12 -- There's no overnight Globex market this morning due to the Labor Day holiday, so today is already shaping up to be a bit of a non-event.

The results of the Saudi tender are out, and they bought 575 TMT of hard wheat, spreading the business around between the EU, Australia and north & south America for shipment between December and February.

Egypt also bought wheat over the weekend, taking 365 TMT of Russian, Ukraine and Romanian material for Oct. 11-20 shipment. Prices were around USD321-323/tonne, with US wheat well priced out at around USD40/tonne more than that. EU wheat wasn't even offered. Russia picked up the lion's share of the business with 240 TMT.

Bangladesh are tendering for 50 TMT of wheat, with the lowest offer reported to be USD344 CIF.

Ben Bernanke kept hopes of QE3 alive in his speech at the Jackson Hole on Friday afternoon, weakening the US dollar.

The Kazakh Farmers' Union estimate the grain harvest there at 11 MMT, versus the Ministry's figure of 12.5 MMT.

Belarus has harvested 8.7 MMT of grain off 96% of the planted area, according to the Ag Ministry there.

India says it's sold 250 TMT of soymeal to Asian buyers in recent weeks in the face of strong demand and high world prices.

Parts of the Midwest picked up 3-5 inches of rain over the weekend, thanks to the remnants of Hurricane Isaac.