Chicago Soybeans Slump To 5-Month Low

16/11/12 -- Soycomplex: Jan 13 Soybeans closed at USD13.83 1/4, down 18 3/4 cents; Mar 13 Soybeans closed at USD13.68, down 16 cents; Dec 12 Soybean Meal closed at USD424.60, down USD5.90; Dec 12 Soybean Oil closed at 47.05, down 0.41 points. For the week overall Jan 13 beans were down 83 1/4 cents with Dec 12 meal lost USD25.10 and Dec 12 oil fell 65 points. Fund selling in beans was estimated at 4,000 contracts on the day. Today's commitment of traders report shows trend following funds reducing their net long in soybeans from 129,657 to 95,554 in the week through to Tuesday night. Trade estimates have them shedding a further 10-12,000 since then. Front month soybeans are now down 22% from the early September highs to 5-month lows. Adding pressure today were reports that China had cancelled around 600 TMT of soybeans purchased from the US. Weekly export sales from the USDA beat trade expectations of 250-500 TMT at a combined 585,200 MT. Weekly shipments were very strong again, surpassing even last week's two year high at 1.8 MMT. A return to wet weather in Argentina may see up to 20% of the intended corn acreage not get planted in time, according to local estimates. That may lead to an increase in soybean sowings.

Corn: Dec 12 Corn closed at USD7.27, up 5 3/4 cents; Mar 13 Corn closed at USD7.31, up 6 cents. For the week Dec 12 corn was 11 3/4 cents lower whilst Mar 13 fell 11 cents. Corn found support on news that the EPA wasn't going to change the US ethanol mandate. Weekly export sales of a combined 312,100 MT were in line with trade ideas of 200-400 TMT, although only 103,900 MT of that was for the 2012/2013 marketing year. Delays in Argentine corn plantings were supportive as was news of Taiwan becoming the latest nation to switch their corn buying away from Brazil due to port congestion causing shipping delays of up to two months there. In Argentina, Martell Crop Projections say that "November warmth and sunshine had allowed spring planting to make modest gains. By mid November, 45% of intended corn was sown but still way behind schedule. The updated forecast is wetter in Buenos Aires, now calling for 2-3 inches of rainfall (50-75 millimetres). The first wave of strong thunderstorms comes Sunday, a 70% risk in western Buenos Aires and La Pampa. A second chance for showers comes Wednesday."

Wheat: Dec 12 CBOT Wheat closed at USD8.38, down 7 1/2 cents; Dec 12 KCBT Wheat closed at USD8.76, down 10 1/2 cents; Dec 12 MGEX Wheat closed at USD9.09 3/4, down 10 1/2 cents. For the week as a whole Chicago wheat was down 48 1/2 cents, with Kansas falling 46 1/4 cents and Minneapolis down 40 3/4 cents. Chicago wheat settled at a four month low. Weekly export sales of 314,600 MT were uninspiring, although in line with trade estimates of 250-450 TMT. Sales need to average 550 TMT a week to hit the USDA's 2012/13 export projections. US wheat prices have got more competitive of late, but they need to start picking up more sales soon to come close to this USDA target. New crop prospects are far from ideal. "The US weather forecast indicates continuing drought in hard red winter wheat from a dominant ridge of high pressure. Not only is the near-term forecast dry, but also the 6-10 day forecast. This comes on the heels of a very dry October in the key bread wheat states," say Martell Crop Projections.

EU Wheat Follows America Lower As Funds Exit

16/11/12 – EU grains closed generally lower with Nov 12 London wheat down GBP2.00/tonne at GBP215.00/tonne, with benchmark May 13 GBP1.10/tonne lower at GBP220.75/tonne and new crop Nov 13 down GBP1.50/tonne to GBP187.50/tonne. Jan 13 Paris wheat ended unchanged at EUR269.25/tonne.

For the week that puts Nov 12 London wheat GBP5.75/tonne lower, May 13 down GBP6.25/tonne and Jan 13 Paris wheat EUR7.75/tonne easier.

EU grains have followed America lower this week, with soybeans leading the way and dragging wheat down with it on fund liquidation, regardless of the fact that there are still plenty of bullish factors in the market for wheat.

Ukraine appear to have confirmed a Dec 1 wheat export ban, although they quickly rescinded similar restrictions set to begin on Nov 15 last month when Egypt rebuked them. Egypt's second half November purchases from Ukraine will be honoured and no more wheat will then be shipped until summer of 2013, that's the way the situation looks now at least.

It can only also be a matter of time before Russian wheat exports dry up, with demand seen switching to Europe. That may have begun to happen already judged by yesterday's announcement that Brussels had issued almost 700 TMT of weekly soft wheat export licences - the largest weekly total since September 2010 just after Russia had announced it's last export ban.

This year's Russian wheat crop is smaller than the one of 2010, as indeed is Europe's. Despite strong early season competition from the Black Sea this week's export licences bring the 2012/13 season's total so far to 6.4 MMT, more than 10% up on this time a year ago and production in Europe last year was 4% higher than in 2012.

EU-27 barley exports are also well ahead of last season at 2.3 MMT, an increase of nearly 28% on this time a year ago.

Meanwhile US wheat is heading into winter dormancy poorly established and in the worst condition it's ever been in and French and UK wheat plantings are well behind schedule and crops here too are looking pretty shabby.

For now however it would seem that the prospect of America falling off it's widely touted "fiscal cliff" carries more clout than any of the above within the speculative community. As we have seen before when they are all stampeding for the exits the market is only going to go one way regardless of the fundamentals.

The Morning Vibe

16/11/12 -- The overnight electronic market is lower, with beans extending their run of bad luck, down around 5-8 cents, with wheat 1-3 cents weaker and corn a cent or so firmer.

Beans are now at levels not seen since June as funds continue to dump their longs, with Jan 13 almost USD4/bu off the August highs for a drop of almost 22%.

The six million dollar question is "is this a buying opportunity?" or are we still going lower yet? The answer to the latter depends on the enigmatic funds themselves. They're still long, they're just not as long as they used to be. In fact last Friday's Committment of Traders report showed them sitting on their smallest long since March (as of last Tuesday night).

They've been estimated as a net seller in 5 of the 7 sessions since then, exiting an estimated further 20,000 contracts by my calculations.

The reasons? The upcoming monster South American crop that has been predicted for some time now? Well, the current production numbers from the USDA for Brazil and Argentina are the same as the ones they were using when the market was peaking in August.

This seems to be more about a general "risk-off" move. The Dow bottomed around 12,100 in June, rallied to around 13,600 by September and finished at 12,542 last night. NYMEX crude was USD80/barrel in June, peaked at around USD100/barrel in September and is currently back around USD85/barrel. A remarkably similar pattern to Chicago beans.

No matter what the futures market does though, the bottom line is that you can't eat paper.

Producer selling in the US is light at these levels. The cash market is firm. Basis bids for soybeans in the US Gulf barge market are higher now than they were 2 1/2 months ago when the US soybean harvest was only just beginning.

Now low water forecasts for the Mississippi in early December are threatening to disrupt shipping from the only supplier that the world has got until the South American crop comes on stream.

Export data from the USDA this afternoon will be of interest. The US shipped the most soybeans in a week than it had for two years last week at 1.75 MMT and export inspections on Tuesday were a similarly robust 64 million bushels.

When Brazil does start harvesting the domestic crushers will be wanting the early beans for themselves. Then we will quickly run into the usual logistical problems, vessels backing up, disruptions on the roads, opportunist strikes. The whole physical soya market is screaming front-end tightness for some considerable time to come to me.

Japan was recently said to have been forced to buy 500 TMT of US corn due to congestion at Brazilian ports leading to shipping delays of up to two months on existing purchases from South America.

Taiwan are also said to now be turning to the US to cover corn requirements already previously booked with Brazil due to similar problems. And all this is going on whilst Brazil is essentially out of the soybean export market, Lord knows what things will be like if and when they have a record soybean crop on their hands too.

Chicago Drifts Lower On Fund Selling

15/11/12 -- Soycomplex: Jan 13 Soybeans closed at USD14.02, down 17 cents; Mar 13 Soybeans closed at USD13.84, down 14 3/4 cents; Dec 12 Soybean Meal closed at USD430.50, down USD5.50; Dec 12 Soybean Oil closed at 47.46, down 21 points. Funds continue to exit their soybean longs, selling an estimated 4,000 lots on the day and driving prices to levels not seen in almost 5 months. South American weather forecasts are less threatening, although a return to wetter weather again in Argentina isn't far away. "Showers are expected to increase across the region this weekend, which will maintain wetness concerns, especially in southwestern areas, where the heaviest rainfall is expected. Widespread rainfall is expected in the 6-10 day period, which should further increase wetness concerns across central and southern areas, potentially leading to some flooding," say MDA CropCast. Trade estimates for tomorrow's weekly export sales report are in the region of 250-500 TMT. Shipments should be robust once again. Vessel listings suggest China will import 4.9 MMT of soybeans in November, up 22% from 4.0 MMT in October. MDA CropCast increased their US soybean production forecast to 75.44 MMT, although that's still well below the USDA's 80.9 MMT estimate.

Corn: Dec 12 Corn closed at USD7.21 1/4, down 4 1/2 cents; Mar 13 Corn closed at USD7.25, down 4 1/4 cents. Fund selling was estimated at around 3,000 contracts on the day. South American corn supplies are said to be tightening as supplies run down after months of aggressive sales. US ethanol production fell 3,000 barrels per day to 824,000 bpd, according to the Energy Dept, which is 10% down on year ago levels as more plants go into mothballs. That sees US ethanol stocks decline by 285,000 barrels to 17.85 million barrels, the lowest in almost a year. The trade is looking for weekly export sales of around 200-400 TMT tomorrow. Last week's sales were only 157,600 MT, well below the 422,000 MT/week needed to match USDA projected exports for 2012/13. Strategie Grains reported an EU-27 corn crop of 53.6 MMT, 15% down on output of 63.4 MMT a year ago. EU corn import requirements were raised from 10.9 MMT to 11.5 MMT.

Wheat: Dec 12 CBOT Wheat closed at USD8.45 1/2, down 3 1/4 cents; Dec 12 KCBT Wheat closed at USD8.86 1/2, down 3 1/4 cents; Dec 12 MGEX Wheat closed at USD9.20 1/4, down 3 1/4 cents. Taiwan bought 68,200 MT of US wheat for Dec/Jan shipment. Algeria was said to have bought up to 400 TMT of probably French wheat. Libya bought 30,000 MT of optional origin wheat for November shipment. Jordan bought wheat for January shipment. The EU has just had their best week on exports in more than two years, according to the volume of soft wheat export licences issued by Brussels. So there is clearly interest out there. Ukraine are now said to have more or less confirmed that a wheat export ban will be in place by the beginning of December. US winter wheat worries are mounting with MDA CropCast saying "extensive dryness will persist across the central and southwestern Plains, with the wheat crop expected to enter dormancy very poorly established." Trade estimates for tomorrow's weekly export sales report are in the region of 250-450 TMT.

EU Wheat Mixed,Weekly Exports Best Since 2010

15/11/12 -- EU grains closed with Nov 12 London wheat unchanged at GBP217.00/tonne, with benchmark May 13 GBP0.55/tonne higher at GBP219.00/tonne. Jan 13 Paris wheat ended EUR1.00/tonne down at EUR269.25/tonne.

It was a relatively quiet session with little movement. Weekly export data out of the principal French grain port of Rouen showed only 34 TMT of soft wheat being shipped out in the week through to Nov 14 - the lowest weekly total since August according to Bloomberg. Whist Algeria was the largest home, it is noteworthy that the UK also featured on the list of destinations taking 4,700 MT.

Algeria were however reported to have bought at least 200 TMT and possibly as much as 400 TMT of wheat in a tender today. The trade expects that to ultimately prove to be of French origin.

News that Brussels had granted 695 TMT of soft wheat export licences this past week - the largest weekly total in more than two years - may indicate that European exports are about to take off.

In an on, off saga that puts Eastenders to shame Ukraine are now said to be considering a wheat export ban from December. They should have hit their self-imposed ceiling of 5.5 MMT by then after grain exports in the first four and a half months of the 2012/13 season have hit record levels.

Egypt's GASC have apparently said that they have received notification from Ukraine's Ag Ministry that they will stop wheat exports from December 1. Egypt have retaliated by saying that they will removed Ukraine from their list of approved wheat suppliers. To further muddy the waters, in what could be one of the shortest contracts in history, Jordan were today said to have bought 50 TMT of Ukraine wheat for January shipment.

Ukraine should however still remain active sellers of corn for much if not all of the current season, although domestic corn prices are said to have jumped in recent weeks.

Russia's grain exports have also been running at unsustainable levels given a clean weight harvest of only 71 MMT, which is 23 MMT down on last year, this year and are expected to now begin to tail off sharply.

That should thrust Europe, and France in particular, to the forefront as chief wheat supplier for North Africa and the Middle East in Q1 of 2013, although India keep letting the odd 100 TMT or so at a time of their wheat surplus trickle out.

Strategie Grains cut their estimate for the EU 2012 soft wheat harvest from 123.0 MMT to 122.7 MMT - a drop of 6 MMT, or 4.7%, on last year. They upped their forecast for EU corn production this year however from 52.8 MMT to 53.6 MMT, although that is still well down on an output of 63.4 MMT a year ago.

In addition they increased their forecast for corn imports from outside the EU from 10.9 MMT to 11.5 MMT. They also pegged 2012/13 global wheat ending stocks at 159.0 MMT, well below the USDA's current 174.2 MMT estimate.

At home the HGCA said that wheat bushel weights here only averaged 69.6 kg/hl this year, more than 11% down on last year's result. Barley bushel weights came in at 62.9 kg/hl on average, down 5%. Both were said to be the lowest on records dating back to 1977.

In other news, UK customs data shows a whopping 80% year-on-year increase in rapeseed exports in the first quarter of 2012/13 (Jul/Sep). The UK shipped 350 TMT of rapeseed in this period, mostly to Holland, Germany and Belgium. The number is all the more impressive when you consider that full season 2011/12 UK rapeseed exports were the highest on record.

World Crop Weather

15/11/12 -- My US weather buddy Gail Martell of Martell Crop Projections provides us with her take on the latest crop weather conditions from around the globe:

Low Humidity, Worsening Dryness in South Brazil

While Mato Grosso, Brazil's top soybean state, has received daily showers, November weather has grown progressively drier in South Brazil. Rio Grande do Sul, Brazil's southernmost farm state, has received virtually no rain in 2 weeks and unusual for this time of year. Parana weather was mixed, rather wet in the east but extremely dry in the west where most corn and soybeans are grown. The South Brazil forecast remains threatening for continued dry weather with a large, cool, ridge of high pressure.

Drying on Some Argentina Farms, Weather Still Unsettled

November weather has been relatively dry in Cordoba and southern Santa Fe, the northern half of Argentina's grain belt, allowing spring planting to advance. Buenos Aires weather has been rather unsettled and cooler than normal. There is no question that weather conditions are a big improvement from October, when twice-normal rainfall was received in the farm belt. Sunshine has been more abundant this month, also helpful for drying. Buenos Aires drying conditions have been less than ideal,with cool night temperatures in the lower 50s F, and occasional showers. The updated forecast is looking for weekend showers with locally heavy rain.

Australia Weather Stress in Maturing Wheat

A heat wave last week caused highs in the mid 90s F in South Australia, Victoria and southern New South Wales on several days. Most wheat was in the grain filling stage. There were strong showers in southern New South Wales last week, producing rains of 1-2 inches. Wheat conditions have stabilized in the wetter areas. The big picture in Eastern Australia is still one of drought and reduced wheat yields. Spring growing conditions were too dry for too long.

Russia Southern Drought Not Resolved

A dry weather pattern has prevailed this week in south Russia the main winter wheat region. Rainfall last week was limited to a small area in Krasnodar. The big picture is one of persistent drought. Just .40 inch of rainfall has occurred in the past 30 days in the Southern District and 32% of normal. Low humidity and dry field conditions contrast sharply with winter grain areas further to the north in the Black Earth and Volga Valley. There, fall showers have been frequent and heavy.

Ukraine Winter Grains Off to Favourable Start

Ukraine winter grains got a big boost from heavy rainfall the past 6-8 weeks, except for the far eastern grain belt bordering Russia. Kirovograd in central Ukraine has accrued a 4-inch moisture surplus completely curing drought. Donetsk is very dry in Eastern Ukraine (near Russia) with 28% of normal rainfall since October 1. Warm weather last week spurred growth where field moisture was favorable. Fall weather conditions last year were incredibly dry slowing growth of winter grains. It is just the opposite this year.

Modest Rains Aid North China Winter Wheat

Light to moderate showers in November improved growing conditions in winter wheat on the North China Plain. October had been perfectly dry with unusually warm temperatures. More rain is still needed. In Northeast China the weather continues cold and stormy. Growers still trying to harvest corn and soybeans have been delayed by frequent showers. Snow is predicted this week in Heilongjiang as the stormy and cold weather continues.

Active Mediterranean Storm Track in Southern Europe

Rainfall over the past month has been very ample in Spain, Italy and southeastern Europe, boosting field moisture for winter wheat. This is the opposite of last year when very serious drought developed, worsening from fall into winter. Mostly growing conditions have been favorable for winter wheat and rapeseed. The northern half of Germany is the notable exception, very dry in the past month. This is a key rapeseed area where less than 50% of normal rain has occurred.

Chicago Closing Comments - Wednesday

14/11/12 -- Soycomplex: Nov 12 Soybeans closed at USD14.32 3/4, up 5 3/4 cents; Jan 13 Soybeans closed at USD14.19, up 11 cents; Dec 12 Soybean Meal closed at USD437.1, up USD0.50; Dec 12 Soybean Oil closed at 47.67, up 65 points. Nov beans went off the board today. Funds were said to have been net buyers of around 3,000 soybean contracts on the day. The USDA reported 120 TMT of beans sold to China for 2012/13 delivery along with 40 TMT of bean oil sold to unknown. As well as the very strong early pace of US soybean exports, backed up again by yesterday's weekly export inspections of 64 million bushels, the domestic US crush is showing no signs of rationing. The October NOPA crush came in at 153.5 million bushels, almost 34 million up on September and well above trade expectations of 144.4 million. The weather outlook in South America is improving. "Abundant rains across northern Brazil continue to significantly reduce dryness there, improving conditions for corn and soybean planting and germination," said MDA CropCast. Argentina has been drier this past couple of days too, although more rain is in forecast for the weekend and next week.

Corn: Dec 12 Corn closed at USD7.25 3/4, up 2 1/4 cents; Mar 13 Corn closed at USD7.29 1/4, up 3 cents. South Korea have been in the market buying optional origin corn. One company bought 139 TMT for Feb/Mar shipment with another taking 130,500 MT for Mar/May shipment. Ag Resource said that the EU-27 could import 10-12 MMT of corn in 2012/13, far higher than the USDA's 6.5 MMT estimate and an increase of 60-90% on last season. There is talk of the US Environmental Protection Agency nearing a decision on requests for the temporary removal of the ethanol mandate in response to this season's drought and subsequently reduced corn crop. Considering the spate of recent ethanol plant closures and the slump in US corn exports changes are thought to be unlikely. The normal Thursday weekly export sales report is delayed until Friday following Monday's Veteran's Day holiday. Corn sales need to average 422,000 MT/week to match USDA projections, amazingly it's been 29 weeks since they've beat that total. China are said to be shopping for corn for Q1 of 2013, what they can't get from South America may end up coming from Ukraine.

Wheat: Dec 12 CBOT Wheat closed at USD8.48 3/4, down 2 1/4 cents; Dec 12 KCBT Wheat closed at USD8.89 3/4, up 2 cents; Dec 12 MGEX Wheat closed at USD9.23 1/2, up 1 1/4 cents. The market was supported by last night's news that the USDA had cut good/excellent ratings for US winter wheat from 39% last week to 36% as of Sunday. That's the worst figure since they began issuing weekly reports in the mid-1980's. Emergence has just about caught up at 79% versus 73% a week ago and 81% for the 5-year average. Ag Resource estimated the global wheat crop in 2012/13 at 649.30 MMT which is 2.1 MMT lower than the USDA and 6.7% down on last season. Exports continue to pour out of Ukraine where they shipped 929 TMT of grain between Nov 1-13 as sellers scramble to get grain out of the country before export restrictions are brought into force. The government's official stance on that issue is that there will be no need for quotas or bans, having earlier said that a ban on wheat exports would be introduced on Nov 15 and being subsequently rebuked by Egypt who have some Ukraine wheat bought for shipment in the second half of this month. A ban is widely expected by the trade come early December.

EU Wheat Rebounds

14/11/12 -- EU grains closed mostly firmer, consolidating from two days of losses with Nov 12 London wheat up GBP2.85/tonne to GBP217.00/tonne, May 13 up GBP1.65/tonne to GBP221.30/tonne and new crop Nov 13 GBP1.00/tonne steadier at GBP189.00/tonne.

Jan 13 Paris milling wheat added EUR270.25/tonne, making it around parity with Jan 13 London feed wheat. London wheat continues to outperform.

After a record early season export programme Ukraine said that its grain stocks are 22% down on last year at 23.1 MMT, including 8.2 MMT of wheat, 2.5 MMT of barley and 8.9 MMT of corn say the State Statistics Service.

The Russian The Ministry of Agriculture say that this year's grain harvest will total 74 MMT in bunker weight and 71 MMT in clean weight. There are small pockets of corn (13% of the planted area) and even wheat (1-2%) left to harvest, they added.

The Russian Grain Union estimated total 2012/13 grain exports at 14-15 MMT. The Interfax News Agency said that Russia has already exported 10.7 MMT of grains to Nov 7.

The Grain Union see November grain exports falling to around 1.5 MMT, then 1 MMT in December and 500-600 TMT each in January and February.

The recent little dip in wheat prices has flushed out some export interest. Syria bought 100 TMT of milling wheat of possibly Black Sea origin. Tunisia bought 75K optional origin durum wheat for Dec-Jan shipment. Jordan and Algeria are also tendering for wheat.

Looking ahead, French Analysts Strategie Grains said that despite an assortment of problems getting winter wheat planted across Europe that the 2013 EU-27 soft wheat crop could still come in at 136 MMT, an increase of more than 10% on this year.

Given the late sowings and lack of emergence in the UK and France in particular that currently looks pretty optimistic, although they do have a point when they highlight farmers' determination to press on and get a winter wheat crop into the ground given current buoyant prices for 2013.

Chicago Mixed In Light Consolidation

13/11/12 -- Soycomplex: Beans closed mixed with nearby Nov 12 16 cents firmer at USD14.27, but Jan 13 was 2 1/4 cents lower at USD13.85 3/4. Meal was USD1-2 firmer and oil 20-40 points weaker. Market jitter continued for a third day, albeit not quite as acutely as on Friday and Monday. CNGOIC estimated China’s November bean imports at 4.8 MMT versus 4.03 MMT in October and substantially better than the kind of numbers that were being touted around before the market slumped by more than USD3/bushel. Weekly export inspections, delayed a day due to the Veteran's Day holiday were robust yet again at 64 million bushels, showing why the USDA has been forced to increase their US export projections for 2012/13 by 7.9 MMT since the September WASDE report. The US soybean harvest is 96% done said the USDA after the close versus 93% normally at this time.

Corn: Nearby Dec 12 corn closed 5 1/2 cents firmer at USD7.23 1/5, with r 13 up 4 cents at USD7.26 1/4. Weekly US export inspections for corn were poor at only 9.5 million bushels, continuing with the recent theme, and missing the nearly 24 million needed to hit USDA target by some distance. The Ukraine Ag Ministry said as of Nov 12th 85% of the corn harvest is in producing 17.1 MMT of corn to date. The average yield is 4.54 MT/ha, down 25% on a year ago. The USDA announced the sale of 158,496 MT of US corn to unknown for 2012/13 delivery. South Korea is shopping for optional origin corn for May shipment. Celeres placed Brazil’s 2012/13 corn planting pace at 61% complete, ten points lower than Safras and 13 points behind last year's pace.

Wheat: Weekly export inspections for wheat were below even last week's modest total of 14 million bushels at just 10.5 million and well short of the volume needed to hit the USDA's 2012/13 target. Russia sold 63,315 MT of wheat from its intervention stocks, making the total sold since October 23rd 376,764 MT. The Ukraine Ministry said that this season's grain harvest is 95% complete at 43.4 MMT - down 16% from a year ago. They re-iterated their forecast for final production of 45.5-46.5 MMT versus 56.7 MMT in 2011. Japan is looking for 195 TMT of mostly US milling wheat in a regular weekly tender. US Plains wheat areas are forecast dry for the week ahead. US winter wheat conditions are now only 36% good/excellent, down three points from a week ago. Plantings are 95% done versus 94% normally.

EU Wheat Dragged Lower By Slump In US Market

13/11/12 – EU grains closed generally lower at the end of a choppy session that saw two-sided trade. On the day Nov 12 London wheat finished unchanged at GBP214.15/tonne, with benchmark May 13 GBP1.35/tonne lower at GBP219.65/tonne and new crop Nov 13 down GBP1.65/tonne to GBP188.00/tonne. Jan 13 Paris wheat ended EUR2.00/tonne down at EUR268.00/tonne.

The fallout from Friday's USDA report continues to generate US fund liquidation, dragging EU grains off last week's record highs, although there are reasons to think that this may not be as good as it gets for EU wheat yet.

Despite a reduced wheat crop in 2012, EU exports are running ahead of last year's pace, and will surely accelerate further as we get into 2013.

IKAR say that Russia has exported 8.5 MMT of wheat so far in 2012/13 out of total grain shipments of 11.5 MMT. Including what is already committed, that means we are knocking on the door of the government's comfort zone already.

Ukraine continues to send out conflicting messages, with their PM apparently saying today that there was no need for grain export restrictions. "We have good stockpiles and a good harvest forecast for next year," he said despite the small matter of an unpredictable winter to get through along with 7-8 months of consumption before the arrival of said good harvest.

FranceAgriMer have made small tweaks to their domestic production numbers, pegging the soft wheat crop at 35.8 MMT versus a previous estimate of 35.9 MMT and up 5.3% from a year ago. Their corn crop is now seen at 15.21 MMT, down 3.1% from a year ago.

The French rapeseed crop is forecast up 1.7% at 5.462 MMT versus 5.442 MMT in 2011. Sunseed output is seen down 14% at 1.617 MMT versus 1.882 MMT. Sunseed plantings were 8% lower for the 2012 harvest.

Rains have eased somewhat in the past week, enabling French farmers to get 80% of their planned winter wheat sown as of last Monday, although that is still well down on 95% a year ago. Only 41% of the crop is emerged compared to 76% this time last year.

In addition, the French corn harvest is only 80% complete versus 99% in 2011 at this time.

French customs data shows that France only exported 3.3 MMT of soft wheat between July 1st and September 30th - down 26% on year. This will likely pick up significantly going forward.

Defra report that UK usage of imported wheat milled in the five week period to Sept 30 was 57.7% higher than a year ago.

Ensus have confirmed that they are to supplement the dire quality of this year's UK wheat harvest by also using an unspecified percentage of imported corn, according to a report on the Farmer's Weekly website today.

Algeria is shopping for 50 TMT of optional origin wheat for January shipment. Jordan are also said to be in the market. Egypt, who have been quiet for the last few weeks, may also not be too far behind.

The Morning Vibe

13/11/12 -- Fund selling, you never know exactly when it's coming or what is going to trigger it. Frequently it would seem the thing that catches us all off guard is that the trigger is something that we've known about for some time.

Like the European debt problem, or the US "fiscal cliff" or impending record South American soybean production. None of these are "new" items, yet these are amongst the reasons being cited for the sharp sell-off in soybeans that has dragged the market down to more than 4-month lows.

The other main factor being mentioned, which wasn't known when the market was peaking in late August/early September, was that drought damage to the US soybean crop wasn't going to be as bad as feared (up 7.6 MMT since then). Then again though, at that time neither did we realise what the extent of early season US export sales were going to be like (full season 2012/13 US exports projected up 6.4 MMT since then). Out of interest, the USDA was forecasting soybean output from both Brazil and Argentina at 81 MMT and 55 MMT back in August, the same as in last week's report.

The bottom line seems to be if and when the funds are in full one risk-off liquidation mode, dragging in weaker capitulating longs, then the market is only going one way. The question we now need to ask is how much longer will this selling continue, as it will undoubtedly provide an opportunity to get some cover on at much better levels than we may have expected a month or two ago. Oh for a crystal ball...

It may be prudent to stand aside whilst the elephants are stampeding for the soybean exit door. You won't get in at the bottom, but you should also avoid getting sucked in on the way down.

This morning sees beans around 10 cents higher in mini Turnaround Tuesday style, but having fallen almost a dollar and a half, or 9.5%, since the first of the month based on last night's close you could hardly call 10 cents a major reversal.

Under the circumstances wheat and corn have done rather well to attempt to distance themselves from things. Corn is down 4.4% since the beginning of the month, whilst CBOT wheat has only fallen 1.2% during this time.

London wheat on the other hand is still GBP4.25/tonne, or 2%, higher than it's Nov 1st close despite last night's weighty demise. Similarly Paris wheat finished last night EUR5.00/tonne, or 1.8%, firmer on the month so far.

Chicago Slump Continues As Funds Exit

12/11/12 -- Soycomplex: Nov 12 Soybeans closed at USD14.11, down 41 cents; Jan 13 Soybeans closed at USD14.05, down 46 1/4 cents; Dec 12 Soybean Meal closed at USD431.40, down USD18.30; Dec 12 Soybean Oil closed at 47.39, down 38 points. This was the lowest close on beans since June as funds dumped an estimated 11-12,000 contracts onto the market, adding to their recent liquidation phase. Friday's USDA report showing US yields and production at a better than expected 39.3 bu/acre and 2.971 billion bushels respectively, coupled with increased planting activity in South America sees fund money reducing their net soybean longs to the smallest in 8 months. Safras e Mercado said that Brazilian soybean plantings are now 54% complete versus 42% a week ago. That's still down on last year's 66% but now slightly ahead of the 5 year average of 51%. Celeres say Brazilian plantings are even more advanced at 58% complete. CONAB estimate the Brazilian soybean area at 26.4-27.3 million hectares versus 25.0 million a year ago, placing the crop at a record 80-83 MMT. Brazilian weather is also looking up. "Needed showers this week will improve moisture across east-central and northern corn/soybean areas," said MDA CropCast. In Argentina "drier weather is expected in most areas this week, which will allow wetness to ease and conditions to improve for corn and soybean planting and germination," they added.

Corn: Dec 12 Corn closed at USD7.18, down 20 3/4 cents; Mar 13 Corn closed at USD7.22 1/4, down 19 3/4 cents. For corn fund selling of an estimated 18,000 contracts drove nearby prices to within 2 cents of the lowest close since the first day of July. Safras said that Brazil's corn planting is 71% complete versus 60.6% a week ago and 78% a year ago. They placed the corn crop there at 67.9 MMT versus 72.3 MMT in 2011/12. CONAB are more optimistic for corn, placing 2012/13 production broadly in line with last year at 71.5-72.8 MMT. Corn exports however will fall from 19 MMT to 15 MMT, they add. The Argentine Ag Ministry estimates 49% of the corn crop has been planted there versus 64% a year ago. The weekly USDA export inspections report normally released on a Monday is re-scheduled for tomorrow due to the Veteran's Day holiday. Corn shipments need to average around 23 million bushels/week to hit the USDA's projections for 2012/13. Last week's total was less than 15 million as high prices ration demand. Ukraine are said to have harvested 16.5 MMT of corn off 81% of the planned area. They've also apparently struck a deal with China over quality standards to enable them to export corn to Chinese buyers in 2013.

Wheat: Dec 12 CBOT Wheat closed at USD8.57 3/4, down 28 3/4 cents; Dec 12 KCBT Wheat closed at USD8.90 1/2, down 31 3/4 cents; Dec 12 MGEX Wheat closed at USD9.24 1/2, down 26 cents. Fund selling in Chicago wheat was placed at 6-8,000 contracts on the day, although tonight's close still leaves wheat stuck in the same sideways range it has been in for around 4 months now. The Veteran's Day holiday also means that the usual Monday night crop condition report is delayed until tomorrow. The trade will be looking at that to see how US winter wheat is getting along, having been rated as poorly as it's ever been at this early stage in last week's report. IKAR said that Russia has exported 11.0 MMT of grain between Jul 1st – Nov 8 including 8.5 MMT of wheat. Ukraine said that they had exported a record 9.42 MMT of grain in a similar period, including 4.57 MMT of wheat. Traders in both countries have clearly been keen to ship before possible export restrictions are introduced. Kazakhstan says that it's harvest is over producing 14.7 MMT of grain in bunker weight, only around half of last year's total, and that the country will export "nearly" 7 MMT of grains in 2012/13.

EU Wheat Slumps As Fund Money Exits Market

12/11/12 -- EU wheat consolidated heavily today, in line with Friday night Chicago weakness that extended into overnight Globex trade.

Nov 12 London wheat closed GBP6.60/tonne lower at GBP214.25/tonne, with benchmark May 13 ending the day GBP6.00/tonne easier at GBP221.00/tonne. Nov 12 Paris wheat went off the board EUR7.25/tonne lower at EUR272.75/tonne, with the more active Jan 13 finishing EUR7.00/tonne weaker at EUR270.00/tonne.

A hangover from a bearish USDA world supply and demand report on Friday was carried into Monday's trade, with fund money scrambling for the exits. Rapeseed, which took the biggest hit Friday, was also on the receiving end again today with front month Feb 13 down EUR11.00/tonne, pressured by US soybean prices slumping to 4 month lows in Chicago as funds cut their length in beans to the lowest in at lest 8 months.

Other commodities like coffee and sugar have also seen heavy fund liquidation in the past week, according to the latest data from NYSE Liffe.

Yet, wetness concerns in the UK and France have now spread into Spain which has picked up 2-4 times its normal rainfall totals in the past 30 days, with 6-8 inches falling in the last seven days in the south of the country in the past week, according to World Ag Weather.

"Showers should finally ease a bit across southern Spain this week, which will allow wetness there to begin to subside," say MDA CropCast.

Things aren't looking promising for US winter wheat heading into dormancy either. "Virtually no rain has occurred for a month in southern Kansas, Oklahoma and the Texas panhandle. Hard red red winter was 28% good-excellent, 48% fair and 24% poor-very poor on the November 4 report from USDA," say Martell Crop Projections.

"Dry weather is expected across the western Midwest and Plains this week, which will allow the dryness to remain extensive in the western Plains. Cooler temperatures will continue to slow wheat growth across the Plains and western Midwest, but no notable freeze damage is expected. Wheat will likely enter dormancy poorly established, and moisture next spring will be critical once the crop emerges from dormancy," said MDA CropCast.

Ukraine's corn crop is 81% harvested at 16.5 MMT to date, say the Ministry there. That takes their total grain harvest to 43.5 MMT to date, with a final output of 46 MMT on the cards, they add. That would be around 19% down on last year. Their wheat harvest finished at 15 MMT.

Total grain exports currently stand at a record 9.42 MMT, of which 4.57 MMT is wheat, 3.1 MMT corn and 1.61 MMT barley as traders scramble to get their grain away before the government shits to door. Full season exports will total around 20 MMT versus 21.79 MMT in 2011/12, say the Ministry. The vast majority of the remainder to ship will be corn.

There is now widespread talk of a Ukraine wheat export ban coming in on Dec 1st, once existing commitments to Egypt have been completed.

Nogger On Tour

12/11/12 -- Following a guest appearance at the South Suffolk Agricultural Association's annual prizegiving thrash last week, this week I am a bit closer to home speaking in Market Rasen at an event co-organised by Offre & Demande Agricole and X-Farm Market Intelligence.

I'm looking forward to hearing what I'm going to say as I haven't even made a start on my presentation yet! I'm sure I'll think of something. I may even dust off my ancient "death by Umbongo" joke. I wasn't sure that the refined ladies and gentlemen of South Suffolk were quite ready for that one yet.

If anyone fsncies availing themselves of free tea, coffee and more importantly bacon rolls on Wednesday morning (14th Nov. 9.30 am start) then I'm told that there may be a few spaces left if you're quick. Email to reserve a place and/or find out more.