Nogger's Blog

Chicago Market Higher, Despite Shaky Outside Influences

12/04/13 -- Soycomplex: The bean and meal market closed higher supported by continued strong demand for US beans, with the USDA today confirming the sale of 110,000 MT to China for 2013/14. Old crop sales meanwhile are already 99% of the USDA target for the season, with Brazilian dockers set to strike next week. Over 60 vessels are waiting at the Brazilian port of Paranagua and the waiting times to load continue to be around 60 days. US weather remains cold and wet, hampering early planting progress. The NOPA March crush report comes out on Monday. A Reuters survey estimates the crush at 136.8 million bushels, versus 136.3 million in Feb. A Dow Jones survey is a bit more bullish at 140.0 million bushels. The Buenos Aires Grains Exchange said that 24% of the Argentine bean harvest has been completed, versus 9.2% a week ago and 22.7% a year ago. They estimate this year's soybean crop at 48.5 MMT, unchanged from their previous estimate and below the USDA's 51.5 MMT. MDA CropCast estimated 2013 US soybean yields at 43 bushels/acre, up only modestly from 41.9 bu/acre in 2012. Funds were judged to have been net buyers of around 5-6,000 soybean contracts on the day. May 13 Soybeans closed at USD14.13, up 11 cents; Jul 13 Soybeans closed at USD13.79 1/4, up 11 cents; May 13 Soybean Meal closed at USD400.20, up USD5.20; May 13 Soybean Oil closed at 49.23, down 54 points. For the week that puts May 13 beans 51 1/4 cents higher, with meal up USD8.30 and oil up 40 points.

Corn: The market closed higher on the day and the week, despite having little help from outside markets nervous over North Korea and the ongoing debt crisis in Europe. Gold slumped to its lowest since July 2011 and NYMEX crude was also down heavily. Adverse weather conditions in the US aren't helping early planting progress. The USDA are thought likely to report corn planting at 4-6% complete in Monday night's crop progress report. There's already some early talk of possible corn acres being switched into beans. Chinese corn plantings are also said to likely be 10-14 days behind normal schedule due to heavy snow in the north of the country, this is also leading to some suggestion of a switch into faster maturing beans. The Buenos Aires Grains Exchange said that the Argentine corn harvest is 28.2% complete, versus 24.3% a week ago and 33.4% a year ago. They estimate Argentina’s corn crop at 25.0 MMT, unchanged from previous their estimate and down 1.5 MMT from the USDA estimate of 26.5 MMT. MDA CropCast forecast potential US corn yields in 2013 at 154 bushels/acre, versus 147.2 bu/acre in 2012. Yesterday's weekly export sales report from the USDA shows that cumulative 2012/13 corn sales stand at 77% of the USDA forecast for the current marketing year versus the 5 year average of 82% at this time. Funds were judged to have been net buyers of 7-9,000 corn contracts on the day. May 13 Corn closed at USD6.58 1/2, up 7 1/4 cents; Jul 13 Corn closed at USD6.41 1/4, up 7 3/4 cents. For the week that puts front month May 13 corn up 29 1/2 cents.

Wheat: The wheat market closed with double digit gains, supported by talk of freeze damage to US winter wheat, and planting delays for US and Canadian spring wheat. Agrium said that they expect western Canadian planting delays of 2-4 weeks due to snow cover. Similar conditions prevail in many US spring wheat states, with the added problem of flooding potential once this snow melts. Weather forecasts for the week ahead are not conducive. There's been some talk of wheat output in Oklahoma, possibly the state worst affected by recent freezing conditions, falling to 120 million bushels, down 24% on the 157.7 million produced last year. There's been no further confirmation today of US wheat sales to China, following yesterday's announcement of 360 TMT of SRW wheat sold to them. The trade is confident that more sales will be confirmed in the next few days. Analysts estimate China’s 2013/14 wheat imports at more than 3.5 MMT versus 3.2 MMT in 2012/13 and 2.933 MMT in 2011/12. Kazakhstan's Apr 1 wheat stocks were down 36.6% on year ago levels at 9.5 MMT, say the Ag Ministry there. French winter wheat development is well behind last year, so too are spring corn plantings. Jordan passed again on a tender to import 100 TMT of wheat due to high prices. Bangladesh bought what is thought likely to have been Indian wheat in a tender this week and is back in tendering for more. Taiwan have been buying US wheat this week. Japan bought wheat from the US, Canada and Australia. Fund buying in CBOT wheat was estimated at 4-5,000 lots on the day. May 13 CBOT Wheat closed at USD7.14 3/4, up 17 cents; May 13 KCBT Wheat closed at USD7.53, up 14 1/4 cents; May 13 MGEX Wheat closed at USD8.07 3/4, up 18 1/4 cents. For the week CBOT wheat was up 15 3/4 cents, with Kansas adding 27 cents and Minneapolis 20 1/4 cents.

EU Wheat Mixed, Crop Development Lags Markedly

12/04/13 -- EU wheat closed mixed with May 13 London wheat down GBP1.35/tonne at GBP197.75/tonne and with new crop Nov 13 up GBP0.40/tonne to GBP187.15/tonne. May 13 Paris wheat settled EUR4.00/tonne higher at EUR249.50/tonne.

For the week this puts May 13 London wheat down GBP0.85/tonne, with Nov 13 up GBP2.90/tonne and May 13 Paris wheat EUR5.75/tonne firmer.

Exactly why the two front months moved in such opposite directions I'm not so sure. Certainly it had nothing to do with currency movements as the pound was little changed against either the euro or the dollar on the day. Perhaps it's more to do with slumping UK exports, rising imports and stagnant demand amidst the closure of Ensus?

Customs data shows that the UK exported only 17,800 MT of wheat in February, the lowest monthly total on record. The marketing year to date total is now 548 TMT, down 74% on last season. Wheat imports in February meanwhile were 256 TMT, taking the 2012/13 total so far to 1.86 MMT, a rise of 210% on 2011/12. Corn imports are also sharply higher year on year, up 70% to 1.11 MMT.

French winter wheat rated good/excellent fell one percentage point this week to 65%, a figure still comparable with last year. Winter barley conditions are better than last year's 57% good/excellent, also at 65%.

Crop development is however still lagging markedly. Soft wheat at the heading stage is only 37% against 96% this time a year ago. Spring barley emergence is 48% versus 95% in 2012, with only 4% of the crop tillering compared to 47% a year ago. Spring corn planting has only just begun at 1% complete, a year ago 35% of the crop was already in the ground.

A better weather forecast for the week ahead should hopefully see some progress being made, both at home and abroad.

It's not just in Europe where things are already well behind schedule, Canadian spring plantings are likely to be 2-4 weeks delayed as a thick blanket of snow covers much of the wheat area there. Spring wheat states on the US Northern Plains are similarly afflicted. Meanwhile "very heavy rainfall has accumulated in Midwest corn states in recent days, 2-3 inches in many areas"-  keeping spring corn fieldwork to a minimum, say Martell Crop Projections.

Further south "Winter wheat on the High Plains this week suffered a hard freeze on 2 successive nights with  temperatures falling into the teens-low 20s F. Producers are worried about potential yield reductions. Normally, wheat in the jointing stage is not damaged by freezing temperatures, but this cold was especially severe," they add.

The forecast for the week ahead is pretty similar for all these areas. More snow for the Dakotas and Minnesota. A storm bringing more heavy rain/wet snow for Missouri, Illinois, Indiana, Wisconsin and Iowa. "A fresh cold wave from Canada would drive into the US heartland behind the storm. Freezing temperatures are expected as far south as the Oklahoma-Kansas border," they conclude.

EU Rapemeal Prices

12/04/13 -- Rapemeal prices on the continent are firmer again today, with Apr 13 now showing gains EUR11/tonne on the week, May 13 is up EUR15/tonne and new crop Aug/Oct 13up EUR12/tonne compared with last Friday.

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

Chicago Close - Thursday

11/04/13 -- Soycomplex: Weekly soybean sales of a combined 383,700 MT fell short of trade expectations of 5-800 TMT, although most of these (319,200 MT) were for already tight old crop. Total US commitments are now 99% of the USDA's upwardly revised target of 36.74 MMT worth of exports this season, and the vast majority of that has already been shipped. There's talk that 1-2 US bean cargoes were sold out of the PNW this week for April shipment too, keeping old crop availability tight. There are reports that Brazilian dock workers will strike on Apr 22, also supportive for old crop US soybean demand. MDA CropCast left their 2012/13 soybean production forecasts for both Brazil and Argentina unchanged at 81.43 MMT and 48.54 MMT respectively. Both are well below the USDA's 83.5 MMT and 51.5 MMT. Wilmar International said China’s soybean imports may fall this year due to bird flu. The price of a chicken McNuggets meal in Shanghai is apparently down from GBP3.60 to GBP2.00 due to consumer reluctance to eat chicken. There are now 38 confirmed human cases of Chinese bird flu with 10 human deaths. Fund buying in beans was estimated at around 3,000 contracts on the day. May 13 Soybeans closed at USD14.02, up 9 1/4 cents; Jul 13 Soybeans closed at USD13.68 1/4, up 3/4 cent; May 13 Soybean Meal closed at USD395.00, up USD2.10; May 13 Soybean Oil closed at 49.77, down 26 points.

Corn: Weekly export sales of a combined 476 TMT were at the top end of the 250-500 TMT estimated by the trade, with 185,200 MT of that old crop. Cumulative sales are only 44.8% of last year’s total versus a USDA target of 51.8%. There's talk that China bought 1-2 cargoes of Argentine corn to test for GMO for April/May shipment. Vietnam bought 15 TMT of Indian corn for May shipment. India’s Farm Minister estimated the 2012/13 corn crop at 21.06 MMT versus 21.76 MMT a year ago. MDA CropCast left their 2012/13 Brazilian corn production estimate unchanged at 74.1 MMT, with Argentina also the same as last week at 23.1 MMT. For 2013/14 they cut Brazil by 0.9 MMT to 70.3 MMT and dropped Argentina by 4.7 MMT to 22.3 MMT. US corn belt weather is forecast cool and wet for the next 10-14 days, delaying early planting hopes. "The preliminary 13/14 U.S. corn production estimate is 13.423 billion bushels. Frequent showers across the central and southern Midwest and northern Delta are maintaining wet soils, and the wetness combined with cool temperatures are keeping corn planting very slow in these areas. Some planting will likely occur this weekend and early next week as drier weather returns, but showers should build back into the region later next week which will slow planting again," said MDA CropCast. Funds were estimated as being net buyers of around 3,000 corn contracts on the day. May 13 Corn closed at USD6.51 1/4, up 2 1/4 cents; Jul 13 Corn closed at USD6.33 1/2, up 1 cent.

Wheat: Weekly export sales of 339,500 MT were at the low end of trade ideas of 3-600 TMT. The USDA did however also confirm the sale of 360 TMT of US SRW wheat to China in the afternoon. Trade gossip suggests that they have bought at least double that volume in the last week. The FAO estimated the 2013 global wheat crop at 690 MMT, unchanged from its previous estimate and up 4.4% from a year ago. Asian wheat buyers are said to have bought 1.5 MMT of wheat in the past 2 weeks on this latest price dip. The trade is adamant that some, as yet unquantifiable, damage has been done to the US winter wheat crop in the past week. The Kansas low on Tuesday was 16 degrees F and Wednesday’s low was a frigid 13 degrees. Oklahoma’s low was in the mid-20s with freezing rain. MDA CropCast cut their 2013/14 world wheat production estimate to 684.6 MMT, down 1.1 MMT from last week due "mainly to dryness and cold damage in the Plains wheat belt and cold in Europe. Very cold temperatures in the southwestern Plains this past week resulted in some damage to jointing wheat," they said. Taiwan was in the market for 83,980 MT of US wheat. Bangladesh bought 50 TMT of optional origin, probably Indian, wheat in a tender. Funds were net buyers of an estimated 1,000 CBOT wheat contracts on the day. May 13 CBOT Wheat closed at USD6.97 3/4, up 1 cent; May 13 KCBT Wheat closed at USD7.38 3/4, up 8 3/4 cents; May 13 MGEX Wheat closed at USD7.89 1/2, up 5 cents.

EU Wheat Mostly Higher On Increased Demand Ideas

11/04/13 -- EU grains bounced mostly a little higher, supported by firmer US corn and wheat futures which were up on ideas that the recent downwards spike in prices is stimulating some increased demand.

On the day, London wheat closed with front month May 13 up GBP0.55/tonne to GBP199.10/tonne and new crop Nov 13 up GBP0.75/tonne at GBP186.75/tonne, even though the pound rose to its best levels against a weak dollar since Feb 20. May 13 Paris wheat closed EUR0.25/tonne firmer at EUR245.50/tonne.

Yesterday's USDA report raised 2012/13 world wheat ending stocks by around 4 MMT, although 3 MMT of that came courtesy of increases to 2011/12 carryout. EU-27 wheat production last year was actually cut slightly by virtue of a reduction in the USDA's estimate for the UK wheat crop which was trimmed from 13.5 MMT to 13.26 MMT. EU wheat consumption was cut by 0.5 MMT this season to 121 MMT, whilst corn usage was raised 1.5 MMT to 67.5 MMT.

The USDA increased Europe's wheat export estimate for 2012/13 by 1 MMT to 20.5 MMT, which is 24% more than last season. Brussels today confirmed that they'd issued 362 TMT of all wheat export licences this week, although that was a 12 week low that still takes the season's total to date to 16.92 MMT, up 42% on year ago levels. Weekly exports now need to average 327 TMT/week to hit the USDA's new target.

MDA CropCast cut 1.8 MMT off their EU 2013 winter wheat production forecast to 128.7 MMT, which represents a modest 1.6% increase on last year. A USDA attaché estimated the EU 2013/14 all wheat crop at 139 MMT, up 5.3% on this season. He said that German winter wheat conditions are good, but noted problems in the UK and France due to wetness and cold.

MDA CropCast increased their Moroccan wheat production forecast by 0.9 MMT to 5.8 MMT, up nearly 57% on last year, and cut 0.7 MMT off Canadian potential to 28.3 MMT, although that's still an increase of 7.2% on last year. They have this year's EU barley crop unchanged from last week at 54.2 MMT, up 2.8% on last year. OSR output was also left unchanged on a week ago at 18.56 MMT, up 2.9% on last year.

European weather conditions are finally set to improve the forecasters tell us, with temperatures in the 18-20 C region promised for East Anglia on Sunday. On the continent things are looking brighter too. "Temperatures are beginning to warm again in western and southern areas, and readings should continue to moderate through next week. This will help to finally accelerate wheat growth across the continent. Also, showers are beginning to return to France and Germany, which will improve soil moisture there. Meanwhile, drier weather in Spain and Italy will allow wetness there to ease," say MDA CropCast.

Defra said that UK animal feed production in February was up 5.9% year-on-year, although wheat usage in feed was down 6.7% to 233 TMT. Barley usage jumped 45.5% to 67 TMT. In the four weeks to Feb 23rd 520 TMT of wheat was milled in the UK, 15% more than in Feb 2012. Of that, home grown usage was down 12% to 356 TMT, whilst imported usage was up 233% to 164 TMT.

The increasing reliance on imports looks set to last well into next season. Despite the fact that the pound has improved in recent weeks against both the dollar and the euro, sterling still isn't that far above 18 month lows against the euro (around 1.14), and a near 3-year low (circa 1.48) set against the dollar only a month ago. That continues to make the cost of imports pretty expensive going forward.

There's talk that Ukraine may lift it's export ban on wheat in the next 2 weeks. The USDA upped their forecast for Ukraine's 2012/13 wheat exports from 6.5 MMT to 7.0 MMT yesterday. They've currently shipped around 6.3 MMT. APK Inform estimated Ukraine’s 2013 grain crop at 53.4 MMT, up 15% from 2012. They have 2013/14 grain exports at 30.1 MMT, up 23% from 24.4 MMT this season.

Bangladesh are said to have paid the lowest price so far this financial year in a tender to buy 50 TMT of optional origin wheat for May shipment, possibly from India.

In the US "another hard freeze developed overnight on the High Plains increasing worries about potential crop damage. Temperatures fell to the teens-low 20s F for the second night in a row, increasing worries about potential damage in jointing wheat," said Martell Crop Projections. Most agronomists now seem to think that some yield damage has definitely been done in Oklahoma and Kansas over the past week, although the extent of tit won’t be known for another 7-10 days.

USDA Weekly Export Sales

11/04/13 -- The USDA's weekly export sales report showed soybeans sales below expectations, wheat sales at the low end of trade ideas and corn sales at the upper end of market forecasts.

Soybean sales of a combined 383,700 MT fell short of trade expectations of 5-800 TMT, although most of these (319,200 MT) were for already tight old crop. Total US commitments are now 99% of the USDA's upwardly revised target of 36.74 MMT worth of exports this season.

For corn, sales of a combined 476 TMT were at the top end of the 250-500 TMT estimated by the trade, with 185,200 MT of that old crop. China were confirmed as a buyer of one cargo of new crop, with "unknown" taking 233,000 MT.

For wheat, combined marketing year sales of 339,500 MT were at the low end of trade ideas of 3-600 TMT. Old crop sales were 263,500 MT but now need to average 467 TMT/week to hit the USDA target for the season (and that assumes that everything sold for 2012/13 will get shipped in 2012/13). Neither of those look very unlikely at this stage.

The new crop wheat sales only included 7,000 MT to China, although separately the USDA have confirmed the sale of 360 TMT of US SRW wheat to the Chinese this afternoon.

EU Rapemeal Prices

11/04/13 -- Rapemeal prices on the continent show little change today. MDA CropCast held their forecast for EU rapeseed production in 2013/14 unchanged from last week at 18.56 MMT, up almost 3% on last year. Crops in the UK and France should finally see some warmer temperatures this weekend. "This will help to finally accelerate rapeseed growth across the continent. Also, showers are beginning to return to France and Germany, which will improve soil moisture there," they say.

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

The Morning Vibe

11/04/13 -- The overnight market sees beans 5-10 cents lower, with wheat up 2-3 cents and corn 4 cents higher to 2 cents lower as traders pour over the USDA numbers. This may be the last time that we are so preoccupied with 2012/13, the emphasis will now start to shift to the 2013 harvest and beyond.

As ever the USDA came up with some plausible stuff, and some not so plausible stuff.

They seem to be resolutely sticking to this 125 million bushels number as a level below which US soybean carryout will not and cannot fall. US soybean exports were raised only fractionally to 1.35 billion bushels (36.74 MMT). That still means that the US already have 98% of that on the books, and in fact 90% of it already shipped.

Reduced Chinese soybean imports in 2012/13 certainly fall into the plausible category, along with increased Brazilian and Argentine ending stocks.

Despite a rise in US ethanol production last week, I'm personally slightly surprised by the increase in projected demand from that sector.

They wheat numbers were the most bearish, and possibly also the least plausible. A sneaky 3 MMT increase in carry in from 2011/12 helped bump world ending stocks up by 4 MMT. Another line in the sand seems to be that Argentina produced 11 MMT of wheat in 2012/13, although nobody else thinks output was that high.

Chinese wheat consumption falling 3 MMT from last month looks questionable, especially as they have their corn usage also dropping. Slightly higher wheat exports from Russia and Ukraine are acceptable though. Egyptian wheat imports of 8.5 MMT may be too high.

This afternoon's weekly export sales report now holds our interest. Will that include any wheat sales to China?

French customs data shows that France exported 6.92 MMT of soft wheat outside the EU between July – February, up 14% from a year ago. FranceAgriMer estimate total French 2012/13 soft wheat exports outside the EU at 10.1 MMT.

Taiwan are in the market buying US wheat overnight.

The Director of the All-Russian Scientific Research Institute of Agricultural Economics and Vice-President of the Russian Academy of Agricultural Sciences (Christ, imagine how big his business card needs to be) forecasts the Russian grain crop at 85-87 MMT this year. That falls into the ballpark of somewhere between SovEcon and IKAR, but significantly less than the Russian Ministry's 90-92 MMT.

IMEA say that Mato Grosso's soybean harvest is 99.1% complete and 75.8% sold.

Mexico’s Ag Ministry estimated their 2013 corn crop at 22.45 MMT versus 21.35 MMT last year.

China’s Ministry of Commerce estimate the country's April soybean imports at 5.7 MMT, up sharply from March imports of 3.84 MMT as supplies from South America speed up.

CNGOIC estimate May and June Chinese soybean imports at above 6.0 MMT each.

Chicago Closing Comments - Post USDA

10/04/13 -- Soycomplex: For soybeans the USDA's WASDE report contained both a few bearish and bullish elements. US 2012/13 ending stocks were left unchanged at 125 million bushels, contrary to the average trade guess for an increase to 137 million. However, both Brazilian and Argentine soybean production were also left unchanged from last month, with the trade expecting cuts to both. World ending stocks, which were expected broadly unchanged from last month's 60.2 MMT were raised to 62.6 MMT, with increases for both Brazil and Argentina. Chinese imports were cut 2 MMT to 61 MMT. The US. soybean crush for 2012/13 was increased 20 million bushels to 1.635 billion. US soybean exports were also raised, but only fractionally (up 5 million bushels to 1.35 billion) considering that there was already more than 98% of the March estimate on the books. In other news Lanworth Inc trimmed their forecast for US 2013/14 soybean production slightly from 3.455 billion bushels to 3.380 billion. They cut their Argentine soybean crop estimate to 49.0 MMT versus a previous estimate of 50.5 MMT. They increased output in Brazil to 81.7 MMT from a previous estimate of 81.1 MMT. Trade estimates for tomorrow's weekly export sales report for beans are 500-800 TMT. May 13 Soybeans closed at USD13.92 3/4, down 2 3/4 cents; Jul 13 Soybeans closed at USD13.67 1/2, down 3 3/4 cents; May 13 Soybean Meal closed at USD392.90, down USD1.90; May 13 Soybean Oil closed at 50.03, up 5 points. Funds were estimated as being net sellers of 3-5,000 soybean contracts on the day.

Corn: It was a very choppy session for corn, which traded both sides, weighed down a little by wheat which was sharply lower for much of the day. The outstanding number for corn was the USDA raising US 2012/13 ending stocks by nowhere near as much as the trade expected, coming out with an estimate of 757 million bushels versus the average trade guess of 824 million. World ending stocks however came in well above expectations of 120.2 MMT at 125.3 MMT. Brazilian production was raised more than anticipated to 74.0 MMT and Argentine output was left unchanged at 26.5 MMT versus the cut to 25.7 MMT that the trade was expecting. The USDA also increased domestic demand from the ethanol sector by 50 million bushels, despite the fact that usage has been lagging in 2013. They clearly believe that lower prices will stimulate demand. Right on cue to back that theory up the Energy Dept today pegged weekly ethanol production at 854,000 barrels/day, up sharply on 807,000 bpd from last week and the highest weekly total since June 2012. This also beat the level required to hit the USDA's March target of 4.5 billion bushels of corn going to feed the ethanol sector in 2012/13. Lanworth Inc increased their forecast for US corn crop in 2013/14 to 13.72 billion bushels from a previous estimate of 13.64 billion. They cut their Brazil corn crop estimate to 76.0 versus a previous estimate of 76.4 MMT, and also reduced Argentina from 25.5 MMT to 25.0 MMT. Trade estimates for tomorrow's weekly export sales report are 250-500 TMT. Funds were seen as net buyers of around 7-8,000 contracts on the day. May 13 Corn closed at USD6.49, up 4 3/4 cents; Jul 13 Corn closed at USD6.32 1/2, up 5 cents.

Wheat: Today's USDA data was most bearish for wheat, raising world ending stocks to 182.3 MMT versus the average trade guess of 178.6 MMT and 178.2 MMT last month. Via a bit of creative accounting 3 MMT of this extra 4 MMT came courtesy of increases to the 2011/12 carryout. US ending stocks were raised in line with expectations and US export potential was left unchanged. EU-27 and Australian wheat exports were both raised 1 MMT each to 20.5 MMT and 17.5 MMT respectively. China's feed wheat usage was cut 3 MMT, increasing their ending stocks by a similar amount. Elsewhere, the Kazakhstan Ag Ministry said that the country had exported 5.2 MMT of grain between July 1st and April 1st versus 8.3 MMT a year ago, adding that they may export a further 2 MMT between now and the end of the season. India’s April 1st wheat stocks were said to be 24.2 MMT versus a government target of only 4.0 MMT. New crop harvesting there is now underway, with a record or near record crop anticipated. Now that the USDA report is out of the way the market will switch back to eyeing new crop prospects in the US and around the world. US winter wheat is under threat from a second big freeze coming to the Plains this week, whilst northern spring wheat states and the Canadian Prairies sit under a deep blanket of snow, delaying plantings there. Trade estimates for tomorrow's weekly export sales report for wheat are 3-600 TMT versus 316,000 MT last week. Funds were estimated as being net sellers of around 5,000 CBOT wheat contracts on the day. May 13 CBOT Wheat closed at USD6.96 3/4, down 12 cents; May 13 KCBT Wheat closed at USD7.30, down 16 1/2 cents; May 13 MGEX Wheat closed at USD7.84 1/2, down 15 1/4 cents.

EU Wheat Slides Late On

10/04/13 -– EU grains traders spent the day sitting on their hands waiting for the USDA April World Supply and Demand report to come out. Unfortunately these reports are now only released at 5pm London time, just as European markets are closing. At least we don't have to wait a whole Easter weekend to start trading this one though.

A late whiff of bearishness from the USDA saw London wheat close with front month May 13 down GBP2.50/tonne at GBP198.55/tonne and new crop Nov 13 GBP1.00/tonne easier at GBP187.25/tonne. May 13 Paris wheat finished EUR0.25/tonne firmer at EUR245.25/tonne.

Concerns remain about crop potential in the UK and France. French soft wheat development lags last year by 19 days and is 9 days behind 2011 (as of April 1), according to FranceAgriMer.

The USDA attaché in Rabat is clearly bullish on grain production potential in Morocco, forecasting output at 7.9 MMT this year, an increase of 55% on twelve months ago. The wheat harvest, which normally takes place in May/Jun, will amount to 5.9 MMT, up 52.5% from 3.87 MMT in 2012, the attaché said.

Such a strong recovery in production this year led the attaché to cut his forecast for Moroccan 2012/13 wheat imports from 4.0 MMT to 3.3 MMT, and estimate that 2013/14 import needs will decrease further to 2.7 MMT.

The USDA office in Cairo meanwhile increased their forecast for Egyptian wheat production this year from 8.5 MMT to 8.7 MMT. The cash-strapped North African nation will be forced to use up most of its domestic wheat reserves this season as it struggles to find the cash needed to import wheat on the international market to fund its subsidised bread program.

Egypt's 2012/13 wheat ending stocks could fall below 1 MMT, the USDA attaché said, versus around 6.7 MMT a year previously. State wheat buyer GASC has only imported 3.4 MMT of wheat so far this season, and looks unlikely to be in the international tender market again until it can secure a loan from the IMF. Last season they imported more than 5 MMT of wheat. A shortage of diesel could disrupt this year's harvest, also due to start next month, as well as the movement of grain, they warned.

Russia sold 51,840 TMT of intervention grain onto the domestic market in it's now regular twice weekly tender offering, that brings the total volume sold to date since sales began at the end of October to 2.764 MMT.

Freezing temperatures in the western plains are keeping crop watchers anxious about US winter wheat production prospects. The mercury dropped into the upper teens – low 20's F last night, with another hard freeze anticipated tonight, according to Martell Crop Projections.

Further north, heavy snow is seen delaying planting in the northern Midwest and Canada. "April northern Midwest temperatures are running 30 F colder than last year, a classic symptom of the Arctic Oscillation. Fieldwork in North Dakota is not expected to start until April 24. In the Canadian Prairies, Saskatchewan wheat fields are buried beneath a thick layer of snow," they add.

DTN Ag forecast a cold trough to remain entrenched across the Canadian Prairies and Northern US Plains bringing temperatures 15-20 F below normal for this time of year in the 5 days ahead. Spring wheat plantings in the region are clearly going to be late.

Brazil have announced that they will double their wheat import quota for purchases from outside of their regional free trade bloc. The move reflects lower production, and reduced quality, in both Brazilian and Argentine wheat this season.

Ukraine wheat remains aggressively offered in the marketplace for new crop positions, with milling wheat at USD265/tonne (around GBP173/tonne) FOB the Black Sea and feed wheat priced as low as USD245/tonne (around GBP160/tonne) for Jun/July shipment. Meanwhile India must decide what to do with it's anticipated record, or near record, wheat crop - the harvesting of which is already underway - given the huge carryover surplus that they still have from last year.

Both are limiting factors. If India do decide to capitulate on price to stimulate some volume movement then that could shatter whatever window of opportunity remains for those still wanting some upside this side of new crop in Europe.

The USDA numbers, and their implications on prices, will be discussed in tomorrow's report.

USDA WASDE Numbers

10/04/13 -- The USDA's eagerly awaited raft of important numbers are out, here's some of them:

EU Rapemeal Prices

10/04/13 -- Rapemeal prices on the continent are firmer again on strong demand and tight availability on old crop. New crop gains on EU rapeseed production concerns. Spot material now not offered. May/Jul up EUR14.00/tonne since Friday.

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

The Morning Vibe

10/04/13 -- The overnight grains are generally a tad easier in quiet trade this morning, any pre-report positioning should be done by now.

Everybody is waiting on the USDA report. What spanners will they throw at us this time? There has to be a possibility that they will raise Brazilian corn production significantly more than the 0.4 MMT that the trade is expecting. The average guess of 72.9 MMT is after all well below CONAB's 77.45 MMT released just yesterday.

What will they do with US corn and soybean ending stocks is also of interest. The trade is expecting the US corn carryout to rise from 632 million bushels to an average guess of 824 million as export commitments lag the required level to hit the USDA target of 22.5 MMT for the season. For soybeans meanwhile the average trade estimate is to see 2012/13 ending stocks up from 125 million last month to 137 million. The 125 million figure appears to have been the line drawn in the sand by the USDA which they will not cross no matter what.

Unlike corn though, US exports are well ahead of schedule. The USDA has an export target for 2012/13 of 36.6 MMT, and almost 33 MMT of that has already been shipped. Outstanding sales unshipped so far are over 3 MMT, so we have a situation where total commitments are already in excess of 98% of this 36.6 MMT goal. Whilst they are maybe unlikely to cut below the existing 125 million carryout, they may not increase it either.

Chinese soybean demand is showing signs of waning though, with Q1 imports down 13.5% at 11.48 MMT. The USDA's forecast for China to import 63 MMT of soybeans in 2012/13 is starting to look a little high. Maybe that means that there is scope to reduce Brazil's export potential?

We've still had no confirmation from the USDA yet of any wheat sales to China. If they have been buying heavily last week how much is just demand switching to the US from Canada (as has been rumoured due to gluten problems in some Canadian cargoes), and how much is fresh interest? There are widespread reports of quality issues with China's own wheat crop last year, not to mention question marks over the size of their harvest.

The European grains have all opened weaker, with London wheat down GBP0.70-0.80/tonne, Paris wheat down EUR1.25-1.50/tonne and Paris corn down EUR0.75/tonne. Where they end up is of more importance, although today's USDA report doesn't come out until the markets are closing at 17.00 BST.

The US Plains are heading for freezing temperatures again, which could damage winter wheat on the Plains. Further north heavy snow could further delay spring plantings. There's been talk this week that last week's freeze may have caused more damage to winter wheat in Oklahoma than was previously though. It has, according to one analyst from Oklahoma State University who says "In my experience, most freeze events are overhyped, however this one was the real deal" in this report (with pics) Freeze injury update – worse than we thought.

The USDA attaché in Morocco forecasts that grain production there will rebound sharply this year from last year's drought hit crop. Total grain production is seen up by more than half to 7.9 MMT, with the wheat crop coming in at 5.9 MMT. The attaché has cut his forecast for Moroccan wheat imports this year from 4 MMT to 3.3 MMT and says that the North African nation will only import 2.7 MMT of wheat in 2013/14.

Before the USDA comes out this afternoon we have the weekly ethanol production data from the US Energy Dept. Last week's daily ethanol output of 807,000 barrels/day fell short once more of the near 840,000 bpd required to hit the USDA target for corn demand of 4.5 billion bushels from the sector.

Chicago Closing Comments

09/04/13 -- Soycomplex: The soybean market reversed the direction of the past 10 days or so by closing with decent gains heading into tomorrow's USDA report in what looks like profit-taking and short-covering. Beans closed near the top end of the session range as funds bought an estimated 7,000 contracts on the day. CNGOIC estimated China Q1 2013 soybean imports at 11.48 MMT versus 13.27 MMT year ago due to Brazilian delay. They have full season '12/13 imports at 59 MMT versus the USDA's 63 MMT. If they're right that would be the first year on year drop in Chinese soybean imports in 9 years. CONAB cut their Brazilian soybean production estimate slightly from 82.06 MMT to 81.94 MMT. The IBGE estimated 80.9 MMT. CONAB said about 75% of the Brazilian bean crop has been harvested. Oil World estimated the Argentine bean crop at 48.5 MMT, unchanged from previous estimate and 2 MMT below the USDA's March forecast. Michael Cordonnier said that some Brazilian exporters are circumnavigating the congested ports Paranagua and Santos and shipping beans from the country's southernmost port in Rio Grande do Sul. Trade estimates for tomorrow's USDA report see 2012/13 US soybean ending stocks up from 125 million last month to 137 million. Both Brazilian and Argentine soybean production estimates are seen being trimmed slightly. World ending stocks are forecast little changes at 60.1 MMT. May 13 Soybeans closed at USD13.95 1/2, up 17 1/2 cents; Jul 13 Soybeans closed at USD13.71 1/4, up 13 1/4 cents; May 13 Soybean Meal closed at USD394.80, up USD1.50; May 13 Soybean Oil closed at 49.98, up 46 points.

Corn: The corn market also got a shot in the arm from short-covering following the recent collapse in prices with funds buying an estimated net 10,000 contracts on the day. Chinese industry analysts estimated China’s 2013/14 corn imports at a record 6-7 MMT versus the previous 2012/13 record of 5.2 MMT. CONAB estimated Brazil’s 2012/13 corn crop at 77.45 MMT, up from their previous estimate of 76.1 MMT and well above the USDA's 72.5 MMT. The IBGE estimated 74.9 MMT. UkrAgroConsult estimated the Ukraine 2013/14 corn crop at a record 21.8 MMT versus their previous estimate of 21.2 MMT. Corn exports next season were also forecast at a record 15.5 MMT versus 12.5 MMT this season. Texas corn planting is said to be 55% complete versus the 5 year average of 53%. Arkansas corn planting is 25% done versus the 5 year average of 47%. Louisiana corn planting is 97% complete. There are reports of some planting activity further north this week. In tomorrow's USDA report US 2012/13 corn carryout is expected to be raised from 632 million bushels to an average guess of 824 million, from within a range of estimates of 625-925 million. That could come via reduced US exports which are consistently lagging the level needed to hit current USDA targets. World ending stocks are forecast to rise from 117.5 MMT to 120.2 MMT. Brazilian corn production is seen increasing, although not by as much as CONAB or the IBGE estimate, from 72.5 MMT to 72.9 MMT. Argentine production may be trimmed slightly to 25.7 MMT is the average trade guess. May 13 Corn closed at USD6.44 1/4, up 10 3/4 cents; Jul 13 Corn closed at USD6.27 1/2, up 8 cents.

Wheat: The wheat market also reversed the recent trend, which in this case meant a lower close in Chicago ahead of the USDA report, even though a forecast hard freeze is on the way for parts of the Plains. The Directorate of Wheat Research in India said India’s upcoming wheat crop will be larger than the 2011/12 record crop of 94.9 MMT. Japan is tendering fro 120 TMT of US, Canadian and Australian wheat in a routine tender. Cash-strapped Egypt are said to be in negotiations with Kazakhstan to import wheat from them for the first time since 2009/10. UkrAgroConsult cut their forecast for Ukraine wheat production this year from 21.07 MMT to 20.23 MMT. The Ukraine barley crop was estimated at 7.75 MMT versus a previous estimate of 8.30 MMT. Oklahoma State University said that the US HRW wheat crop there has suffered some significant frost damage. The USDA yesterday increased the percentage of the crop rated as very poor by three points to 13%, with a further 20% rated as poor. Nationally the had winter wheat conditions 30% poor to very poor, unchanged from a week ago but well up on only 10% a year ago. There's talk of abandonment rates this year of around 25%. The Deutsche Bank forecast the average CBOT wheat price in 2013 at USD6.70 - down 22.7% from previous forecast. In tomorrow's USDA report the trade is expecting US 2012/13 ending stocks to rise from 716 million bushels to an average guess of 731 million, from within a range of guesses of 700-776 million. World ending stocks are forecast at 178.6 MMT versus 178.2 MMT last month. May 13 CBOT Wheat closed at USD7.08 3/4, down 3 3/4 cents; May 13 KCBT Wheat closed at USD7.46 1/2, up 1 1/2 cents; May 13 MGEX Wheat closed at USD7.99 3/4, unchanged.

EU Wheat Narrowly Mixed Ahead Of USDA Report

09/04/13 -- EU wheat was in consolidation mode ahead of tomorrow's USDA supply and demand numbers, closing narrowly mixed. Even though wheat is not expected to play a starring role tomorrow, everyone knows by now that the USDA's capacity to surprise should not be underestimated.

London wheat closed with May 13 unchanged at GBP201.05/tonne and with new crop Nov 13 GBP0.25/tonne easier at GBP187.00/tonne. May 13 Paris wheat settled EUR0.75/tonne lower at EUR245.00/tonne.

For European wheat the general background is one of strong exports tightening old crop stocks, and weather concerns over new crop.

Latest customs data out of France shows that their Feb soft wheat exports were 1.88 MMT, almost double the 993 TMT shipped a year earlier and the best monthly total since March 2011. All this was achieved in the shortest month of the year too. Barley exports were also almost double year ago levels in Feb at 582 TMT.

That takes soft wheat exports for 2012/13 to 11.36 MMT, an increase of 17% on a year ago, with barley exports up by almost a third to 3.66 MMT. Algeria was the largest soft wheat export home in February taking 414 TMT of the grain. Morocco (271 TMT), Yemen (137 TMT) and Tunisia (107 TMT) were the other major buyers.

French soft wheat plantings are seen up 2.2% this year to 4.97 million hectares, with barley sowings down 5.5% to 1.59 million ha, and the OSR area down 5.6% at 1.52 million ha. Despite an increase in wheat plantings Agritel today forecast the French soft wheat crop at 34.8 MMT, down 1 MMT on last year. They are estimating wheat yields at 6.98 MT/ha, which is 4% below the five year average due to delayed crop development and autumn planting problems.

Elsewhere, UkrAgroConsult cut 4% off their Ukraine wheat crop estimate to 20.23 MMT, although this is still up sharply on the USDA's 15.8 MMT estimate for last year's crop. The Ukraine analysts predict yields down from 3.21 MT/ha previously to 3.08 MT/ha, and versus 2.52 MT/ha in 2012. They raised their corn production estimate from 21.2 MMT to 21.8 MMT however.

IKAR cut their Russian grain production estimate from 90-92 MMT to 89-90 MMT, versus 83-89 MMT from SovEcon and 90-92 MMT from the Ag Ministry. The Russian government sold 54 TMT of intervention grain at today's tender, bringing the total volume sold since sales began to 2.71 MMT. Russian grain exports in March were only 307 TMT, including 116 TMT of corn, 94 TMT of wheat and 82 TMT of barley. That takes their 2012/13 marketing year to date grain export total to 14.15 MMT, down 37% on a year ago.

The export tender line-up is currently rather thin with Bangladesh in for 50,000 MT, Jordan in for 100,000 MT and Taiwan in for 82,300 MT. South Korea bought 55,000 MT of optional origin feed wheat overnight at USD309.75/tonne basis cost and freight for arrival by July 20.

A freeze threat will spread across areas of the western US Plains tonight and stretch into tomorrow, with Kansas and Oklahoma the most at risk states.

Last night's crop condition report from the USDA had Kansas winter wheat up two percentage points in the poor/very poor category to 31%, the same proportion of the crop in the state is also rated good/very good, highlighting how variable crop conditions are this year. Oklahoma saw a three point switch out of poor into very poor, with a third of the crop remaining rated in the bottom two categories, along with a one point gain in good/excellent to 28%. Texas very poor was up seven points to 22%, with poor down five to 29% and good/excellent up one to 17%.

Nebraska was only rated 11% good/excellent and 51% as poor/very poor. South Dakota was rated 0% excellent, 3% good, and a whopping 75% of the crop was in the poor/very poor category. These two states typically account for around a combined 10% of US winter wheat production, versus 22% from the top state of Kansas, 7% Oklahoma and 6% from Texas.

Informa Bullish On Rapeseed Production In 2013

09/04/13 -- Informa seem pretty bullish on world rapeseed production this year, estimating a global crop of 65.4 MMT, up 7% on last year's output.

The rise will be led by a leap of almost 19% in Canadian production to 15.8 MMT, followed by an increase of over 10% in Europe to 20.7 MMT, they say.

The latter seems a bit optimistic to me, given the current state of the crops in France and the UK.

Increases will also come from China, up over 7% to 13.8 MMT, and India - up nearly 3% to 7.0 MMT.

EU Rapemeal Prices

09/04/13 -- Rapemeal prices on the continent are firmer again today, garnering support from adverse weather conditions in Europe extending the feeding season and also potentially harming 2013 yields.

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

Chicago Rallies On Short-Covering Ahead Of USDA Report

08/04/13 -- Soycomplex: Today's price action can maybe be attributed to short-covering ahead of Wednesday's USDA report, following recent steep declines. Concerns over bird flu in China also seem to be easing a little. China took around two thirds of the 15.251 million bushels of soybeans inspected for export for the week through to Apr 4, according to USDA data today. That does appear to indicate a slow down in demand for US beans, and that maybe South America is starting to get a handle on its logistical problems, although it was bang in line with the expected 12-17 million bushels forecast by the trade. Year to date inspections are still running 18% ahead of last year. From here on in exports only need to average 5.2 million bushels/week to hit the USDA target for the season. The trade is expecting soybean ending stocks to come in near 135 million bushels in this Wednesday’s report, up from 125 million last month. The USDA may also lower soybean output in Brazil and Argentina, but could balance that with reduced Chinese imports. Safras e Mercado said in their weekly report that 76% of the Brazilian bean crop has been harvested versus 79% a year ago and 70% for the 5 year average. Funds were said to have been net buyers of around 4-6,000 soybean contract on the day. May 13 Soybeans closed at USD13.78, up 16 1/4 cents; Jul 13 Soybeans closed at USD13.58, up 14 1/4 cents; May 13 Soybean Meal closed at USD393.30, up USD1.50; May 13 Soybean Oil closed at 49.52, up 69 points.

Corn: The corn market closed modestly higher in what was probably also light short-covering ahead of Wednesday's USDA report. Weekly export inspections offered no support though, at little more than 10 million bushels, with the market expecting 14-18 million. Inspections for the marketing year to date are now 442.746 million bushels, less than half the 980.565 million of a year ago. Exports need to average 18.2 million bushels/week to hit the USDA target for the season. This slow pace gives the USDA room to potentially lower their export projection for 2012/13, and thereby possibly raise ending stocks, in Wednesday's WASDE report. The trade is expecting an increase from 632 million bushels last month to 812 million this time round. That would mean that US corn stocks as a percent of use would increase to 7.4% from 6% in last month’s report. Safras estimated that the Brazilian corn harvest is 57% completed versus 66% this time last year. The Argentine Ag Ministry say that the corn harvest there is 31% complete versus 28% a year ago. CONAB release their Brazilian crop estimates tomorrow, last month they had the corn crop estimated at 76.1 MMT. A Dow Jones survey estimated the Argentine corn crop at 25.7 MMT versus the USDA March estimate of 26.0 MMT. Funds were seen as net buyers of around 5-7,000 corn contracts on the day. May 13 Corn closed at USD6.33 1/2, up 4 1/2 cents; Jul 13 Corn closed at USD6.19 1/2, up 1 3/4 cents, new crop months were slightly lower.

Wheat: The wheat market drew support from ideas that all is not well with wheat production potential in the US, parts of Europe and also Russia, along with the apparent confirmation of large US SRW wheat sales to China. With funds holding a large net short position heading into Wednesday's report, wheat is the most vulnerable to an upside correction. Both Reuters and Bloomberg reported the sale of 14-16 cargoes of US SRW wheat to China for Jun/Dec 2013 delivery, quoting the website of the Chinese think tank organisation known as CNGOIC. There was no confirmation of any sales to China under the daily reporting system from the USDA today however. Weekly export inspections of 27.161 million bushels beat last week's 26.199 million and comfortably eclipsed the 17.859 MB reported in the same week last year. SovEcon estimated Russia’s 2013 grain crop at 83-89 MMT versus the Russian Ag Ministry estimate of 90-92 MMT, saying that crop conditions had deteriorated last week. There was talk that crop damage in Oklahoma from last week's freeze was worse than originally thought. After the close the USDA pegged 36% of the US winter wheat crop as in good/excellent condition, up from 34% a week ago. However, the proportion of the crop rated very poor also increased from 10% last week to 12%. Fund buying was estimated at around 4,000 CBOT wheat contracts on the day. May 13 CBOT Wheat closed at USD7.12 1/2, up 13 1/2 cents; May 13 KCBT Wheat closed at USD7.45, up 19 cents; May 13 MGEX Wheat closed at USD7.99 3/4, up 12 1/4 cents.

EU Wheat Rises On Continued Crop Concerns, Chinese Buying

08/04/13 -- EU grains bounced higher on apparent confirmation of the recently rumoured sales of US wheat to China. Various news wires this morning said that China had bought "14-16 cargoes" of US SRW wheat - said to be close to 1 MMT - for delivery June-December last Thursday. The business was widely rumoured last week, although there has been no official confirmation of yet.

On the day, London wheat closed with front month May 13 up GBP2.45/tonne to GBP201.05/tonne and new crop Nov 13 up GBP3.00/tonne at GBP187.25/tonne even as the pound rose to its best levels against the dollar since Feb 21 following weak US jobs data. May 13 Paris wheat closed EUR2.00/tonne firmer at EUR245.75/tonne, having hit a 2 1/2 month high of EUR247.75/tonne earlier in the day.

These large scale sales to China come hot on the heels of news Friday that, as well as dumping 51% of their corn longs, and 31% of their soybean length in the week through to last Tuesday, funds added significantly to their CBOT wheat shorts. Heavily oversold conditions always leaves the market vulnerable to a short-covering rally.

Crop concerns remain to the forefront in parts of Europe and the US. A FranceAgricole survey found that 38% of French farmers rate wheat yield potential on their farms this year as "significantly lower" than normal, with a further 33% expecting a "slightly lower" crop and with 23% anticipating a "normal" year. Only 4% saw potential as "slightly higher" than normal and 2% of respondents were hoping for yields to be "much higher" than normal.

A different survey said that 57.4% of French growers had no wheat sold forward at all yet, with 12.5% having committed 0-15% of planned output and 13.7% having 15-30% of their anticipated 2013 production sold.

Europe remains too cold in the north and too wet in the south, although "temperatures are expected to finally warm across the region later this week, which should allow winter crop growth to finally improve in northern areas, and spring crop planting to increase," say MDA CropCast. French crop development appears 2-3 weeks behind normal. In the UK, following on from the very cold March, the first week of April was apparently the coldest in 90 years.

North western Ukraine and northern and western parts of the Central Region of Russia are expected to see cold temperatures remain this week, keeping winter crops in dormancy, according to MDA CropCast.

Optimism is still quite high for a sharp rebound in Black Sea grain production this year however. The USDA attaché in Kazakhstan sees grain production there increasing by more than half to 15.0 MMT this year. The Russian Ministry are forecasting a crop of 90-92 MMT versus 70.9 MMT last year, whilst the Ukraine grain harvest may reach 54-56 MMT, from 46 MMT last year say the Ukrainian Agrarian Confederation.

The Ukraine Ministry said that grain exports there this season currently amount to 19.73 MMT including 11.0 MMT of corn, 6.3 MMT of wheat and 2.04 MMT of barley. Agritel suggest that the Ministry may soon announce that they are allowing a further 3-700 TMT of wheat for export. Ukraine early spring plantings meanwhile currently stand at just under 800,000 ha, or 27% of the planned area.

New crop Black Sea wheat is said to be offered around USD255/tonne FOB (around GBP167/tonne) for August shipment, South Korea reportedly paid USD297/tonne C&F for August arrival any origin (thought to be Black Sea) wheat last week.

As is often the case, these cheap new crop offers out of the Black Sea are likely to depress European prices come harvest time no matter what size crop we end up with here.

EU Rapemeal Prices

08/04/13 -- Rapemeal prices on the continent are firmer, supported by reduced production due to low crush margins on old crop, and for new crop on adverse weather conditions leading to production concerns for the 2013 harvest. Higher soymeal prices overnight also add support.

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

Bye, Bye, Fund Money

08/04/13 -- Friday's Commitment of Traders Report from the CFTC made interesting reading, highlighting the extent that fund money has pulled out of the grains in the week through to last Tuesday night.

Their corn long was more than halved from around 192,500 lots to little more than 98,000 lots, for a net withdrawal of some USD3.7 billion. They also cut their soybean long by 35,000 contracts, or 31%, to 112,000 and added a further 13,000 worth of CBOT wheat shorts, taking their net position now to just over 35,000 short.

Overall the data shows them pulling a net USD7.5 billion out of the grains sector. For interest they also took USD3.9 billion out of metals too. Some of the money went into energy (up USD2.5 billion), but the rest of it seems to have disappeared - from commodities at least.

Saxobank say "this was one of the biggest weekly reductions since 2008 almost wiping out the net amount bought the previous two weeks.

Fund length in now heavily concentrated in the energy sector at USD49.3 billion, as opposed to USD7.7 bln and USD7.6 bln respectively in metals and grains.

Here We Go Again

08/04/13 -- There's some new trading hours to get used to again from our old time tinkering chums the CME. As from today, and for how long it is anybody's guess judging on recent performances, there are some new trading times for the overnight electronic market. The tossers.

Here they are in BST: Overnight electronic session opens 1am and trades through to 13.45pm. Then it has a little power nap for three quarters of an hour. It and the main daytime open outcry CBOT session then also trade between 2.30pm to 7.15pm. The market then goes to the pub, gets completely slaughtered at the stress of being so badly buggered about, wakes up in a seedy motel room next to an unconvincing transvestite called "Gina" with a kebab stuck to the side of it's head, has a quick shower and stumbles back into work at 2am reeking of Jack Daniels and does it all over again.

The Morning Vibe

08/04/13 -- The overnight market sees beans 10-12 cents higher, with wheat and corn up 4-5 cents (on the nears at least).

Not that I want to belittle death, generally it's quite a bad thing which can be fatal, but are six deaths from bird flu amongst a population of 1.4 billion really THAT serious? I mean more people probably died in China over the weekend from having a filing cabinet fall on their heads than six.

Ditto 20,000 poultry slaughtered in Shanghai on Friday. That sounds like a minuscule amount to me. I've tried Googling "poultry numbers in China" and not come up with a potentially credible looking number, but it's going to be BLOODY GIGANTIC compared with 20,000 that's for sure.

Last year China produced 18.23 MMT of poultry meat is one figure I've unearthed, which kind of knocks the significance of 20,000 scrawny chickens into a cocked hat (or is that a woked hat?) from a feed perspective.

Maybe that's what the market is thinking this morning?

In other news, Bloomberg are reporting as a done deal 14-16 cargoes of US SRW wheat sold to China "for the second half" - presumably they meant to add "of 2103" there? That would appear to be responsible for adding a bit of support to wheat this morning.

My US weather chum Gail Martell says that the weather we have been experiencing across the winter is typical of a cold Arctic Oscillation, which normally sees:

1) Northern Europe is dominated by cold dry air

2) Unusually warm conditions develop in North Africa and the Middle East

3) An active winter storm track develops in the Mediterranean Sea causing heavy precipitation in southern Europe

Similar winter developed 2 years ago in Europe from a cold Arctic Oscillation. That year (2011/2) "Northern Europe, where the vast majority of European wheat is grown, produced a disappointing crop. The top 4 European wheat producing nations of France, Germany, United Kingdom and Poland had a combined wheat production of 83.37 MMT, 3.4% below the 86.3 MMT harvested the previous season," says Gail.

Additionally, wheat imports in the 2011-12 marketing year into the Middle East and North Africa jumped 16%, year-on-year, requiring 48 MMT of wheat imports into the region," she adds.

As if echoing her theory NDA CropCast say that: "An active storm track across southern Europe in recent weeks has resulted in notable wetness, especially across Spain, Italy, and southeastern Europe, Also, temperatures have been quite cold across northern areas, which have maintained winter crops in dormancy and also significantly slowed spring crop planting."

However, "temperatures are expected to finally warm across the region later this week, which should allow winter crop growth to finally improve in northern areas, and spring crop planting to increase. Showers should also begin to rebuild in north central and northwestern areas, which will begin to replenish moisture," they conclude.

The USDA release their weekly crop condition report tonight. Last week gave us winter wheat good/excellent at 34% and poor/very poor at 30%. Before that we get their weekly export inspections report this afternoon.

Tomorrow we have the latest Brazilian crop estimates from CONAB and on Wednesday our old mates the USDA release their April WASDE report. After that we get the world cereal supply and demand numbers from the FAO on Thursday along with the latest UK cereal usage data from DEFRA, not to mention the usual weekly export sales report from the USDA.

A busy week lies ahead then, bring it on...