Nogger's Blog

Dates For The Diary In The Week Ahead

27/04/13 -- Upcoming important events for the week ahead:

Monday: Weekly export inspections from the USDA; Weekly US crop progress from the USDA (corn planting expected 8-10% complete, US winter wheat conditions may fall 1-2% in the good/excellent category); Chinese Dalian market closed.

Tuesday: German and EuroZone unemployment data; The Wheat Quality Council's US winter wheat tour begins; Fed 2 day policy meeting begins; May 13 MATIF Rapeseed Expires; Chinese Dalian market closed; First notice day for deliveries against CBOT May contracts.

Wednesday: Chinese Dalian market closed.

Thursday: Weekly US export sales from the USDA; European and Chinese economic data released; ECB meets - speculation they may cut interest rates by 0.25%; Chinese Dalian market closed.

Friday: US unemployment data due; May 13 MATIF barley expires; Stats Canada Quarterly Grain Stocks Report; Chinese Dalian market reopens; Weekly Commitment of Traders Report released.

Chicago Mixed, Soybeans Up, Wheat And Corn Down

26/04/13 -- Soycomplex: Beans traded both sides, but managed to close with modest gains, despite minimal support from wheat or corn. There's talk of more Chinese soybean cancellations and/or rolling over of existing old crop purchases into new crop. Based on yesterday's weekly export sales data the US already has 99% of the USDA target for the season on the books, and 92% of it is shipped already, so further cancellations now shouldn't be too destructive. Soymeal sales incidentally are now 101% of the USDA target for the season, so an increase to exports there, and possibly a hike therefore in the domestic crush could be on the cards in the May WASDE report. A delay to timely planting of the 2013 US crop is what the market is fretting about. The IGC forecast China's 2012/13 soybean imports down 2 MMT from last month to 59 MMT. A Brazilian analyst said that, as of 25 April, Brazil has already exported 6.58 MMT of beans this month versus 3.53 MMT in the whole of March. The Rosario Grain Exchange said that Argentine farmers have only forward sold 26% of their soybean crop, versus 46% this time a year ago, as they continue to hold beans as a hedge against inflation and the declining peso. Fund buying in beans was estimated at around 3-4,000 contracts on the day. May 13 Soybeans closed at USD14.30 3/4, up 7 1/4 cents; Jul 13 Soybeans closed at USD13.81, up 8 3/4 cents; May 13 Soybean Meal closed at USD417.90, up USD3.60; May 13 Soybean Oil closed at 49.66, down 11 points. For the week that places front month May 13 beans 2 1/2 cents higher, with meal up USD5.50 and oil up 50 points.

Corn: The trade isn't expecting any huge improvement in Monday's corn planting progress report, with maybe around 8-10% of the US crop in the ground versus 4% a week ago and 33% normally. It is however expecting a big improvement to be made in the week ahead, which should be reflected in the USDA's report due May 6th. Warmer and drier weather is in the forecast for the US Midwest next week. US corn sales currently stand at 81% of the USDA target for the season, versus 85.5% normally at this time. Old crop sales need to average just over 200 TMT/week to hit USDA targets. Indonesia bought 200 TMT of South American corn for May/Jun shipment overnight. Corn planting in China is seen at 16.8% completed, slightly lower than average at this time. The Ukraine Ag Ministry said that Ukraine has exported 20.6 MMT of grains so far this season, including 6.49 MMT of wheat and 11.76 MMT of corn. Fund money continues to desert the grains sector, and corn in particular. Net fund ownership of corn, soybeans, CBOT and KCBT wheat as of Apr 23 was USD27.2 billion, down USD1.7 billion on the week and down 40.6% year-on-year - its lowest value since December 2011. Funds were estimated as being further net sellers of around 5-7,000 corn contracts today. May 13 Corn closed at USD6.44, down 1 1/4 cents; Jul 13 Corn closed at USD6.19 3/4, down 4 3/4 cents. May 13 was 8 cents lower on the week, with Jul 13 down 13 1/4 cents.

Wheat: Wheat didn't put up any sort of a positive performance heading into the weekend, with little sign of this week's price decline encouraging any fund short-covering. The trade will be looking with interest to Monday's crop report to see if any further freeze damage appears to have been done to wheat on the Plains this week. The threat of that has at least been supporting Kansas wheat relative to Chicago and Minneapolis this week. There's talk that Egypt's GASC may tender for wheat next week. If they do then US origin material might stand a decent chance, although it will be interesting to see if there are any Black Sea offers, judging on this week's talk of Ukraine and possibly Russia re-entering the market. Yesterday's weekly export sales report included only 71,700 MT of old crop wheat, with 253 TMT/week needed to hit the USDA target for the season. An Asian buyer is reportedly seeking 300 TMT of US or Australian wheat for July shipment. Ukraine and Russian weather conditions remain largely dry for the week ahead, which is seen a beneficial for planting progress, for now. Ukraine in particular seem confident of a very strong rebound in grain and oilseed output this year. Funds were estimated to have been net sellers of around 2-3,000 CBOT wheat contracts on the day. May 13 CBOT Wheat closed at USD6.88 3/4, down 12 1/2 cents; May 13 KCBT Wheat closed at USD7.56 1/2, down 7 1/4 cents; May 13 MGEX Wheat closed at USD8.11 1/4, down 12 cents. For the week that puts Chicago wheat down just over 20 cents, with Kansas adding 10 1/2 cents and Minneapolis losing 14 1/4 cents.

Old Crop London Wheat Closes At Lowest Since Early August

26/04/13 - The EU grains market closed mixed but mostly lower on the day, with old crop London wheat pretty friendless. New crop London wheat was supported by questionable production prospects here, even if things are improving on the Continent. The May/Nov spread tonight stands at GBP8.75/tonne, little more than half the  GBP16.50/tonne it was at the start of the month.

London wheat closed with front month May 13 down GBP1.75/tonne at GBP191.00/tonne and new crop Nov 13 GBP0.70/tonne easier to GBP182.25/tonne. May 13 Paris wheat finished EUR1.00/tonne higher at EUR242.50/tonne. For London wheat this was a new lowest close for a front month since the beginning of August 2012.

For the week as a whole May 13 London wheat fell GBP5.00/tonne, with Nov 13 down GBP4.40/tonne and May 13 Paris wheat down EUR3.00/tonne. A stronger pound/weak euro aided French wheat relative to London wheat this week. There's a growing feeling that the ECB may lower interest rates in the Eurozone next week, which is putting the euro under pressure. The pound finished at it's best level against the euro tonight since mid-January.

News that Brussels only issued 237 TMT of soft wheat export licenses this week, the smallest weekly total also since last August, was seen as a sign that demand for EU wheat is starting to wane. News this week that Ukraine, and possibly Russia too, will soon be back in the export market this side of new crop weighed on sentiment. Even so, EU soft wheat exports to date are 47% up on last year at 16.56 MMT.

Also of note was that Brussels granted over 100 TMT of wheat import licenses, with 77 TMT of that coming from the US. Corn imports are also flooding in to Europe, with 9.4 MMT of licenses granted so far in 2012/13, more than double year ago levels.

The Ukraine Ag Minister said that Ukraine would allow a further 0.3-0.5 MMT of wheat exports in 2012/13. Early spring grains there have now been planted on 92% of the planned area, whilst corn plantings are 20% complete and sunseed sowings at a 1.56 million ha are a record area for this time and constitutes 41% of the expected final area. A USDA official earlier this week suggested that both the corn and sunseed crops could set record production highs this year.

French conditions and planting progress have improved with a week of sun on the crops. Winter wheat headed has jumped from 69% last week to 94% this time round, although that still lags 100% from a year ago. Good/excellent is up two points from last week to 67%, which is also two points ahead of last year.

Winter barley headed is up from 76% to 96% (versus 100% last year), with good/excellent up from 65% last week to 66%, and ahead of 59% in 2012. Spring barley tillering is up from 17% to 37% (versus 89% last year), and good/excellent conditions there are up two points from a week ago to 81% (versus 87% in 2012).

French corn plantings have advanced from only 4% last week to 29% complete this week, although that still lags the strong early pace of 65% in 2012.

Jordan are tendering for 150 TMT of milling wheat, having passed on several recent tenders due to price. There's talk that Egypt's GASC might also tender for wheat next week.

Chicago Closing Comments - Thursday

25/04/13 -- Soycomplex: Strength in outside markets spilled over into the soycomplex, despite net cancellations of 206,300 MT in old crop beans and sales of "only" 628,500 MT for new crop in today's weekly export sales report. The trade was expecting net combined sales of 600 TMT to 1 MMT. The Buenos Aires Cereals Exchange estimated the Argentine soybean crop at 48.5 MMT, unchanged from their previous estimate and 2 MMT lower than the USDA. They said that Argentina’s bean harvest is 56.2% complete. There's talk of Chinese crushers rolling old crop US bean purchases to new crop, it's unclear whether this is due to bird flu reducing domestic demand for soymeal or not. A weaker US dollar was supportive to the entire complex today. There's some talk of that enabling South American beans to be shipped into the US reasonably economically. Funds were estimated to have been net buyers of around 7,000 soybean contracts on the day. May 13 Soybeans closed at USD14.23 1/2, up 19 1/2 cents; Jul 13 Soybeans finished at USD13.72 1/4, up 27 cents; May 13 Soybean Meal closed at USD414.30, up USD8.40; May 13 Soybean Oil closed at 49.77, up 59 points.

Corn: Weekly export sales were in line with trade expectations, and heavily skewed in favour of old crop at 314,700 T for 2012/13 and only 21,200 MT for 2013/14 (the trade was expecting a combined 200-600 TMT). In addition to that the USDA also announced sales of 300,000 MT of US corn to China and 240,000 MT to unknown for 2013/1 delivery. The Buenos Aires Cereals Exchange estimated Argentina’s 2012/13 corn crop at 24.8 MMT, down slightly from a previous estimate of 25.0 MMT and versus 26.5 MMT from the ever optimistic USDA. They said that said Argentina’s corn harvest is 35.1% complete. The IGC estimated the 2013/14 world corn crop at a record 939 MMT, up 10% from a year ago. They placed 2013/14 world corn ending stocks at 143 MMT versus their 2012/13 estimate of 116 MMT. MDA CropCast increased their Brazilian corn production estimate by 780 TMT from last week to 74.88 MMT. They are forecasting US corn production at 13.3 billion bushels in 2013 (337.9 MMT versus 253.6 MMT in 2012). The CME group declared force majeure at a number of Illinois River terminals due to high water levels. Funds were said to have been net buyers of around 7,000 contracts on the day. May 13 Corn closed at USD6.45 1/4, up 5 3/4 cents; Jul 13 Corn is at USD6.2 4 1/2, up 6 1/4 cents.

Wheat: Wheat got support from more fears of winterkill on the US Plains this week. Weekly export sale of 71,700 MT of old crop and 234,700 MT of new crop were uninspiring against the expected 500-800 TMT. Japan bought 95,621 MT of milling wheat for May/Jul delivery in a routine tender, with around 66 TMT of that coming from the US. MDA CropCast increased their world wheat production estimate by 200 TMT from last week to 676.4 MMT, with increases for Canada (to 27.5 MMT versus 26.4 MMT in 2012) more than offsetting a reduction in US production to 57.4 MMT. The IGC estimated the 2013/14 world wheat crop at 680 MMT versus a previous estimate of 683 MMT, but up from 655 MMT a year ago. They estimated 2013/14 world wheat ending stocks at 181 MMT versus a 2012/13 estimate of 179 MMT. Analysts said China will continue to import wheat to help rebuild their strategic reserves. Sinograin has bought 1.0 MMT of 2013/14 US SRW wheat so far and is expected to buy 2-3 MMT more. Dry weather is allowing good progress to be made with spring plantings in the Black Sea countries. MDA CropCast noted dryness concerns are building for wheat planting in Australia. Funds were estimated as net buyers of around 4,000 Chicago wheat contracts on the day. May 13 CBOT Wheat closed at USD7.01 1/4, up 9 1/2 cents; May 13 KCBT Wheat closed at USD7.62, up 23 cents; May 13 MGEX Wheat closed at USD8.23 1/4, up 6 cents.

EU Wheat Rebounds From Multi-Month Lows

25/04/13 -- EU grains closed mostly higher, following the US market lead, and rebounding modestly from recent multi-month lows.

On the day, May 13 London wheat closed GBP0.75/tonne higher at GBP192.75/tonne and with new crop Nov 13 GBP0.10/tonne firmer to GBP182.95/tonne. May 13 Paris wheat settled EUR1.75/tonne higher at EUR241.50/tonne.

The pound rose following the news that the UK had managed to avoid a triple dip recession courtesy of growth of 0.3% in Q1 of 2013, beating forecasts of growth of 0.1%, and fears of negative growth thereby signalling recession.

That kept a lid on UK price rises.

French grain exports from the main hub of Rouen fell 45% week on week to just under 88 TMT, including 33,370 MT of soft wheat. Morocco was the main destination for the latter, along with 4,400 MT heading for the UK.

MDA CropCast estimated the world wheat crop at 676.4 MMT, up 200 TMT from last month. Increases for Canadian output more than offset reductions to US production.

Bangladesh received a lowest offer of USD314 CIF in a tender to buy 50 TMT of optional origin wheat, India is thought to be the most likely seller.

Russian spring grain plantings are 8.8% complete at 2.65 million ha, well ahead of last year's pace of 1.22 million ha.

The International Grains Council (IGC) said today that global corn production in 2013/14 is expected to rise by 10% in 2013/14 to a record 939 MMT.

They also said that 2013/14 world wheat production is forecast to rise more modestly by around 4% to 680 MMT this year.

Despite the current poor UK crop conditions things look a whole lot rosier elsewhere around the world, especially in the Black Sea countries, frequently the cheapest sellers.

Get The Bunting Out

25/04/13 -- News that the UK managed to avoid slipping into a dreaded triple dip recession with growth of a MASSIVE 0.3% in the first quarter of 2013 was all it took to get the pound up above 1.18 against the euro and over 1.54 against the dollar today.

Chancellor George Osborne, the great big cry baby, said that the news was "encouraging" in a stunning display of gregariousness.

There's talk that the euro may weaken further next week if the ECB lowers interest rates in the Eurozone, which many think they will following weak German economic data this week.

With rates at 0.75% there's not a great deal of room for manoeuvring, and the benefit that would be derived from a 0.25% cut may only be minimal, but we shall see. An announcement is due next Thursday.

Meanwhile, Spanish unemployment has hit a record 27.2%, and a few Real Madrid and Barcelona players may be joining the queue judging on this week's football results.

EU Rapemeal Prices Mostly Lower

25/04/13 -- Rapemeal prices on the continent are mostly lower today on an improving new crop rapeseed outlook across most of Europe. Oil World yesterday forecast production in Ukraine in 2013 up 54% to 2 MMT.

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

Chicago Closing Comments - Wednesday

24/04/13 -- Soycomplex: Beans closed lower for a third session in a row, pressured by an improved Midwest weather outlook. Lanworth Inc increased their forecast for US soybean production this year from 3.38 billion bushels to 3.42 billion, up 12% on output of 3.015 billion in 2012. News that the Chinese bird flu outbreak has now spread to Taiwan was also viewed as bearish. The H7N9 Bird Flu virus has infected 108 people and killed 22 in China since it was first detected. Nearby demand remains strong though, which is reflected in cash premiums at near record levels. It will be interesting to see if tomorrow's weekly export sales include a decent slug of old crop sales Trade estimates are for combined soybean sales of 600 TMT - 1 MMT. The USDA today announced the sale of 116 TMT of new crop US soybeans to unknown destinations. Funds were estimated as being net sellers of around 3,000 soybean contracts on the day. May 13 Soybeans closed at USD14.04, down 15 3/4 cents; Jul 13 Soybeans closed at USD13.45 1/4, down 13 1/4 cents; May 13 Soybean Meal closed at USD405.90, down USD5.80; May 13 Soybean Oil closed at 49.18, up 61 points.

Corn: The corn market closed higher, albeit modestly, for the first time this week. Lanworth increased their 2013 US corn production forecast from 13.72 billion bushels to a record 13.93 billion, with potential yields were upped from 155.8 bu/acre to 158.1 bu/acre on the back of recent weather improvements. They also increased their Brazilian corn production forecast for 2012/13 from 76.0 MMT to 77.1 MMT. The weekly ethanol grind data was supportive, showing production up 21,000 barrels/day on last week to 853,000 bpd. POET announced that it was re-opening an ethanol plant in Montana due to better margins. South Korea said it had bought 55 TMT of optional origin corn overnight for August arrival at the lowest price it has managed to achieve in almost 10 months. Israel bought 100 TMT of optional origin corn overnight, possibly thought to be from South America. Stats Canada is projecting corn plantings there this year up 17.6% on last year at 3.81 million acres. Estimates for tomorrow's weekly export sales report are 200-600 TMT. Funds were estimates as being net buyers of around 4,000 contracts on the day. May 13 Corn closed at USD6.39 1/2, up 1 cent; Jul 13 Corn closed at USD6.18 1/4, up 4 1/4 cents.

Wheat: The wheat market was mixed, with Chicago ending lower and Minneapolis and Kansas finishing higher. Lanworth Inc lowered slightly their US all wheat production estimate from 2.02 billion bushels to 2.007 billion. They pegged Australian wheat production in 2013/14 at 25 MMT, up 13% on 2012/13. Jordan passed once again on their tender to buy 100 TMT of wheat due to price. Russia sold 57,884 MT of intervention grain in it's regular twice weekly offering. Japan bought 70 TMT of feed wheat and 20 TMT of barley for shipment by the end of July. They are also tendering for 95,621 MT of milling wheat for May/Jul delivery, most of which will be of US origin, with the results expected tomorrow. Israel bought 45 TMT of feed wheat, expected to be of Black Sea origin. Ukraine said it will raise the ceiling on 2012/13 wheat exports. There's talk that Russia too will soon be back in the export market. Stats Canada came out with a bearish wheat planting estimate of 26.6 million acres, up 12% on an area of 23.7 million in 2012. Many farmers are seen switching into wheat and out of rapeseed. Estimates for tomorrow's weekly export sales report are 500-800 TMT. May 13 CBOT Wheat closed at USD6.91 3/4, down 5 3/4 cents; May 13 KCBT Wheat closed at USD7.39, up 1 3/4 cents; May 13 MGEX Wheat closed at USD8.17 3/4, up 2 1/2 cents.

EU Wheat Extends Slide As Global Production Prospects Improve

24/04/13 -- EU grains spent most of the day on the defensive again, with May 13 London wheat slipping to lows not seen since last July, as production prospects in many places around the globe improve.

London wheat closed with front month May 13 down GBP1.05/tonne at GBP192.00/tonne and new crop Nov 13 down GBP1.15/tonne at GBP182.85/tonne. May 13 Paris wheat closed EUR1.25/tonne lower at EUR239.75/tonne.

Stats Canada released their 2013 prospective plantings estimates today, estimating the all wheat area 2.2 million acres - much more than the average trade guess (24.4 mln) and significantly higher even than the highest trade forecast (25.2 mln) at 26.6 million acres. That represents a jump of 12% on last year. Much of this extra area is seen coming from reduced rapeseed plantings, which are forecast down from 21.5 million last year to 19.1 million in 2013. Paris rapeseed futures rose on the news.

Things are looking up in Eastern Europe, with the USDA attaché in Romania forecasting a rebound of 22% in wheat production and 19% in barley output this year. Decent rains in recent months have helped replenish soil moisture reserves there, they say.

In Ukraine prospects for the 2013 harvest are "very optimistic" said one USDA analyst in Odessa. Corn production there could come in at a record 26 MMT this year, which would be up by almost a quarter on last year. They could also chip in with a record sunseed crop of 11 MMT, up 22% on last year, he added, whilst stressing that these were his personal forecasts and won't necessarily correspond with the USDA's May WASDE estimates due out on May 10.

Separately, Oil World forecast a 54% hike in rapeseed production in Ukraine in 2013, according to a report on Bloomberg today.

The Ukraine Ag Ministry said that 685,000 ha of corn and 1.3 million ha of sunseed has been planted there so far. Meanwhile the planting of early spring grains, which excludes such crops, is 89% complete at 2.6 million ha, they said. Almost 93% of winter grains are in good/satisfactory condition, they added.

Some report today said that the Ukraine government have lifted their ceiling on wheat exports by a further 200,000 MT for 2012/13. Other reports suggest that "all limits" have been lifted and that these could now rise close to 7.0 MMT by the end of the season. Grain exports in 2012/13 to date are 20.5 MMT, including 6.46 MMT of wheat, as well as 11.6 MMT of corn and 2.04 MMT of barley.

Morocco's grain harvest is seen jumping 90% this year to 9.7 MMT on favourable winter conditions. Last year's drought-hit crop was only 5.1 MMT. Wheat production is also forecast to rise 90% to 5.2 MMT. MARS said on Monday that promising cereal production prospects exist in Turkey, Morocco, Algeria, and north Tunisia, all of which have had average or above average rainfall across the winter.

Elsewhere Lanworth Inc forecast Australian wheat production in 2013/14 at 25 MMT, an increase of 13% on last year. They did however trim slightly their estimate for US wheat production in light of potential freeze damage from 2.02 billion bushels to 2.007 billion (54.6 MMT), which would be 11.6% down on output in 2012.

More than compensating for that was a rise in predicted US corn production this year. Lanworth increased their estimate from 13.72 billion bushels to 13.93 billion (353.8 MMT), which would easily set a new record and beat last year's output by a whopping 80 MMT, or 29%.

Stats Canada Forecast Big Leap In Wheat Plantings

24/04/13 -- Stats Canada are forecasting a 12% jump in all wheat plantings this year from 23.798 million acres in 2012 to 26.719 million for the 2013 harvest.

The figure is well above the average trade estimate of 24.4 million acres, and significantly higher even than the highest trade estimate for which the range was 23.3-25.2 million.

Many of these near 3 million extra acres are seen coming from rapeseed plantings, which are forecast down from 21.531 million last year to 19.133 million in 2013.

The average trade guess for rapeseed plantings was 20.3 million acres, from within a range of 19.7-21.0 million, so this number is below even the lowest trade guess.

Pro Canada Farmer said that whilst plantings are a week to 10 days behind normal it's too early to get too concerned about that just yet. "We’ve seen stressed springtime conditions many, many times over the years. Generally speaking, the crop gets in," they said

EU Rapemeal Prices

24/04/13 -- Rapemeal prices on the continent remain steady nearby, supported by tight availability, but the further forward positions are finally showing signs of cracking. Hopes that the worst is over for new crop potential and an improvement in prospects for US soybean production in 2013 leave few wanting to commit to forward purchases at these levels.

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

Chicago Closing Comments - Tuesday

23/04/13 -- Soycomplex: Beans were firmer nearby on strong demand, but weaker further forward on an improved weather forecast for the Midwest and concerns about global economic growth, particularly in China - the world's biggest soybean buyer. The USDA announced the sale of 392,000 MT of new crop soybeans to China, although this seemed largely ignored. Talk that some US farmers had already made the decision to switch from corn to beans and better planting prospects had new crop on the defensive. China’s bird flu outbreak has now risen to 105 human cases, with 21 deaths. There's some talk of these instances being heavily under-reported. The market is wondering and debating how much effect bird flu could have on Chinese demand, conscious that March bean imports were down more than 20% versus March 2012 (although at least some of that will have been due to shipping delays out of Brazil). The Rosario Grains Exchange said that only 20% of the 2012/13 Argentine bean crop has been sold as local farmers hold back due to the weak peso and inflation concerns. Michael Cordonnier said that the Argentine bean harvest is about 40% complete, with Brazil about 90% done. He estimated production there at 50.0 MMT and 81.5 MMT respectively, unchanged from last week. US soybean planting is underway in the Deep South with Louisiana 20% complete, up from 11% a week ago but behind the 32% of a year ago. Mississippi is 7% complete versus 4% a week ago and 39% a year ago. Planting did get off to a flyer last year though. May 13 Soybeans closed at USD14.19 3/4, up 2 1/2 cents; Jul 13 Soybeans closed at USD13.58 1/2, down 5 3/4 cents; May 13 Soybean Meal closed at USD411.70, up USD1.70; May 13 Soybean Oil closed at 48.57, down 5 points.

Corn: A warmer and drier outlook for the Midwest kept corn under pressure. Although only 4% of the national crop was planted as of Sunday, it was noted that it was only 5% complete at this time in 2009 when final yields came in at a record 165 bu/acre. Clearly there is still time for a bin-busting crop yet if the weather co-operates. Last night's planting progress report had Illinois 1% planted versus 56% a year ago and 24% on average. Indiana was 1% planted versus 43% a year ago and 16% on average; Ohio was also only 1% planted versus 31% a year ago and 12% on average. When the weather is conducive though these states could all easily plant 25% of the crop in a week. CNGOIC estimated China’s 2012/13 corn imports at 3.0 MMT, down more than 50% on a year previously. They said China has imported 2.12 MMT of corn so far this season, down 26% versus a year ago. Michael Cordonnier said that the Argentine corn harvest is about 32% complete, with production estimated at 24.0 MMT, unchanged from his previous forecast. He pegged the Brazilian crop at 75.0 MMT, also unchanged from previously. There's lot of talk of 2nd crop corn in Brazil getting off to a great start due to plentiful moisture levels. On the international tender front Israel are in for 100 TMT, with Indonesia and Malaysia also in for optional origin corn. The Black Sea may be the favourite to win the Israel business with the latter two picked up by South American origin corn. US corn exports continue to lag the level needed to hit USDA targets. Fund selling was estimated at around a net 8,000 on the day. May 13 Corn closed at USD6.38 1/2, down 7 1/4 cents; Jul 13 Corn closed at USD6.14, down 9 1/2 cents.

Wheat: The wheat market was down quite sharply in early trade, but that may have flushed out some short covering and/or profit taking as fund money holds a significant short position in Chicago wheat. Another chance of freeze damage on the southern/central Plains tonight may discourage the bears from pressing the pedal too much lower yet. Monday night's crop condition numbers appeared to reflect some of last week's potential freeze yield losses with good/excellent down one point and poor/very poor up two. In the top three winter wheat states Texas was 12% good to excellent versus 17% a week ago; it was 60% poor to very poor, up from 50% a week ago. Oklahoma conditions were 27% good to excellent versus 25% a week ago; the state was 36% poor to very poor versus 37% a week ago. Kansas conditions were 30% good to excellent, unchanged from a week ago; the state was 37% poor to very poor, up from 33% a week ago. Yesterday's weekly export inspections of 24.85 million bushels were pretty strong, and above the 24.67 million needed to hit the USDA's target for he season. Talk however that both Russia and Ukraine could soon be back in the wheat export business, prior in fact to the 2013 harvest, highlighted what a short window of opportunity the US has to get some sales on before cheaper Black Sea material is back flooding the market. Stats Canada are out with their planting estimates tomorrow. The trade is using an average all wheat acreage estimate of 24.4 million, from within a range of estimates of 23.3-25.2 million and up 2.5% versus 23.8 million last year. May 13 CBOT Wheat closed at USD6.97 1/2, down 4 3/4 cents; May 13 KCBT Wheat closed at USD7.37 1/4, down 2 1/4 cents; May 13 MGEX Wheat closed at USD8.15 1/4, down 3 1/2 cents.

London Wheat Ends At 8-Month Low On Talk Of Black Sea Return To Market

23/04/13 - The EU grains market was under pressure all day on talk of improving crop conditions in Europe and a better weather outlook for the US Midwest in the week ahead. There's also talk of Russia and Ukraine both potentially re-entering the wheat export market, adding to the negative tone.

London wheat closed with front month May 13 down GBP2.45/tonne at GBP193.05/tonne and new crop Nov 13 was GBP0.50/tonne easier at GBP184.00/tonne. May 13 Paris wheat finished EUR2.75/tonne lower at EUR241.00/tonne. For London wheat this was the lowest close for a front month since last August.

The Russian Ministry said that they were to reduce their weekly intervention grain offering as domestic prices have fallen as local demand is waning. SovEcon said that Russian wheat prices were now low enough to maybe allow exports to resume to the tune of "a few hundred thousand tonnes" between now and the end of the current marketing year. To date 2012/13 grain exports are at 14.32 MMT, 40% down on last year. The General Director of Russia's ProZerno said that prices for 3rd grade wheat there may fall a further 10-15% in the next month or two from the current 9,700 roubles/tonne as the 2013 harvest approaches and old crop prices give up some more of their premium.

Ukraine's Ag Minister said that they may allow wheat exports to begin again mid-May, with trade talk of a further 500,000 MT of what may largely be government-owned stocks coming back onto the market before prices there feel the effect of too much harvest pressure.

Meanwhile spring grain planting in Kazakhstan is underway, with around 300k ha in the ground so far, out of an expected spring wheat area of 13 million ha, along with 1.6 million ha of spring barley. Soil moisture levels are significantly better than they were 12 months ago.

The weather forecast calls for the dry pattern of the past week or so to continue in Ukraine and the European part of Russia, which will aid fieldwork and is seen as being favourable (for now) for spring plantings to proceed in a timely manner. They won't want this dry spell to continue for too long of course.

Europe has finally trended a bit warmer and drier too, which will allow winter crop development to maybe catch up a bit, and also see significant spring planting progress. Crop development ratings in France still lag year ago levels, but did jump significantly in Friday's report versus a week previously. Similar improvement may be on the cards again this week.

Deep snow on the northern US Plains and Canadian Prairies will delay spring plantings there. Meanwhile the Central and Southern Plains could be in for another freeze tonight/tomorrow before things finally warm up in the 6-10 day time frame. Rain and snow continues to maintain a beneficial moisture supply in the Midwest, although this is also hampering fieldwork and spring plantings. The US corn crop was only 4% planted as of Sunday night, according to the USDA. However, it was only 5% complete in 2009 at this time and yields finished up at a record 165 bu/acre!

Reuters reported that Russia has agreed to finance and build a storage facility in Egypt to house Russian grain to sell to either Egypt or other North African buyers, although no time frame was mentioned.

Egypt's state wheat imports are seen falling 35% to 3.4 MMT this marketing year (Jul/Jun), with private sector imports forecast 33% lower as the country struggles to finance purchases on the international market. The Industry and Trade Minister repeated Egypt's bullish forecast for a domestic wheat crop of 10 MMT this year, and said that the country aims to be self sufficient in wheat production within 2-3 years. He didn't say how they were going to achieve this goal, and most would see this claim as no more than political posturing.

The EU-27 rapeseed crush in Jul 12/Feb 13 was 15.5 MMT, an increase of 4.7% on last season, say Oil World. The French OSR harvested area is seen falling 5.6% on last year to 1.517 million hectares, say the Ag Ministry there. Even so, this would still be higher than the 5-year average of 1.505 million.

EU Rapemeal Prices

23/04/13 -- Rapemeal prices on the continent are lower today, consolidating from recent steep gains. Nearby availability remains tight though on reduced crushings, but demand is starting to wane as the weather improves.

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

Chicago Ends Lower To Start The Week

22/04/13 -- Soycomplex: A weekend of less severe weather than anticipated, and an improved outlook for the week ahead set the tone. China imported 3.84 MMT of soybeans last month, down 20.4% from a year ago, according to customs data. That takes Jan/Mar imports to 11.49 MMT, down 13.35% from a year ago. At least some of this decline will have been down to shipping delays out of Brazil. Nevertheless bird flu concerns, and the possible impact on demand for beans and meal have got the market nervous. China's April bean imports are estimated at 4.18 MMT, rising to 5.9 MMT in May and 6.9 MMT in June. This seasonal pick-up in demand is normal for this time of year. The question now is will it materialise? There have now been 104 confirmed cases of bird flu in China with 21 deaths. Weekly US soybean export inspections of 4.907 million bushels were below the expected 6-11 million. That added a little to the negative tone even though net commitments are already 99.7% of the USDA's target for the season. Safras e Mercado said that the Brazilian bean harvest is 86% complete, which is around normal for this time of year. They estimated the crop there at 82.495 MMT, along with Argentina's bean crop at 50.0 MMT and Paraguay's at 8.0 MMT. The USDA announced 174 TMT of new crop US beans sold to China. Fund selling was estimated at around 6-7,000 soybean contracts on the day. May 13 Soybeans closed at USD14.17 1/4, down 11 cents; Jul 13 Soybeans closed at USD13.64 1/4, down 18 1/4 cents; May 13 Soybean Meal closed at USD410.00, down USD2.40; May 13 Soybean Oil closed at 48.62, down 54 points.

Corn: An improved weather outlook was also seen as bearish for corn. Weekly export inspections of 12.401 million bushels were in line with the expected 10-15 million, although hardly spectacular. This is still around 5 million bushels below the level needed to hit the USDA target of 800 million bushels worth of US corn exports this season. Bird flu concerns in China are also weighing on corn. Customs data shows China imported 237,044 MT of corn in March, down 49.78% compared to a year ago. That takes Jan/Mar imports to 1.028 MMT, down 41.05% from a year ago. Pilgrims Pride’s CEO (the second largest chicken producer in the US) was quoted as saying that they plan to buy 10% of their Dec 12/Jul 13 corn requirement from Brazil. Safras e Mercado report that Brazil's first corn crop is 70% harvested versus 83% a year ago. They estimate Brazil's second corn crop at 41.56 MMT versus 37.977 MMT a year ago. The USDA reported after the close that 4% of the US corn crop has been planted, versus the 5-year average of 16% and 26% a year ago. The trade seems to be viewing recent heavy Midwest rains as likely to do more good than harm at this stage in terms of helping resolve long-term drought. Early corn plantings last year, as we now know, turned out to be less beneficial than was thought likely to be the case at the time. You could even make out a case that they were harmful to final yields in that they speeded crop maturity up to coincide with the height of the drought. Fund selling was estimated at a net 7,000 contracts on the day. May 13 Corn closed at USD6.45 3/4, down 6 1/4 cents; Jul 13 Corn closed at USD6.23 1/2, down 9 1/2 cents.

Wheat: The wheat market closed lower, but well off early session lows. Weekly export inspections of 24.848 million bushels beat last week's 23.678 million and were above the top end of trade expectations of 18-24 million. China's March wheat imports of 289,344 MT were down 46.03% from a year ago. Jan/Mar imports are now 691,229 MT, down 38.34% from a year ago. Drier and warmer weather this week in the US Midwest will be beneficial for fieldwork. After the close the USDA reported winter wheat in the good/excellent category declined by one point to 35%. Poor/very poor meanwhile increased two points to 33%. This was in line with trade expectations. Only 7% of the US spring wheat crop was was planted, up just one point from 6% last week and compared to 52% last year. The 5-year average for this time of year is 24%. Winter wheat headed is only 8% versus 42% last year and the 5-year average of 19%. Winter wheat conditions are worst in Texas, where 60% of the crop is rated poor/very poor, followed by Colorado (56%), South Dakota (53%), Nebraska (43%), Kansas (37%) and Oklahoma (36%). Egypt's Ag Ministry estimated their 2013/14 wheat crop at a record 10.0 MMT versus a previous estimate of 9.5 MMT. Few believe this to be realistic. The USDA currently say 8.7 MMT, and many private estimates are lower than this. Funds were judged to have been net sellers of around 2-3,000 Chicago wheat contracts on the day, and remain net short. It might not take a move too much below USD7/bu to encourage some profit-taking. On the day May 13 CBOT Wheat closed at USD7.02 1/4, down 6 3/4 cents; May 13 KCBT Wheat closed at USD7.39 1/2, down 6 1/2 cents; May 13 MGEX Wheat closed at USD8.18 3/4, down 6 3/4 cents.

EU Grains Lower To Start The Week

22/04/13 -- EU grains closed mostly lower on news of less severe weather in the US over the weekend than the market had feared, and ideas that EU and Black Sea production potential for 2013 is trending higher.

On the day, May 13 London wheat closed down GBP0.50/tonne at GBP195.50/tonne and with new crop Nov 13 GBP2.15/tonne easier to GBP184.50/tonne. May 13 Paris wheat settled EUR1.75/tonne weaker at EUR243.75/tonne.

Russian growers have planted spring grains on 2.2 million hectares so far this year, or 7.4% of the planned area, which is well up on the 900,000 ha that they'd sown this time a year ago. There's increased talk of domestic Russian wheat prices having now fallen low enough to stimulate a bit of export interest in old crop.

The EU Commission’s Monitoring Agricultural Resources unit (MARS) estimated the average EU soft wheat yield at 5.63 MT/ha this year, up 4% on last year and in line with the 5-year average. Barley yields were estimated at 4.48 MT/ha, up 3% on last year and 2.3% up on average. OSR yields were seen at 3.09 MT/ha, similar to last year and 1.6% up on average.

"The start of spring has been characterised by temperatures below the long-term average in northern and central Europe," they said. "As a consequence, a significant delay in winter crop development and spring sowing was observed in most of Europe, with the exception of the Mediterranean regions and around the Black Sea," they summarised.

"While in northern and central Europe the likelihood of realising full crop potentials is somewhat compromised by the long delays, it is still too early to revise the forecasts that have been made in the previous bulletin based on the temporal trends and averages of previous years," they suggested.

Consequently, despite what we see in the fields here, they left potential UK wheat yields the same as last month at 8.02 MT/ha, up 20% on last year, and above the 5-year average of 7.66 MT/ha. For barley they estimate UK yields at 5.52 MT/ha (unchanged from last year, but down on the 5.73 MT/ha 5-year average). For OSR they estimate yields here at 3.5 MT/ha (versus 3.4 MT/ha in 2012 and 3.47 MT/ha for the 5-year average).

In France they said that "yield expectations are currently slightly below the average, but weather conditions in the forthcoming weeks will be critical to evaluate more accurately yield potentials." Whilst in Germany "Crop development is clearly delayed...Spring sowings are also delayed. It is too early in the season to evaluate whether the shortened crop cycle will have negative influences that cannot be compensated further in the season."

They said that promising prospects exist in Turkey, Morocco, Algeria, and north Tunisia, all of which have had average or above average rainfall across the winter.

On the international tender front, Tunisia bought 50 TMT of optional origin soft wheat for June shipment on Friday, the Black Sea may be the most likely supplier. The Philippines seek 50 TMT optional origin feed wheat for July shipment. Libya are tendering for 30 TMT of optional origin soft wheat for May shipment.

Panic Over!

22/04/13 -- The EU Commission’s Monitoring Agricultural Resources unit (also known as MARS) say the following with regards to UK crop production potential this year:

"For all crops, while the likelihood of realising their full potential is somewhat compromised by these long delays, it is still too early to revise the forecasts that have been made in the previous bulletin based on the temporal trends of previous years."

The news comes the same day that my chums at Wynnstay have emailed me to say that their planned Jun 6th Arable Event, at which yours truly was due to speak, has had to be cancelled as the variety plots are too poor to demonstrate.

Nevertheless, MARS have UK wheat yields this year beating the previous 5-year average at 8.02 MT/ha, with OSR yields also a little ahead of average at 3.50 MT/ha.

The MARS report also goes on to praise Luis Suarez for his consistently outstanding contribution to sportsmanship. The bell ends.

EU Rapemeal Prices

22/04/13 -- Rapemeal prices on the continent are mostly a tad lower for once, in light consolidation after posting very strong gains over the past week, encouraged perhaps by a softer tone to the soymeal market Friday night and again this morning.

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