Nogger's Blog: 26 May 2013

CBOT Close - Friday

31/05/13 -- Soycomplex: The soybean market closed higher on the day and higher on the week. Weekly soybean export sales came in at net reduction of 108,000 MT for old crop and net sales of 756,600 MT for new crop versus trade expectations for sales of a combined 300-800 MT. China cancelled 207,500 MT of old crop but bought 587,000 MT of the new crop along with unknown destinations taking a further 128,000 MT. The USDA also reported 149,200 MT of old crop meal sales along with 40,900 MT of new crop. Even with a few old crop bean cancellations, this strong demand for meal will keep the domestic soybean crush high, hence also soybean disappearance. CNGOIC estimated China’s May bean imports at 5.6 MMT and pegged June imports at 7.0 MMT, both up sharply versus April imports of 3.98 MMT. The Buenos Aires Grains Exchange reported that the Argentine soybean harvest is 96.1% complete versus 93% a week ago and 92.8% a year ago. They have the Argentine bean crop estimated at 48.5 MMT, unchanged from their previous estimate. Jul 13 Soybeans closed at USD15.10, up 14 1/4 cents; Nov 13 Soybeans closed at USD13.04 1/4, up 15 cents; Jul 13 Soybean Meal closed at USD447.20, up USD6.40; Jul 13 Soybean Oil closed at 48.38, down 20 points. For the week front month beans were 33 3/4 cents higher, with meal up USD19 whilst oil was down 86 points.

Corn: There was a modest 85,700 MT of old crop corn in the weekly export sales report, along with a more robust 789,600 MT of new crop which was mostly for China (483,000 MT) and unknown destinations (242,000 MT). Trade estimates were for net sales of a combined 500-800 TMT. The trade continues to debate the number or US corn acres that will go unplanted this year, with most estimates in the 1-3 million acres region versus the current USDA estimate of 97.3 million acres. The USDA will report on planting progress again on Monday night. Weekend weather forecasts have rain in them, but the early part of next week is seen dry. The Buenos Aires Grain Exchange forecast the Argentine corn crop at 54.7% harvested versus 50.5% a week ago and 61.7% a year ago. Taiwan cancelled a tender to import US corn for Jul/Aug due to high prices. The IGC increased their forecast for world corn production in 2013/14 by 6 MMT to a record 945 MMT, US planting problems or not. That will help take ending stocks next season to a 5 year high of 145 MMT, they said. The US corn crop was estimated at 355 MMT this year, up a tad less than 30% on last year. Jul 13 Corn closed at USD6.62, up 7 3/4 cents; Dec 13 Corn closed at USD5.67 1/4, up 4 1/2 cents. Jul 13 gained 4 3/4 cents on the week.

Wheat: As the 2012/13 US wheat marketing year draws to a close the USDA announced 35,900 MT of old crop sales along with 728,300 MT of new crop versus trade expectations for sales of a combined 300-700 TMT. South Korea cancelled a tender to import US wheat due to the discovery this week of GMO wheat growing in Oregon. Taiwan are also voicing concern, as indeed too are the EU. The IGC raised their 2013/14 world wheat production estimate by 2MMT, but increased consumption by a similar amount. They now have the global crop for the coming season at 682 MMT, an increase of 4.1% on this season. Their estimate for Russian wheat production was 52 MMT, up 38% on last year, although not the largest number in circulation. Canada will produce 29 MMT and the EU a crop of 138.2 MMT, 6% up on last year. Big increases are also on the cards for other major exporting nations such as Kazakhstan, Ukraine and Argentina. The Buenos Aires Grain Exchange left their estimate for the Argentine wheat planted area at 3.9 million hectares, up 8% on last year. That isn't as large an increase as others are forecasting. Last season wheat acres were cut at the expense of other crops such as barley. The BAGE see this year's barley area falling 19% to 1.27 million ha. Jul 13 CBOT Wheat closed at USD7.05 1/2, up 6 3/4 cents; Jul 13 KCBT Wheat closed at USD7.51, up 5 cents; Jul 13 MGEX Wheat closed at USD8.20, up 4 1/2 cents. For the week CBOT wheat was up 7 cents, Kansas 5 1/2 cents higher and MGEX up 14 1/4 cents.

EU Wheat Mixed In Quiet Trade

31/05/13 -- EU grains closed mixed in a quiet end to quiet week. Jul 13 London wheat finished the day GBP1.00tonne lower at GBP182.50/tonne, Nov 13 ended GBP1.00/tonne lower at GBP178.50/tonne. Nov 13 Paris wheat settled EUR1.50/tonne higher at EUR206.00/tonne.

For the week that puts front month London wheat GBP2.50/tonne higher with it's Paris counterpart up EUR1.25/tonne. For the calendar month front month London wheat is down GBP11.00/tonne.

FranceAgriMer said that the proportion of French winter wheat and winter barley rated good/excellent had improved one percentage point each from last week to 68% and 67% respectively. Spring barley rated good/excellent was unchanged from a week ago at 78%. Corn rated good/excellent slipped five points to 67%.

Another fairly dull and wet week sees crop maturity still well behind. Only 35% of French winter wheat is heading versus 85% a year ago. The proportion of winter barley heading climbed from 84% last week to 96% and versus 100% a year ago. Corn planting only advanced two percentage points from last week to 89% versus 96% this time last year.

Further east things look better though. FCStone said that Romanian winter wheat conditions are favourable and harvesting there will be underway by the end of the month.

Crop conditions in Ukraine are generally pretty good apart from one or two places in the relatively unproductive south and east. Rains are still on tap for the driest regions of Russia into next week as wheat crops begin to head. Russian spring grains planting is 85% done at 25.7 million hectares, say the Ministry. That's around 1.8 million less than this time a year ago. Of that total spring wheat has been sown on 10.1 million ha (78% of plan), spring barley on 7.4 million ha (92%) and corn on 2.3 million ha (105%).

Brussels issued 260 TMT of soft wheat export licences this past week, up from 247 TMT a week previously. Year to date exports now stand at 17.9 MMT. Corn imports are at 10.1 MMT.

On the international tender front, Iraq bought 250 TMT of Russian milling wheat for July shipment. Thailand bought 109 TMT of Black Sea feed wheat for July/August shipment. Japan bought Canadian, French and Australian wheat in a tender, passing on US origin. South Korea postponed a planned US wheat tender until the newly emerging GMO issue with US wheat becomes clearer.

The Buenos Aires Grains Exchange left their 2013 Argentine wheat planted area estimate unchanged at 3.9 million ha, up more than 8% on last year. They said that 9% of the crop had been planted so far.

Late in the day the International Grains Council increased their forecast for world corn production this year by 6 MMT to a record 945 MMT despite sluggish plantings in the US. They also increased their outlook for the global wheat crop by 2 MMT to a near record 682 MMT.

EU Rapemeal Prices

31/05/13 -- Rapemeal prices on the continent a bit firmer today, although buyers are few and far between. MDA CropCast yesterday estimated the EU rapeseed crop in 2013 at 18.98 MMT versus 18.04 MMT in 2012.

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

May13	unq	n/a
Jun13	290.00	+2.00
FH Jul13	285.00	+1.00
LH Jul13	unq	n/a
Aug/Oct13	233.00	+2.00
Nov13/Jan14	229.00	+1.00
Feb/Apr14	228.00	+1.00
May/Jul14	224.00	+1.00

Chicago Mixed But Mostly Lower Thursday

30/05/13 -- Soycomplex: Beans were mixed, with new crop gaining on old crop. There's some talk that the late maturity of the US wheat crop will push back harvesting, thereby reducing some planned double cropping with follow-on soybeans acres. Widespread wet weather in the Midwest continues to disrupt planting of both corn and soybeans. MDA CropCast raised slightly their 2013 US soybean production estimate due to a shift in plantings out of corn. They now estimate the 2013 crop at 84.94 MMT, up 11.7% on last year. They have the 2013/14 world soybean crop up 7% to 265.54 MMT, with output in Argentina up from this year's 48.5 MMT to 54.0 MMT and Brazil's crop rising from 81.4 MMT to 83.0 MMT. They have the world oilseed rape crop up 5.5% to 59.0 MMT, led by an increase of 9.2% in Canada to 14.63 MMT. There's talk of China cancelling more old crop soybeans, in addition to the 147 TMT that was confirmed by the USDA yesterday. There's also talk of Brazilian cargoes getting cancelled/deferred. Nevertheless the USDA announced 120 TMT of new crop US beans sold to China. USD15/bu on beans and USD450 on meal are looking like difficult levels to break above and hold. Trade expectations for tomorrow's delayed weekly export sales report for beans are 300-800 MT. Jul 13 Soybeans closed at USD14.95 3/4, down 6 cents; Nov 13 Soybeans closed at USD12.89 1/4, up 3/4 cent; Jul 13 Soybean Meal closed at USD440.80, down USD3.50; Jul 13 Soybean Oil closed at 48.58, down 5 points.

Corn: Corn also saw new crop gain on old crop, although both ultimately closed lower. Weekly US ethanol production fell 12,000 barrels/day to 863,000 bpd. South Korea's NOFI bought 68 TMT of optional origin corn for October shipment. MDA CropCast trimmed their US 2013 corn production forecast by a modest 0.6 MMT from last week to 338.6 MMT, which is still an increase of more than 30% on last year. "Rains increased across west central areas this past week, which resulted in some wetness especially in Iowa and northwestern Illinois. Rains should remain abundant over the next few days across much of the corn belt, but should ease a bit this weekend and early next week before returning mid and late next week again. The rains will maintain abundant moisture for germination and early growth, but will slow any remaining planting," they said. Various banks are lining up to project lower corn prices by the end of the year following the anticipated sharply higher US production. Macquaire today said prices could fall to USD4/bu, although maybe not until 2014. Optimism is high for a large, if delayed, US corn crop this year they said. Elsewhere MDA CropCast see Brazil's 2012/13 corn crop at 74.9 MMT and Argentina's at 23.1 MMT. Ukraine meanwhile will harvest a record corn crop of 25.3 MMT this year, they project, up more than 22% on last year. Europe's corn crop will rise 7% to 58.0 MMT, they forecast. Trade estimates for tomorrow's weekly export sales report from the USDA are 500-800 TMT. Jul 13 Corn closed at USD6.54 1/4, down 10 3/4 cents; Dec 13 Corn closed at USD5.62 3/4, down 3 cents.

Wheat: Wheat closed down, but well off early lows which were triggered by news that GMO wheat had been found growing in a field in Oregon. That immediately prompted Japan to announce that it was suspending purchases of US western white wheat and feed wheat. They did buy 117 TMT of a mixture of US and Canadian wheat in a tender, but the planned purchase of 25 TMT of of western white US wheat was scrapped. Recent Chinese wheat purchases from the US have been supporting the market, if they too decide to back away from buying US wheat, or even worse cancel some of the existing purchases, then that would undoubtedly send US prices lower. "Rains favoured eastern and southern portions of the Plains wheat belt this past week, which further improved moisture there for the crop as it pushes through heading. Additional improvements are expected there this week. However, dryness will continue to build across western areas," said MDA CropCast. They left their world wheat production estimate unchanged versus last week at 680.2 MMT, up 7% on last year. Large production increases are pencilled in for Russia, Ukraine, Kazakhstan, Argentina and Canada. Lebanon bought 25 TMT of German wheat for June shipment. Jordan retendered for 150 TMT of optional origin wheat and 100 TMT of optional origin barley. Bangladesh retendered for 50 TMT of optional origin wheat for June/July shipment. India’s STC tendered to sell 100 TMT of wheat for July shipment. Estimates for tomorrow's weekly export sales are 300-700 TMT. Jul 13 CBOT Wheat closed at USD6.98 3/4, down 4 cents; Jul 13 KCBT Wheat closed at USD7.46, down 1 3/4 cents; Jul 13 MGEX Wheat closed at USD8.15 1/2, down 1/4 cent.

EU Wheat Mixed, UK Crops Downgraded But Elsewhere Things Looking Better

30/05/13 - EU grains were mixed, but mostly a little firmer. News that GMO wheat had been found growing in an Oregon field 8 years after trials ceased unsettled the US market, particularly as Japan immediately announced that it was suspending the purchase of US winter white wheat (and feed wheat) on the back of it.

That could be viewed as supportive for other origin wheats. Around 80% of EU wheat imports from the US are soft white wheat.

London wheat closed with Jul 13 up GBP2.00/tonne at GBP183.50/tonne and Nov 13 up GBP0.10/tonne at GBP177.50/tonne. Paris wheat closed with front month Nov 13 unchanged at EUR204.50/tonne.

Toepfer estimate the UK wheat crop at 11.56 MMT this year, down 13% on last season's 13.31 MMT. They have the 2013 UK OSR crop at 1.88 MMT, down 27% on 2.56 MMT last year.

Yet again though we need to remind ourselves that just because the UK is having a fairly torrid time of it, that isn't necessarily true elsewhere, and therefore that doesn't mean that prices can only go up from hereon in. FCStone said that Spain's winter barley harvest will start within the next two weeks under "near perfect" conditions and that a bumper harvest is expected.

Toepfer have the EU-28 soft wheat crop estimated at 129.79 MMT, up 3.5% from last year. MDA CropCast go for 131.3 MMT, an increase of 3.7% versus 2012. The latter also forecast a barley crop here in Europe of 54.7 MMT, up 3.8%, and a corn crop of 58.0 MMT, up 7%.

Apart from the US, where wheat output in 2013 is seen down 9.5%, almost all the other major wheat exporting nations will see significant production increases this year, they say. Kazakhstan's output will rise 55% to 15.0 MMT, with Russia's up 39%, Ukraine's up 33%. Argentina's up 25% and Canada's rising by 12.5%, they estimate.

MDA CropCast have also today trimmed slightly their 2013 US corn production estimate by 0.6 MMT to 338.6 MMT due to acreage reductions, although that's still up a whopping 30.4% vs. 2012.

EU crop conditions have been dogged by cool and wet weather throughout May, but a return to at least warmer conditions could be around the corner once we get the weekend out of the way. UK, French and German day time highs are forecast to reach 68-70F Monday through to Wednesday next week, with temperatures in Poland in the 70-73F range.

Low levels of winterkill have the German Stats Office forecasting the 2013 winter wheat harvested area at just over 3 million hectares, up 6.5% on last year. Winter barley is seen at 1.23 million ha, up 13% and the OSR area at 1.44 million ha, up 10%.

The Ukraine Ministry said that sugar beet plantings there are down from 516,000 ha two years ago to 450,000 last year and only 300,000 ha in 2013 due to better potential returns from cereals and depressed local sugar prices. Much of this extra area is seen going into wheat. It's a similar situation in Russia where the 2013 sugar beet area is forecast down 15-20% on last year.

Perth, WA, to midday today has received 138mm of rain this month - its wettest May since 2005. There's also heavy rain in the forecast for SA today/tomorrow moving into NSW and VIC across the weekend.

At home, for winter wheat the HGCA reported "improved growing conditions from mid-April and during May allowed crops to catch up a little following late drilling and the cold spring, but development is still 10-14 days behind normal at the end of May."

For spring barley they noted "drilling continued into May, with farmers taking late decisions to replace failed wheat and rape crops. An estimated 100-140,000ha was drilled in May, compared to typically 35-50,000ha in more recent years."

For OSR they said that "in some regions it is estimated that of the area planted in the autumn up to 25% has already been replaced and a further 15% is patchy, thin and unlikely to yield well. However, the majority of remaining crops are in reasonable condition, especially crops established early, and even some of the poor crops have improved over the last month."

GMO Wheat Found Growing In US

30/05/13 -- Breaking news says that the USDA have found a strain of GMO wheat growing in a field in Oregon which is resistant to glyphosate herbicide.

"The rogue wheat was a strain tested from 1998 to 2005 by Monsanto, the world’s largest seedmaker, which withdrew its application for approval amid concern buyers would avoid crops from the US, the world’s biggest wheat exporter," report Bloomberg.

No varieties of GMO wheat are legal for sale in the US. Nobody seems to be immediately able explain how a GMO variety that was shelved in 2005 is now growing in Oregon eight years later.

A report on Reuters says that the Japanese have already announced that they "will refrain from buying (US) western white and feed wheat effective today."

The US market is now concerned that other nervous Asian buyers might follow suit, particularly with an avalanche of alternative new crop wheat about to come onto the market from other willing sellers.

EU Rapemeal Prices

30/05/13 -- Rapemeal prices on the continent are mostly a bit weaker on old crop and a little firmer on new crop positions today. Concerns over new crop rapeseed production in the UK and France remain. Toepfer estimate the 2013 UK rapeseed crop at 1.88 MMT, down 27% on last year.

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

May13	unq	n/a
Jun13	288.00	-2.00
FH Jul13	284.00	-1.00
LH Jul13	280.00	+2.00
Aug/Oct13	231.00	+3.00
Nov13/Jan14	228.00	+2.00
Feb/Apr14	227.00	+2.00
May/Jul14	223.00	unch

Chicago Mixed, Still Some Confusion Over Final US Plantings

29/05/13 -- Soycomplex: The USDA announced the cancellation of 147 TMT of old crop soybeans sold to China. The trade is thinking that there may be more cancellations to come. Michael Cordonnier said that 1-2 million acres of planned US corn could go unplanted this year, and that around two thirds of that area could get switched into soybeans (with the rest being claimed on insurance as "prevent plant"). Oil World said China imported 15.5 MMT of beans between Jan-April, down 2.6 MMT from a year ago. At least some of that reduction will have been due to shipping delays out of Brazil. They also said that China would import 13.0 MMT of soybeans in May/June, up from 10.9 MMT in the same period a year ago. Paraguay's grains exporting chamber said that they harvested a record high 9.3 MMT of soybeans in 2012/13 versus 4.3 MMT a year ago. Some Paraguayan beans are supposed to have been sold to the US to cover old crop tightness. Citi Group forecast a new crop soybean price of USD11.50-11.75/bu, unchanged from their previous estimate and in line with Rabobank's forecast of last week. Jul 13 Soybeans closed at USD15.01 3/4, down 7 1/2 cents; Nov 13 Soybeans closed at USD12.88 1/2, up 1/2 cent; Jul 13 Soybean Meal closed at USD444.30, up USD2.00; Jul 13 Soybean Oil closed at 48.63, down 91 points.

Corn: New crop corn gained on ideas that persistent wet weather in the Midwest will see some planned corn acres switched into beans. Between the top 5 states for US corn acreage, a total of 6.4 million acres were unplanted as of Sunday. China's spring grain planting is said to be 91.6% complete on 1.229 billion hectares, up 0.8% from a year ago. Agroconsult estimated Brazil’s corn exports this year at 22.6 MMT versus 19.8 MMT in 2012. They estimated Brazil's corn ending stocks at 10.3 MMT. Brazil’s Ag Secretary said that the government may buy up to 1 MMT of domestic corn for stocks, CONAB said that the government may buy 2.0 MMT. South Korea's NOFI bought 55 TMT of optional origin feed wheat for September shipment in preference to corn. Taiwan are tendering for 23 TMT of corn for July shipment. The weekly ethanol production data report is delayed until tomorrow. The bulls will be hoping for a continuation of last week's 875,000 barrels/day. Citi Group forecast a new crop corn price of USD5.00/bu, unchanged from their previous forecast and similar to Rabobank's estimate of last week. Ukraine's Ag Ministry said that growers there had planted a record 4.77 million hectares of corn, 2% more than the planned area and more than 9% up on last year. Jul 13 Corn closed at USD6.65, down 1 1/2 cents; Dec 13 Corn closed at USD5.65 3/4, up 14 3/4 cents.

Wheat: Given that US wheat is significantly more expensive that Black Sea and other origins going forward then today's rally might have been more about short-covering. Analysts' opinions over Russian grain production this year vary quite widely, from anywhere between 85-100 MMT. Output in 2012 was 71.7 MMT. Russagrotrans today forecast grain production at 97.2-100 MMT (which would probably imply a wheat crop of around 57-58 MMT), with exports in 2013/14 rising to 23-25 MMT, including 17-18 MMT of wheat. They said that 2012/13 grain exports so far are 14.9 MMT. SovEcon are less bullish, estimating Russia’s 2013 wheat crop at 50.0 MMT, although that's still up by almost a third versus the 2012 crop of 38 MMT. They estimate Russia’s 2013/14 grain exportable surplus at 19.0 MMT versus a previous estimate of 16.0 MMT. They have the Russian wheat exportable surplus at 13-15 MMT next season. SovEcon also estimated Russia’s 2012/13 grain ending stocks at 9.4 MMT, up 8% from their previous estimate. There's been some talk of late that last year's production was in fact higher than official estimates. Australia's 2013/14 wheat crop is estimated at 24-25 MMT versus 22 MMT this year. FC Stone estimated the 2013 Ukraine wheat crop at 19-21 MMT versus 15.8 MMT a year ago. Jul 13 CBOT Wheat closed at USD7.02 3/4, up 9 cents; Jul 13 KCBT Wheat closed at USD7.47 3/4, up 4 1/4 cents; Jul 13 MGEX Wheat closed at USD8.15 3/4, up 9 1/4 cents.

EU Grains Mixed, But Mostly A Little Higher

29/05/13 -- EU grains closed mixed but mostly a little higher on the day after earlier trading generally lower. US winter wheat crop conditions deteriorated again based on last night's USDA report, with 42% of the crop now rated as poor/very poor. Delayed US spring wheat plantings are also supportive.

Jul 13 London wheat finished the day GBP1.00/tonne higher at GBP181.50/tonne, and with Nov 13 ending GBP0.10/tonne firmer at GBP177.40/tonne. Nov 13 Paris wheat settled down EUR0.50/tonne at EUR20450/tonne.

Whilst the US crop may not be in great shape though, the same can't be said for grain production potential in the Black Sea and FSU region, and these are the guys who normally dictate where wheat prices go.

Rusagrotrans said that they expect the Russian grain harvest to come in at 97.2-100.0 MMT today, which would be up around 36-39% on last year. The increase is due to higher plantings in the Southern, North Caucasus and Central Districts, they said. Harvesting is expected to begin 1-2 weeks earlier than normal, they added.

They increased their 2013/14 Russian grain export forecast to 23-25 MMT, including 17-18 MMT of wheat, 3.0-3.5 MMT of barley and 2.5-2.7 MMT of corn. Wheat exports are picking up as the 2012/13 marketing year draws to a close. Russia has exported 323 TMT of grains so far this month (to May 22), of which 188 TMT is wheat, 47 TMT is barley and 87 TMT is corn. That brings the total season to date grain exports to 14.9 MMT with just over a month left to go, suggesting a final 2012/13 total of around 15.5 MMT. Exports of 23-25 MMT next season would therefore represent an increase of around 50-60% on this year.

The Russian government today sold 41,235 MT of intervention grain in its regular bi-weekly auction.

Ukraine spring grain plantings are almost done at 99% complete, say the local Ministry. That includes a record 4.77 million hectares of corn, an increase of more than 9% on last year. The USDA currently has Ukraine down to produce 26 MMT of corn this year, of which 16.5 MMT will be exported. Both are record volumes. Ukraine, agronomist Mike Lee says "plenty of rain around Ukraine at the moment, cool weekend weather has now turned warm, all in all, great growing conditions."

Emerald group said that Australia will produce almost 24 MMT of wheat this year, versus 22 MMT in 2012/13. The eight-day Australian Bureau of Meteorology weather forecast shows excellent and timely rainfall of 20-100 mm for South Australia, Victoria and NSW.

The Egyptian government said that they have procured more than 3 MMT of wheat on the local market since the 2013 harvest began, an increase of 45% on year ago levels. They remain stubbornly absent from the international tender market.

The HGCA said that UK 2012/13 wheat ending stocks will be the highest since 2009/10, despite last year's dramatic slump in production, following record levels of imports.

Whilst the UK and French OSR crops look shoddy, Toepfer today forecast the German crop at 5.46 MMT, an increase of 13.3% on last year. They will also harvest a 2013 wheat crop of 23.35 MMT, up 4.3% on 2012, they forecast.

AccuWeather are predicting a cooler summer than normal for the UK and northern France. "This is not to say that summer like warmth will be absent in the coming months. Short-duration spells of warmer weather are possible in July and August. Agriculturally, it is expected to a decent year for the region. Wheat, sunflower seeds and corn should not suffer under these conditions," they add.

Morning Snippets

29/05/13 -- The overnight Globex grains are mostly a little lower, with wheat down 3-4 cents of so, and beans and corn down 1-3 cents.

London wheat sees Nov 13 down GBP0.25/tonne in early trade with Paris wheat around a euro easier.

Wheat looks to be continuing to grind lower. US wheat will soon be under harvest pressure even if last night's USDA report showed 60% of the US winter wheat crop was headed versus 72% normally and 85% a year ago.

Crop conditions aren't great though, the percentage of winter wheat rated very poor rose from 21% last week to 23%, far worse than 6% this time last year. A further 19% of the crop is rated as poor. Good/excellent was unchanged on last week at 31%.

Spring wheat is 79% planted versus 86% normally, with emergence at 42% versus 66% normally.

Corn planting has astonishingly almost caught up with the 5 year average pace of 90% at 86% complete. Notable laggards are Wisconsin at 64% done (versus 85% on average), Minnesota at 82% (vs. 95%) and Iowa at 85% (vs. 98%). Others are actually ahead of normal like Indiana (86% vs. 77%) and Ohio (89% vs. 71%). Corn emergence at 54% isn't too far behind the 5 year average of 67% under the circumstances.

Notable soybean planting laggards are Iowa at 40% done (83% on average), Minnesota (42% vs. 76%), Mississippi (46% vs. 88%) and Wisconsin (29% vs. 60%). One or two are ahead of schedule such as Ohio (70% vs. 49%) and Indiana (60% vs. 49%).

A wet forecast for the Plains has Oklahoma forecast to receive 1.5-1.8 inches of rain in the next 5 days, with central Kansas in for up to 1.75 inches. This should be of some benefit to later maturing winter wheat and newly planted corn there.

In other news the Ukraine Ministry say that spring grain plantings there are more or less done at 99% of the planned area. This includes 4.77 million hectares of corn, which is up 9% from last year's 4.37 million ha, and I'm pretty sure that is a record area.

An article on Reuters suggests that congestion at Brazil’s Santos port is being blamed on new truck rules which prevent drivers from parking in the port at night. "Lines of parked trucks extended as much as 50 kilometres (31 miles) on the Anchieta highway" leading into Santos, they report.

Record high wheat imports in 2012/13 mean that the UK's ending stocks will be the highest since 2009/10, say the HGCA.

The eight-day Australian Bureau of Meteorology weather forecast shows excellent and timely rainfall of 20-100mm for South Australia, Victoria and NSW.

The pound is threatening to slip back below 1.50 against the dollar for the first time since mid-March on ideas that the BoE will continue to ease policy whilst the Fed is looking to cut back on its stimulus.

Chicago Closing Comments - Tuesday

28/05/13 -- Soycomplex: The soybean market began the week sharply higher on delayed planting concerns and strong demand. The USDA reported the sale of 120 TMT of new crop beans to China. Industry analysts pegged the Chinese Jan 1st-May 24th total soybean crush volume at 22,087,920 MT, up 1% from a year ago. Chinese May soybean imports are estimated at 5.30 MMT, rising to a record 7.8-8.0 MMT in June. Oil World estimated Brazil’s May soybean exports at 8.7-9.0 MMT versus 7.3 MMT in May 2012. They peg Brazil’s January–May 2013 soybean exports at 20.4 MMT, or 53% of Brazil’s expected 2013 total and versus 18.5 MMT in the same period in 2012. The USDA were expected to announce US soybean plantings at 42% complete after the close, according to the average trade estimate in a Reuters survey. They came out with a figure of 44%, slightly better than expected but well behind the 61% five year average. Weekly export inspections were poor, but in line with expectations, at just under 3.4 million bushels. Jul 13 Soybeans closed at USD15.09 1/4, up 33 cents; Nov 13 Soybeans closed at USD12.88, up 40 1/4 cents; Jul 13 Soybean Meal closed at USD442.30, up USD14.10; Jul 13 Soybean Oil closed at 49.54, up 30 points.

Corn: Weekly export inspections came in at 12.427 million bushels, versus the expected 9-14 million. After the close the USDA reported US corn plantings had advanced from 71% done last week to 86% complete as of Sunday night. That's bang on the average estimate in a Reuters survey and a pretty incredible achievement by US farmers, considering that planting was only 28% done two weeks previously. The five year average for this time is 90%. Even emergence isn't lagging by too much at 54% versus 67% normally. Heavy rain in many states continues to dog some farmers planting efforts. Elsewhere, Brazil's IMEA forecast Mato Grosso safrinha, or 2nd crop, corn production at a record 17.37 MMT as the rainy season in central Brazil has lasted longer than normal. That's well up on their previous estimate of 14.64 MMT and output of 15.59 MMT last year. The normal weekly ethanol production data from the Energy Dept is delayed until Thursday. Last week's production was an 11 month high 875,000 barrels/day. Fund buying was estimated at around 12,000 contracts on the day. Jul 13 Corn closed at USD6.66 1/2, up 9 1/4 cents; Dec 13 Corn closed at USD5.51, up 14 1/2 cents.

Wheat: Despite spillover support from a rising corn and soybean market wheat just couldn't manage to post a rally. Weekly export inspections of 21.220 million bushels were at the top end of trade expectations of 15-21 million. For the US the 2012/13 marketing year is about to end with a larger carryover into 2013/14 than currently forecast by the USDA. US exports are also likely to tail off markedly once the Black Sea begin harvesting their 2013 wheat crop. The tender line up looks pretty thin. Oman bought 40 TMT of optional origin wheat, possibly Russian, for Aug/Sept shipment. The Ukraine Ag Min said that the country has exported 21.7 MMT of grain so far this season (Ukraine’s season ends June 30th) including 6.6 MMT of wheat, 12.6 MMT of corn and 2.05 MMT of barley. They too look unlikely to meet the government target of exports of 24.5 MMT this season, also leaving larger carryover into 2013/14 to re-market. Their production in 2013/14 is seen sharply higher already. Funds were estimated to have been net sellers of around 1,000 CBOT wheat contracts on the day. Jul 13 CBOT Wheat closed at USD6.93 3/4, down 3 3/4 cents; Jul 13 KCBT Wheat closed at USD7.43 1/2, down 2 1/4 cents; Jul 13 MGEX Wheat closed at USD8.06 1/2, up 3/4 cent.

EU Wheat Mixed, Fresh News Scarce

28/05/13 -- EU grains closed mostly firmer on concerns that US planting delays had been extended over a wetter than anticipated holiday weekend.

Jul 13 London wheat finished the day GBP0.50tonne higher at GBP180.50/tonne, Nov 13 ended GBP0.70/tonne lower at GBP177.30/tonne. Nov 13 Paris wheat settled EUR1.00/tonne higher at EUR205.00/tonne.

Fresh news was relatively thin on the ground after US markets were slow to wake up having been closed yesterday along with the UK.

The trade is eagerly awaiting tonight's USDA planting progress report. Reuters report average trade expectations of 86% complete for corn and 42% done for soybeans. Last year’s plantings were at 100% for corn and 87% for soybeans at this point.

Wheat is lagging soybeans and corn in the US. Although winter wheat conditions there are far from ideal, they are pretty good in most places elsewhere around the world.

Australian plantings are expected to pick up markedly this wee after decent rains fell in the east of the country in the last 7 day. The Bureau of Meteorology is forecasting 15-25mm rains this week across NSW and most of Victoria and Queensland.

SovEcon forecast the Russian grain crop at 84-89 MMT versus 71.7 MMT in 2012/13 and 94.2 MMT in 2011/12. The Southern Volga Valley remains drier than normal.

Romanian wheat is the cheapest around at the moment after many areas picked up 20-30mm of rain last week. Prospects in Ukraine are also pretty good.

There continues to be talk of additional cargoes of US SRW sold to China, over and above what was announced on Friday, but there's been no official confirmation as yet.

CNGOIC suggested over the weekend that traders may have bought up to 650,000 MT of US wheat last week. All we have to go on so far are reports of 180,000 MT of SRW confirmed on Friday.

The trade looks tired. Unless we see fund money come back into the market soon for wheat then it looks like harvest pressure will take prices lower.

The Morning Vibe

28/05/13 -- The overnight market sees beans 8-12 cents higher, with corn up 6-8 cents and wheat fractions either side. Ideas are that weekend rains in parts of the Midwest will have further hampered corn & soybean planting progress. Rain on the Plains though may help winter wheat.

The USDA will give us the latest numbers tonight. Last week we had corn planting at 71% complete and soybeans at 28% sown. The trade is expecting those numbers to now be in the upper 80's for corn and the upper 30's, pushing 40% for beans.

China was widely touted as buying more US wheat last week than the 180 TMT that the USDA confirmed, there might be further announcements on that today/tomorrow.

Concerns over wheat production potential in parts of Russia remain. Better than last year but not great seems to sum up things there. SovEcon forecast the Russian grain crop at 84-89 MMT versus 71.7 MMT in 2012/13 and 94.2 MMT in 2011/12.

The Black Sea port of Novorossiysk is said to have just finished loading 54 TMT of wheat bound for Yemen and is about to load 43 TMT of wheat for Kenya as the Russians clear the decks ahead of new crop. There's little point in hanging on hoping for higher prices now with harvest fast approaching and other Black Sea producers sharpening their pencils.

Romanian wheat is the cheapest around at the moment for new crop. On farm storage here is virtually non-existent with local growers selling just about everything they've produced all at the same time for whatever price they can get. Prospects here look very good for this season after many areas picked up 20-30mm of rain last week.

Things are looking pretty good in Ukraine too, particularly the more productive west. The National Weather Centre yesterday forecast the winter wheat crop at 19.3 MMT (there's not much spring wheat grown in Ukraine) versus a crop of 15.8 MMT last year. Corn production prospects also look pretty good this year, with the USDA currently forecasting a record 26 MMT crop, up by almost 25% on last year. They will also be aggressive early sellers of both wheat and corn in 2013/14.

Wheat planting in Argentina is just about underway. The Buenos Aires Grain Exchange are forecasting plantings up 8.3% this year, the Ag Secretary says farmers could sow close to 40% more wheat. An increase of 10-15% is probably about right. Planting conditions are said to be very good.

Australia has picked up some needed rain in the past week as wheat planting there gets underway.

India are tendering to sell 50 TMT of wheat, although they've not had a great deal of luck lately as their price aspirations have been generally too high.

Militant Argie dockers are reported to have ended their strike.

Kazakhstan's spring grain sowing is said to be 64% complete, slightly behind last year's pace of 68% done. Spring wheat sowings in Russia lag last year's pace by 3 million ha at 76% complete as they wait for rain.

Paris Wheat Lower In Quiet Holiday Trade

27/05/13 - With both the UK and US markets closed for public holidays this was never going to be a thriller, and so it proved. At the end of a thin trading session Paris wheat closed with front month Nov 13 EUR0.75/tonne lower at EUR204.00/tonne. Corn and rapeseed futures were also mostly modestly lower.

Fresh news was understandably thin on the ground. The Ukraine Ministry said that the country had exported 21.6 MMT of grains so far this marketing year, up 11% on a year ago. May exports to date are around 700 TMT, of which a little under 100 TMT is wheat, with almost all the remainder being corn.

That leaves them with a very busy five weeks ahead if they want to hit the Ministry's target of 24.5 MMT of grain exports for the season. A more realistic target is probably now 23 MMT, leaving an extra 1.5 MMT to be carried over into 2013/14.

Production prospects for that are becoming clearer, with the Ukraine National Weather Centre today forecasting a winter grain crop of 22.5 MMT, of which 19.3 MMT will be winter wheat and 2.47 MMT winter barley. A winter grain crop of 22.5 MMT would be almost a third up on production of 17.1 MMT last year.

Ukraine are clearly going to be their usual aggressive early season marketeers. New crop Ukraine milling wheat is currently offered in the market at around USD257/tonne FOB the Black Sea, the equivalent of around GBP170/tonne. Romanian milling wheat is even cheaper at around USD250/tonne FOB Constanta (circa GBP165/tonne).

These are the sort of offers that will undermine European prices at harvest, and almost certainly through until at least the end of the calendar year, despite what production prospects here look like. Not that things in Europe look too bad in general, at least not for wheat and barley at any rate.

The vibes coming out of France as far as rapeseed production potential is concerned aren't good though, with parallels to the UK being drawn. French rapeseed was sown under dry conditions last autumn, had a very wet winter and a cool and damp spring. A survey of analysts and traders last week pegged the French rapeseed crop at 4.5-4.8 MMT, versus 5.5 MMT in 2012.

A survey by Agritel published today pegs the French rapeseed crop at a 7-year low of 4.4 MMT. If true that's a drop of almost 24% on last year, although they did point out that farmers whose crops had been worst affected by the weather may have been the most likely to respond to the survey, so to treat the number with a degree of caution.

Separately Bloomberg reported on Friday that French oilseed institute Cetiom said that an estimated 42% of winter rapeseed in Lorraine had been ploughed up. Lorraine is normally responsible for around 9-10% of the French national crop.

Cetiom estimate the French rapeseed area at 1.47 million hectares. Yields in 2012 were 3.38 MT/ha, the same as in the UK, so a drop down to 3.0 MT/ha this year doesn't seem too outlandish and that would indeed only produce a crop of 4.4 MMT.

Wetter and cooler than normal is the forecast for most of Europe for the next 7 days. After that the GFS model is giving warmer than normal for everywhere east of France, whilst the CMC model maintains a cooler outlook for the entire continent through the next 14 days.

Further east, Russia, Ukraine and Kazakhstan are all seen warmer than normal for the next two weeks. The GFS model also has things wetter than normal too for most of the region, with the exception of Kazakhstan which remains dry. The CMC model gives wetter than normal for central and southern Russia, all of Ukraine and western Kazakhstan for the next 14 days.

Tomorrow night's US planting progress report from the USDA will be the next market mover, with the trade expecting corn plantings at around 80-90% complete and soybeans around 35-40% sown.