Nogger's Blog

Chicago Market Ends Lower, Weather Outlook Improves

21/06/13 -- Soycomplex: Beans slumped for a second session in a row, with the biggest losses coming on new crop on ideas that the US weather is finally cooperating and good strides will have been made in Midwest plantings this week. Last week's plantings were 85% done versus the 5-year average of 91%. The weekend forecast is warm and dry, which is seen as beneficial for now, and it's thought that plantings could be into the upper 90's complete in Monday night's report from the USDA. Crop condition ratings may also improve. As far as the demand side of the coin goes China holds the key to world soybean demand. Chinese customs data shows that they imported 5.1 MMT of soybeans in May, down 3.4% on May 2012. China's Jan/May 2012 soybean imports are 20.6 MMT, down 12.2% from a year previously. Many consider that the current USDA forecast for Chinese soybean imports of 69 MMT in 2013/14 is way too high and will need to be reduced in subsequent estimates, adding to global ending stocks. ABIOVE estimated the 2012/13 Brazilian soybean crop at 81.6 MMT versus a previous forecast of 82.3 MMT, although still a record. They estimated 2012/13 exports at 39 MMT versus a previous forecast of 38.20 MMT, and have 2012/13 carry out at 2.84 MMT versus 3.40 MMT previously. South Korea bought 55 TMT of Argentine origin soymeal for October shipment in a tender. Jul 13 Soybeans closed at USD14.93 1/4, down 4 1/4 cents; Nov 13 Soybeans closed at USD12.73 1/2, down 11 1/2 cents; Jul 13 Soybean Meal closed at USD447.70, up USD2.10; Jul 13 Soybean Oil closed at 48.02, down 38 points. For the week front month beans were down 23 1/4 cents, with meal falling USD3 and oil shedding 46 points.

Corn: The corn market also fell, but with the greatest losses in nearby Jul 13. Interior cash bids remain at relatively strong levels but are off the highs from last week, and yesterday's weekly export sales were poor. Wednesday's ethanol production data also fell short of the levels required to hit the USDA's target for the season, adding to the negative vibe. MDA CropCast raised their world corn production forecast by 1 MMT from last week, thnks to increases in output from Europe. Coceral estimated the 2013 EU-28 corn crop at 66.2 MMT versus their March forecast of 64.4 MMT. FranceAgriMer however cut their good/excellent ratings for the French corn crop by 2% from a week ago to 58%, and versus 72% a year ago. Only 95% of the crop has been planted so far versus 100% this time a year ago. Growth remains retarded with only 54% of the crop displaying 6/8 leaves versus 88% this time last year. French analysts Arvalis said that maybe 60,000 ha of intended corn acreage may not get sown this year. The trade is hoping for/expecting a significant improvement in the proportion of the US corn crop rated good/excellent on Monday night. Last week the USDA had 64% of the crop in the top two categories. Chinese customs data shows May corn imports at only 66,612 MT, down 42.7% from a year ago. Jan/May corn imports now stand at 1.5 MMT, down 19.31% from a year ago. Jul 13 Corn closed at USD6.61 3/4, down 11 1/2 cents; Dec 13 Corn closed at USD5.56 1/4, down 4 1/4 cents. For the week overall front month Jul 13 corn was 6 3/4 cents higher, with new crop Dec 13 up 23 1/4 cents.

Wheat: The wheat market consolidated a little in pre-weekend profit-taking following earlier gains during the first half of the week. MDA CropCast cut their world wheat production estimate by 5.4 MMT from last week, primarily due to lower output from India. They now see the crop there at 87.8 MMT versus 92.0 MMT from the USDA. Nevertheless, the Asian nation still has an abundance of wheat, and the government there have announced plans to release 10 MMT of surplus stocks onto the domestic market. Oil World said that Argentine wheat prices are "through the roof" and are currently 60% higher than those for soybeans as domestic supplies run out. Argentine farmers cut their planted area sharply for the 2012/13 wheat crop in protest to government interference in the market. The former major wheat exporting nation may end up having to import wheat this season for the first time in 60 years, say Oil World. The Argentine government have been offering growers there various tax incentives to increase production in 2013/14. With plantings in full swing, prices 60% higher than soybeans may offer them all the encouragement they need. Coceral estimated the EU-28 2013 soft wheat crop at 130.74 MMT versus a previous estimate of 127.77 MMT. Reports that Egypt could be back in the wheat market "by the end of the year" yesterday were apparently misinterpreted as meaning the end of the Egyptian financial year that ends this month. It is now understood that all they mean is by the end of the current calendar year. Jul 13 CBOT Wheat closed at USD6.98, down 2 1/2 cents; Jul 13 KCBT Wheat closed at USD7.36 1/2, down 1/2 cent; Jul 13 MGEX Wheat closed at USD8.14, unchanged, For the week overall CBOT wheat was still 17 1/4 cents higher, with KCBT up 25 cents and MGEX up 10 cents.

EU Grains Mixed But Mostly Higher On The Week, Has The Decline Been Arrested?

21/06/13 -- EU grains closed mixed, with front month Jul 13 London wheat closing the gap between it an new crop November from a cavernous GBP8/tonne, based on last night's close, to a more reasonable looking GBP2.75/tonne tonight.

Jul 13 London wheat finished the day GBP5.00/tonne firmer at GBP167.50/tonne, and with the more active new crop Nov 13 ending GBP0.25/tonne lower at GBP170.25/tonne. Nov 13 Paris wheat rose EUR0.50/tonne to close at EUR200.50/tonne.

For the week as a whole Jul 13 London wheat was up GBP4.25/tonne and Nov 13 up GBP4.95/tonne. Nov 13 Paris wheat was EUR4.25/tonne higher and Aug 13 Paris rapeseed was down EUR6.00/tonne.

What we need to know now is whether the start of a price decline that began around late November/early December for London wheat, and accelerated during the first two weeks of the month (during which Jul 13 lost almost GBP22/tonne), is now over or are we merely pausing for breath.

In Europe, crop production in 2013 looks set to return to close to "normal" levels. Coceral today estimated the EU-28 soft wheat crop at 130.7 MMT, up 4.2% on last year, with durum output rising to 8.8 MMT, a 9.2% increase. That gives us an all wheat crop of 139.5 MMT this year, exactly the same as Strategie Grains forecast yesterday (although their split was 131.5 MMT and 8.0 MMT), and just over 2 MMT more than the USDA currently project.

For barley Coceral estimate a crop of 56.3 MMT, up 3.6% on last year, versus 56.1 MMT from Strategie Grains and 55.6 MMT from the USDA. For corn they predict output at 66.2 MMT, up 15.7%, and versus 66.0 MMT from Strategie Grains and the USDA's 63.9 MMT. For rapeseed production Coceral estimate 19.9 MMT, up 2.2% on 2012 and versus 19.7 MMT from the USDA and 19.72 MMT from Oil World.

The 5-year average for wheat production in the EU-27 is 138.9 MMT, add on around 600 TMT for Croatia and this year's projected output according to Coceral and Strategie Grains is bang on "average".

Production in the UK this year however is likely to be anything but average for a second year running. Coceral estimate the wheat crop here at 11.76 MMT, down 11.6% on last year's disaster, and the lowest output since 2002. Things are better for barley, as you might expect, with the full crop estimated at 6.45 MMT, up 16.6% on last year thanks to a 25% jump in plantings. Coceral had the UK wheat area at 2.0 million hectares and barley plantings at 1.6 million for the 2012 harvest. This year those two figures have essentially been transposed by the wretched British winter weather.

Coceral forecast the UK rapeseed crop at 1.92 MMT in 2013, down 25.3% on last year, and similar to the USDA's 1.90 MMT estimate.

The Black Sea grain harvest is starting to gather pace. Russia is already at the 1 MMT mark, and Ukraine is very close. The Russian Ministry say that they've harvested 228k ha of mostly winter barley so far, with average yields up 50% versus the same time a year ago at 4.49 MT/ha. The Ukraine Ministry say that they've harvested 950 TMT of winter grains, again mostly barley, with early yields also significantly better than at this stage in 2012.

Rusagrotrans meanwhile say that the spring grain sowing campaign in Russia is finished, and at almost 31 million ha will be the largest area sown since 2008. Low levels of winterkill (6.3% versus 8-10% normally) mean that the winter grain harvested area will be 14.5 million ha, versus 13.91 million last year and 13.95 million in 2011, they say. They now forecast Russian grain production this year at 97-100 MMT, up around 30% on last year's crop.

The Russian Ag Minister raised his estimate for grain production there from 93 MMT to 95 MMT, including 54 MMT of wheat (an increase of 43% on last year). Winter wheat harvesting in the south is expected to pick up pace next week and be in full swing by the first week of July.

Closer to home, FranceAgriMer increased their winter wheat and winter barley good/excellent ratings by one point each from last week to 69% and 68% respectively.Spring barley rated in the top two categories was left unchanged from last week at 72%. Spring barley at the heading stage jumped from only 23% a week ago to 80% as the crop finally got a bit of sun on its back (although that's still below the level of 98% for the same week a year ago).

There's still some nervousness over corn though. Plantings only advanced from 92% complete a week previously to 95% done, with some analysts suggesting that around 3% of the intended crop might not get sown due to heavy rains persisting in some areas.

Overall, the threat of a glut of cheap Black Sea grain soon coming flooding onto the market should outweigh limited production concerns in some parts of Europe, and could bring further downside pressure to the grains sector yet.

Chicago Falls On Broad-Based Commodity Sell-Off

20/06/13 -- Soycomplex: Broad-based selling in commodities spilled over into the ag sector. Gold fell to a 2 1/2 year low following Fed Chairman Ben Bernanke's statement that the QE party is almost over and that financial stimulus, currently running at USD85 billion a month, could cease by mid-2014. The Argentine Ag Ministry estimated the 2012/13 soybean crop there at 50.2 MMT versus 50.6 MMT previously. The Rosario Grain Exchange put Argentine production at 48.3 MMT versus 51.0 MMT from the USDA and 40.1 MMT in 2011/12. The Buenos Aires Grains Exchange said that the Argentine soybean harvest is now complete, they estimate the crop at 48.5 MMT. Weekly US export sales of 52,600 MT of old crop and 108,500 MT of new crop fell short of trade expectations for combined sales of 350-600 TMT. Meal sales of 141,200 MT, of which only 26,600 MT were old crop, were however in line with expectations of 100-200 TMT. Things are warming up on the weather front across the Midwest. "Persistent high pressure would bring the hottest temperatures of the growing season. Peoria Illinois is expecting highs near 90 F starting today and continuing through Wednesday next week. Night lows would fall to the upper 60s F–low 70s F in a warm and humid environment. Similar temperatures are expected in the Midwest at large, said Martell Crop Projections. This is largely seen as beneficial, for now, but sentiment could easily change given last year's problems. Jul 13 Soybeans closed at USD14.97 1/2, down 25 1/2 cents; Nov 13 Soybeans closed at USD12.85, down 25 3/4 cents; Jul 13 Soybean Meal closed at USD445.60, down USD8.00; Jul 13 Soybean Oil closed at 48.40, down 95 points.

Corn: The corn market also caved in to the general "risk off" move in commodities. Weekly export sales of 133,400 MT of old crop and 77,100 MT of new crop were at the low end of expectations for combined sales of 200-450 TMT. The Argentine Ag Ministry raised their corn production forecast from 25.7 MMT to 26.1 MMT, saying that harvesting is 80% complete. The Buenos Aires Grains Exchange estimated the Argentine corn crop at 24.8 MMT, unchanged from their previous estimate and versus 26.5 MMT from the USDA and 21.0 MMT in 2011/12. Heavy rain in France may cut the 2013 corn planted are and could also be harming yield potential some analysts are saying. The Ukraine weather centre estimated corn production there in 2013 at 23.0-24.2 MMT, depending on July rainfall. The Ukraine Ag Ministry are more bullish, estimating production this year at a record 27-28 MMT (versus 26 MMT from the USDA). Strategie Grains forecast EU-28 corn yields up 16% this year to 6.9 MT/ha and see production rising 15% to 66.0 MMT. Warm and wet seems to the theme for the week ahead for much of the Midwest. "Hot temperatures are predicted in the Midwest, but also recurring strong showers in the northwest part of the corn belt. A ridge of high pressure would build up in the Midwest today and tomorrow the beginning of a heat wave, but heavy rainfall is likely in Minnesota, Wisconsin, North Dakota, South Dakota and northern Iowa from recurring strong thunderstorms," said Martell Crop Projections. Jul 13 Corn closed at USD6.73 1/4, down 9 cents; Dec 13 Corn closed at USD5.60 1/2, down 10 cents.

Wheat: Wheat also succumbed to the general sell-off even though weekly export sales of 432,700 MT (plus a small 2014/15 sale of 2,000 MT) were decent enough. The trade was expecting sales of 300-650 TMT. In amongst the total was 90,800 MT sold to China, including 50,000 MT switched from unknown destinations. China was said to have bought French wheat yesterday. They are rumoured to also have been interested in US and Australian wheat this week. Japan bought 152,231 MT of milling wheat, split between US, Canadian and Australian origin. US Western white wheat was excluded on GMO grounds. Japan has bought 473,365 MT of wheat so far this month - the most in seven months. Taiwan bought 85,500 MT of US wheat for Jul/Aug shipment with a non GM guarantee. The Buenos Aires Grains Exchange said that the Argentine wheat crop is 42% planted versus 52.5% a year ago and stood by their planted area estimate of 3.9 million hectares. Strategie Grains estimated the EU all wheat crop 2 MMT higher than the USDA at 139.5 MMT. Russia’s federal statistics agency said that June 1st grain stocks were 11.0 MMT, down 34.3% from a year ago. The head of the Russian Grain Union estimated the 2013/14 wheat exportable surplus at 18-20 MMT and said that harvesting will start in earnest next week, around a fortnight earlier than usual. The tender line-up out of the Middle East and North Africa is quiet this week, although Egypt has hinted that it may be back in the market after a 4-month absence before the end of June. Jul 13 CBOT Wheat closed at USD7.00 1/2, down 6 1/2 cents; Jul 13 KCBT Wheat closed at USD7.37, down 2 3/4 cents; Jul 13 MGEX Wheat closed at USD8.14, up 1/2 cent.

EU Wheat Mixed, Production Estimates For 2013 Raised

20/06/13 -- EU grains closed mixed with Jul 13 London wheat finishing the day GBP0.55/tonne easier at GBP162.50/tonne, and with Nov 13 ending GBP0.45/tonne higher at GBP170.50/tonne as the gap between old and new crop widens further. Nov 13 Paris wheat settled EUR0.25/tonne steadier at EUR200.00/tonne.

French analysts Strategie Grains increased their EU-28 soft wheat production estimate from last month to 131.5 MMT, up 600,000 tonnes from their May forecast and a 5% rise on the 2012 crop.

"This figure could go even higher if conditions are favourable as the growing cycle ends," they said.

With a durum crop of 8.0 MMT, Strategie Grains now estimate the EU-28 all wheat crop at 139.5 MMT, around 2 MMT more than the USDA's current forecast.

They also raised their EU-28 barley production estimated from 55.3 MMT to 56.1 MMT (and versus 55.6 MMT from the USDA), but cut their corn number by 400 TMT to 66.0 MMT, although that's still 15% up on last year and higher than the USDA's 63.9 MMT.

For wheat in 2013/14 "Global trade is projected to fall and thus leave a smaller share for EU exports on the global market. As a result, the EU will not be in a position to export all of its exportable surplus, which suggests a heavy situation pulling down prices in the EU, and this bearish effect may be reinforced by the heavy maize balance sheet," they said.

News that China apparently bought 200-220 TMT of French new crop wheat yesterday was seen as supportive however.

Brussels granted 203 TMT of EU soft wheat export licenses in the past week, bringing the marketing year to date total to 18.56 MMT, up almost 50% on year ago levels. Corn imports however are also sharply higher, up nearly 80% versus 2011/12 at 10.6 MMT.

Russia's 2013/14 wheat exportable surplus could rise from around 11 MMT this season to 18-20 MMT, according to the head of the Grain Union there. Harvesting is expected to begin next week, around 2 weeks earlier than normal, he added. Early barley yields have so far been better than expected and substantially higher than last year.

Ukraine's state weather centre forecast the corn crop there this year at 23.0-24.2 MMT depending on whether or not they get rain in July. That compares to a USDA estimate of 26.0 MMT and output of 20.9 MMT in 2012.

Chicago Posts Strong Gains Across The Board

19/06/13 -- Soycomplex: Informa Economics cut their 2013 US soybean planted area estimate from 78.286 million acres to 77.756 million. Although that's around 600,000 acres above the current USDA forecast it's not as large a switch as many have been expecting. Good planting progress should be made this week under warm and dry conditions, but trade ideas are now thinking that a sizable area may fall into the "prevent plant" insurance category. CNGOIC estimated China's June soybean imports at 6.9 MMT versus 5.1 MMT in May. The USDA attaché in China estimated China’s 2013/14 soybean crop at 12.0 MMT, the same as the USDA predict. He has imports in the 2012/13 marketing year at 59.0 MMT, half a million less than the USDA. South Korea bought 60 TMT of South American meal for October shipment. News of an outbreak of a deadly piglet virus spreading to 13 US states wants watching. Trade estimates for tomorrow's weekly export sales report are 350-600 TMT for beans and 100-200 TMT for meal. Jul 13 Soybeans closed at USD15.23, up 12 1/4 cents; Nov 13 Soybeans closed at USD13.10 3/4, up 21 cents; Jul 13 Soybean Meal closed at USD453.60, up USD1.80; Jul 13 Soybean Oil closed at 49.35, up 54 points.

Corn: Informa cut their 2013 US corn planted area estimate from 96.827 million acres last month to 95.262 million, over 2 million acres below the USDA's forecast of 97.3 million. That was friendly to new crop. Supportive for old crop was the continuing tight domestic stocks situation with cash prices at the US farm gate said to be well in excess of USD7/bu. Weekly US ethanol production last week averaged 873,000 barrels/day, down 11,000 bpd from the previous week. CNGOIC said China has already bought 2.5 MMT of US corn this year for 2013/14 delivery. Mexico’s Ag Ministry estimated their 2013 corn crop at "above 20.0 MMT" versus a previous estimate of 22.45 MMT and the 2012 crop of 21.35 MMT. Farmers in Brazil's Mato Grosso state are 3% into harvesting their anticipated record safrinha corn crop. New crop corn, said to be of Ukraine origin, traded into South Korea at USD259 C&F yesterday, well below replacement from the US. Trade estimates for tomorrow's weekly export sales report are 200-450 TMT. The US swine virus outbreak (called PEDV) in piglets, said to be "spreading rapidly across the US" could be bearish for demand if it escalates further. Jul 13 Corn closed at USD6.82 1/4, up 9 cents; Dec 13 Corn closed at USD5.70 1/2, up 20 cents.

Wheat: The wheat market followed corn higher, likely triggering some short-covering as prices in Chicago rose back above the USD7/bu mark for the first time in two weeks. Russia sold 34 TMT of intervention grain at auction, bringing the total sold so far to in excess of 3.5 MMT. Russian President Putin said that there would be no export embargo this year, that 2010 was essentially a "one off" and that the Russian market has proven in 2012/13 that it can regulate itself. As the old season draws to a close Ukraine's Ag Ministry estimated their 2012/13 grain exports at 23.0 MMT versus a previous estimate of 24.4 MMT. They said that farmers there had harvested 300 TMT of grain so far in 2013/14 with an average yield of 2.3 MT/ha versus 1.6 MT/ha a year ago. Informa said US farmers will plant 11.791 million acres of spring wheat and 1.751 million acres of durum wheat this year. That's down 4% and 17.5% versus last year. It's also 610,000 acres lower than they projected the spring wheat area at last month and 150,000 acres down in the case of durum. Tomorrow's export sales are estimated at 300-650 TMT. Jul 13 CBOT Wheat closed at USD7.07, up 19 1/2 cents; Jul 13 KCBT Wheat closed at USD7.39 3/4, up 20 1/2 cents; Jul 13 MGEX Wheat closed at USD8.13 1/2, up 14 1/2 cents.

EU Grains Consolidates, China Maybe Bought French Wheat

19/06/13 -- EU grains traded higher for a second day, seemingly on ideas that the recent slump in prices may have been overdone.

Jul 13 London wheat finished the day GBP1.30/tonne firmer at GBP163.05/tonne, and with Nov 13 ending up GBP2.05/tonne at GBP170.05/tonne. Nov 13 Paris wheat settled EUR3.00/tonne steadier at EUR199.75/tonne.

A report on Reuters suggested that China may have bought around 200 TMT of new crop French wheat.

ODA said that some French fields may have sustained recent hail damage in the Centre, Charentes and Pays-de-la-Loire regions. Other reports suggest that thunderstorms yesterday damaged crops in the South West too.

Russia sold 34,290 MT of intervention grains at auction, bringing the total sold so far since sales began last October to over 3.5 MMT.

Russian President Vladimir Putin said that the country will not be issuing a grain export embargo in 2013/14.

Ukraine's Ag Ministry said that the country has harvested 300 TMT of grain so far this season with an average yield of 2.3 MT/ha versus 1.6 MT/ha a year ago.

The latest figures from UK Customs & Excise show Jul12/Apr13 domestic wheat imports at 2.38 MMT, an increase of 325% on the same period in 2011/12. April imports were almost 256 TMT versus exports of only 28 TMT.

These imports are already within touching distance of the current Defra forecast for full season of 2.537 MMT. With imports currently running at around 250 TMT/month it looks likely that we will exceed this official estimate and probably end up importing around 2.9 MMT of wheat in 2012/13.

That means that despite last year’s disappointing harvest, UK ending stocks at the close of the current season could actually be well over the 2 MMT mark, which is historically rather high.

Corn imports into the UK in 2013/14 are also expected to continue to be high. New crop Ukraine corn traded into South Korea yesterday at USD259/tonne C&F, the equivalent of around GBP166/tonne.

Ukraine corn is offered in the market at USD222/tonne FOB for October, circa GBP142/tonne before freight and discharge costs are added. Ukraine origin milling wheat is quoted at USD256/tonne (or GBP163.50/tonne) for July shipment FOB. French milling wheat is offered at EUR192/tonne (GBP164.75/tonne) for July delivery to Rouen and French new crop feed barley is around EUR179/tonne (GBP153.50/tonne), say Agritel.

Ants Trade Limit Up On Rumoured Chinese Buying

19/06/13 -- Bollocks to soymeal, ants are the future and they're trading limit up on strong rumours that the insatiable Chinese are in the market for 10 million tonnes of US origin ants. As long as they don't come from Oregon of course.

Argentine ants are on strike, and Brazilian ants are suffering with logistical problems. Reuters report a line of ants stretching eighteen times around the world trying to get into Santos port after the Brazilian government said that ants could only work for 8 hours/day.

Meanwhile, as we all know, the Russian dung beetle crop has been badly affected by a chronic dung shortage this year.

It's actually quite an interesting concept this: Ant Pellets.

I can't wait to see them on Cargill's list. "They were ex store Liverpool but now they're ex store Preston, we don't know where they'll be tomorrow yet."

EU Rapemeal Prices

19/06/13 -- Rapemeal prices on the continent are mostly a little easier today. Drier and much warmer weather across most of the continent is seen as beneficial for crop development. New crop French OSR is offered at EUR417/tonne (GBP358/tonne equivalent) for July delivery FOB Moselle.

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

18/06/13 -- Soycomplex: Beans were little changed despite the USDA announcing the sale of 240 TMT of new crop beans to China. Oil World said that the US will import up to 100,000 MT of beans in June and up to 150,000 MT of beans in July as demand for meal stays high. Michael Cordonnier estimated the US 2013 soybean planted area at 77.87 million acres, up 750,000 acres from the USDA estimate. He placed the 2013 bean yield at 42.5 bu/acre, unchanged from his previous estimate, pegging production at a record 3.26 billion bushels, also unchanged from his previous estimate. Informa are due out tomorrow with their US 2013 acreage estimates. Last month they had the 2013 US soybean area at 78.286 million acres versus the USDA estimate of 77.1 million. AgriFood Canada estimated the soybean crop there at 4.5 MMT versus 4.9 MMT last year and the USDA's 4.85 MMT forecast. The Argentine farmers strike ends at midnight tomorrow. The Rosario Grain Exchange said that there were 553 trucks entering the port yesterday versus 3,561 last Monday. Jul 13 Soybeans closed at USD15.10 3/4, down 1 3/4 cents; Nov 13 Soybeans closed at USD12.89 3/4, up 4 1/4 cents; Jul 13 Soybean Meal closed at USD451.80, up USD2.70; Jul 13 Soybean Oil closed at 48.81, down 3 points.

Corn: The corn market closed higher, particularly on new crop, on ideas that 2-3 million US acres will still go unplanted this year. South Korea's NOFI bought 68 TMT of optional origin corn for October shipment along with 58 TMT of what was thought to be a first time Black Sea purchase for November shipment at what was said to be the cheapest price in more than a year. Michael Cordonnier estimated the US 2013 corn planted area at 94.3 million acres, down 3.0 million from the USDA estimate. He pegged the US 2013 corn yield at 153.0 bu/acre and estimated production at a record 13.26 billion bushels, both are unchanged from his previous estimate. AgriFood Canada estimated the Canadian corn crop at 13.8 MMT versus 13.1 MMT last year. Weekly US ethanol production data comes out tomorrow. Also due tomorrow are the latest US acreage estimates from Informa, last month they forecast the 2013 US corn area at 96.827 million acres versus the USDA estimate of 97.3 million. Chinese industry analysts estimated the 2012/13 Brazilian corn crop at 77.0 MMT, unchanged from their previous estimate. They forecast the Argentine corn crop at 24.0 MMT, also unchanged from previously. Jul 13 Corn closed at USD6.73 1/4, up 4 3/4 cents; Dec 13 Corn closed at USD5.50 1/2, up 12 cents.

Wheat: Jordan bought 100 TMT of optional origin wheat Sept/Oct shipment. The USDA attaché in Saudi Arabia estimated 2013/14 wheat production at 600,000 MT versus 780,000 MT in 2012/13. He pegged 2013/14 Saudi wheat imports at 2.5 MMT, up 13% from a year ago. ABARES estimated global wheat output at 690 MMT, up 5.3% from a year ago, but below the USDA's 696 MMT. They said that the FOB Gulf price of US HRW wheat is seen averaging USD315/tonne in the year starting July 1st versus a previous forecast of USD320/tonne and USD348/tonne in 2012/13. Japan tendered for 152 TMT of US, Canadian and Australian wheat but excluded US Western White Wheat for the fourth tender in a row on GMO concerns. AgriFood Canada estimated the Canadian all wheat crop at 29.4 MMT versus 27.2 MMT a year ago. The Russian and Ukraine barley harvest is underway and yields are said to be much higher than a year ago. ODA said that the French soft wheat crop is 67% good to excellent as of June 4th, up sharply versus the start of April when conditions were only 56% good to excellent. They said that expect the 2013 French soft wheat crop to be the largest since 2009. Jul 13 CBOT Wheat closed at USD6.87 1/2, up 7 cents; Jul 13 KCBT Wheat closed at USD7.19 1/4, up 5 1/2 cents; Jul 13 MGEX Wheat closed at USD7.99, down 1 1/4 cents.

EU Wheat Attempts Mini Recovery Following Recent Rout

18/06/13 -- EU grains closed mostly higher in what looks like a long overdue spot of consolidation following the recent rout. The bears are still firmly in control however, and that's unlikely to change as the Black Sea harvest gets going just ahead of the combines starting to move in here in Europe too.

Jul 13 London wheat finished the day GBP1.00/tonne firmer at GBP161.75/tonne, and with Nov 13 ending GBP3.00/tonne higher at GBP168.00/tonne. Nov 13 Paris wheat rose EUR1.00/tonne lower at EUR196.75/tonne.

Early reports out of Russia say that 140,200 hectares have been harvested so far in the south of the country, producing 682,600 MT of grains with an average yield of 4.87 MT/ha, up 63% on a year ago. Yields in Krasnodar are up up 32%, whilst in Stavropol they are said to be up 78%. The Russian Ministry are forecasting a grain crop of 95 MMT this year, up almost a third on a year ago.

Ukraine is reporting similar results, with 79,200 ha of land harvested so far with an average yield of 2.25 MT/ha, 37% up versus 1.64 MT/ha this time last year. Yields should improve as the harvest progresses west and north. The Ukraine Ministry are currently forecasting a grain crop of 53-54 MMT, up 15-17% on last year.

The Ukraine Ministry also say that the country had exported 22.48 MMT of grains this marketing year so far (to June 1), including 7 MMT of wheat, almost 13 MMT of corn and over 2 MMT of barley. They estimate 2012/13 ending stocks at 5.78 MMT.

ODA maintained their French soft wheat crop forecast at 36 MMT, a 4 year high. The French durum crop is normally around 2.1-2.3 MMT, taking total all wheat output this year very close to the USDA's current 38.2 MMT prediction.

South Korea are reported to have bought optional origin corn, thought most likely to be sourced from the Black Sea, at USD259.23/tonne C&F. That's said to be their cheapest corn purchase in more than a year. The Asian nation is reported to have bought in excess of 1.3 MMT of corn and wheat on the recent price dip.

Bloomberg are reporting that the UK OSR crop could fall to 1.5-2.0 MMT this year, a drop of anywhere from 20-40% on last year and at least the lowest since 2009 (and possibly the smallest since 2002), meaning that the UK could become a net importer for the first time in four years in 2013/14.

AgriFood Canada are forecasting a rapeseed crop there of 14.1 MMT, up 6% on last year despite a lower planted area. They see this year's Canadian wheat crop at 29.4 MMT, up 8%, with barley production increasing up 6% to 13.8 MMT and corn output rising more than 5% to 13.8 MMT.

Sources report that new crop Black Sea feed barley is offered around USD248/tonne FOB (circa GBP159/tonne). New crop French milling wheat deld Rouen (July) is quoted at EUR192/tonne, circa GBP164.80/tonne based on this evening's late (and reduced) exchange rates of around 1.1650 versus the euro and 1.56 against the dollar.

EU Rapemeal Prices

18/06/13 -- Rapemeal prices on the continent are mostly a little easier today following losses in soymeal values in the US last night, and warmer and drier in the weather in Europe improving new crop production prospects. AgriFood Canada estimate canola production there at 14.1 MMT this year, an increase of 6% on last year, despite a fall in planted area as yields rebound to more like normal levels.

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

The Morning Vibe

18/06/13 -- It's a turnaround Tuesday sort of a day for beans, which are currently 2-4 cents higher in overnight Globex trade, wheat is 4-5 cents firmer and corn mixed a cent or so either side. It looks like a bit of consolidation might be in order today following recent declines.

There was no corn planting estimate from the USDA last night, corn emergence was at 92% versus 100% last year and 97% normally. The soggy northern states of Wisconsin (75% emerged versus 96% normally), North Dakota (81% vs 94%) and Minnesota (86% vs 99%) are notable laggards. Good/excellent conditions improved one point from last week to 64%. Iowa is 16% poor/very poor, up 2 points from 14% a week ago. Illinois is 11% poor/very poor, down 2 points from 13% last week.

Soybeans are 85% planted versus 91% normally. Again the northern states stand out with Wisconsin only 72% done versus 97% normally, North Dakota is 87% against 96% normally, Minnesota is 87% compared to 99% on average. North Carolina is also sluggish at 57% done versus 74% normally. Soybean emergence is 66% versus 80% normally. Good/excellent is 64% in the first ratings of the season (versus 56% this time last year).

Winter wheat harvesting is only 11% done compared to 25% normally and 51% a year ago. The crop is 89% headed versus 91% normally. Good/excellent conditions in winter wheat were unchanged at 31%, poor/very poor was up a point on last week to 43%. In Texas 75% of the crop is rated poor/very poor, in Colorado it's 72%, in South Dakota it's 55%, in Oklahoma it's 53%, in Nebraska it's 52% and in Kansas it's 45%.

Spring wheat plantings have almost caught up at 92% done versus 97% normally. A better week with a bit of sun sees good/excellent conditions amongst spring wheat jump from 62% to 68%, although that's still behind 76% a year ago. Spring wheat emergence is at 84% versus 94% normally.

The Russian harvest is off to a good start, with Reuters reporting early average yields at 5.43 MT/ha in Krasnodar, up 32%. In Stavropol they are said to be up 78% at 3.8 MT/ha and in Adygeya they're up 35% at 3.88 MT/ha.

The Ukraine harvest is also underway, with average early yields at 2.25 MT/ha, up 37% versus 1.64 MT/ha this time last year. Yields should improve further as the harvest progresses west and north.

New crop French milling wheat deld Rouen (July) is quoted at EUR192/tonne, circa GBP163.50/tonne.

Watch out for the Fed's monetary policy statement tomorrow for hints at how and when it will scale down its pace of bond purchases, currently said to be running at around USD85 billion/month. That could give the dollar the collywobbles and might knock the stock market as well.

The jungle drums are suggesting that China may have used this latest price dip on wheat to top up with a bit more US SRW wheat out of the west coast.

Chicago Markets Mixed To Start The Week

17/06/13 -- Soycomplex: Bans were mostly lower on a favourable 1-5 day weather forecast despite the May NOPA crush of 122.63 million bushels coming in above the average trade guess of around 118 million. Weekly export inspections of 2.76 million bushels weren't great, but nor do they need to be. A Bloomberg survey of Chinese crushers estimated China's 2013/14 soybean imports at 63.0 MMT, well below the USDA's forecast of 69.0 MMT. They also placed 2012/13 imports at 58.0 MMT, slightly lower than the USDA's 59.0 MMT. Argentine farmers are striking through to Wednesday and the country is on holiday Thursday and Friday. The trade was expecting soybean plantings at 85-90% done, up from 71% complete last week. The USDA came out with a figure at the low end of that range, 85%, after the close. Last year 98% of the crop was planted at this stage and the 5-year average is 91%. The first crop condition ratings of the season pegged good/excellent at 64%, up from 56% a year ago. Jul 13 Soybeans closed at USD15.12 1/2, down 4 cents; Nov 13 Soybeans closed at USD12.85 1/2, down 12 3/4 cents; Jul 13 Soybean Meal closed at USD449.10, down USD1.60; Jul 13 Soybean Oil closed at 48.84, up 36 points.

Corn: Weekly export inspections came in quite strong at 14.144 million bushels versus the 5-10 million expected by the trade. That helped old crop post the best gains of the day. South Korea's NOFI tendered for 140 TMT of corn, including Black Sea origin within it's list of approved origins. The trade views this as being due to persistent shipping delays out of South America. The Argentine corn harvest is 80% complete versus 69% a year ago, according to the local Ag Ministry. MARS estimated EU corn yields this year at an average 7.13 MT/ha, up from 6.87 MT/ha last month and up more than 20% on 5.91 MT/ha last year. Russia said that it's spring grain planting campaign was complete, including 2.3 million ha of corn, 106.5% of the originally expected area. The USDA didn't issue a planting progress estimate for corn, they did say however that 92% of the crop is emerged versus 85% last week and 97% for the 5-year average. Good/excellent ratings rose one point from last week to 64%. Jul 13 Corn closed at USD6.68 1/2, up 13 1/2 cents; Dec 13 Corn closed at USD5.38 1/2, up 5 1/2 cents.

Wheat: Weekly export inspections of 21.592 million bushels were in line with the expected 20-26 million. Egypt remains absent from the international tender market. They said that they had bought almost 4 MMT of wheat on the local market since their 2013 harvest began. Wheat imports in the 2012/13 financial year are placed at 6.6 MMT versus the USDA's estimate of 8.5 MMT. The Ukraine Weather Centre estimated their wheat crop at 20.0 MMT versus 19.5 MMT from the USDA. APK Inform forecast the Russian 203 wheat crop at 52.1 MMT, up 38%. The see the 2013/14 exportable surplus at 15.0 MMT, up 50% from 10.0 MMT in 2012/13. South Korea's NOFI tendered for 55 TMT of feed wheat and excluded US wheat from the list of approved origins due to GMO issues. The USDA said that the recent discovery of GMO wheat growing in a field in Oregon was a one off incident. The USDA said that 11% of the nation's winter wheat crop was harvested versus 25% normally. Spring wheat planting is 92% complete versus 97% normally. Jul 13 CBOT Wheat closed at USD6.80 1/2, down 1/4 cent; Jul 13 KCBT Wheat closed at USD7.13 3/4, up 2 1/4 cents; Jul 13 MGEX Wheat closed at USD8.00 1/4, down 3 3/4 cents.

EU Wheat: Same Song, Different Day

17/06/13 -- EU grains slumped to new lows once more as Jul 13 London wheat finished the day GBP2.50/tonne easier at GBP160.75/tonne, and with Nov 13 ending GBP0.30/tonne down at GBP165.00/tonne. Nov 13 Paris wheat settled EUR0.50/tonne lower at EUR195.75/tonne.

Jul 13 London wheat traded down to GBP160.00/tonne at one point - a near 13 month low for the contract and the lowest level for a front month since January 2012. Both London and Paris wheat are down around 22% since the turn of the year on the front month continuous chart.

Jul 13 London wheat has now closed lower in 10 of the last 12 trading sessions, losing GBP22.75/tonne during this bear run.

The EU is looking like having a relatively average crop this year. Good in some places, not so good in others, although yield potential is generally seen better than it was a month ago. The Black Sea is shaping up for a strong rebound in output, and that is what is hanging over the market right now, and is dragging world prices lower.

The EU Commission's MARS unit said that crop conditions across the continent have been mixed during the past month. "An over-wet and cold May has constrained crop development in large parts of central Europe. Good conditions prevailed in Romania, Hungary, and, especially, Spain where an excellent season boosts spring barley forecast yields," they observed.

EU-wide soft wheat yields were forecast up fractionally from last month to 5.55 MT/ha, a 2.6% increase on last year. Barley yields are seen at 4.68 MT/ha versus 4.56 MT/ha last month, a 7.6% increase on 2012, whilst corn yields are expected to jump to 7.13 MT/ha, from the 6.87 MT/ha estimated in May and up more than 20% on 5.91 MT/ha last year. OSR yields are seen averaging 3.02 MT/ha, down slightly from the 3.06 MT/ha forecast last month and 2.6% lower than last year.

Yields in the UK, France and Germany were forecast unchanged to slightly lower this month compared to May. In France, where they said that cold and wet conditions have delayed crop growth, soft wheat yield potential was revised down from 6.91 MT/ha to 6.87 MT/ha, a 4.6% decline on last year's 7.2 MT/ha. Germany's soft wheat yields were pegged at 7.35 MT/ha compared to 7.48 MT/ha last month but little changed from 7.33 MT/ha in 2012. UK wheat yields were estimated at 7.63 MT/ha versus 7.68 MT/ha last month, but up almost 11% on last year's 6.88 MT/ha.

In Germany they said that "wet conditions in the south and east of the country are constraining plant development on heavy soils, while conditions are more favourable in the north-west. Yields are now close to or below the 5-years average for all crops." In the UK "a period of favourable weather conditions has sustained steady crop growth. However, both winter and spring crops still show a strong developmental delay. They retain a fair yield potential, but the shift in time exposes them to higher risks," they noted.

In Spain "below-average temperatures are favouring the ripening of winter crops in southern regions. Spring cereals are currently starting the grain-filling stage under favourable weather conditions. Yield potentials both for winter and spring cereals are among the highest ever," they added.

Russian spring grain plantings have been completed on 30.4 million hectares, up slightly on the 30.3 million originally estimated by the Ministry. APK Inform forecast the 2013 Russian wheat crop at 52.1 MMT, in line with other trade estimates and 38% up on last year. They say that the wheat exportable surplus in 2013/14 will be 15 MMT.

APK Inform estimated the Kazakhstan wheat crop at 14.3 MMT, up 46% on last year, although lower than the USDA's 15.0 MMT.

The Ukraine Weather Centre forecast wheat production there this year at 20.0 MMT, a 27% increase on the 2012/13 crop, and a bit higher than the USDA's 19.5 MMT estimate. The local Stats Office say Jun 1 grain stocks in Ukraine were 6.3 MMT, down 42% on year ago levels, including 2.6 MMT of corn, 2.5 MMT of wheat and 0.7 MMT of barley.

Winter wheat harvesting in the US is also underway, adding a little bit of seasonal pressure, although early results are mixed. The USDA will report tonight on crop conditions and planting progress for spring wheat (only 80% done last week versus the 5-year average of 92%) as well as those for corn and soybeans. Weather forecasts for the week ahead are generally favourable offering warmer and drier conditions.

South Korea is tendering for 55 TMT of feed wheat for October shipment which may go to the Black Sea. They are also in for 140 TMT of corn for Oct/Nov shipment, including Black Sea origin for the first time, along with 6 TMT of feed barley for October shipment.

EU Rapemeal Prices

17/06/13 -- Rapemeal prices on the continent are mostly weaker, with the exception of nearby old crop which remains tight on seasonal shut-downs. Prospects for 2013 rapeseed production across Europe look a little brighter.

Since the beginning of the month the Nov 13 Paris rapeseed future is down over 20 euros, yet the price of meal on the continent is unchanged in this time, meal in Erith is up GBP3/tonne and meal in Liverpool up GBP5/tonne during the same period! The pound meanwhile has improved, up around a cent against the euro (and over 5 cents versus the dollar) over the course of the month so far. Hmmmm....

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

The Morning Vibe

17/06/13 -- The overnight Globex grains are almost universally lower to start the week, with only front month Jul 13 bucking the trend, a whopping 1/2 cent higher at 9am London time. Beans are around 5-10 cents lower, with the largest declines at the front end, and wheat is down 4-5 cents to the lowest levels since early April.

On the agenda for this week we have the latest EU analysis and yield forecasts from the EU Commission's MARS unit, along with the latest weekly crop condition and planting progress report from the USDA. Both of these are out today.

In tonight's USDA report the trade is looking for soybean plantings at 85-90% done versus 71% a week ago. Corn planting might be around 97% complete versus 95% a week ago. We'll also be looking to see how spring wheat plantings have progresses. Last week planting was up just one point from the previous week to 80% done, and versus the 5-year average of 92%.

EU grains may follow the US lead and open a bit weaker in early trade. Paris wheat has only closed lower than the EUR196.25/tonne where Nov13 finished Friday night once for a front month in the last 18 months. London wheat is at levels not seen since Feb 2012 and Paris rapeseed is close to hitting the lows of Nov 2011.

The latter might make you think "so why is rapemeal still so bloody dear then?" The answer would partly appear to be down to veg oil prices also being low. Some of it might be farmer reluctance to sell seed, prices are perceived as low and certainly there's still a large question mark over yield potential this year. Rapemeal still looks expensive going forward though, especially given the outlook for soybean prices in the second half of the year.

Also out this week we have UK cereals trade data from Defra due tomorrow, the minutes of the June BoE's MPC meeting due on Wednesday along with the June Fed policy meeting. The vibe coming out of the latter recently has been that we may soon start to see the Septics begin reigning in their hitherto relaxed fiscal policy a little. As mentioned previously they can't keep on buying USD85 billion worth of assets every month ad infinitum can they? That might keep the dollar under pressure for the next few days, and possibly a lot longer depending on what Fed chairman Ben Bernanke has to say.

The USDA says that the finding of GMO wheat growing happily in a field in Oregon was an isolated incident. I'm sure that will put Asian minds at rest.

Agrimoney report that Russia may start it's intervention purchasing programme earlier than expected. The Russian Ag Minister recently said that they may not begin buying until October/November.

The Egyptian government say that they have bought almost 4 MMT of wheat on the local market since the 2013 harvest began. There's been some suggestion of late that they may return to the market as buyers soon.