Nogger's Blog: 30 Jun 2013

Chicago Close: New Crop Dec Corn Falls Below USD5/bu For First Time Since Dec 2010

05/07/13 -- Soycomplex: Front month July beans closed higher, but all other positions were lower on a combination of a strong dollar and a non threatening weather outlook for the Midwest lasting at least until the middle of the month. Weekly soybean export sales of 120,600 MT of old crop and 249,100 MT of new crop were in line with trade forecasts for combined sales of 200-500 TMT. Meal sales of 116,300 MT of old crop were up noticeably from recent weeks. New crop meal sales were 4,200 MT. Trade expectations were for meal sales of a combined 50-125 TMT. This strong demand for old crop meal is one of the main factors supporting the nearby market. Jul 13 meal is currently running at a huge premium of around USD130 over Dec 13. The Brazilian truckers strike ended yesterday. Dock worker strikes however are lined up for Jul 10-11th. These disruptions may keep nudging a little bit of old crop demand back to the US, where pipeline supplies are already razor thin. Chinese industry analysts estimated China’s June soybean imports at 7.28 MMT and July's imports at 7.5 MMT. The USDA attaché in China estimates 2012/13 bean imports at 59.5 MMT, rising to 67.5 MMT in 2013/14, a bit lower than the USDA's official forecast of 69 MMT although still a record by a long way. CONAB release their July Brazilian crop forecasts on Tuesday. Last month they had the 2012/13 Brazilian soybean crop at 81.3 MMT and 2012/13 exports at 36.78 MMT. Prior to that the USDA will release their weekly crop progress report on Monday night. We then get the July WASDE report from the USDA on Thursday, along with the regular weekly export sales. Jul 13 CBOT contracts expire on Friday. Jul 13 CBOT soybeans closed up 4 1/2 cents at USD15.88; Nov 13 beans closed down 22 1/2 cents at USD12.28 1/4; Jul 13 meal closed down USD1.50 at USD489.10; Jul 13 soybean oil closed at 47.23, up 1 point. For the week that puts Jul 13 beans up 13 1/2, Nov 13 beans down 21 3/4 cents, Jul 13 meal down USD1.20 and Jul 13 oil up 81 points.

Corn: As with beans the combination of a strong US dollar and the "hot house" effect of warm, wet and sunny weather in the Midwest sent corn futures lower in all but front month Jul 13, strong nearby demand continues to support that. Weekly export sales of 233,100 MT of old crop and 81,400 MT of new crop were at the low end of trade expectations for sales of a combined 250-500 TMT. In addition, the USDA announced the sale of 120 TMT of new crop corn to unknown under the daily reporting system. The Buenos Aires Grain Exchange estimated the Argentine corn harvest at 84.1% complete versus 76.9% a week ago and 81% a year ago. They forecast the Argentine corn crop at 24.8 MMT, unchanged from their previous estimate. The USDA attaché in China estimated the 2013/14 Chinese corn crop at 210 MMT versus an official USDA estimate of 212.0 MMT. APK Inform estimated the Ukraine corn crop at 23.9 MMT versus the USDA's 26.0 MMT forecast. They see corn exports rising from 13.5 MMT to 17.0 MMT in 2013/14, which is 1 MMT more than the USDA currently predict however. The FAO yesterday predicted a record world corn crop of 972 MMT in 2013/14, up 9 MMT on last month. The EU Commission meanwhile forecast an EU-28 corn crop of 70.02 MMT this year, also a record and up nearly 17% on last season. CONAB come out Tuesday with their monthly Brazilian crop report. Last month they estimated Brazil's 2012/13 corn crop at 78.5 MMT. There's talk that corn prices in Brazil are now well below the cost of production in the interior, given the huge expense of transporting the crop to the ports. This could have a negative impact on Brazilian corn production in 2013/14. The USDA currently predict output falling to around 72 MMT next season, other private estimates are in the 65-70 MMT region. Jul 13 CBOT corn closed 6 1/2 cents higher at USD6.84 3/4; Dec 13 corn fell below the USD5/bu mark for the first time since 2010, closing at USD4.91 1/4, down 11 1/2 cents. On the week that puts Jul 13 up 5 1/2 cents, with Dec 13 down 19 3/4 cents.

Wheat: The announcement of another sale of US SRW wheat to China wasn't enough to send the market higher, weighed on by new crop corn slumping to fresh lows. Weekly export sales of 593,000 MT were also pretty decent. In addition, actual shipments of 688,500 MT included 233 TMT heading for China. There are further rumours of other sales to the Chinese still to be confirmed. The USDA attaché in China estimated their 2013/14 wheat crop at 118 MMT versus an official USDA estimate of 121 MMT. The attaché forecast China's 2013/14 wheat imports at 4.0 MMT versus an official USDA estimate of 3.5 MMT. These would be the highest level of imports in 9 years, and some analysts think that they could in fact end up being far higher than this. The National Australia Bank forecast 2013/14 wheat production there at 24.0 MMT, up from 22.1 MT last year, but below the 25.4 MMT predicted by ABARES and the 24.5 MMT estimated by the USDA. NAB see Australia's wheat exports falling from 20.1 MMT to 15.8 MMT in the season ahead on increased competition from the Black Sea. AKP Inform said that Russia's 2012/13 wheat ending stocks finished at a 10-year low of just 2.8 MMT. They see Russian production up 38% in 2013/14 at 52.1 MMT, with exports rising a similar percentage to 15.0 MMT. The Argentine wheat crop is 66% planted versus 53% last week and 58% last year, according to the Buenos Aires Grain Exchange. A report on Reuters said that the Argentine government had invoked a special law stating that wheat and flour producers must "take the necessary commercial actions to adequately supply the domestic market, starting on the day that this resolution is published," effectively blocking exports. Argentine wheat output fell to its lowest level since 1995 last year as growers scaled back on plantings due to dissatisfaction with the government's constant interference in the market Jul 13 CBOT wheat closed 1 3/4 cents lower at USD6.56; with Jul 13 KCBT wheat down 7 cents at USD6.76 1/2 and Jul 13 MGEX wheat closed unchanged at USD7.61 1/4. For the week that puts Chicago wheat up 7 1/2 cents, with Kansas up 1/4 cent and Minneapolis down 23 3/4 cents.

EU Wheat Mixed, Egypt Unrest Promotes Risk-Off Mentality

05/07/13 -- EU grains were mixed but mostly lower to finish the week on Friday, despite surging crude oil values following Egypt's military declaring a state of emergency in the province of Suez. There was some suggestion that they may have said that they couldn't guarantee the safety of vessels passing through the Suez Canal following clashes with supporters of the newly ousted President Morsi.

You might have expected grain prices to move higher on the news, although all it seemed to do was encourage a further "risk off" mentality, just as it did when during the last round of political instability and government overthrows in North Africa.

On the day Jul 13 London wheat went off the board unchanged at a nominal GBP155.75/tonne, and benchmark Nov 13 ended GBP0.45/tonne easier at GBP166.55/tonne. Nov 13 Paris wheat settled EUR2.00/tonne lower at EUR194.75/tonne. For the week, Nov 13 London wheat was GBP1.95/tonne firmer and Nov 13 Paris wheat up one euro.

FranceAgriMer pegged French wheat, winter and spring barley crop conditions unchanged from a week ago at 69%, 68% and 72% good/excellent respectively. Corn good/excellent rose one point to 56%. Planting of the latter is now very late but still ongoing, rising from 96% complete last week to 98% done.

The pound closed below 1.49 against the US dollar. Apart from a brief period in mid-March it hasn't spent any length of time down at that level for three years. It also slumped below 1.16 versus the euro. A sustained period of sterling weakness should support London wheat.

EU soft wheat exports finished 2012/13 at 18.9 MMT, the highest level since 2008/09. Barley exports of over 5 MMT were the best since 2002/03. Competition will be much fiercer in 2013/14 however, with the EU Commission yesterday forecasting EU-28 grain ending stocks rising from 30.4 MMT in the season just ended to 40.1 MMT at the end of the one just begun.

Much of the reason for that is a sharp rebound in production in the Black Sea of course. Ukraine are already rampaging around the market mopping up new crop sales at discount prices. APK Inform forecast the Ukraine grain crop rising from 46.2 MMT to 54.1 MMT this year, with exports increasing 26% to a record 29.2 MMT.

They estimate corn production at 23.9 MMT, with wheat output at 20.5 MMT and a barley crop of 7.1 MMT. Corn exports will therefore climb from 13.5 MMT in 2012/13 to 17.0 MMT, with wheat exports up from 6.8 MMT to 9.2 MMT and barley exports up from 2.1 MMT to 2.5 MMT, they forecast.

Russia meanwhile will harvest a wheat crop of around 51-54 MMT, according to various estimates in the market, versus output of 37.7 MMT last year. APK Inform see wheat exports at 15 MMT, up 38% on 2012/13. The Russian Grain Union forecast total grain exports of "up to 25 MMT including 18 MMT of wheat." The latter figure would be a rise of over 60% on the season just ended.

The Russian Ministry said that the 2013/14 grain harvest currently stands at 10.3 MMT, of which 8.3 MMT is wheat and 1.6 MMT barley. Average wheat yields are said to be up 22% and those for barley up 38% versus this time a year ago.

China was confirmed as a buyer of 120 TMT of US SRW wheat by the USDA today, adding to the 360 TMT of similar it was announced that they'd purchased earlier in the week. They've also bought at least 300 TMT of Australian wheat this week, plus 200-220 TMT of French wheat bought mid-June and were already said to have had over 1.5 MMT of US SRW wheat already on the books for 2013/14 prior to this week's activity.

That's a pretty busy couple of weeks for the Chinese, slithering in under the radar. They are currently forecast by the USDA to only need to import 3.5 MMT of wheat in the whole of 2013/14. Apparently 2013 is Chinese year of the snake, not as appropriate as the rat I'm smelling, but not a bad analogy.

Ukraine Latest And Essex Girls

05/07/13 -- APK Inform Agency estimate grain production in Ukraine this year at 54.1 MMT, a 17% increase on last season. That total includes 23.9 MMT of corn, 20.5 MMT of wheat and 7.1 MMT of barley. These numbers are pretty close to Agritel's recent estimates of 24.9 MMT, 20.5 MMT and 7.4 MMT respectively. The USDA currently come in unfashionably low for them on wheat at 19.5 MMT, with their corn estimate at 26.0 MMT and barley at 7.0 MMT.

For exports, APK Inform go 29.2 MMT in all grains, a 26% hike on 2012/13. That includes corn exports rising 26% to 17.0 MMT (the USDA say 16.5 MMT), with wheat exports up 35% to 9.2 MMT (versus 8.0 MMT from the USDA) and barley exports up 19% to 2.5 MMT (compared to the 2.0 MMT forecast by the USDA).

No doubt much of that will be crammed into the front end of 2013/14 at whatever price they can get. Ukraine are a bit like Essex girls it would seem. Except not quite as orange. Mrs N#1 was from Essex you know, she once said to me down at the beach one day "hey, I read in the paper the other day that a hairy back is a sign of virility." I said "yeah, on men it probably is darling."

The Morning Vibe

05/07/13 -- It looks like the Septic Tanks are all still in bed, as to my immense disappointment there's no trade on the overnight Globex market following yesterday's Independence Day holiday. Quelle bummer as they say on the continent.

To say I'm crestfallen is an understatement. I feel like one of Katie Price's kids being unceremoniously switched to bottled milk. Talking of which, when I lived in Devon (where else would this happen?) I knew this woman who had 12 nipples. Twelve nipples. Sounds a bit funny that, dozen tit?

So it looks like we have to sit around until this afternoon for a bit of action, I can't see Europe doing a lot before then somehow. Fresh news is pretty thin on the ground. This afternoon will bring the weekly export sales report from the USDA. Trade estimates for that are: Wheat 400-800 TMT; Corn 250-500 TMT; Beans 200-500 TMT; Meal 50-125 TMT.

South Korea's NOFI has bought 124 TMT of corn for Nov shipment, one cargo of Black Sea origin and one of Brazilian. They've also bought 45 TMT of Black Sea feed wheat for October arrival.

Grabbing my attention this morning is a story on Agrimoney that the USDA attaché in China has cut his forecast for wheat production there to 118 MMT. A 2.6 MMT drop on last season, the first year-on-year decline in Chinese wheat production in 10 years, and 3 MMT lower than the USDA currently predict.

The attaché has raised his forecast for Chinese wheat imports to 4 MMT versus 3.5 MMT from the USDA themselves. Rabobank said last month that they thought that China could import as much as 10 MMT in 2013/14. They already had 1.6 MMT of confirmed US SRW wheat on the books for this season before the sale of a further 360 TMT was announced earlier in the week. They've also bought at least 300 TMT of Australian wheat this week and 200 TMT of French wheat a week or so ago. That adds up to almost 2.5 MMT so far for a season that's only just begun, as Karen Carpenter would say.

With 10-11 MMT of wheat in Henan province, China's largest producing state, said to be downgraded to only fit for feed use this year could it be that it's wheat not corn that the Chinese are going to be big buyers of in 2013/14? The USDA currently have them down to more than double their corn imports from 3 MMT to 7 MMT, but with wheat imports only rising modestly from 3.2 MMT last season to 3.5 MMT in the new marketing year. Those numbers may end up being the wrong way round.

Another noteworthy story on Reuters this morning is news that Europe's largest biodiesel maker, Diester Industrie, is to close two French plants with a combined capacity of 350-375 TMT a year of biodiesel.

The reason for the closures seems to be proposals by the EU Commission to cap the usage of crop-based biofuels to 5% of consumption. The two plant's main feedstock is rapeseed and sunseed. The smaller of the two plants in Venette may be switched to processing used cooking oil and animal fat, it is being suggested.

Brussels issued 125 TMT of soft wheat export licences in the first part week of the new 2013/14 marketing campaign (Jul 1-2).

Kazakhstan finished 2012/13 exporting 7.1 MMT of grains/flour, down more than 40% on a record 12.1 MMT in 2011/12.

Ukraine got good rains last week, leaving the corn crop there "in very good shape" heading into pollination, say Agritel.

Lanworth estimated Russia’s 2013/14 wheat crop at 51.1 MMT, down 2% from their previous estimate and 3 MMT below the USDA's current forecast. Personally I feel that we will see yields start to drop off as the harvest there progresses, so they may be right.

EU Wheat Modestly Higher In Quiet Trade, Record Crops On The Horizon Though

04/07/13 -- EU grains closed firmer with Jul 13 London wheat (which expires on tomorrow and has an open interest of zero) nominally finishing the day GBP1.25/tonne higher at GBP155.75/tonne. Benchmark new crop Nov 13 ended also GBP1.25/tonne higher at GBP167.00/tonne and Jan 14 closed up GBP0.90/tonne at GBP168.50/tonne. Nov 13 Paris wheat rose EUR2.00/tonne to close to EUR196.75/tonne.

With US markets closed for the Independence Day holiday it was always likely to be a quiet one, and so it proved. It remains to be seen when the US market re-opens again tomorrow what it makes of the latest developments in Egypt.

It appears that there was probably some protection built into the prices GASC paid for wheat on Tuesday, considering that the average price of USD263.44/tonne C&F was almost USD5/tonne higher than that paid by Tunisia on the same day - a destination that would have had a more expensive freight cost.

Reuters report that the head of the Russian Grain Union forecast that Egypt's wheat imports will fall to 7-8 MMT in 2013/14, versus the USDA's current projection of 9 MMT. He added that he expects Russia to supply around half of that total versus 2.7 MMT in the season just ended.

The killer comment in his statement however was that he expects domestic Russian 3rd grade milling wheat prices to fall to USD180/tonne by September. The current price is around USD240/tonne. If he's correct then that would suggest Russian wheat FOB the Black Sea at less than USD200/tonne. That's more than 20% below the USD251/tonne paid by Egypt on Tuesday. A similar cut of 20% off tonight's London wheat close would take Nov 13 down into the low GBP130's/tonne!

The Russian harvest is now underway in the Samara district, some 2-3 weeks earlier than normal. Grain output here is expected to be up 36% on last year, say the Russian Ag Ministry. They also say that nationally 2.7 million hectares of grains have been harvested so far, producing a crop of 9.7 MMT with yields averaging 3.56 MT/ha. This time a year ago the harvest stood at 5.5 MMT with yields at 2.83 MT/ha.

Of the total harvested so far wheat stands at 7.7 MMT off 2.2 million ha with an average yield of 3.49 MT/ha, up 22%. Barley accounts for a further 1.5 MMT of the total, with yields of 4.43 MT/ha, up 39% on this time a year ago.

Also on the Black Sea, Ukraine has now harvested 6.82 MMT of grains off 2.72 million hectares, with yields averaging 2.5 MT/ha, up 42% versus this time in 2012. That total includes 4.21 MMT of wheat and 2.29 MMT of barley. The Ukraine Ag Minister forecast the 2013 wheat crop at 21.0 MMT, up 33%, and 1.5 MMT more than the USDA currently predict.

The FAO increased their forecasts for world wheat and corn production this year. They pegged the global wheat crop at a record 704 MMT, up 2 MMT from last month and 8 MMT above the current USDA suggestion. That is a 6.8% increase versus 2012. They noted "good prospects in nearly all major producing countries with the exception of the US." That's not quite the full story though, they have 2013/14 world wheat ending stocks at 169 MMT, which is actually 12 MMT lower than both the USDA and IGC, thanks to a much lower projected carry-in from 2012/13.

For world corn, the FAO predicted a crop of 972 MMT, up 9 MMT on last month and versus the USDA's current prediction, and also a record. They have world corn ending stocks at 175 MMT in 2013/14, well above the USDA's 152 MMT and the IGC's 149 MMT.

Final figures from Brussels for the 2012/13 season show 18.9 MMT of soft wheat export licences were cleared (versus 12.5 MMT in 2011/12). They also issued 5.05 MMT of barley export licences (versus 2.9 MMT in 2011/12) and authorised 10.8 MMT of corn imports (up from 6.15 MMT in 2011/12).

The European Commission forecast the 2013/14 EU-28 soft wheat crop at 129.96 MMT, up 4.2 MMT or 3.3%, on last year. They have durum output at 8.83 MMT versus 8.53 MMT last year and the barley crop at 58.8 MMT versus 54.94 MMT in 2012, an increase of 7%. In addition they gave us a EU-28 rapeseed crop estimate of 20.13 MMT, up 4.5% versus 2012. The biggest surprise though was their prediction for an EU-28 corn crop of 70.02 MMT, up nearly 17% on last season. Bear in mind that these figures do now include new member state Croatia (who have a wheat crop of around 600 TMT normally, along with 1.8-2.0 MMT of corn). Even so, that corn number would be a record and is well above the USDA's EU-27 estimate of 63.875 MMT.

Both the ECB and BOE kept interest rates in the UK and Eurozone on hold at 0.5% today. The pound fell, and looked in danger of slipping below 1.50 against the US dollar for the first time since mid-March at one stage, before staging a mini late recovery, although it still stood 2 cents down on the day heading into the close. An accompanying statement from the BOE that effectively said that interest rates were unlikely to rise any time soon was to blame.

Jordan bought 100 TMT of milling wheat, split half for October delivery at USD283/tonne C&F, and half for December delivery at USD4/tonne more. Algeria are tendering for 50 TMT of optional origin feed barley for August shipment.

In the UK, wheatfeed prices continue to fall, with GBP132/tonne reportedly traded for pellets on a Oct/Apr winter run out of South Eastern mills yesterday, down from GBP140/tonne at the end of last week. Interestingly, the seller was said to be a feed manufacturer.

Chicago Market Mostly Higher Heading Into Holiday

03/07/13 -- Soycomplex: For soybeans and meal it was the same old story of tight US old crop stocks and strong world demand pushing prices higher. As ever, the prospect of potentially bumper US production in the months ahead paints a somewhat less bullish picture going forward. Lanworth estimated the 2013/14 US soybean crop at 3.36 billion bushels, up from a previous estimate of 3.34 billion. MDA CropCast estimated the crop at s 3.198 billion bushels, up 26 million bushels from last week "due to favourable moisture in much of the belt." Informa Economics raised their forecast to o 3.376 billion bushels, from 3.366 billion previously. They see yields at a near record 43.9 bu/acre this year. Lanworth also estimated the 2013/14 global soybean crop at 294.0 MMT versus the USDA/s 285.3 MMT forecast and versus 267.6 MMT in 2012/13. The USDA attache in Beijing forecast Chinese 2013/14 soybean imports at 67.5 MMT, a record and 8 MMT above imports in 2012/13, but 1.5 MMT lower than the USDA's official current estimate. The market will be closed tomorrow for Independence Day and reopen with the usual Globex overnight session Friday morning. Jul 13 Soybeans closed at USD15.83 1/2, up 10 1/2 cents; Nov 13 Soybeans closed at USD12.50 3/4, up 8 1/4 cents; Jul 13 Soybean Meal closed at USD490.60, up USD3.60; Jul 13 Soybean Oil closed at 47.22, up 30 points.

Corn: Corn closed mixed heading into the holiday, with front month Jul 13 supported by the firm cash market. Lanworth estimated the 2013/14 US corn yield at 158.9 bu/acre, with production at 13.9 billion bushels versus a previous estimate of 13.7 billion. MDA CropCast were less bullish at 13.391 billion bushels, although that was up 51 million on last week. "The continued abundant rains in eastern areas will increase wetness concerns there, but corn conditions should remain favourable in the majority of the belt," they said. Informa estimated US corn yields at 160.0 bu/acre, with production coming in at 14.259 billion bushels, versus 14.078 billion previously due to an increase in planted area. Informa see this year's Brazilian corn crop at 80.1 MMT, but project output in 2013/14 falling to only 65.2 MMT due to reduced plantings. The USDA currently estimate Brazilian production at 72.0 MMT next year. A Brazil truckers strike continues. The strike ends tomorrow at 6 am local time. Weekly US ethanol production fell to 863,000 barrels/day last week from 885,000 bpd the previous week. Jul 13 Corn closed at USD6.78 1/4, up 5 1/2 cents; Dec 13 Corn closed at USD5.02 3/4, unchanged. The USD5/bu level is seen as pivotal, can it hold as we get closer to a potential near 14 billion bushels record US corn crop becoming a reality?

Wheat: Wheat closed higher on all three exchanges. There may have been a bit of profit-taking and book squaring ahead of what many will be taking as a 4-day weekend. The market could therefore be pretty thin on Friday. News that China bought 360 TMT of US SRW wheat along with 300 TMT of Australian wheat was supportive. China's Grain Reserves Corporation (Sinograin) said it had suspended stockpiling wheat the country's top producing region of Henan. The winter wheat crop there was damaged by rain at harvest time and domestic prices have subsequently risen to 6-month highs. Lanworth estimated the 2013/14 global wheat crop at 692.0 MMT versus 695.8 MMT from the USDA. They see Russian output at 51.1 MMT, down 2% from their previous estimate and versus 54.0 MMT from the USDA. ANZ Research said that they expect Indonesia’s 2013/14 wheat imports to rise 15% this season, they are said to have been eyeing Australian wheat lately. Informa cut their forecast for US all wheat production this year to 2.016 billion bushels, from their previous estimate of 2.057 billion and the USDA's 2.080 billion bushels. MDA CropCast raised their US wheat production estimate to 2.076 billion bushels, up 25 million bushels from last week due to improved yields in the Plains. Jul 13 CBOT Wheat closed at USD6.57 3/4, up 8 1/4 cents; Jul 13 KCBT Wheat closed at USD6.84, up 10 cents; Jul 13 MGEX Wheat closed at USD7.61 1/4, up 4 1/4 cents.

EU Grains Modestly Higher, Egypt Business Supports

03/07/13 -- EU grains closed mostly little higher, recovering a bit of ground from recent steep declines. Egypt re-entering the market after a four month absence yesterday added a bit of support. One swallow however doesn't make a summer.

On the day London wheat closed with the soon to expire Jul 13 future up GBP0.25/tonne to GBP154.50/tonne and new crop Nov 13 GBP0.50/tonne firmer at GBP165.75/tonne. Front month Nov 13 Paris wheat was up EUR1.50/tonne to finish the day at EUR194.75/tonne.

In a market desperate for a bit of positive news Egypt seem to have provided it. However the purchase of 180 TMT of wheat, the first such tender since February, when they used to be in the market every 2-3 weeks in previous seasons hardly seems to herald a return to "the good old days" for what was previously the world's largest wheat buyer.

France are still said to be considering Egypt's request for help with imports and storage. Considering how to say no without incurring an Egyptian backlash more like.

The Egyptian tender, won by Ukraine and Romanian wheat, also highlighted the fact that EU, US and even Russian wheat are now getting undercut in the new crop market.

Early barley harvesting is now underway in France, with yields said to be significantly better than expected.

Things do seem to be improving for Europe, with even our own wheat and barley crops here in the UK now looking pretty decent. The IGC upped their forecast for EU wheat production from 138.2 MMT to 139.4 MMT earlier in the week. That's 2 MMT more than the USDA currently estimate and 7% up on last season's showing. The USDA's FAS attache in Europe today forecast a wheat crop here of 138.4 MMT, 1 MMT above the official USDA estimate.

China bought 300 TMT of new crop Australian wheat for Jan shipment, adding to recent purchases from France and the US. This development could provide some bullish impetus going forward. Rabobank estimate that China may import up to 10 MMT of wheat this season, far more than the USDA's current 3.5 MMT estimate.

Russia sold 28,340 MT of intervention grain today, taking the total volume cleared since sales began in October to 3.67 MMT.

Algeria are tendering for 50 TMT of feed barley for August shipment of optional origin. There should be plenty of willing sellers for that from Europe and the Black Sea. UK feed barley prices are reportedly down to around GBP130-135/tonne off the combine, depending on location.

French port union workers announced they will stage a 24 hour strike tomorrow.

Chicago Close - Tuesday

02/07/13 -- Soycomplex: The same old, same old theme of old crop higher, new crop weaker continued today. The USDA reported better crop ratings than last week, up 2 points good/excellent to 67%, last night. With plantings at 92% we still have around 3 million acres of US soybeans waiting to go into the ground, this week is make or break, although ideal weather conditions are in the forecast for the Midwest. The IGC estimated the Argentine soybean crop at 52.5 MMT versus 48.5 MMT last year, but 2 MMT lower than the USDA. They have Brazilian output at 84.5 MMT (versus 81.3 MMT last year and 85.0 MMT from the USDA) and US production at 93.0 MMT (82.1 MMT and 92.3 MMT respectively). The Brazil Trade Ministry said Brazil exported 6.57 MMT of beans in June versus the record 7.95 MMT shipped in May. A Brazilian truckers strike continues through Thursday at 6 am local time. Brazilian union port workers announced they will be on a nationwide strike on July 10th. Jul 13 Soybeans closed at USD15.73, up 2 1/2 cents; Nov 13 Soybeans closed at USD12.42 1/2, down 3/4 cent; Jul 13 Soybean Meal closed at USD487.00, up USD2.20; Jul 13 Soybean Oil closed at 46.92, up 7 points.

Corn: The corn market was sharply higher nearby on old crop tightness and bargain hunting after a sharp decline on front month Jul 13 yesterday. The IGC estimated the Ukraine corn crop at 23.0 MMT versus 21.6 MMT previously and 20.9 MMT last year. Agritel say 24.9 MMT. The USDA go for 26.0 MMT. South Korea bought 55 TMT of Black Sea origin new crop corn at USD247 C&F (GBP162.50) for Nov shipments. Mato Grosso in Brazil are around 20% into their anticipated record sarfinha corn harvest, with Mato Grosso do Sul and Parana said to be around 10% complete. Lack of storage for the bumper harvest is said to be a problem with some corn having to be stored out in the open. The IGC estimated the Brazilian 2013/14 corn crop at 72.0 MMT versus 78.5 MMT in 2012/13. They have production in Argentina at 23.0 MMT (versus 26.0 MMT this year) and the US crop at 355 MMT versus 273.8 MMT in 2012/13. There's trade talk that Chinese private buyers bought at least 2 cargoes of US new crop corn yesterday. Jul 13 Corn closed at USD6.72 3/4, up 17 1/4 cents; Dec 13 Corn closed at USD5.02 3/4, up 1 1/2 cents.

Wheat: The wheat market closed mixed. Improved harvest conditions in the western plains and better than expected yields continue pressure the market into new lows but futures were able to rebound overnight following a surprise tender release for Egypt. Tunisia is tendering for 100,000 MT of wheat as well. Egypt re-entering he market after a 4 month absence was supportive, even if US wheat didn't feature in their buying order. CNGOIC estimated the Chinese wheat crop at 120.63 MMT versus 121.0 MMT from the USDA. The IGC estimated the Egyptian wheat crop at 9.4 MMT, up 0.4 MMT from their previous forecast and 10% higher than last year's 8.5 MMT production. They cut the Argentine wheat crop by 0.3 MMT from last month to 12.0 MMT, along with a 2 MMT reduction for India to 91.5 MMT. South Korean flour millers will meet this week to discuss ending a ban on US white wheat. Jul 13 CBOT Wheat closed at USD6.49 1/2, up 3 3/4 cents; Jul 13 KCBT Wheat closed at USD6.74, down 2 3/4 cents; Jul 13 MGEX Wheat closed at USD7.57, down 21 1/2 cents.

EU Wheat Mixed Tuesday

02/07/13 -- EU grains were mixed Tuesday, supported a little from the recent rout by Egypt re-entering the market for the first time since February.

A fragile and soon to expire Jul 13 London wheat finished the day GBP0.25/tonne firmer at GBP154.25/tonne, and the more liquid Nov 13 ended also up GBP0.25/tonne at GBP165.25/tonne. Nov 13 Paris wheat settled EUR0.75/tonne easier at EUR193.25/tonne.

The market found some solace from a surprise Egyptian tender, which resulted in them buying two cargoes of Romanian wheat and one of Ukraine origin. There were 11 offers, which is somewhat surprising given that nobody knows who is going to be in charge next week, let alone in August when the wheat is due for delivery.

The fact that there were so many willing to bid for the business maybe highlights how keen the market is for buying orders right now.

The Russian harvest rumbles on, with 8.5 MMT of grain in the bin so far with an average yield of 3.67 MT/ha versus 2.74 MT/ha this time last year. Of that total 6.8 MMT is wheat, with yield up 29% on a year ago at 3.58 MT/ha.

Ukraine finished 2012/13 exporting 22.82 MMT of grains, including 13.5 MMT of corn (versus 13.86 MMT in 2011/12), 6.8 MMT of wheat (5.17 MMT) and 2.1 MMT of barley (2.58 MMT).

Agritel say that Ukraine will harvest 20.5 MMT of wheat thus year (versus the 19.5 MMT estimated by the USDA), 24.9 MMT of corn (26.0 MMT) and 7.4 MMT of barley (7.0 MMT).

The IGC yesterday forecast the EU wheat crop this year at 139.4 MMT, up from 138.2 MMT previously and 130.3 MMT last year.

They have output in Kazakhstan, Ukraine and Russia at 14.0 MMT, 20.0 MMT and 52.0 MMT respectively. That compares with 9.8 MMT, 15.8 MMT and 37.7 MMT in 2012/13.

Chicago Mixed, New Crop Corn At 30-Month Low

01/07/13 -- Soycomplex: Nearby beans were firmer and new crop lower on a continuation of the recent theme of razor thin old crop stocks versus the USDA promise of potentially record US production to come. Front month Jul 13 raced to a lifetime contract high above USD16/bu before giving up most of those gains at the close, even so the contracts still finished the day 6 cents higher, with new crop Nov 13 ending 8 3/4 cents lower. Weekly soybean export inspections were fair at 4.518 million bushels given the early season meteoric pace. The Argentine Ag Ministry said that 99% of the bean harvest there was complete as of Friday, the same as a year ago. Safras e Mercado said that Brazil has sold 78% of their 2012/13 soybean crop versus 92% a year ago. They said that Brazilian farmers had sold 10% of their 2013/14 bean crop versus 33% a year ago. They estimated Brazil’s 2013/14 bean crop at 85.0 MMT. Brazilian truckers are on strike. The strike started this morning at 6 am local time and will end Thursday at 6 am local time. After the close the USDA pegged the 2013 US soybean crop at 96% planted versus 92% a week ago and 98% for the 5-year average. They have emergence at 91% versus 81% a week ago and 94% for the 5-year average. Good/excellent crop conditions rose two percentage points from last week to 67%, and well ahead of 45% this time last year. The US weather outlook remains non-threatening for the time being. Jul 13 Soybeans closed at USD15.70 1/2, up 6 cents; Nov 13 Soybeans closed at USD12.43 1/4, down 8 3/4 cents; Jul 13 Soybean Meal closed at USD484.80, down USD5.50; Jul 13 Soybean Oil closed at 46.85, up 43 points.

Corn: Unlike soybeans, the largest losses in corn today came on the nears as long holders cashed in their chips, taking advantage of the large inverse between old and new crop. Dec 13 is threatening to fall below USD5.00 for the first time in 30 months as new crop corn extended its losing run to nine straight sessions. Rabobank forecast Q4 corn prices at USD4.90/bu, with Q1 2014 levels down to USD4.80/bushel. Nevertheless, old crop availability remains very tight. Weekly export inspections were decent at 14.818 million bushels, versus the expected 4-9 million. The Indonesian Stats Bureau estimated their 2013 corn crop at 18.84 MMT versus 19.39 MMT last year. South Korea are tendering for 60 TMT of optional origin corn for Sep/Nov shipment. The Argentine Ag Ministry said that 88% of their corn harvest is complete versus 80% a year ago. Safras e Mercado said that Brazil has harvested 5% of their 2nd corn crop versus 3% a year ago. The Ukraine Ministry said that they'd finished the 2012/13 season exporting 13.53 MMT of corn versus 13.86 MMT a year previously. The IGC estimated the 2013/14 global corn crop at a record 946 MMT versus a previous estimate of 945 MMT and up almost 11% on 854 MMT in 2012/13. They forecast world 2013/14 corn ending stocks at 149.0 MMT - a 13 year high and up 25% from their 2012/13 estimate. They have the US corn crop at a record 355.0 MMT, unchanged from their previous estimate and up almost 30% on 273.8 MMT in 2012/13. After the close the USDA rose US corn crop conditions by two points in the good/excellent category to 67% versus 48% a year ago. Jul 13 Corn closed at USD6.55 1/2, down 23 3/4 cents; Dec 13 Corn closed at USD5.01 1/4, down 9 3/4 cents.

Wheat: Wheat was mixed, under pressure from weakening corn. Weekly export inspections of 26.42 million bushels were larger than the expected 14-20 million. The Argentine Ag Ministry said that 54% or their wheat crop has been planted versus 47% a year ago. Exports for the remainder of 2012/13 are now banned. It remains to be seen whether that encourages farmers to plant the government's target of 4.5 million hectares of wheat this year. The Buenos Aires Grain Exchange forecast only 3.9 million ha, an 8% rise on last year. Russia's wheat harvest is picking up pace, but there are signs that maybe final yields may not be as strong as some of the very early harvest results suggested. With 3.9 MMT of wheat harvested nationally average yields are now coming in at 3.71 MT/ha as of Friday, the Russian Ag Ministry said today. That's up 15% on this time a year ago, a decent gain but not spectacular given how bad things were in 2012. The IGC estimated the 2013/14 global wheat crop at 683 MMT versus a previous estimate of 682 MMT and up 4% on 655.0 MMT in 2012/13. They see China's 2013/14 wheat imports at 3.5 MMT, the same as the USDA. Rabobank however said that China's import requirement could reach 10 MMT in the year ahead, the most since 1995. After the close the USDA said that the US winter wheat harvest had advanced from 20% complete last week to 43% done as of Sunday night. Spring wheat crop condition ratings fell two points in the good/excellent category to 68%, contrary to market expectations for a slight improvement. Emergence is at 93% versus 90% a week ago and 99% for the 5-year average. Only 18% of the crop is headed versus 69% a year ago and 32% for the 5-year average. Jul 13 CBOT Wheat closed at USD6.45 3/4, down 2 3/4 cents; Jul 13 KCBT Wheat closed at USD6.76 3/4, up 1/2 cent; Jul 13 MGEX Wheat closed at USD7.78 1/2, down 6 1/2 cents.

EU Wheat Closing Comments - Monday

01/07/13 -- EU grains closed mixed with Jul 13 London wheat (which expires on Friday) finishing the day GBP1.70/tonne easier at GBP154.00/tonne, and with the more active new crop Nov 13 ending GBP0.40/tonne higher at GBP165.00/tonne. Nov 13 Paris wheat rose EUR0.25/tonne to close to EUR194.00/tonne.

Dec 13 Chicago new crop corn slumped to 30 month lows following the USDA's surprise rise in planted area on Friday. CBOT wheat also came under pressure in afternoon trade, the USDA predicted US all wheat plantings at a 4-year high on Friday.

The spectre of a large Black Sea harvest hangs over the market. The Ukraine PM said that their 2013 grain harvest would come in 10-12 MMT up on last year's 46.2 MMT, which would make for record crop if true. Early wheat yields are said to be 15-20% up on last year, with OSR yields 10-12% higher.
Ukraine agronomist Mike Lee said that weekend rains in Western Ukraine had given way to sunny and dry weather today and for the rest of the week, saying that growing conditions were "perfect".

Russia's Krasnodar distract meanwhile has already harvested 30% (around 2 MMT) of it's wheat crop, with yields coming in 23% higher than last year at 5.14 MT/ha. Other grain/legume yields are 25.7% up on last year at 5.18 MT/ha, producing a crop of 3 MMT so far, say the local Ag Ministry.

Russian 4th grade milling wheat prices fell 16% last week as the harvest prepares to get into full gear, according to a report on Bloomberg today.

The UK could be in for a month of warm and sunny weather, according to Sky. A ridge of high pressure building from the south west starting Friday could bring plenty of sunshine lasting until the end of the month, they said.

The French wouldn't mind a dose of the same after the wettest spring in more than 50 years and the coldest in 25 years. The French corn growers group AGMP said that corn plantings there could total 1.63 million acres this year, some 70,000 less than the USDA currently predict. That's broadly in line with other trade forecasts for 50-60,000 ha of intended corn acres not to get sown this year.

EU-28 soft wheat exports are forecast to drop 9.2% to 17.7 MMT in 2013/14, according to Strategie Grains, as competition from the Back Sea hots up.

Syria are tendering for 200 TMT of wheat flour on humanitarian grounds. Payment they said will be via frozen Syrian bank accounts in the EU and Arab nations.

Tunisia seeks 100 TMT of soft wheat and 75 TMT of feed barley of optional origin for Aug/Oct shipment.

Cash strapped and civil unrest riddled Egypt remain absent from the market. There's no deal yet with the IMF to secure a USD4.8 billion loan. Presumably the IMF want to wait to see who is going to be in charge first?

EU Rapemeal Prices

01/07/13 -- Rapemeal prices on the continent are lower today. Nearby FH Jul has now slumped over EUR20/tonne in two days as old crop falls to meet new crop, even so it's still at a hefty near EUR80/tonne premium to Aug/Oct so more losses can be expected. US farmers will/have planted a record 77.7 million acres of soybeans the USDA tell us. The trade thinks that it's probably higher than that too.

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