Nogger's Blog

Chicago Corn And Beans Crash Ahead Of Weekend, Wheat Little Changed

12/07/13 -- Soycomplex: The soybean market closed sharply lower to end the week, but still managed to post weekly gains. Profit-taking ahead of the weekend was probably the most likely reason for today's crash. Sunday night's latest weather forecasts may decide where we go to start next week. A slightly cooler and wetter outlook in this afternoon's forecasts was all that was needed to get traders to take some money off the table. Jul 13 contracts went off the board in a fittingly volatile fashion. Jul 13 beans, which closed just over USD16/bu last night traded in a range of around 75 cents, from an intra day high of USD16.10 to a low of USD15.34 1/2 before expiring at USD15.63 1/4, down 38 cents on the day. New front month Aug 13 closed at USD14.29, down 43 cents, Nov 13 beans closed at USD12.57 1/4, down 33 1/2 cents. Jul 13 Soybean Meal closed at USD535.50, up USD9.80, yet new front month Aug 13 closed USD15.10 lower at USD442.90. Jul 13 Soybean Oil closed at 46.09, down 40 points, Aug 13 closed at 46.22, down 31 points. For the week Nov 13 beans gained 29 cents and Aug 13 meal finished USD19.60 higher.

Corn: If I told you that the USDA today announced a sale of almost a million tonnes of US corn to China (it was 960 TMT to be precise) and that this was the eighth largest reported US corn sale of all time, then I guess that you'd expect the market to close higher, right? Not today my friend. Ever heard the expression buy the rumour, sell the fact? The sale appeared to confirm rumours from earlier in the week that China's state-owned Sinograin had bought 1 MMT of US corn (some say up to 1.3 MMT) to replenish government stocks. On a jittery Friday, where about to expire Jul 13 had already gained 32 cents on the week and Dec 13 had added 35 3/4 cents, heavy fund selling and profit-taking ahead of the weekend saw corn prices give up around half of those gains. The Commitment of Traders report shows managed money increasing their short position in corn for the week through to Tuesday night to almost 56k lots. The market will be watching Monday night's crop condition report to see if the US corn crop has made any improvement in the past week. Last week had good/excellent at 68%. Jul 13 Corn closed at USD7.01 1/2, down 15 1/4 cents; New front month Sep 13 Corn closed at USD5.45 1/2, down 15 1/4 cents; Dec 13 Corn closed at USD5.09 1/4, down 17 3/4 cents. For the week Dec 13 corn was 18 cents higher.

Wheat: Wheat closed little changed on all three exchanges, which wasn't a bad performance given the thrashing dished out to beans and corn. Wheat appears to be setting itself up to recreate it's position as maintaining a healthy premium over corn, with the USDA standing by their forecast for a huge US crop of the latter later this year. They cut world wheat stocks sharply in yesterday's WASDE report, much more so than the trade anticipated. Even whilst doing so they held steady on their forecast for a Russian wheat crop of 54 MMT and an Indian one of 92 MMT. They are probably at least 2 MMT, and possibly more like 4 MMT, too high on the former and around 5 MMT too high with the latter. That's another 7-9 MMT that may also disappear in future reports. The Commitment of Traders report shows managed money decreasing their short position on CBOT wheat for the week through to Tuesday night by around 2,300 contracts. They still sit on a short of around 48k lots however. China's Stats Bureau forecast the winter wheat crop there at 115.67 MMT, up 1.3% on last year. Many think that this is deliberately too high. Jul 13 CBOT Wheat closed at USD6.75 1/2, down 3 3/4 cents; Jul 13 KCBT Wheat closed at USD7.12 3/4, up 1 1/4 cents; Jul 13 MGEX Wheat closed at USD7.96 1/4, down 1/4 cent. For the week that puts CBOT wheat up 19 1/2 cents, with Kansas rising 36 1/4 cents and Minneapolis up 35 cents.

EU Wheat Lower On The Day, Higher On The Week

12/07/13 -- EU wheat finished lower on the day, but still managed to post weekly gains. Paris rapeseed took another mauling however, with Aug 13 finishing EUR5.25/tonne lower at EUR392.50/tonne, the lowest close in the contract's history.

Nov 13 London wheat ended the day GBP1.25/tonne lower at GBP169.75/tonne and with Jan 14 also closing down GBP1.25/tonne to GBP170.95/tonne. Nov 13 Paris wheat fell EUR1.50/tonne to close at EUR197.75/tonne. For the week Nov 13 London wheat was up GBP3.20/tonne and Nov 13 Paris wheat gained EUR3.00/tonne.

The German Farm Cooperatives Association estimated the wheat crop there at 24.07 MMT, up 7.5% on last year. That's higher than the USDA's forecast of 23.70 MMT from yesterday and marginally more than the 24.01 MMT that they estimated a month ago.

They forecast the German rapeseed crop at 5.58 MMT, a leap of over 16% on last year. Again that is higher than the USDA's 5.45 MMT and the 5.43 MMT that the Association predicted in June.

The German winter barley harvest is now underway, 10-14 days later than normal, and will total 8.23 MMT, also more than 16% up on last year. Spring barley production will fall however to 1.88 MMT, they said. Germany's corn harvest will also decline, down 17% to 4.55 MMT due to lower plantings and too much spring rain, they added.

The Italian soft wheat crop will fall 12% this year to fractionally under 3.0 MMT, according to the local Ag Ministry. Reduced plantings and lower yields due to too much rain are also to blame, they said.

The French winter barley harvest is also underway, if late, at 5% complete (this time last year when the harvest was early 50% of the crop had already been cut), say FranceAgriMer. Corn planting is 98% complete, and presumably won't now get any higher than that.

Winter wheat crop conditions were unchanged from a week ago at 69% good/excellent. Winter and spring barley good/excellent both fell one point from last week to 66% and 71% respectively. Corn good/excellent was unchanged from last week at 56%, although that's well behind 75% this time a year ago.

A farmer survey conducted by a UK company on behalf of the German Kleffmann Group, who specialise in agricultural market research, estimated the UK winter rapeseed area that will make it through to harvest at only 545,000 ha. Abandonment rates were as high as 27% in Yorks/Humber and the East Midlands, and averaged 22% nationally, the survey found.

They say that a lot of the lost area would be left fallow, although a significant number intended on switching to spring barley, with others opting for other crops (including spring rapeseed). The USDA estimated the UK all rapeseed harvested area at 610,000 ha yesterday.

Chicago Closes Higher, Although USDA Report Bearish Beans And Corn

11/07/13 -- Soycomplex: The USDA report came in bearish for beans, but the market closed higher. What does that tell us? Maybe that the market doesn't believe the USDA? It wouldn't be the first time and it sure won't be the last. Or maybe the market is an ass? Time will tell. US soybean carryout at the end of the current season will be 125 million bushels, the same as last month and the month before that. That's what the USDA insist anyway. The trade was expecting a reduction (nobody at all was expecting an increase), but it's no great surprise that they didn't get it given that the USDA have clearly decided that 125 million bushels is as far into their comfort zone as they are prepared to eat. For 2013/14 the trade was expecting a small increase in US ending stocks versus last month, from 265 million bushels to 270 million. Instead the USDA came in at 295 million. The US 2013 soybean crop was forecast at a record 93.08 MMT, up from 92.26 MMT last month and up 13.4% on last year. Brazilian soybean production in both 2012/13 and 2013/14 was left unchanged from last month at 82.0 MMT and 85.0 MMT respectively. Argentine output was trimmed slightly in both crop years, from 51.0 MMT to 50.2 MMT in the case of the harvest just ended (2012/13) and from 54.5 MMT to 53.5 MMT for the crop that hasn't yet been planted (2013/14). World ending stocks for both crop years were increased slightly, to 61.5 MMT in 2012/13 and to 74.1 MMT in 2013/14. China's import requirement in 2013/14 was left unchanged at a record and ambitious looking 69.0 MMT. In other news, weekly export sales were negative 70,900 MT for old crop beans and 410,800 MT for new crop beans versus trade expectations of 150-500 TMT. Jul 13 Soybeans closed at USD16.01 1/4, up 9 1/2 cents; Nov 13 Soybeans closed at USD12.90 3/4, up 6 cents; Jul 13 Soybean Meal closed at USD525.70, up USD5.20; Jul 13 Soybean Oil closed at 46.49, down 49 points.

Corn: The corn market closed higher too, helped by strong weekly export sales of 392,000 MT of old crop and 657,800 MT of new crop, versus trade forecasts for sales of only 300-600 TMT. In addition the USDA announced another 120 TMT of new crop sales to China under the daily reporting system. The USDA lowered slightly their estimate for US 2013 corn production twixt either side of the magical 14 billion bushel mark, from 14.005 billion to 13.95 billion. The latter would still comfortably be a record output and represent a 29.4% increase on production last year. Old crop ending stocks were not cut quite as much as expected, trimmed from 769 million bushels to 729 million, which was 7 million more than the average trade guess. The large 2013 crop however sees 2013/14 ending stocks estimated 10 million bushels higher than last month at 1.959 billion bushels versus the cut to 1.874 billion that the trade was expecting. There were no changes to Brazilian or Argentinian corn production for either 2012/13 or 2013/14. World corn ending stocks for both marketing years came in a little below expectations, but only marginally so. China's 2013/14 corn crop was lowered 1 MMT, from 212 MMT to 211 MMT, with their import requirement left unchanged at 7 MMT. I guess that the market now goes back to trading the weather and fretting over a US corn crop, much of which was planted all in the same week, all pollinating at the same time and whether or not weather conditions will be conducive to producing a near 14 billion bushel crop. We won't have long to wait to find out as this is likely to happen around the end of the month/first week in August. In other news Taiwan bought 60 TMT of Brazilian corn for Sep/Oct shipment, and another Taiwanese buyer passed on a US corn/soybean tender saying that the prices quoted were too high. Jul 13 Corn closed at USD7.16 3/4, up 7 cents; Dec 13 Corn closed at USD5.27, up 5 1/2 cents.

Wheat: The wheat market was mixed, with Chicago higher and Kansas and Minneapolis a little lower. Weekly export sales of 1.47 MMT comfortably outstripped expectations of 600 TMT to 1 MMT and included 1 MMT to China. The USDA raised their projection for Chinese wheat import by much more than was anticipated by most, from 3.5 MMT to 8.5 MMT, a 166% increase on imports in 2012/13 and the highest since 1995. Chinese feed usage was raised by a corresponding 5 MMT, and carry-in from 2012/13 was lowered by 4.6 MMT from last month. Elsewhere though they raised a few eyebrows by leaving both Russian and Indian production unchanged for 2013/14. Just about everyone else, apart from the local Ministry, are seeing Russian wheat production in the 50-52 MMT region, but the USDA left their forecast unchanged at 54 MMT. The USDA's own FAS this week pegged the Indian crop at 87 MMT, but the USDA themselves held steady at 92 MMT. They also left production in Ukraine the same as last month at 19.5 MMT, an increase could have been justified here. Kazakhstan's potential was cut 0.5 MMT to 14.5 MMT. They pegged the US 2013 all wheat crop a bit higher than the market expected at 57.52 MMT. One of the largest surprises came with regards to world inventories. Global wheat ending stocks in 2012/13 crop were cut 5.37 MMT and those for 2013/14 shrank 8.87 MMT to 172.38 MMT, the lowest since 2008/09. US wheat stocks for 2012/13 were cut from 746 million bushels to 718 million, well below trade forecasts of 745 million and below the lowest trade estimate. US carryout in the 2013/14 crop year also was also cut far more than anticipated, from 659 million bushels last month to 576 million versus the average trade guess of 624 million. Jul 13 CBOT Wheat closed at USD6.79 1/4, up 7 1/4 cents; Jul 13 KCBT Wheat closed at USD7.11 1/2, down 1/2 cent; Jul 13 MGEX Wheat closed at USD7.96 1/2, down 1 cent.

EU Wheat Higher Heading Into USDA Report

11/07/13 -- EU grains were mixed but mostly firmer, although Paris rapeseed took another bath, falling around EUR5-7/tonne. The rest of market sat on its hands for most of the day waiting for the release of the USDA's WASDE report at 5pm London time.

London wheat closed with front month Nov 13 GBP1.00/tonne firmer at GBP171.00/tonne and Nov 13 Paris wheat ended EUR1.75/tonne higher to finish the day at EUR199.25/tonne. This was the highest close on London wheat for a month, and almost, but not quite, the same for Paris wheat.

Brussels confirmed that the 2013/14 marketing year is off to a fair start, issuing 166 TMT of soft wheat export licences, along with 142 TMT for barley and 149 TMT for corn in the first full week of the season. That takes soft wheat licences to 291 TMT already this year.

Egypt said that they only had half a million tonnes of imported wheat left on hand to blend in with lower quality domestic stocks - said to be of 3 MMT. Reports suggest that a deal has been done with UAE, Saudi Arabia and Kuwait who have offered Egypt USD12 billion in aid to tide them over the current political and financial crisis. Buying wheat and oil is said to be their number one priority, so we can maybe expect them to be back in the international tender market before long.

Libya bought 50 TMT of Russian wheat in a tender, and Algeria was said to have bought 4-500 TMT of optional origin (most likely French) wheat for Sep/Oct shipment.

The Czech Republic's Stats Office said that they expect a grain harvest this year of 6.53 MMT, up 15.7% on last year. Wheat yields are forecast up 25% and rapeseed yields to rise by 13%. The 2013 wheat crop is estimated at 4.4 MMT versus 3.5 MMT last year. The rapeseed crop is seen rising from 1.11 MMT to 1.31 MMT, whilst barley output will fall from 1.62 MMT to 1.57 MMT, they said.

The Russian wheat harvest rumbles on, producing 18.8 MMT of grains so far off 12.8% of the planned area, with yields said to be up 27% at 3.23 MT/ha. The harvest so far is mostly winter wheat, spring sown crops are said to generally be in a pretty poor state and will likely yield much lower.

MDA CropCast today cut their forecast for 2013 Russian wheat production by 1.2 MMT from last week to 50.5 MMT. That puts them in a similar area as SovEcon, IKAR and Lanworth. They also cut 1.0 MMT off Australia's wheat potential this year to 22.3 MMT.

As the EU market was closing the USDA came out with their July numbers, they didn't see the need to alter their Russian estimate leaving it unchanged at 54.0 MMT, whilst they actually raised Australia by 1.0 MMT from last month to 25.5 MMT.

Wheat production in Europe was also raised, although this was largely due to the inclusion of Croatia in the new EU-28. There were however small tweaks higher elsewhere, including raising UK output from 11.55 MMT to 11.75 MMT. Production in the EU-28 is now forecast at 138.6 MMT.

World wheat production in 2013/14 was revised upwards to a new record 698 MMT, although consumption is also seen at an all time high 700 MMT. One of the most significant changes was the upgrade of China's wheat import needs from 3.5 MMT to 8.5 MMT, which was more than most expected, even if still below Rabobank's recent 10 MMT forecast. Either number would be the highest since 1995.

World wheat ending stocks for 2013/14 were cut sharply, from the 181 MMT estimated last month to 172 MMT - the lowest since 2008/09.

USDA WASDE Report Summary

11/07/13 -- The USDA's eagerly awaited raft of important numbers are out. For wheat they left Russian and Indian output unchanged at 54 MMT and 92 MMT respectively, when a drop may have been in order. They did however raise Chinese wheat imports in 2013/14 from 3.5 MMT to 8.5 MMT.

Here's a selection of some of them, with a few more to follow, I'm typing as fast as I can you know, and there's only me.....

EU Rapemeal Prices

11/07/13 -- Rapemeal prices on the continent are mostly a bit firmer, chasing gains in CBOT soymeal values last night. It's likely to be a quiet day as traders sit tight ahead of this afternoon's USDA report.

The Czech Stats Office estimate rapeseed yields there up 13% this year at 3.13 MT/ha.

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

Morning News Headlines

11/07/13 -- The overnight Globex grains are generally firmer, particularly on the nears (although remember that all these Jul 13 contracts go off the board tomorrow and are a bit technical).

The first thing to catch my eye this morning, apart from the lady with the substantial chest out jogging on my way into the office this morning, is news that Chinese think tank CNGOIC have raised their estimate for wheat imports in 2013/14 from 3.5 MMT to 5.0 MMT. They say that's a 73% increase on last season. It's certainly 1.5 MMT more than the USDA said last month, and may still prove to be only the first increase of several. Let's see what the USDA have to say later.

Also catching the eye this morning is NYMEX crude creeping stealthily on to currently stand at above USD107/barrel, a level last visited 16 months ago. Data yesterday revealed the biggest two-week decline in US crude stockpiles on record. The Egyptian situation is also buoying prices.

Other news throws up a variety of business/tenders for wheat, including Iran buying 450 TMT of Russian/Baltic material and Jordan (the country, not the woman with the big jugs, stop going on about funbags will you?) tendering for 150 TMT of wheat. I somehow suspect that they won't be passing on this one due to price as they did consistently a month or so ago. Then again, the USDA might decide to change all that this afternoon.

Talking of the USDA (I am tempted here to get my third "tits" reference into three of the last four paragraphs in a row here), I wonder if we will get a clue as to whether this afternoon's report is bullish or bearish in the half hour or so leading up to the WASDE report's release at 5pm London time?

That's what happened last month, and not for the first time either. Although the numbers are given to the various news agencies prior to the official release time to the market to enable them to push them out onto the wires within seconds after the embargo is lifted, the people involved write them up under very strict conditions I understand. Like in a locked room, with all mobile phones etc taken off them.

I find it hard not to believe that in the modern era, with Google Glass etc and all the money that's at stake that someone hasn't found a way around this problem. "Mobiles, laptops, dongles, pagers, iPads on the table please ladies and gentlemen. Nah, you're all right mate you can take the pigeons in..."

Elsewhere, the German wheat harvest will be underway in 2/3 weeks, only a week later than normal after the recent spell of warm, dry and sunny weather has accelerated crop development markedly, according to a report on Reuters.

MDA CropCast have cut their Russian wheat production estimate by 1.2 MMT from last week to 50.5 MMT "due to recent dryness in spring wheat areas." They also trimmed their outlook on Australia by 1.0 MMT to 22.3 MMT on dryness issues.

Egypt's stocks of imported wheat have dwindled to just 500,000 MT, which is barley enough to feed a Sphinx cat, I also read this morning. They say that they've bought 3.7 MMT of (insert words "fairly crappy") local wheat since the domestic harvest began, and have 3.0 MMT of that in stock, they say.

The latest numbers from Defra out this morning show that the UK milled 505 TMT of wheat in the 4 week period through to April 27, a 7.5% increase on the same period in 2012. Home grown wheat used in the grist was almost 316 TMT, down 24% versus last year, whilst the proportion of imported wheat grew 256% to 189 TMT.

For the crop year to date total wheat milled comes in at just under 5.5 MMT, up 11.6% year-on-year. Home produced wheat accounts for 4.2 MMT of that (down 5%), with imported wheat at 1.36 MMT (up 137%).

Total UK barley usage in 2012/13 to the end of April is just under 1.5 MMT, almost exactly the same as a year previously.

Breaking news on Twitter from the Public Ledger are reports that the EU's 2013 rapeseed harvest may be higher than expected, according to Oil World. No, hang on that isn't breaking news, I told you about that on Tuesday.

Another newsworthy item via Twitter is a plea for any Welsh speaking vets looking for a job to get in touch. They don't say where the job is, but my money is on East Anglia.

Elsewhere in Twittersphere we get this from the Farmer's Weekly: "Teat tampering probe launched at Great Yorkshire Show" (that's 4 tit mentions so far in this report). It's not quite as amusing as the Phoenix Night's Crimewatch spoof featuring the headline "Police probe Leed's woman's snatch" but it's a fair effort before the 9 o'clock watershed.

Chicago Market Mixed Ahead Of USDA Data Due Tomorrow

10/07/13 -- Soycomplex: For once old crop beans performed the worst, although they do go off the board on Friday so some erratic trade to close the last few days of a contract with very thin open interest is maybe only to be expected. Customs data revealed that China imported 6.93 MMT of soybeans in June, an increase of 36% versus a month previously. The US weather forecast is far from ideal. Potentially heavy rains in the Eastern Corn Belt, caused by tropical disturbance Chantal, may be a mixed blessing further delaying the wheat harvest and thwarting any lingering double planting with soybean hopes. Meanwhile the Western Corn Belt remains hot and dry, whilst northern states are turning cooler. "A Canadian air mass has begun descending into the US heartland dropping morning temperatures in North Dakota into the lower 50's F," said Martell Crop Projections. The trade is expecting the USDA to cut US old crop soybean ending stocks to 121 million bushels tomorrow, even though they've doggedly refused to go below 125 million in previous reports. New crop 2013/14 carryout is expected to come in near 263 million bushels, down slightly from 265 million in June. On a global level, for beans the average guess for 2012/13 world ending stocks is 60.94 MMT versus 61.21 MMT in June, and in 2013/14 they are forecast at 73.56 MMT versus 73.69 MMT last month. Trade estimates for tomorrow's weekly export sales report for soybeans are 150-500 TMT. Jul 13 Soybeans closed at USD15.91 3/4, down 21 1/2 cents; Nov 13 Soybeans closed at USD12.84 3/4, up 8 1/2 cents; Jul 13 Soybean Meal closed at USD520.50, down USD0.30; Jul 13 Soybean Oil closed at 46.98, down 10 points.

Corn: The corn market maintained the recent theme of old crop strength. Reuters reported that the corn basis in Cedar Rapids was now USD1.75 over CBOT futures as opposed to just 25 cents a year ago. Weekly US ethanol production rose to 881,000 barrels/day from 863,000 the previous week. The USDA reported the sale of 120 TMT of new crop corn to China. South Korea bought 120 TMT of optional origin corn at USD241.17 C&F for December shipment. IKAR forecast the Russian corn crop at 9.2 MMT, with exports at 2.7 MMT. FranceAgriMer estimated French 2012/13 corn exports at 6.78 MMT, down 1.7% on a year previously, with ending stocks up 15.8% to 2.82 MMT. Hotter temperatures in the Central US this week are a mixed blessing, say Martell Crop Projections. "Shallow rooted corn and soybeans, planted very late, are subject to decline as topsoil moisture is depleted. Better established crops with deeper roots are tapping into subsoil moisture, benefiting from the heat and sunshine and putting on good growth," they commented. In tomorrow's WASDE report the trade is looking for 2012/13 US corn ending stocks to come in at 725 million bushels, down from 769 million in June. The 2013/14 carryout is expected to come in near 1.895 million bushels, down from 1.949 in June. The range of estimates is for that is split by a whopping 720 million bushels. Dock workers at the Brazilian port of Santos began a 24 hour strike today in protest over a plan to privatise port terminals. Port authorities said that the strike disrupted containerised traffic, but that bulk cargoes were loading relatively normally. Trade estimates for tomorrow's weekly export sales report for corn are 300-600 TMT. Jul 13 Corn closed at USD7.09 3/4, up 5 3/4 cents; Dec 13 Corn closed at USD5.21 1/2, down 1/4 cent.

Wheat: The wheat market finished mixed. There are signs of a pick up in international demand on the recent price slump. Iran are said to have bought around 450 TMT of wheat this week, split 250 TMT of Russian origin and 200 TMT from the Baltic. Algeria bought 50 TMT of optional origin wheat overnight for September shipment. Jordan are tendering for 150 TMT of wheat for delivery between November and February. Japan are tendering for 120,000 MT of feed wheat, and 200,000 MT of feed barley. For once wheat isn't expected to be consigned to play only a minor role in tomorrow's USDA report. The market is expecting a cut to US HRW wheat production, tempered by a potential raise in SRW wheat output. The bottom line is for US all wheat production in 2013/14 to come in at 2.070 billion bushels, down slightly from the June estimate of 2.080 billion but down sharply from 2012 levels of 2.269 billion. US 2013/14 wheat ending stocks are expected to come in at 632 million bushels versus 659 million in June. World 2012/13 wheat carryout is estimated at 179.34 MMT versus 179.87 MMT in June. World 2013/14 wheat ending stocks are seen at 180.29 MMT versus 181.25 MMT last month. It will be interesting to see what, if anything, they do with Russian and Indian production and exports along with Chinese imports. The Russian grain harvest is said to currently stand at 16.7 MMT, with average yields up 26% at 3.27 MT/ha. The Ukraine grain harvest is at 11.85 MMT with yields up 37% at 2.68 MT/ha. Trade estimates for tomorrow's weekly export sales report for wheat are an impressive 600 TMT - 1 MMT. Jul 13 CBOT Wheat closed at USD6.72, down 3 1/2 cents; Jul 13 KCBT Wheat closed at USD7.12, up 5 1/4 cents; Jul 13 MGEX Wheat closed at USD7.97 1/2, down 1/2 cent.

EU Wheat Mostly Higher, Question Marks Over Russia, India, China

10/07/13 -- EU grains were mixed but mostly higher with benchmark Nov 13 London wheat closing GBP0.55/tonne firmer at GBP170.00/tonne and Nov 13 Paris wheat settling EUR0.75/tonne stronger at EUR197.50/tonne.

Today was maybe about a bit of consolidation and book-squaring ahead of tomorrow's all important USDA crop report.

We can only wait and see what that will bring. For wheat it may include the lowering of the Indian 2013/14 wheat crop. The USDA's FAS office today estimated wheat production there at 87.0 MMT as opposed to the USDA's current 92.0 MMT forecast, they also cut exports to 5.0 MMT, which is 3.0 MMT under where the USDA currently line up.

The trade will also be looking to see what they have to say with regards to Russian wheat production (and exports) in the light of recent downward revisions from private analysts. The grain harvest is now well underway in southern areas of Russia and pushing rapidly north. Whilst early yields of winter grains have been encouraging, currently up 26% on year ago levels, there is a feeling in the market that things will tail off as the harvest progresses into spring sown cropping areas.

It’s been very dry, and unusually hot, in much of Russia since spring sowing campaign was completed – and spring wheat typically accounts for around 40% of the Russian wheat crop. The main areas where early yields have been fairly strong are in the North Caucasus and Southern Districts. Further north in Rostov, where the harvest is now 50% complete, yields are only said to be slightly ahead of last year.

The President of Tatarstan, further north again, today said that the grain crop there would only total 2.5 MMT this year, 22% down on 2012, which was in turn 40% below output in 2011.

IKAR forecast the Russian wheat crop at 52.4 MMT, with exports at 15.4 MMT and domestic use of 35.0 MMT, they predict 2013/14 ending stocks of 7.5 MMT. APK Inform suggest 2012/13 wheat carryout was at a 10-year low of 2.8 MMT, which before you reach for the calculator, fails to add up to the tune of 5.5 MMT. Nobody is suggesting that Russia will import 5.5 MMT of wheat this season, they only imported 1.7 MMT of grain in 2012/13. So what gives?

Domestic usage is pretty inelastic, and IKAR's production estimate may also end up being too high, SovEcon after all only now suggest 49.5-51.5 MMT. A crop of 50-51 MMT, less domestic usage of 35 MMT and the replenishment of intervention stocks at the government's stated target of 5-6 MMT, only leaves room for exports of around 10-12 MMT including using up the carry-in, which is only about the same level as in 2012/13.

Another figure that will be looked out for tomorrow is Chinese wheat imports, which will surely be increased from the current 3.5 MMT forecast given their recent large purchases.

In other news, FranceAgriMer today estimated French wheat (incl. flour) exports at 17.95 MMT, an increase of 5.5% on 2011/12. They peg ending stocks at the close of the season just finished at 2.35 MMT, up 3% on a year previously. Barley exports were said to be 7.36 MMT (+27.2%), with carryout at 1.22 MMT (+27.6%) and corn exports at 6.78 MMT (-1.7%) and stocks at 2.82 MMT (+15.8%).

FCStone said that the Polish wheat harvest will begin next week, with output expected to exceed 9 MMT (the USDA currently say 9.2 MMT) compared with 8.6 MMT a year ago, and with yields of around 4.3 MT/ha. Old crop carryover stocks also appear to be larger than expected, they added.

Algeria has bought 150 TMT of optional origin, possibly French, wheat in a tender.

The harvest in Ukraine is in also full swing in many areas, indeed 90% of the winter barley crop is already in, with even the spring barley area 17% cut. Winter wheat harvesting is 46% done, producing 8.52 MMT so far. The OSR harvest is almost at the halfway point (48% complete) producing 906 TMT so far. Nationally 41% of the total grain area has been cut, with yields of 2.68 MT/ha up 37% on year ago levels.

Lunchtime News Bites

10/07/13 -- Chinese customs data puts June soybean imports at 6.93 MMT, up 36% vs. May. They're gonna need to stay close to that level every month for the whole of 2013/14 if the USDA target of full season imports of 69 MMT is to be equalled.

Reuters say that the corn basis in Cedar Rapids is USD1.75 over CBOT futures as physically available corn in the US remains as tight as a shark's arse at 50 fathoms, a year ago it was 25 cents.

Algeria has bought 150 TMT of optional origin wheat (although French is usually their little favourite origin of choice) for September shipment. At least somebody likes the French.

South Korea has bought 120 TMT of optional origin corn at USD241.17 (around GBP162/tonne) delivered to it's very own doorstep in December.

Friday's CFTC report shows our old muckers, the hedge funds, selling the arse off everything in the grains sector bar Kansas wheat. As of last Tuesday they were net short of around 20k lots of CBOT corn (their biggest short in at least the last 12 months). They were also sitting on a net short of 50k in CBOT wheat, also their largest short in the past year. For beans they were long 111k (their smallest long in the preceding 12 months was 63k).

The Ukraine grain harvest is 41% done at 11.85 MMT. That includes 8.52 MMT of winter wheat, off 46% of the planned area, along with 2.57 MMT (90% of plan) of winter barley. Even the spring barley crop is 17% harvested at 578 TMT. They're also approaching halfway with the OSR harvest, which is 48% done producing 906 TMT.

The Russian government say that they will buy 6 MMT of this year's grain harvest to replenish depleted intervention stocks. They sold 15,938 MT of grains in today's intervention tender, bringing the total sold so far since sales began to 3.687 MMT.

FCStone say that the Polish wheat harvest will start next week.

The USDA's FAS office in India say that the 2013/14 wheat harvest will drop to 87 MMT, which is 5 MMT less than the USDA currently project, with exports falling to 5.0 MMT.

Oil World say that "Brazilian soybean exports likely to plunge in Sept/Dec 2013, raising global dependence on US supplies." I don't like Germans either.

My favourite German joke: Two German men are sitting in a pub. One turns to the other and says: "Last night I saw lots of strange men coming in and out of your Mum's house." The other man replies: "Yes, she has become a prostitute to subsidise her drug habit."

And remember kids, people that say it's never too late to tell somebody just how much you love them, have obviously never tried it after coming home drunk at 3 o'clock in the morning like I did last night.

EU Rapemeal Prices

10/07/13 -- Rapemeal prices on the continent are mostly firmer, in line with strong gains in Chicago soymeal values last night and a rebound in Rapeseed values in the past week or so on the MATIF after futures prices fell below EUR400/tonne for the first time since October 2010.

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

Chicago Market Sharply Higher On Weather, Short-Covering

09/07/13 -- Soycomplex: For a change it was new crop beans that led the charge today, even if soon to expire old crop Jul 13 did set another lifetime contract closing high. The US weather is warming up, and the late planted soybean crop is consequently lagging in development with only 10% of the crop at the flowering stage versus 24% normally at this time. CONAB estimated the Brazilian 2012/13 soybean crop at 81.5 MMT versus a previous estimate of 81.3 MMT. They forecast 2012/13 soybean exports at 37.8 MMT versus a previous estimate of 36.78 MMT and compared to 32.5 MMT a year previously. Dock workers in Brazil's port of Santos are said to be staging a 24 hour strike tomorrow, causing further disruptions to shipping in the region. For the USDA report on Thursday the trade is looking for 2012/13 ending stocks to come in at 121 million bushels, down from 125 million in June. The 2013/14 carryout is expected to come in near 263 million bushels, down from 265 million in June. Michael Cordonnier estimated 2013 US soybean yields at 42.0 bu/acre, unchanged from his previous forecast. Jul 13 Soybeans closed at USD16.13 1/4, up 4 cents; Nov 13 Soybeans closed at USD12.76 1/4, up 24 cents; Jul 13 Soybean Meal closed at USD520.80, up USD9.70; Jul 13 Soybean Oil closed at 47.08, up 7 points.

Corn: Corn closed with decent gains. As with soybeans new crop months made the largest advances on what may have been short-covering ahead of Thursday's upcoming USDA report after the Dec 13 contract fell to it's lowest level since late 2010 recently. Friday's Commitment of Traders report showed managed money holding a net short in CBOT corn for the first time since April 2010. A warmer and drier outlook for the Midwest is no doubt making the shorts nervous, mindful of what happened last year and conscious that heat damage during pollination can really knock yield potential. CONAB estimated the Brazilian 2012/13 corn crop at 79.1 MMT versus a previous estimate of 78.1 MMT. Second crop corn will account for 44.24 MMT of that. They see 2012/13 corn exports at only 15.0 MMT, unchanged from their previous estimate but well down on 22.3 MMT in 2011/12. Taiwan bought 60 TMT of Brazilian corn for September shipment. Michael Cordonnier left his 2013 US corn yield forecast of 153 bu/acre unchanged from previously. For the USDA report on Thursday, the trade is looking for 2012/13 ending stocks to come in at 725 million bushels, down from 769 million in June. The 2013/14 carryout is expected to come in near 1.895 million bushels, down from 1.949 in June. Jul 13 Corn closed at USD7.04, up 12 1/4 cents; Dec 13 Corn closed at USD5.21 3/4, up 21 1/4 cents.

Wheat: Wheat closed sharply higher on all three exchanges. Following the recent surge in Chinese buying, the trade is wondering if, and by how much, the USDA may raise their forecast for China's 2013/14 wheat imports from the existing estimate of 3.5 MMT. Estimates for Russia's 2013 grain and wheat harvest are also in decline. The Russian PM hinted at a lower 2013 grain harvest than the current official forecast of 95 MMT. "In June and in early July, the European part of our country saw abnormally hot weather and 13 regions were hit," he said. That isn't the case everywhere in the Black Sea and Eastern Europe though, the Ukrainian Agrarian Confederation said that they expect a grain harvest there of 55-58 MMT, with export potential at a record 27-29 MMT. CONAB forecast the Brazilian 2013/14 wheat crop at 5.61 MMT versus a previous estimate of 5.56 MMT. In Thursday's USDA report the trade is looking for US 2013/14 wheat ending stocks of 632 million bushels (versus 659 million in June). World 2012/13 wheat carryout is estimated at 179.344 MMT (versus 179.87 MMT in June). World 2013/14 wheat ending stocks are seen at 180.293 MMT (versus 181.25 MMT last month). Jul 13 CBOT Wheat closed at USD6.75 1/2, up 15 1/2 cents; Jul 13 KCBT Wheat closed at USD7.06 3/4, up 15 1/2 cents; Jul 13 MGEX Wheat closed at USD7.98, up 25 cents.

EU Wheat Prices Rise On Weak Currencies, Declining Russian Hopes

09/07/13 -- EU grains closed firmer as both the pound and euro fell sharply against the dollar, with Nov 13 London wheat ending GBP2.75/tonne higher at GBP169.45/tonne and Jan 14 also closing up GBP2.75/tonne to GBP170.75/tonne. Nov 13 Paris wheat rose EUR3.25/tonne to close at EUR196.75/tonne.

The vibe coming out of Russia is that this year's grain crop might only be average at best. Whilst the harvest currently stands at 14.4 MMT, with wheat accounting for 12.1 MMT of that and yields up 26% versus this time a year ago at 3.28 MT/ha, the feeling is that yields will start to decrease as the harvest progresses into spring grains.

Spring grain crop conditions have deteriorated, particularly in the south and Volga regions, under conditions which have been hot and dry for the past couple of months. One report suggests that spring production potential this year is "much lower" than in 2011, and in some places even worse than last year's dismal performance.

The Russian Ministry remain upbeat for now, sticking by a grain production estimate of 95 MMT, with exports at 20 MMT. They did however throw in a little caveat however that they may lower this estimate as the harvest progresses. The Russian Weather Centre downgraded their production estimate to 90-94 MMT today, following the lead of IKAR and SovEcon who both cut their forecasts yesterday to 91.9 MMT and 83-87.5 MMT respectively.

The French Farm Ministry estimated the French soft wheat crop at around 35.9 MMT, including a small quantity of spring wheat, a modest increase versus 35.5 MMT a year ago. Barley production is forecast at 10.445 MMT down 7.9% compared to 11.341 MMT in 2012, with the OSR crop at 4.434 MMT, down 18.8% versus 5.463 MMT last year.

Oil World estimated the French OSR crop higher at 5.0 MMT. They also increased their German crop forecast from 5.5 MMT to 5.8 MMT, a near 21% increase on 4.8 MMT last year. The UK crop was estimated down 23% at 2.0 MMT, with the EU-28 crop as a whole seen up 6.25% at 20.4 MMT. A large rebound in production in Ukraine is also on the cards, with Oil World forecasting a crop of at least 2.0 MMT versus 1.3 MMT in 2012.

DBV forecast a German grain crop of 45 MMT, with winter wheat production seen at 23 MMT, off 3 million hectares with yields at 7.6 MT/ha. Good to above average yields are expected in the areas not affected by the flooding a few months back, they said.

The Ukraine grain harvest stands at 10.5 MMT, including 7.38 MMT of wheat, say the Ag Ministry. Average yields are said to be 2.64 MT/ha versus 1.96 MT/ha a year ago at this time, and should improve as the harvest progresses north and west. The country exported 261,800 MT of grains in the Jul 1-8 period, including 51,300 MT of wheat and 151,700 MT of corn.

EU Rapemeal Prices

09/07/13 -- Rapemeal prices on the continent are mostly unchanged, with a couple of small adjustments to the nearby positions as July and Aug attempt to converge a bit closer together. The French Farm Ministry estimate OSR production there this year will fall 18.5% to 4.4 MMT.

German output however is expected to rise 21% to 5.8 MMT, according to Oil World, as the two countries swap places at the head of the EU-28 rapeseed production table.

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

The Morning News

09/07/13 -- The overnight grains are generally firmer, adding to last night's gains. Nearby Jul 13 beans and meal are now at their highest level ever in the contract's history, and at the highest for a front month since last September,

All Jul 13 CBOT contracts expire on Friday, Aug 13 will then be the new front month for beans and meal and Sep 13 for corn and wheat.

Thursday bring the July WASDE report from the USDA. As far as world stocks go the trade is estimating 2012/13 wheat carryout at 179.344 MMT (versus 179.87 MMT from the USDA last month), with 2013/14 ending stocks at 180.293 MMT (181.25 MMT).

For corn the trade is forecasting 2012/13 at 124.222 MMT (124.31 MMT) and 2013/14 at 152.404 MMT (151.83 MMT). For beans the average guess for 2012/13 is 60.938 MMT (61.21 MMT) and in 2013/14 at 73.557 MMT (73.69 MMT). Not a lot of changes there then.

As far as US ending stocks go the trade estimates 2012/13 corn carryout at 725 million bushels (versus 769 million from the USDA last month). Soybean carryout in 2012/13 is estimated on average at 121 million bushels (versus the USDA's apparent "line in the sand" of 125 million last month).

For 2013/14 US ending stocks the average trade guesses are Wheat 632 million bushels (vs. 659 mln in June), corn 1.896 billion (vs. 1.949 bln) and soybeans at 263 million (vs. 265 mln).

They will also give us a 2013/14 US wheat production estimate, with all wheat forecast at 2.070 billion bushels versus 2.080 bln last month and 2.269 bln in 2012.

The pound has just gone for another bath against the dollar shortly after 9.30am London time. There were some UK industrial and manufacturing production estimates due out then, so they must have fallen short of expectations. Latest 1.4889.

The French Farm Ministry have estimated soft winter wheat production there at 35.8 MMT, up 0.7% versus 35.5 MMT last year, with durum output down 24.3% to 1.8 MMT. The barley crop is estimated at 10.5 MMT, down 7.7%, The French OSR crop is seen falling 18.5% to 4.4 MMT this year.

In Russia's southern Krasnodar district the 2013 grain harvest is already 75% complete at 6.1 MMT. Wheat accounts for 5 MMT of that total, with yields said to be averaging 5.14 MT/ha, up 22.7% on last year's very poor result.

Nationally the Russian harvest is now said to be complete on 10% of the planned area at 14.4 MMT with average yields up 23% at 3.19 MT/ha. An improvement but not a bin-buster it would seem, and this might be as good as it gets I suspect.

In Ukraine grain production now stands at 10.5 MMT, with average yields of 2.64 MT/ha, up 35% on this time last year. Yields here should improve as the harvest moves north and west.

London wheat has opened with Nov 13 up a pound and Paris wheat EUR1.50-2.00/tonne firmer.

Chicago Jul 13 Soybeans Close At Lifetime Contract High

08/07/13 -- Soycomplex: Strong export demand for beans continues, with the USDA today announcing the sale of 120 TMT of new crop US beans sold to China, along with 135 TMT to unknown. Front month Jul 13 beans closed at a lifetime contract high. Weekly export inspections were modest at 2.465 million bushels, although in line with expectations of 2-6 million. After the close the USDA left good/excellent US soybean crop conditions unchanged at 67%, the trade was expecting a small improvement. There's talk that the weather in the Midwest is turning hotter 7-10 days from now. Safras e Mercado estimated Brazil’s 2012/13 soybean crop at 82.336 MMT and pegged Argentina’s at 49.1 MMT. They have the total South America bean crop at 146.347 MMT versus 117.456 MMT a year ago. They said that Brazilian gorwers have sold 78% of their 2012/13 bean crop versus 92% a year ago. AgRural said Brazil has sold 20% of their as yet unplanted 2013/14 bean crop, up from only 5% sold at the end of May, but down on the estimated 52% sold this time last year. CONAB come out tomorrow with their monthly Brazilian crop report. Last month they had the 2012/13 bean crop at 81.3 MMT and soybean exports at 36.78 MMT. Once that is out of the way the trade will be focusing on Thursday's WASDE report from the USDA. There may be a bit of position squaring ahead of that as nobody underestimates the USDA's capacity to spring a surprise. Jul 13 CBOT beans closed 21 1/4 cents higher at USD16.09 1/4; Nov 13 beans were 17 1/2 cents firmer at USD12.31 1/4; Jul 13 meal ended USD22.00 higher at USD511.10; Jul 13 soybean oil closed 22 points lower at 47.01.

Corn: The corn market closed higher. Talk of a hotter and dryer outlook for the Midwest may have encouraged some short-covering ahead of Thursday's USDA report following the recent demise of new crop prices. Friday's night's close in Dec 13 corn was the lowest since 2010. The USDA announced the sale of 120 TMT of US new crop corn to Mexico. Weekly export inspections of 8.205 million bushels were slightly below the low end of expectations of 9-15 million. Taiwan tendered for optional origin corn for September shipment. The Buenos Aires Exchange pegged Argentina’s corn harvest at 84.1% complete, with production forecast at 24.8 MMT. Macquaire Bank didn't specifically change their forecast for US corn prices to average USD4.50/bu in the last quarter of 2013, but did say that prices could fall below that level once the US harvest is over in the Oct/Nov period. After the close the USDA said that corn good/excellent crop conditions improved one percentage point from last week to 68%. That's a lot better than 40% this time last year. Silking is only at 6% versus 46% a year ago and 20% for the 5-year average. Safras e Mercado said as of Friday 8.3% of Brazil’s 2nd corn crop has been harvested. CONAB are due out tomorrow with their July Brazilian crop production estimates, last month they had corn output at 78.5 MMT. Argentine Ag Minister said as of Friday 90% of the corn crop has been harvested versus 85% a year ago. Argentina will be on holiday tomorrow. Reports that a large volume of China's 2013 wheat harvest may only be suitable for feed usage could be detrimental to Chinese corn imports in 2013/14. Jul 13 CBOT corn closed 7 cents higher at USD6.91 3/4; Dec 13 corn closed 9 1/4 cents higher at USD5.00 1/2.

Wheat: The wheat market closed higher on all three exchanges, supported by the announcement of the sale of 840 TMT of US SRW wheat to China for 2013/14 delivery. With last week's and prior US sales on top, added to recent known Chinese purchases from France and Australia it is reckoned that China has already booked around 4.2 MMT of wheat for 2013/14 delivery. The USDA's current forecast is only 3.5 MMT for the entire season. They will doubtless be revisiting that estimate on Thursday. Both IKAR and SovEcon trimmed their estimates for Russian grain and wheat production in 2013. CONAB are out with their Brazil crop estimates tomorrow, last month they had the 2013/14 wheat crop at 5.56 MMT. After the close the USDA said that the US winter wheat harvest was now past halfway at 57% done, up from 43% a week ago, but below 78% this time last year and 64% for the 5-year average. Good/excellent crop conditions were unchanged at 34%, although 42% of the crop is still rated poor/very poor. In Indiana, where good/excellent is 76%, there are reports that early yields are coming in at over 100 bu/acre versus 67 bu/acre last year. The USDA raised the percentage of spring wheat rated good/excellent from 68% last week to 72% as of Sunday night. Algeria are tendering for 50 TMT of optional origin wheat for September shipment. Pakistan are said to have bought around 250 TMT of Black Sea wheat for Aug/Sep shipment in the past few weeks. Iran are said to be in the market for 250-350 TMT of wheat, but they won't take Indian origin. Jul 13 CBOT wheat closed 4 cents higher at USD6.60; Jul 13 KCBT wheat closed 14 3/4 cents higher at USD6.91 1/4; Jul 13 MGEX wheat was 11 3/4 cents higher at USD7.73.

EU Wheat Mixed, China Steps Up Buying Activity

08/07/13 -- EU grains were mixed with new front month Nov 13 London wheat GBP0.15/tonne firmer at GBP166.70/tonne and Nov 13 Paris wheat down EUR1.25/tonne to finish the day at EUR193.50/tonne.

The market is looking for direction ahead of Thursday's upcoming USDA report. Whilst there are many reasons pointing to lower prices later in the year, there are also a few bullish indicators starting to emerge.

Possibly top of the list of those is Chinese demand. The USDA today reported the sale of 840 TMT of US SRW wheat to China, existing US sales already topped 1.5 MMT as of last week. There have also been recent significant volumes bought from France and Australia, yet the USDA currently only have China down to import 3.5 MMT of wheat in the whole of 2013/14.

Recent reports that over 10 MMT of the recently harvested Chinese 2013/14 winter wheat crop in Henan province may have suffered quality damage prior to harvesting, downgrading it to only suitable for feed, have subsequently been usurped by private estimates suggesting that as much as 20 MMT may be nearer the mark.

Another supportive, if not outright bullish factor, is news that the 2013/14 Russian wheat crop might be diminishing in size. IKAR today cut their forecast from 54.0 MMT to 52.4 MMT, which now places them in line with other private estimates of 52.1 MMT from IPK Informa and 52.0 MMT from the IGC. This is still a decent rebound in output versus last year's terrible 37.7 MMT crop, but not the "bin buster" that was originally advertised.

IKAR estimated Russia’s 2013/14 grain crop at 91.9 MMT versus a previous estimate of 94.0 MMT. SovEcon estimated Russia’s 2013/14 wheat crop at 49.5-51.5 MMT versus a previous estimate of 50.5-52.5 MMT. They have Russia’s 2013/14 grain crop at 83-87.5 MMT versus a previous estimate of 85-89 MMT.

In addition we have news of Argentina invoking an antihoarding law aimed at calming spiralling bread prices, effectively shutting off wheat exports for the remainder of the season. They won't begin harvesting until the back end of the year. Farmers there are estimated by the local Ag Ministry to have sown 2.5 million ha of the anticipated 3.9 million as of last week.

Not so friendly for prices however is news that new crop milling wheat levels in Ukraine are below GBP120/tonne in some areas as the harvest there rumbles on. Grain exports in 2013/14 are expected to be at record levels.

Also bearish is a report on Agrimoney.com that Macquaire Bank are forecasting CBOT corn levels "significantly below" their May estimate of USD4.50/bu by the end of the year. Whilst corn has been trading above the level of CBOT wheat lately, "normal" may be considered for wheat to be at a USD1.00-1.50/bu premium. That potentially puts Dec CBOT wheat in the USD5.00-5.50/bu region versus the circa USD6.75/bu where it currently trades.

Warm and sunny weather across much of Europe is seen helping crop maturity and speeding early harvesting activities.

Morning News Snippets

08/07/13 -- There's not a lot to get your teeth into so far this morning, with a relatively subdued feel to the market. That will all change later in the week no doubt when the USDA release their July WASDE report on Thursday. At least that means that we in Europe don't have to wait a whole weekend to trade the numbers for once.

I wonder what they will come out with for world wheat production? They dropped their estimate last month from a record 701 MMT to a almost but not quite record 696 MMT. Subsequently US winter wheat yields have maybe come in better than expected, ditto Russia and Ukraine. We've also seen the FAO/AMIS raise their estimate from 702 MMT to a new record 704 MMT.

The latter also upped their world corn production estimate to a record 972 MMT this month, 9 MMT more than the USDA suggested in June.

There is potential then it would seem for another bearish slant to things later in the week.

Russian wheat production estimates are slipping however. IKAR this morning have cut their forecast for the Russian wheat crop from 54.0 MMT to 52.4 MMT. That puts them in a similar ballpark to APK Inform (52.1 MMT) and the IGC (52.0 MMT), if a little above Lanworth's 51.0 MMT estimate. The USDA went 54.0 MMT last month. My feeling is that they could end up with a crop of around 49-50 MMT based on reports I am hearing from over there. It may be that it's the other FSU nations and the Eastern Europeans that will be the most aggressive marketeers in in first half of 2013/14.

Harvesting in the southern district of Stavropol is almost halfway done already, and as one contact puts it "early harvests are rarely bumper harvests" - at least not in Russia. The local Ministry say that almost 3 MMT of grains and legumes have been harvested with an average yield of 3.06 MT/ha. Unhelpfully they don't give us a comparison with last year. However, early barley yields were reported to be averaging 3.71 MT/ha mid-June, so things have clearly slipped as the harvest has progressed.

The Ukraine Ministry said that they'd exported 120 TMT of grains, mostly corn and barley, last week - the first week of the new 2013/14 season. They said that they are concerned about falling domestic wheat prices, with 3rd grade milling wheat prices as low as UAH1430/tonne (under GBP118/tonne) at farm level. They see 2013/14 full season exports up 14% to a record 26.0 MMT, although the likes of APK Inform see shipments reaching in excess of 29.0 MMT. Well, they will at those prices won't they?

Jul 13 London wheat has finally expired. New front month Nov 13 opened GBP0.10/tonne lower this morning but has now turned higher, aided by an ailing pound. Paris wheat currently trades around 1-2 euros weaker.

The US agricultural attaché says that Pakistan’s wheat crop will rise from 23.3 MMT to 24.0 MMT this year, the same numbers that the USDA themselves give. Domestic consumption is also pegged at 24.0 MMT.

Even friendless Iran have said that they won't import Indian wheat due to contamination fears.

The Saskatchewan Ministry of Agriculture say that 83% of spring wheat, 87% of the durum, and 73% of the canola crop is rated good to excellent. In Alberta 84.9% of all crops are rated good to excellent versus a 5-year average of 66.3%. That includes spring wheat at 86.2% good to excellent, durum 87.5% at good to excellent, barley at 84% good to excellent, oats at 87.9% good to excellent, and canola at 83.1% good to excellent.