Nogger's Blog: 1 Sept 2013

Chicago Closing Comments Friday Night - Big USDA Report Looms

06/09/13 -- Soycomplex: Aside from front month gains there wasn't a lot of change to end the week. Today was maybe more about a bit of book squaring ahead of the weekend, and the market will regroup on Sunday night/Monday morning and take in the latest revised weather forecasts. There may have been some unwinding of long new crop beans against short wheat/corn spreads going on today by the looks of things. Informa Economics trimmed their 2013 US soybean yield estimate from 42.6 bu/acre to 42.4 bu/acre, only 0.2 bu/acre less than the August USDA forecast. Informa are however frequently optimistic with their crop estimates. A Bloomberg survey came up with an average soybean yield of 41.2 bu/acre, which may be nearer the mark next week (the USDA are out on Thursday). Informa estimated the USDA pegging the US soybean crop at 3.239 billion bushels barely changed versus 3.255 billion last month. The average trade forecast in the Blomberg survey was predictably less than that at 3.134 billion. The range of trade estimates is still fairly wide, remember that Allendale earlier in the week pegged yields at only 39.0 bu/acre and production below 3 billion bushels, both less than last year's drought riddled crop. Macquarie yesterday estimated 2013 US soybean yields at 40.9 bu/acre, but said that if rains come within the next few weeks yields then they could finish up above 42.0 bu/acre. Another Bloomberg survey pegged world 2012/13 soybean stocks at an average 61.83 MMT versus the USDA's 62.22 MMT last month, with 2013/14 carryout at 71.07 MMT versus 72.27 MMT from the USDA in August. CNGOIC estimated China's August soybean imports at 6.0 MMT, but said that full season imports may fall below the USDA's current record large 69 MMT forecast. Once next Thursday is out of the way the market will also start to look at South America. Brazilian soybean plantings will begin the middle of this month. Many analysts see plantings 4-6% higher. FC Stone yesterday estimated Brazil’s 2013/14 soybean crop at a new record 87.5 MMT, up 7.4% on 81.5 MMT in 2012/13. The current soybean/corn price ratio heavily favours beans. Today's weekly export sales report showed old crop soybean sales of 5,100 MT and new crop sales of 844,100 MT versus trade expectations of 600-800 TMT. Meal sales were 57,800 MT of old crop and 84,300 MT of new crop against trade ideas of a combined 100-200 TMT. Sep 13 Soybeans closed at USD14.37, up 14 cents; Nov 13 Soybeans closed at USD13.67 3/4, up 1/4 cent: Sep 13 Soybean Meal closed at USD482.10, up USD2.60; Sep 13 Soybean Oil closed at 43.36, up 17 points. For the week Sep 13 beans added 13 cents, meal USD13.90 and oil fell 53 points. Macquarie said they are bearish on soybeans at current levels.

Corn: The corn market was mostly higher in pre-weekend activity, but still showed a net loss for the week. Weekly export sales were disappointing, showing net cancellations of 113,200 MT of old crop and new crop sales of only 328,300 MT versus trade expectations for combined sales of 400-650 TMT. Essentially the US looks set to have a record corn crop this year, the trade just can't decide exactly how big it's likely to be. Mid-session Informa Economics surprisingly said that they expect the USDA to raise their forecast for the 2013 US corn crop from the 13.763 billion bushels predicted last month to 14.013 billion. They see yields at 157.2 bu/acre versus the USDA's August estimate of 154.4 bu/acre. If they are right then that would put a very bearish spin on corn and we could go from current levels of just under USD5/bu closer to the USD4.50/bu range that many have been predicting. Some are now even looking at USD4.00-4.25/bu as being a realistic downside target. Informa are however, as previously noted, regularly towards the top end of the market with their production estimates. Indeed, in the same Bloomberg survey referred to above the highest trade estimate was 14 billion (and the lowest 13.36 billion although even that is still a record crop). The range of estimates on corn yields was 150-158 bu/acre however, so somebody out there is even more bullish on yield potential this year than Informa. The average trade guess on yields was 153.9 bu/acre, incidentally. There could still be some significant harvest pressure to come on the corn market if the reality of the situation turns out to be that we have production and yields close to some of the higher estimates in the market. And early US yields ARE said to be coming in higher than anticipated in southern US states. The FAO yesterday estimated the 2013/14 world corn crop at a record 983 MMT, substantially higher than the USDA's current forecast of 957 MMT, yet they only see usage 4 MMT more than the USDA at 934 MMT. The bottom line from the FAO is world ending stocks in 2013/14 26 MMT more than the USDA predicted last month at 176 MMT, 30% up on a year previous, with US carryout rising 146%. The Bloomberg survey came up with very little change for 2012/13 world corn ending stocks at 123.53 MMT versus the USDA's estimate of 123.11 MMT last month. For 2013/14 they came up with an average trade guess of 148.97 MMT, well below the FAO and just over 1 MMT less than the USDA said in August. South Korea NOFI bought 60 TMT of optional origin corn for Feb shipment. In their first estimate of the season FranceAgriMer forecast the 2013/14 French corn crop at 15.6 MMT, up 1.9% from a year ago, largely thanks to a sharp rise in planted area. Ukraine will soon begin harvesting its own record corn crop and domestic prices there are on the floor at little more than USD150/tonne, or less than GBP100/tonne. Sep 13 Corn closed at USD4.91 1/2, up 2 cents; Dec 13 Corn closed at USD4.68 1/4, up 7 1/4 cents. For the week Sep 13 corn was 3 1/2 cents lower and Dec 13 fell 13 3/4 cents.

Wheat: Wheat followed corn higher on the day, but closed lower on the week - in Chicago and Minneapolis at least. Weekly export sales were strong at 668,000 MT for 2013/14 plus a further 79,000 MT sold for 2014/15. Trade expectations were for sales of 450-600 TMT and sales of only 365,700 MT were needed to keep on track to hit the USDA target for the season. Brazil was back again as the largest buyer, where it has now featured for three of the past four weeks, booking 187,000 MT. Actual shipments of 954,800 MT were also robust, a marketing-year high in fact, and included 185,900 MT to China and 172,100 MT to Brazil. So demand for US wheat has been impressive so far in 2013/14, although a large chunk of the reason for that is this "new" demand from China and Brazil. How long that sticks around for remains to be seen. Brazil will be harvesting their own wheat crop soon, and many would expect US sales to dip off in the second half of the season given the premium that US wheat holds compared to other world origins. Egypt was back in the market again today, although on this occasion only booking one cargo of Romanian wheat at USD251/tonne FOB for Nov 1-10 shipment, well below US levels. Pakistan bought 25 TMT of Ukrainian wheat for October shipment. South Korea's Nofi cancelled a tender for 60 TMT of optional origin feed wheat due to high prices. Tunisia also cancelled a tender to import 42 TMT of durum wheat of optional origin for Oct shipment. French customs data shows that France exported 829 TMT of soft wheat in July, up 7% from a year ago as demand for EU wheat remains strong. EU soft wheat export licences issued so far this season stnad close to 4.5 MMT versus only 2.1 MMT this time a year ago. Germany head the table with 1.4 MMT of soft wheat export licenses attributable to them, with France in second at 1.25 MMT and Romania in third with a strong 910 TMT. US winter wheat growers in Kansas are starting to think about getting their 2014 winter wheat crop sown. Rain would be useful, although only the western half of the state is expected to see better than normal rainfall over the next couple of weeks, almost the entire state should get 0.75-1.5 inches of rain in the next fortnight. The Canadian wheat harvest is moving along briskly under sunny skies and unseasonably warmer than normal temperatures. Stats Canada today said that Jul 31 all wheat stocks were 5.06 MMT, down 14.7% on a year ago but comfortable enough with a bumper harvest expected for 2013/14. Canadian barley stocks were pegged at 0.98 MMT versus 1.2 MMT a year previously. Wheat harvesting in Russia and Kazakhstan is moving along slowly, with late season rains hampering progress. Russian wheat is almost 60% done, with only around 20% of the Kazakh wheat crop cut. IKAR suggest that a larger than normal proportion of this year's Russian wheat crop may only be of feed grade as rains have damaged quality. Sep 13 CBOT Wheat closed at USD6.35, up 7 3/4 cents; Sep 13 KCBT Wheat closed at USD7.08 1/2, up 7 1/4 cents: Sep 13 MGEX Wheat closed at USD7.07 3/4, up 1 3/4 cents. For the week that means that Chicago wheat lost 8 1/4 cents and Minneapolis 12 1/2 cents, whilst strong demand from Brazil saw Kansas wheat rise 7 cents.

EU Wheat Mixed, Strong Pound Weighs On London

06/09/13 -- EU grains closed mixed with Nov 13 London wheat settling GBP0.55/tonne higher at EUR155.05/tonne and Jan 14 GBP0.75/tonne firmer at GBP157.50/tonne. Mar 14 London wheat on the other hand closed GBP1.55/tonne lower at GBP157.00/tonne, inexplicably now at a discount to Jan 14 (a situation that will surely be rectified next week). Nov 13 Paris milling wheat rose EUR1.25/tonne to EUR188.75/tonne whilst Nov 13 Paris rapeseed settled EUR2.20/tonne lower at EUR382.00/tonne.

For the week Nov 13 London wheat was GBP2.45/tonne lower, with Nov 13 Paris wheat EUR1.50/tonne higher and Nov 13 Paris rapeseed EUR0.75/tonne firmer. London wheat took a hit from a strong pound. Sterling posted its best monthly gain against the euro in a year last month, and has added a further 1.2% to those gains this week to hit a 7 1/2 month high above 1.19 against the single currency today.

Toepfer estimated the UK wheat crop at 12.47 MMT, a 6% reduction on last season but better than many had expected earlier in the year. Given the large volume of imports in 2012/13 (and more are already lined up for 2013/14) the carry-in of old crop into new has also been much larger than many anticipated.

This still leaves the UK with an exportable surplus this season, yet Nov 13 feed wheat at GBP155.05/tonne is the equivalent of EUR183.40/tonne, less than five euros under the price of Paris milling wheat. That explains why out of the near 4.5 MMT of soft wheat export licences issued by Brussels so far this year the UK has only applied for 3,600 MT two months into the season. Even last year we exported 737 TMT of wheat.

Feed barley at farm level meanwhile is only fetching GBP130/tonne, and we will of course have a much larger crop of that than normal this year.

For now though, UK growers are generally busying themselves wrapping up the last of the harvest and making preparations for sowing winter crops for 2014. All the problems with winter OSR last year may see less of that get planted this year, and whilst GBP155/tonne for wheat might not appear too attractive when looking into the rear view mirror, it's better than GBP130/tonne for barley, so winter wheat plantings for the 2014 harvest should be higher. At least soil conditions look a lot better than they did 12 months ago.

In other news, FranceAgriMer raised their forecast for the 2013 soft wheat crop there to 36.68 MMT, up 3% on last year and above their previous estimate of "in excess of 36 MMT" released last month. It's also a bit higher than the French Farm Ministry's 36.1 MMT, and getting closer to trade forecasts of 37.0-37.5 MMT.

They also released their first estimate for 2013 French corn production, forecasting a crop of 15.6 MMT, a 2% rise on last year. They trimmed their French barley crop estimate slightly from 10.6 MMT to 10.5 MMT, a near 8% drop on last year due to reduced plantings and lower yields. Separately they left their crop condition ratings for the 2013 corn crop unchanged from a week ago at 55% good/excellent.

Egypt bought one cargo of Romanian milling wheat at USD251/tonne FOB (around GBP160.50/tonne equivalent) plus freight at USD12.69/tonne for early Nov shipment. Romanian trade association ARCPA said that wheat yields were up more than 50% on last year.

The USDA attaché in Cairo said that recent Egyptian purchases (2 MMT) mean that they've now got enough wheat bought to last them through to Jan 2014.

The Ukraine Ministry increased their forecast for their 2013/14 grain harvest from a record 57.1 MMT to "nearly" 58 MMT. Exports to date this season stand at 4.1 MMT, including 2.2 MMT of wheat, 1.4 MMT of barley and 0.6 MMT of corn. They'd like to export 30 MMT or more of that crop this season, although logistics remain a major challenge. Once winter hits hard that will also provide them with another hurdle to get over.

Russia's harvest now stands at 63.9 MMT off 58.9% of the planned area. Wheat accounts for 40.8 MMT of that, with yields so far averaging 42% more than last year at 2.73 MT/ha. With over 40% of the wheat crop still to be harvested current trade estimates for final production of around 52 MMT could prove to be on the low side even though spring wheat yields will obviously be lower.

The Siberian presidential envoy was recently quoted as saying "I think that the harvest will be close to a record, above average that's for sure."

The Kazakhstan harvest meanwhile currently stands at just over 4 MMT off 21% of the combinable area. That also suggests that the current Ministry forecast for production of only 15 MMT this year may also be understated.

Server Problems

06/09/13 -- Please note that my server is currently experiencing a few problems and will be offline for 20 minutes or so whilst I try to find a hammer.

Some of the elements of the blog and/or content contained within may go missing temporarily during this time. Apologies for the inconvenience.

EU Rapemeal Prices

06/09/13 -- Rapemeal prices on the continent are lower across the board today, despite a firmer tone to last night's soymeal market in Chicago.

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

Sep13	205.00	-10.00
Oct13	210.00	-8.00
Nov13/Jan14	218.00	-4.00
Feb/Apr14	218.00	-5.00
May/Jul14	216.00	-5.00
Aug/Oct14	207.00	-1.00
Nov/Jan14	212.00	-1.00

News Bytes

06/09/13 -- It's a grim old day here up in North Yorkshire today, although the rain was certainly needed (unless you've got a bit of wheat or spring barley/OSR left to cut). It will undoubtedly be welcomed for newly sown winter OSR. Thoughts will also be turning to planting winter wheat, and a fair bit more of that is likely to go in than last year judged on current conditions.

Morning markets are mostly a bit higher, with Nov 13 London wheat up 75p as I type, although that's still GBP2.25/tonne down on the week. Nov 13 Paris wheat is flat-lining at EUR0.25/tonne higher for a net gain of half a euro versus last Friday. Yawn. The strong pound has hit London wheat this week. The continued brisk pace of EU exports is supporting Paris wheat.

FranceAgriMer have this morning raised their estimate for the French wheat crop from "in excess of 36 MMT" to a more precise 36.68 MMT, up 3% on last year. Much better yields in the north of the country are behind the rise. Wheat yields in Picardie are said to be averaging 9.11 MT/ha versus a FranceAgriMer forecast of 8.37 MT/ha as recently as July.

Romanian wheat has also yielded above expectations this year, with the local trade organisation ARCPA saying yields have averaged around 4.0 MT/ha, up more than 50% versus only 2.6 MT/ha in last year's drought-hit harvest. No wonder then that they've been so aggressive in the recent Egyptian tenders.

Talking of whom, the USDA attaché in Cairo says that recent Egyptian purchases mean that they've got enough wheat bought to last them through to Jan 2014. They'll start harvesting their next crop around April time.

Russia's grain harvest bumbles along at 63.9 MMT off 58.9% of the combinable crop area. Wheat accounts for 40.8 MMT of that, off 59.6% of plan, with yields up 41.5% at 2.73 MT/ha. They've also harvested 12.7 MMT of barley off 68.7% of plan, along with 493 TMT of corn (off 4.2% of plan) and 905 TMT of sunseed (5.2%).

IKAR peg the Russian grain harvest at 89.7 MMT, including 51.9 MMT of wheat, 14.7 MMT of barley and 9.92 MMT of corn. They see exports at 21.5 MMT, including 15.5 MMT of wheat, 3 MMT of corn and 2 MMT of barley. A larger than normal proportion of this year's wheat crop will only be of feed grade which will limit exports along with sluggish demand and tough competition, they say.

Kazakhstan has harvested 4.02 MMT of grains off 21.2% of the planned area, with average yields so far up 61.4% on last year at 1.2 MT/ha.

Planting of the 2013/14 Argentine corn crop is underway, despite the dry conditions.

A Bloomberg survey puts 2013 US corn yields at 153.9 bu/acre, up 25% on last year, and not too far below the USDA's August estimate of 154.4 bu/acre. The same survey sees soybean yields at 41.2 bu/acre, up a more modest 4% on last year and 1.4 bu/acre below the USDA's August estimate.

Overall the US 2013 corn crop is estimated at an average of 13.641 billion bushels (record), a tad lower than the USDA's August number (13.763 billion), but 26.5% more than last year's disaster. The average for the US 2013 soybean crop is 3.134 billion bushels versus the USDA at 3.255 billion last month. That would be a 4% rise on output in 2012.

Chicago Mixed In Choppy Trade

05/09/13 -- Soycomplex: It was another choppy day for beans, particularly so in front month Sep 13 which had a daily trading range of 43 1/2 cents, and closed right up at the top end of that spread. The weekly Drought Monitor indicated increases in the percentage of the Midwest impacted by drought (28.7% this week versus 25.1% last week) and severe drought (7% this week versus 3.7% last week). There was a wetter look to the latest 15-day weather forecast though, but the trade is making the assumption that much of the damage is done. The 15-day forecast calls for wetter than normal conditions in northern and western Corn Belt states and the Upper Plains. Crop conditions in the Dakotas and Minnesota should see some improvement if the forecast holds true. China sold 417,448 MT of soybeans in today’s government auction - 82.95% of the total offered - the best response yet since sales began five weeks ago. MDA CropCast cut their forecast for US 2013 soybean production by 34 million bushels to just over 3 billion on continued dryness. In their first forecast for world 2013/14 soybean production the FAO's AMIS predicted a crop of an all-time high 284 MMT, up 18 MMT or 6.8% on last year and 2 MMT more than the USDA's current figure. Usage will grow by 3.8% in 2013/14, compared to 4.2% growth in the current season. Consequently "stocks (ending 2013/14) are forecast to rebound strongly in 2013/14, notably in the United States, Argentina and Brazil," they said. Macquaire Bank cut their forecast for 2013 US soybean yields to 40.9 bu/acre from 42.5 bu/acre previously. They pegged the Brazilian 2013/14 crop at a record 87 MMT. The trade now has one eye on the changing daily weather forecasts and the other on next Thursday's upcoming USDA WASDE report. Before that we get the latest one day delayed weekly export sales report from the USDA tomorrow. Trade expectations for that are in the 600-800 TMT region for beans, along with 100-200 TMT for meal. Sep 13 Soybeans closed at USD14.23, up 25 1/4 cents; Nov 13 Soybeans closed at USD13.67 1/2, up 15 cents; Sep 13 Soybean Meal closed at USD479.50, up USD10.90; Sep 13 Soybean Oil closed at 43.19, down 37 points.

Corn: The slightly wetter outlook for the US weather provided a negative tone for corn, although the notion that the crop is already made suggests that it stands to benefit less than soybeans from any moisture that may come its way next week. It may be more likely that the trade thinks that the warm and dry weather will accelerate the harvest, and one that is still generally thought to be record large. There are plenty of reports of the corn basis continuing to weaken as new crop comes onto the market in the south, moving gradually north. Better than expected yields are being reported in what has been cut so far. There are some reports of corn being cut wet in an attempt to get the most out of the nearby premiums. Aflatoxin problems are being mentioned in some cases. MDA CropCast cut their forecast for the US 2013 corn crop by 74 million bushels to 13.467 billion, still comfortably a record crop. Crop growth is finishing up and moisture needs are therefore declining, they noted. Particularly bearish was the FAO's AMIS adding 11 MMT to their previous forecast for the world corn crop in 2013/14, pegging production at a record 983 MMT, up 108 MMT or 12.3% vs. 2012/13 and way higher than the USDA's current 957 TMT estimate. The rise is due to "larger crops officially reported in Argentina and improved outlook for the EU and Ukraine," they said. "General conditions are good. In the US approximately half of the corn is in good to excellent condition and in spite of dry weather and rising temperatures in August, a bumper production is expected largely due to increased planted area. In Canada, conditions are favourable and yields are expected to be average to above average," they added. The weekly ethanol production report offered no support, with output down 1,000 barrels/day from last week to 819,000 bpd. The market is conscious that demand from the ethanol sector in the soon to end 2012/13 season is heavily overstated by the USDA. That will add some extra bushels to the carry in for 2013/14. Ethanol demand for next season looks questionable too. Malaysia seeks 120 TMT of optional origin corn for Nov/Dec shipment. South Korea's Nofi is looking for 140 TMT of optional origin corn for Feb shipment. South America/Black Sea corn may fare better than US origin in both of those tenders. Trade estimates for tomorrow's weekly export sales report for corn are around 400-650 TMT. Sep 13 Corn closed at USD4.89 1/2, down 4 1/2 cents; Dec 13 Corn closed at USD4.61, down 8 1/2 cents.

Wheat: Wheat followed corn lower. The FAO's AMIS went the whole hog and forecast a record world wheat crop in 2013/14, as well as all time high corn and soybean production. They now see world output at 710 MMT in 2013/14 versus their previous estimate of 704 MMT and the USDA's current 705 MMT. That's a cool 50 MMT more than last year, an increase of 7.6%. The rise is due to "an improved outlook in the EU and the CIS as well as more favourable prospects in Australia, Argentina and Canada," they say. Ending stocks (for 2013/14) are forecast "to rebound by some 8%, with most of the increase concentrated in the EU, China and CIS countries" to 170 MMT, they said. South Korea's Nofi are tendering for 60 TMT of optional origin feed wheat for December shipment. Japan bought 116,350 TMT of US/Canadian milling wheat in a routine tender. Tunisia are tendering to buy 42,000 MT of durum wheat. Russia has now harvested 40.5 MMT of wheat off less than 60% of the planned area, yields are up 42% on last year and only lag those of 2011 by 0.08 MT/ha. Good harvest weather is being reported in Canada and a bumper wheat crop is expected there. Stats Canada comes out tomorrow with their July stocks report. EU soft wheat sales continue at a brisk pace, with Brussels issuing 550 TMT of export licences this past week. That brings the total issued so far to 4.5 MMT, well ahead of 2.1 MMT this time a year ago. Barley exports are also running full steam ahead at a cumulative 2.5 MMT versus 1.45 MMT this time last year. MDA CropCast trimmed their forecast for Australian wheat production by 340 TMT to 22.44 MMT due to dryness in some parts of the east. "Rains continued across western portions of Western Australia as well as Victoria this past week, which further improved moisture for crop growth. Rains should favour eastern portions of Western Australia, southeastern South Australia, and Victoria this week. However, dryness will continue to stress wheat across northern New South Wales, Queensland, and western New South Wales. Yield potential continues to decline due to the ongoing dryness," they said. Trade estimates for tomorrow's weekly export sales report for are around 450-600 TMT. Sep 13 CBOT Wheat closed at USD6.27 1/4, down 7 cents; Sep 13 KCBT Wheat closed at USD7.01 1/4, down 3 3/4 cents; Sep 13 MGEX Wheat closed at USD7.06, down 9 cents.

EU Grains Down Again, FAO Predicts Record World Wheat, Corn And Soybean Crops

05/09/13 -- EU grains closed weaker on harvest pressure and calls from the FAO for record world wheat, corn and soybean production in 2013/14.

London wheat hasn't been helped by the pound rising close to 1.19 versus the euro, a level it has only been above fleetingly since the first few weeks of the year. Both the Bank of England and the ECB left interest rates in the UK and Eurozone unchanged today.

Nov 13 and Jan 14 London wheat both settled GBP1.50/tonne easier at GBP154.50/tonne and EUR156.75/tonne respectively, whilst Nov 13 Paris milling wheat fell EUR0.25/tonne to close at EUR187.50/tonne.

Both Nov 13 London and Paris wheat are not too far off retesting the 2013 closing lows of GBP150.75/tonne and EUR182.00/tonne respectively.

The FAO's Agricultural Market Information System (AMIS) increased their forecast for world wheat production this year from 704 MMT previously to 710 MMT, a 50 MMT or 7.6% increase on last year's crop.

"Prospects are favourable in the Northern Hemisphere. Winter wheat harvest is complete and spring wheat is in late-maturity to harvest stages. In the US, Canada, Russia and Kazakhstan spring wheat conditions are good though final yields will depend on favourable weather in the coming month," they noted.

They also predicted a record world wheat crop in 2013/14, at 983 MMT that would be up 108 MMT, or 12.3%, versus 2012/13 and way higher than the USDA's current 957 TMT estimate.

"General conditions are good. In the US approximately half of the corn crop is in good to excellent condition and in spite of dry weather and rising temperatures in August, a bumper production is expected largely due to increased planted area. In Canada, conditions are favourable and yields are expected to be average to above average. In the EU, prospects are good except in northern Italy, Hungary, Austria, Slovenia and Croatia where there is concern due to late sowing and dry and hot conditions," they said.

In their first forecast for world 2013/14 soybean production they predicted a crop at an all-time high of 284 MMT, up 18 MMT or 6.8% on last year.

At home, ADAS said that "near perfect harvest weather coincided with peak crop maturity, an estimated 1.3M ha of combinable crops were harvested (in the week through) to 3 September. This is the highest rate of clearance in a single week for at least the last 5 years and included 45% of the wheat area and almost 40% of the spring barley area."

They now estimate that the domestic wheat crop is 85% harvested, along with 70% of the spring barley and oat crops. Winter OSR is almost finished at 95% done, with 10% of the spring OSR crop harvested.

They have wheat yields averaging 7.6-7.7 MT/ha, winter barley 6.5-6.9 MT/ha, spring barley at 5.5-5.7 MT/ha and winter OSR at 3.2-3.4 MT/ha. All in all that's generally a fair bit better than was expected back in the spring/early summer.

French exports continue to press on well. The port of Rouen saw traffic of 171,390 MT of grains in the past week. Algeria was the largest soft wheat home, taking 78,750 MT (there was also a small 3,300 MT coaster destined for the UK) along with 39,500 MT of malting barley loaded for China.

The French Federation of Oilseed Producers estimated the 2013 OSR crop there at 4.5 MMT, a drop of 17% on last year and 13% below the 5-year average. A combination of lower plantings, higher than normal winter losses and reduced yields was to blame. They predict winter OSR plantings for the 2014 harvest at 1.5 million ha, down versus 1.6 million a year ago (although the final harvested area was only 1.45 million due to quite heavy winter losses).

The Ukraine Ministry say that their winter OSR crop is already 50% planted. They have the total winter grains cropping area up 2.4% versus last year at 8.2 million hectares.

Russia's wheat harvest is 58.7% done, producing 40.5 MMT to date, with yields currently up 42% at 2.75 MT/ha, say the Ag Ministry there. They've stepped up their participation in the last few Egyptian wheat tenders. The latter have now bought 830 TMT of wheat in the past week, taking their total 2013/14 tender purchases so far to 1.91 MMT since the beginning of July.

EU Rapemeal Prices

05/09/13 -- Rapemeal prices on the continent are lower across the board today. Paris rapeseed futures were down hard last night, and that momentum has carried through into morning trade.

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

Sep13	215.00	-3.00
Oct13	218.00	-2.00
Nov13/Jan14	222.00	-5.00
Feb/Apr14	223.00	-4.00
May/Jul14	221.00	-3.00
Aug/Oct14	208.00	-4.00
Nov/Jan14	213.00	-5.00

The Morning Vibe - It's All Looking Bearish

05/09/13 -- My conviction that we are heading into seasonal harvest lows remains intact. Soybeans appear to have had their shot at posting a pre-harvest jitters rally on Tuesday. I just can't buy into the Allendale 39.0 bu/acre yield estimate released yesterday, not with good/excellent crop conditions at 54% versus 30% a year ago. As mentioned earlier this number was based on a farmer-led survey, if you get my drift.

Sure, trim a bit off the final production numbers and yields, but lower than last year? Really?

The FAO this morning say that world food prices fell for the fourth consecutive month in August to hit their lowest level since June 2012. Fancy that coinciding with funds pulling out of agri-commodities too, the cynics might observe.

The FOA's Agricultural Market Information System (AMIS) have this morning released some revised crop estimates of their own, and they all look pretty bearish - well, very bearish actually - predicting a record world wheat, corn and soybean crop in 2013/14.

The now forecast the global wheat crop in 2013/14 at a record 710 MMT versus their previous estimate of 704 MMT and the USDA's current 705 MMT. That's a cool 50 MMT more than last year, an increase of 7.6%.

The rise is due to "an improved outlook in the EU and the CIS as well as more favourable prospects in Australia, Argentina and Canada," they say. Ending stocks (for 2013/14) are forecast "to rebound by some 8%, with most of the increase concentrated in the EU, China and CIS countries" to 170 MMT, they add.

They've also added 11 MMT to their previous forecast for the world corn crop in 2013/14, pegging production at a record 983 MMT, up 108 MMT or 12.3% vs 2012/13 and way higher than the USDA's current 957 TMT estimate.

The rise is due to "larger crops officially reported in Argentina and improved outlook for the EU and Ukraine," they say.

Corn ending stocks for 2013/14 are "put 30% above their low opening level, with most of the increase occurring in the US where inventories may rise by 27 MMT, or 146%," they add

In their first forecast for world 2013/14 soybean production they predict a crop of an all-time high 284 MMT, up 18 MMT or 6.8% on last year and 2 MMT more than the USDA's current figure.

"Stocks (ending 2013/14) are forecast to rebound strongly in 2013/14, notably in the United States, Argentina and Brazil," they say.

Big prices clearly equal big plantings.

MDA CropCast have today trimmed their US 2013 corn production forecast to 13.467 billion bushels (still comfortably a record crop mind), down 74 million on last week due to dryness. However, crop growth is finishing up and moisture needs are therefore declining, they note.

They've cut 34 million bushels off their US 2013 soybean production estimate to 3.006 billion bushels, not much higher than Allendale. I don't believe them either.

They've also trimmed 300 TMT off the global wheat crop due to dryness in eastern parts of Australia where they now predict a 2013/14 wheat crop of 22.44 MMT.

South Korea's Nofi are tendering for 140 TMT of optional origin corn for Feb shipment, along with 60 TMT of optional origin feed wheat for December.

Japan have bought 116,350 TMT of US/Canadian milling wheat in their regular weekly tender.

French grain exports via the leading port of Rouen were up 24% this week to 171,390 MT. That total includes 39,500 MT of malting barley for China, along with 78,750 MT of soft wheat heading to Algeria and 3,300 MT of the same coming to the UK.

Russia's grain harvest has now reached 63.3 MMT off 58% of the combinable crop area. Wheat accounts for 40.5 MMT of that off only 58.7% of plan, with yields averaging 2.75 MT/ha, up 42% versus last year. Is anybody else starting to get the feeling that reports of early season "trouble ahead" for the Russian wheat crop were a con? The USDA's 54 MMT crop estimate may ultimately turn out to be on the low side.

Ukraine's Ag Ministry say that they expect a winter crop area of 8.2 million hectares, up 2.4% on last year. Winter OSR plantings are already half done at 461k ha, they add.

Chicago Falls In 'Turnaround Tuesday' - On A Wednesday

04/09/13 -- Soycomplex: Beans closed sharply lower in a one day holiday-delayed "Turnaround Tuesday" style. Having finished disappointingly well off the highs last night, that was no great surprise. The USDA cut soybean good/excellent ratings by 4 percentage points to 54% versus the 4-6 point reduction that the trade was forecasting. The fact of the matter is that this is still substantially better than the 30% G/E rating that the crop had this time last year, the so-called "worst drought year in a generation." It was surprising then to see Allendale issue a 2013 US soybean yield estimate of only 39.0 bu/acre, some 1.5% BELOW last year's 39.6 bu/acre. They have production at less than 3 billion bushels, 2.98 billion in fact, versus 3.105 billion in 2012. The USDA's August yield estimate was 42.6 bu/acre with production at 3.255 billion bushels. Everyone is agreed that some yield potential has been hit since then, but Allendale's farmer-survey led estimate is the lowest in the ring yet. Michael Cordonnier cut his estimate for 2013 US bean yields to 40.5 bu/acre from previous estimate of 41.0 bu/acre. Lanworth Inc revised theirs down from 40.8 bu/acre to 40.4 bu/acre, with production cut from 3.14 billion bushels to 3.114 billion. New Edge estimated the US soybean crop at 3.17 billion bushels. FCStone pegged the crop at 3.146 billion bushels with yields at 41.2 bu/acre. As you can see, despite it being relatively late in the season, opinion is still quite widely divided over the yield potential of this crop. A Reuters survey came up with a yield low of 39.0 bu/acre (Allendale, we assume) and a high of 42.3 bu/acre - a spread of more than 8% - giving an average guess of 41.09 bu/acre. QT Weather said that although there has been some noted deterioration in crop conditions in the week through to Sep 2 overall "the latest remote sensing says despite backing up in numerous areas of the Plains and Corn Belt last week...in the face of record heat and limited moisture, vegetation health remains vigorous across the Canadian Prairie and normal to better than normal in all key Corn Belt States except 50% of MN, 70% of WI and a bit surprising only 20% of IA and 10% of IL." Sep 13 Soybeans closed at USD13.97 3/4, down 37 3/4 cents; Nov 13 Soybeans closed at USD13.52 1/2, down 34 1/4 cents; Sep 13 Soybean Meal closed at USD468.60, down USD16.80; Sep 13 Soybean Oil closed at 43.56, down 26 points. Note: as of tonight's close Nov 13 beans have still added 10.4% in terms of price protection to cover potential yield losses since the USDA's Aug 12th yield and production estimates were released.

Corn: "Corn started out lower overnight and then just pretty much laid there for the rest of the day in what amounted to a pretty quiet, non-eventful session," said Benson Quinn Commodities. That pretty much sums up the situation. The market doesn't seem to feel that corn prices above USD5/bu are warranted at this time, but neither does it appear to fancy the downside too much either right at this moment. As with beans there were a plethora of US corn production and yield numbers thrown into the ring today, ahead of the USDA's own estimates due next Thursday. Doom-laden on soybean's production prospects, Allendale came out with a forecast more in line with trade expectations for corn, predicting US 2013 yields to average 153.4 bu/acre and production to come in at a record 13.676 billion bushels. The USDA's August estimates were 154.4 bu/acre and 13.763 billion bushels respectively. Lanworth estimated 2013 US corn yields at 151.6 bu/acre versus a previous estimate of 152.4 bu/acre. They now have production at 13.330 billion bushels versus a previous estimate of 13.406 billion. New Edge estimated the US 2013 corn crop at 13.705 billion bushels and said that US corn ending stocks in 2013/14 will reach 1.889 billion bushels versus the current USDA estimate of 1.837 billion, and far higher than the 719 million forecast at the end of the current marketing year. FCStone estimated the 2013 US corn crop still close to the magical 14 billion bushel mark at 13.942 billion, only marginally down on a previous forecast of 13.993 billion. They now peg yields at 156.4 bu/acre versus a previous estimate of 157.0 bu/acre. Michael Cordonnier left his 2013 US corn yield unchanged at 152.0 bu/acre, but didn't rule out the possibility of a reduction at some time in the future. A Reuters poll pegged US 2013 corn yields a fraction below 154 bu/acre. The surprisingly good remote sensing data referred to above also applies to corn. QT Weather said that "these recent images show that yields are potentially better than previously thought over some key growing regions that have some very dry soil and saw record late season heat...for example in Iowa. Did the heat help?" Only time will tell. There's a feeling that the US corn crop is "made" and that the recent warm and dry spell will speed up the harvest, which will soon be in full swing in the heart of the Corn Belt. Brazil’s Ag Ministry said that they expect China to approve corn imports from Brazil in 2013/14. The trade will be looking to tomorrow's Energy Dept data to see how the weekly ethanol grind is holding up, last week's number showed a 24,000 barrels/day fall in output to 820,000 bpd. Sep 13 Corn closed at USD4.94, down 4 cents; Dec 13 Corn closed at USD4.69 1/2, down 5 3/4 cents.

Wheat: At the risk of repeating myself, wheat remains a follower of corn. A third Egyptian tender in a week seems to indicate that they think that wheat at USD250-255/tonne is good value. Today they booked 180 TMT of Black Sea wheat for late October shipment, with two cargoes coming from Russia and one from Romania, all priced around USD252/tonne FOB. US wheat is closer to USD270/tonne. Ukraine wheat missed out, as too did French. Some think that Ukraine backing off may be down to the notion that they will be going full steam ahead on corn exports by late October and into November. The Ukraine Ministry has them down to export record volumes of corn in 2013/14. APK-Inform today said that Ukraine has the potential to export a record 30.4 MMT of grains and pulses in 2013/14, including 18 MMT of corn, 9.5 MMT of wheat and 2.5 MMT of barley. As Ukraine steps away from the wheat limelight, it is interesting to see Russia re-entering it. The Russian grain harvest now stands at 62.5 MMT off 56.9% of the combinable crop area. Yields are averaging 2.38 MT/ha, up 25.9% vs. last year, say the Ag Ministry. Russia has harvested "about 40 MMT" of wheat of 57.8% of the planned area. Yields are up 41% at 2.75 MT/ha, say the Ag Ministry. The current highest wheat production estimate in the hat for Russia is 54 MMT from the USDA. Lanworth estimated the 2013/14 global wheat crop at 701.84 MMT, up 3.0 MMT from their previous estimate, although slightly below the USDA's 705.38 MMT that's still a record volume and up 7% versus 2012/13. Recent rains in Western Australia are said to have completely turned the crop's fortunes there around. CBH Group estimated the volume of grain that they would handle in the state this year up from 9 MMT to 10.0-10.6 MMT. There's still talk of India re-entering the world wheat export market following the recent devaluation of the rupee. South Korea bought 22,500 MT of US milling wheat for Nov/Dec shipment. Bangladesh are tendering for 50 TMT of wheat, their third tender since the beginning of July. They expect to buy 850 TMT of foreign wheat this year. Jordan bought 50 TMT of optional origin feed barley for June shipment. They cancelled on a tender to buy 100 TMT of optional origin wheat for Mar-May shipment due to high prices. The world barley crop is seen 8.3% higher in 2013/14, according to the USDA - the highest output since 2009/10. The increased use of barley in feed rations this year, along with a record world corn crop is seen limiting the potential upside for wheat. The size of the current fund short in CBOT wheat should continue to see buying on any dips. Ultimately though downside harvest pressure on corn could drag wheat lower as buyers look at the price differentials between the two. Sep 13 CBOT Wheat closed at USD6.34 1/4, down 2 1/4 cents; Sep 13 KCBT Wheat closed at USD7.05, up 8 1/4 cents; Sep 13 MGEX Wheat closed at USD7.15, up 11 1/4 cents.

EU Wheat Slips Despite Further Egypt Interest

04/09/13 -- EU grains followed US markets lower, although support came from Egypt's third tender in the space of a week. The results of that are expected tonight, the lowest offers were said to be from the usual suspects - Russia, Romania and Ukraine at around USD252-253/tonne FOB, although French wheat has narrowed the gap from Monday, coming in at a best priced USD258/tonne.

At the close both Nov 13 and Jan 14 London milling wheat both settled GBP1.90/tonne easier at GBP156.00/tonne, and EUR158.25/tonne respectively. Nov 13 Paris milling wheat fell EUR1.00/tonne to EUR187.75/tonne and Nov 13 Paris rapeseed settled EUR5.50/tonne weaker at EUR384.00/tonne.

The market remains extremely choppy, which is not unusual for this time of year, until more is known about the size of the US corn and soybean crops.

It is generally perceived that the US corn crop is/was closer to being "made" before the worst of the recent hot and dry spell struck than the soybean crop. That explains the particular volatility that we've seen lately in soybeans.

The soybean market is influencing European rapeseed prices, which had risen almost 14% from their late July lows as of last night's close. Beans are up nearly 12% in 2 1/2 weeks, but currently showing signs of cracking.

Lanworth Inc today increased their world 2013/14 wheat crop estimate by 3 MMT from last month to an all time high, just short of 702 MMT and more than 7% up on last year. They did however trim their estimates for US corn and soybean production, although the former (at 13.33 billion bushels) would still be a record output.

Wheat's problem isn't so much that there's going to be 7-8% more of it (depending on who's figures you go with) in the world this year, as that this increase also comes in conjunction with a 10-11% hike in corn production too.

Russia's grain harvest now stands at 62.5 MMT off 56.9% of the combinable crop area, including "about 40 MMT" of wheat for which yields are 41% higher than a year ago at 2.75 MT/ha. They've also harvested 12.3 MMT of barley off 66.3% of plan, plus a smaller percentage of corn and sunseed (409 TMT of corn off 3.4% of plan, along with 826 TMT of sunseed off 4.8% of plan).

CBH Group raised their forecast for wheat production in Western Australia state from around 10 MMT to 11.0-11.6 MMT, around 90% of which they expect to handle themselves. After concerns of a very dry June and July, August rains are said to have completely turned around production potential in the state this year.

APK-Inform said that Ukraine has the potential to export a record 30.4 MMT of grains and pulses in 2013/14, including 18 MMT of corn, 9.5 MMT of wheat and 2.5 MMT of barley.

Bangladesh are tendering for 50 TMT of wheat, their third tender since the beginning of July. Jordan bought 50 TMT of optional origin feed barley for June shipment.

News late in the day reveals that Egypt bought 180 TMT of wheat for Oct 21-31 shipment in today's tender. They booked one cargo of Romanian wheat at USD252/tonne FOB, along with two cargoes of Russian wheat at USD252.80/tonne.

News Snippets

04/09/13 -- Egypt's GASC are back again, issuing their third wheat tender in a week. This one being for Oct 21-30 shipment, with the results expected later this afternoon.

Bangladesh are also tendering for 50 TMT of wheat, their third tender since the beginning of July.

Ukraine farmers have planted 394,000 ha of winter OSR, or 43% of the intended area, according to the Ag Ministry.

The Russian grain harvest now stands at 62.5 MMT off 56.9% of the combinable crop area. Yields are averaging 2.38 MT/ha, up 25.9% vs. last year, say the Ag Ministry.

Russia has harvested "about 40 MMT" of wheat of 57.8% of the planned area. Yields are up 41% at 2.75 MT/ha, say the Ag Ministry.

They've also harvested 409 TMT of corn off 3.4% of plan, along with 826 TMT of sunseed off 4.8% of plan.

APK-Inform say that Ukraine has the potential to export 30.4 MMT of grains and pulses in 2013/14, including 18 MMT of corn, 9.5 MMT of wheat and 2.5 MMT of barley.

Heavy rain has fallen in parts of Mato Grosso. Rains usually begin about this time in central Brazil. Early soybeans and full-season corn planting in MG will begin in the middle of this month.

"South American farmers will probably plant more soybeans than expected hitherto, weather permitting," say Oil World.

Chartists say that the failure of Nov 13 soybeans to breach the USD14.09 1/2 level last night indicates an approach to retest the USD13.51 level. Nov 13 currently trades at USD13.71 1/4, down 15 1/2 cents on the Globex market.

EU Rapemeal Prices

04/09/13 -- Rapemeal prices on the continent are generally a tad easier today, following a weaker tone to the protein sector that began mid-afternoon yesterday and has followed through into morning trade.

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

Sep13	218.00	-2.00
Oct13	220.00	-2.00
Nov13/Jan14	227.00	unch
Feb/Apr14	227.00	-2.00
May/Jul14	224.00	unch
Aug/Oct14	212.00	unch
Nov/Jan14	218.00	-1.00

Some Thoughts On Soybeans

04/09/13 -- It's "Turnaround Tuesday" on a Wednesday following the Labor Day holiday on Monday. If you get my drift. At least it's a turnaround for soybeans, which actually began an hour of so into yesterday's daytime open outcry session.

The USDA cut soybean good/excellent ratings by 4 points to 54% last night, versus the 4-6 point cut that most were expecting. Is the glass half full or half empty with that one?

Well, good/excellent ratings in beans were only 30% this time a year ago, and US farmers still ended up with a final yield of 39.6 bu/acre. If we go back a further 12 months, at this time in 2011 56% of the soybean crop was rated good/excellent, 2 points better than currently. Final yields then finished up at 41.5 bu/acre.

So it seems fair to me to assume that, as things stand, US soybean yields should end up significantly better than 39.6 bu/acre, although maybe a tad lower than 41.5 bu/acre.

The question now then is what does the trade think? How much of a decline in yields has been factored in since the USDA report came out with their 42.6 bu/acre estimate on Aug 12th? Nov 13 beans closed at USD12.25 1/4 that night, they've risen USD1.61 1/2 since then, as of last night's close.

That's a 13% increase, which looks way too much from where I am standing. You will recall last week's soybean seasonal chart here which showed a frequent pre-harvest weather scare peak in the mid-Aug/early-Sep period before prices fall back again to set an early Oct low.

Seeing as the current 54% good/excellent rating is very close to the 56% of 2011 it may interest you to hear that at the end of Aug 2011 front month beans were USD14.49, by early October they were USD11.78, a 18.7% fall.

They've done studies, you know, 60% of the time it works every time.

Chicago Market Mixed - Fails To Hold Early Gains

03/09/13 -- Soycomplex: Beans closed with good gains, although finishing well off the early session highs. Nov 13 failed to break through last Monday's high of USD14.09 1/2, reaching USD14.08 1/2, but subsequently falling back to close the day at USD13.86 3/4. Another dry week was seen trimming yield potential further in beans. "Hot or cool, the Midwest drought goes on. A cool front passed through the Midwest yesterday, dropping temperatures by 10 degrees F, but hardly any rain fell in corn and soybean farms. August finished with only 2.55 inches of rainfall in soybean farms. That represent 28% below normal rainfall, on average, in the Midwest. August is the key period for pod filling and the most sensitive time for yields. A significant yield loss is anticipated. Cumulative rainfall in July and August, together, is 5.5 inches, ranking among the lowest 10% on record. Cooler summer temperatures have eased moisture stress, to a degree, but prolonged drought has damaged soybean and corn yields," said Martell Crop Projections. After the close the USDA cut good/excellent crop ratings by 4 percentage points to 54%, the trade was anticipating a 4-6% decline. They said that 92% of the crop is setting pods versus 84% last week and 96% normally. The IGC estimated Brazil's soybean area to rise 5% for 2013/14 encouraged by the depreciating real and rising bean prices in relation to depressed local corn levels. Based on tonight's closes the Nov 13 bean: Dec 13 corn price ratio is over 2.9:1 versus 2.2:1 a year ago, which clearly favours soybean planting. Brazil is expected to produce a record crop again in 2013/14, currently estimated by most to be in the region of 85-88 MMT. Early season logistical problems, and the 2012/13 record crop, mean that Brazil still has plenty of beans left to sell. The Brazil Ministry said that they shipped 5.38 MMT of soybeans in August, more than double the 2.43 MMT exported in August 2012. US weekly soybean export inspections were very light at just 1.422 million bushels. Sep 13 Soybeans closed at USD14.35 1/2, up 11 1/2 cents; Nov 13 Soybeans closed at USD13.86 3/4, up 29 1/4 cents; Sep 13 Soybean Meal closed at USD485.40, up USD17.20 (the first four months were limit up at one stage); Sep 13 Soybean Oil closed at 43.82, down 7 points.

Corn: Corn traded higher in the overnight Globex market, but gave up all those gains and then some on all but the front month Sep 13 once the daytime open-outcry session opened. Reports from the country suggest that the basis, the differential between corn futures and cash prices, has "collapsed" as the harvest gathers momentum in the South and more new crop corn comes onto the market. "Minimal rainfall is predicted through Friday-Saturday in the primary corn and soybean states. A broad flat ridge of high pressure would effectively block rainfall from the central Great Plains, Midwest and Mid South. However, by the weekend, scattered rains are possible in Upper Midwest farms as high pressure weakens (flattens) along its northern rim. Light-moderate rainfall is expected from scattered showers in North Dakota, Minnesota, South Dakota, Iowa and Wisconsin. Short-wave disturbances tracking out of the Northern Rocky Mountains, across the Upper Plains and into the Great Lakes would eventually weaken the “heat dome” in northern corn and soybean growing areas. The 6-10 day forecast from the Climate Prediction Center indicates near-normal rainfall for the majority of the Midwest, though dry conditions would persist in the south-central United States and Southeast," said Martell Crop Projections. After the close the USDA cut corn good/excellent ratings by 3 percentage points, in line with the 2-4 point decline that the trade was expecting. The hot and dry weather has at least allowed crop maturity to improve closer to "normal" levels. The USDA said that 84% of the crop was at the dough stage versus 70% last week and 89% normally. They have 42% of the crop as dented versus 23% last week and 61% normally. Weekly corn export inspections came in at 17.436 million bushels vs. 12.059 million the previous week, better than the expected 10-13 million. The Brazilian Ministry reported August corn exports at 3.05 MMT versus only 733 TMT in July and 2.76 MMT a year ago. Sep 13 Corn closed at USD4.98, up 3 cents; Dec 13 Corn closed at USD4.75 1/4, down 6 3/4 cents.

Wheat: Once corn futures turned lower, wheat also quickly capitulated. The recent weakness in Minneapolis wheat was extended, with front month Sep 13 losing 16 1/2 cents and is now in danger of slipping below the USD7.00/bushel mark. The threat of a very large Canadian crop and improving US spring wheat conditions are behind the fall from grace. Mid-May Minneapolis wheat was a dollar and a half premium to Chicago wheat, tonight it's less than half that. Wheat also took a knock from news of just how far out US wheat is priced out into North Africa highlighted by the Egyptian tender over the weekend. The successful bids were around USD250-253/tonne, in the region of USD25/tonne lower than US wheat FOB the Gulf. That said, weekly export inspections came in better than the 24-28 million bushels expected at 36.410 million. After the close the USDA raised spring wheat good/excellent ratings by 3 percentage points from last week to 70%. They said that 64% of the crop is harvested versus 69% normally at this time. The Ukraine Ministry raised their forecast for grain production there to a record 57.9 MMT versus 56.7 MMT previously. Japan are tendering for 116,350 MT of milling wheat for Oct–Dec shipment in a routine tender with the results expected Thursday. US wheat accounts for 67,932 MT of the total. Turkey's Ag Ministry estimated their 2013 wheat crop at 22.0 MMT versus the 2012 wheat crop of 20.5 MMT. Turkish imports are likely to be lower in 2013/14. The Egyptian Supplies Minister last week suggesting that Egypt will only need to import 5 MMT of wheat in 2013/14, versus 8-10 MMT normally. Those two were Russia's largest wheat export homes in 2012/13. The Russian grain harvest is plodding on, and wheat yields continue to hold up well at 43% more than in 2012. The wheat harvest there so far stands at 39.8 MMT off 56.8% of the planned area. Rain has slowed progress in Siberia, and may also be damaging quality. Morocco are tendering for 50 TMT of durum wheat of EU origin. Sep 13 CBOT Wheat closed at USD6.36 1/2, down 6 3/4 cents; Sep 13 KCBT Wheat closed at USD6.96 3/4, down 4 cents; Sep 13 MGEX Wheat closed at USD7.03 3/4, down 16 1/2 cents.

EU Grains Give Up Early Gains

03/09/13 -- EU grains traded firmer for much of the day, supported by ongoing trade concerns over Midwest dryness and sharply higher US soybean values overnight. That took Paris rapeseed prices up above EUR390/tonne for the first time in more than 7 weeks, dragging wheat and corn values a higher too. Lower trade in the afternoon CBOT open outcry session however ultimately dragged EU grains into negative territory at the close.

Despite a sharply higher soybean market, EU wheat values failed to find a great deal of traction, with price rises capped by cheaper offers out of the Black Sea. Egypt's latest tender was won by a combo of Russian, Romanian and Ukraine wheat all priced in the region of USD250-253/tonne FOB. French wheat was offered at USD263/tonne, and US wheat is currently indicated at around USD276/tonne.

At the close both Nov 13 and Jan 14 London milling wheat settled GBP0.75/tonne easier at GBP157.90/tonne, and EUR160.15/tonne respectively. Nov 13 Paris milling wheat fell EUR1.25/tonne to EUR188.75/tonne and Nov 13 Paris rapeseed settled EUR2.50/tonne firmer at EUR389.50/tonne.

The US soybean crop may be getting smaller, but the outlook for oilseed production elsewhere this year is increasing, not least here in our own backyard. Strategie Grains now estimate the EU-28 OSR crop at 20.8 MMT, up almost 7% on last year's 19.5 MMT. They also increased their outlook for the EU-28 sunflower crop to 8.4 MMT, up 20% on last year. Faced with sluggish demand from the EU biodiesel industry and a large sunseed crop, demand for rapeseed in the EU is expected to show a year-on-year decline in 2013/14.

A large rebound in OSR production in Ukraine, most of which will be for export, will also cap demand for the oilseed here.

Whilst wheat and corn prices have nudged a bit firmer from the mid-August lows it would not be beyond the realms of possibility to see both return to retest those values in the coming weeks. In the case of London wheat the mid-Aug closing low was GBP150.75/tonne, with the low on Paris wheat EUR182/tonne and on Paris corn EUR164.50/tonne.

A bearish influence for corn is the impending new crop harvest both sides of the Atlantic. Ukraine values in particular could be the thing that drags European corn and wheat lower again. New crop Ukraine corn is currently priced around USD198-200/tonne FOB the Black Sea (circa GBP127.50-128.50/tonne).

The main challenge that lies ahead for Ukraine is getting this year's record harvest physically onto the market, although that doesn't mean that the threat of it won't be enough to depress prices further yet. The Ukraine Ministry have set a target for grain exports (not including by-products) of a record 30 MMT in 2013/14, yet they've only managed to ship 3.8 MMT of that in the first two months of the new campaign - on paper they need to be aiming for around 2.5 MMT/month minimum to meet that target, and that excludes making allowances for the inevitable weather disruptions in the midst of a Ukraine winter.

Russia meanwhile have also exported 3.8 MMT of grains in the Jul/Aug period, say IKAR, that's up from 2.9 MMT in the same period a year ago. Almost all of that (3.0 MMT) is wheat.

The Russian grain harvest trundles along at 61.7 MMT off 55.9% of the combinable crop area. Yields are averaging 2.39 MT/ha, a 26.5% rise on last year. Barley yields aren't great, at 2.05 MT/ha they're "only" up 15% on 2012, but wheat yields are coming in much better at 2.79 MT/ha, 43% more than last year. The Russian Ministry have left their 2013/14 grain production estimate unchanged at 90 MMT, with wheat accounting for "at least" 50 MMT of that total.

Russia's largest wheat export home in 2012/13 was predictably enough Egypt at 2.7 MMT, followed by Turkey in second at 2.1 MMT. There are concern surrounding demand from both in 2013/14. Egypt's problems are well documented, despite a recent spate of 7 tenders since the beginning of July, prior to that they'd bought nothing at all for 4 months. They say that they will only need to import a total of 5 MMT of wheat in 2013/14 versus 8-10 MMT normally.

Turkey meanwhile have had a decent harvest this year, with wheat, corn and barley production all seen up around 8-12%. Responding to the Turkish Grain Board new protein-based wheat procurement policy, farmers there increased their use of certified seeds for the 2013 harvest. This should cut back on their 2013/14 wheat import requirements, which will also be impacted upon by the devaluation of the Turkish lira.

The French National Institute of Statistics say that domestic grain prices in July were down 3.3% versus June and down 17.7% compared with July 2012. Wheat prices were down 4.9% versus June and 20.2% compared to July 2012, whilst oilseed prices fell by 11.8% and 21.0% respectively, they add.

The recent dry weather is seen disrupting barge movements on the Lower Rhine and the Danube.

A report on the ADAS website suggests that Ensus will run a trial on triticale when the plant re-opens. They are clearly keeping their options open. Ukraine corn will doubtless also feature in the mix of possible feed stocks to return the plant to profitability.

EU Rapemeal Prices

03/09/13 -- Rapemeal prices on the continent are mostly a bit firmer today, although they are nowhere near reflecting substantial USD20 gains in soymeal overnight on the back of continued weather concerns for soybeans in the US.

Strategie Grains have increased their forecasts for EU-28 rapeseed and sunseed production this year to 20.8 MMT and 8.4 MMT respectively.

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

Sep13	220.00	+2.00
Oct13	222.00	+1.00
Nov13/Jan14	227.00	+2.00
Feb/Apr14	228.00	+2.00
May/Jul14	224.00	-1.00
Aug/Oct14	212.00	unch
Nov/Jan14	219.00	unch

The Morning Vibe

03/09/13 -- The market is taking the view that weekend Midwest rains were not as beneficial as they might have been. You can see a map of the last 3 days precipitation here: Another reason why you should be on Twitter.

Continuing with the recent theme, the trade seems to think that this is more of an issue for beans than corn, as we currently have the overnight Globex market around 35-40 cents higher on beans (and meal up USD18) versus 5-7 cents firmer on corn. Wheat, the corn follower, is up 2-4 cents.

The market will now be looking to see how much the US corn and soybean crops have deteriorated in condition last week. The USDA will report on that after the close of Chicago tonight, with the trade expecting a 2-4 percentage point decline in corn rated good/excellent and a 4-6 point drop for beans. They cut corn G/E by 2 points last week to 59%, with beans down 4 points to 58%.

The Russian grain harvest is now at 61.7 MMT off 55.9% of the combinable crop area, with yields at 2.39 MT/ha versus 1.89 MT/ha in 2012 and 2.60 MT/ha in 2011. Wheat accounts for 39.8 MMT of that off 56.8% of the planned area, with yields at 2.79 MT/ha, a 43% increase on 2012. They've also harvested 12.2 MMT of barley (65.6%), 295 TMT of corn (2.4%) and 734 TMT of sunflower (4.2%).

Morocco are tendering for 50 TMT of durum wheat and 9 TMT of corn of EU origin.

France are said to be about to send their first barley shipment to Jordan in over 5 years with a vessel currently waiting to load at Rouen before proceeding to Dunkirk to load the remainder of a 50 TMT cargo.

The Turkish Ag Ministry say that their wheat harvest this year will rise 7.3% to 22 MMT, cutting imports which have also been hit by the recent devaluation of the Turkish lira. They were Russia's second largest wheat export home in 2012/13 after Egypt.

I hear that Strategie Grains have increased their forecast for UK OSR production to 2.2 MMT, that's still down more than 15% on last year's result but 4-500 TMT more than private estimates that were being discussed back in March/April.

They've also increased their forecast for EU-28 OSR production to 20.8 MMT, up almost 7% on last year's 19.5 MMT. They have output in Germany up 18.8% at 5.7 MMT, with the Polish crop up 19% at 2.5 MMT and the Czech Republic's crop up 27% at 1.4 MMT.

Strategie Grains are said to have also increased their EU-28 sunflower crop estimate from 8.3 MMT to 8.4 MMT, up 20% on last year, including output of 1.8 MMT each in France and Romania, along with 1.6 MMT in Bulgaria and 1.4 MMT in Hungary.

Ukraine are starting to become (predictably) a victim of their own success, The Brazil of the northern hemisphere has a bumper harvest and record volumes of grain to export in 2013/14, yet their infrastructure has barely changed in years. As well as aiming at record grain exports they also have large volumes of by-products such as sunpellets to shift too this season, putting further pressure on the nation's antiquated logistics. Grain exports fell to 500 TMT last week, and that's before they try to cram looming record corn exports out of the door too.

New crop Ukraine corn offers are said to be around USD198-200/tonne FOB which is the equivalent of around GBP127.50-128.50/tonne.

Newly planted wheat in Argentina could do with some rain, but there's not a lot in the 7 day forecast. Old crop wheat stocks are extremely tight meanwhile.

British Sugar are reported to have announced their 2013/14 opening dates: Newark and Wissington September 17. Bury St Edmunds September 19 and Cantley will open on September 24.

EU Wheat Rises, Egypt Back In The Market Again

02/09/13 -- EU grains closed firmer, although aside from news of a second wheat purchase within a week from Egypt over the weekend, fresh news was lacking in light of US markets being shut for the Labor Day holiday.

At the close Nov 13 and Jan 14 London wheat were GBP1.15/tonne firmer at GBP158.65/tonne and GBP160.90/tonne respectively. Nov 13 Paris wheat finished the day EUR2.75/tonne firmer at EUR190.00/tonne (around GBP161.35/tonne equivalent).

Better than expected UK manufacturing data saw the pound rise close to 1.56 versus the dollar and 1.18 against the euro, depressing London wheat a little.

Egypt's GASC bought a 355 TMT mixture of Russian, Romanian and Ukraine wheat in a surprise weekend tender, their seventh since they began buying at the beginning of July after a 4 month sabbatical. They booked three cargoes of Russian wheat, two of Romanian origin and one from Ukraine, all at prices around USD265/tonne C&F for Oct 11-20 shipment.

Those prices work out at around USD18/tonne beneath the cheapest French offer when freight is factored in. Excluding freight French wheat was offered at USD263/tonne FOB, which was around USD10/tonne above offers out of Russia and Romania and some USD13/tonne over the successful Ukraine bid.

Ukraine customs data shows that they exported 500 TMT of grains last week, split 315 TMT of wheat and 194 TMT of barley. That's down from 580 TMT the week before. The top destination was Thailand, taking 105 TMT, followed by South Africa with 79 TMT and Spain on 66 TMT.

Kazakhstan's rain-stalled grain harvest now stands at 2.323 MMT off 11.5% of the cropped area, with yields averaging 1.28 MT/ha. This time a year ago they'd harvested 6.14 MMT, so a direct yield comparison with last year (0.76 MT/ha) is probably not as revealing as it might look at first glance.

Bangladesh picked up a best priced quote of USD282.66/tonne in a tender to import 50 TMT of wheat for Sep/Oct shipment. They plan to buy around 850 TMT of wheat this year on the international markets, versus only 350 TMT in 2012/13 to replenish state stocks, say the Ministry.

The Czech Ag Ministry say that the rapeseed harvest there is 94% complete, with yields "much better than expected" despite the flooding earlier in the season. Yields are up around 20% on year ago levels and they should be in for their largest OSR crop ever, the Ministry add.

Reports suggest that a second freeze within a month caused further damage to the Brazilian wheat crop in the southern state of Parana last week. It is estimated that 55-60% of the wheat that was in a sensitive stage of heading and flowering experienced the recent round of freezing temperatures on Wednesday night. That could cut Parana's wheat crop to below 2 MMT, analysts say, and the state normally provides around half of the national crop.

Dates For The Diary

02/09/13 -- Upcoming important events for the next couple of weeks ahead:

Tuesday (3rd): USDA weekly crop progress report.

Thursday (5th): Bank of England and ECB announce interest rate decisions. FAO world cereals supply and demand estimates. UK cereals usage data.

Friday (6th): Stats Canada grain stocks estimates. USDA weekly export sales.

Monday (9th): USDA weekly crop progress report. HGCA UK cereal quality survey.

Tuesday (10th): ABARES Australian crop report.

Thursday (11th): USDA WASDE report. USDA weekly export sales.

Friday (12th): Sep 13 CBOT contracts expire.

Twitter Rules

02/09/13 -- On a "no news" sort of a day I thought I'd proffer a few thoughts on Twitter, finding myself with nothing much else to do this lunchtime. I'm a big fan of Twitter, as many of you will have probably realised. It gives you the opportunity to link and converse with all sorts of people interested in the same subjects as you, many of whom that you'd probably never get the chance to have a dialog with otherwise.

In some ways Twitter reminds me of the relatively early days of the internet. Many people are wary of it, many simply don't understand or "get" it. A bit like the time I told a leading feed compound mill buyer that he could get my market reports/prices online (we are going back somewhere around 17-18 years ago here), to which he replied "I don't do the internet, it's just full of Freddie Starr ate my hamster stories isn't it." I don't end that sentence with a question mark deliberately, as he wasn't asking, he was stating what as far as he was concerned was a known fact.

The point is, in 2013, you just couldn't possibly imagine somebody saying that they can't/won't access your market information because "they don't do the internet" can you? This response was however not that uncommon not that long ago, and now it's an indispensable tool.

Could Twitter be considered likewise not too many years from now? If it is, then don't you think it might be an idea to get on board the train now, before it starts to resemble the Mumbai rush-hour?

Think of Twitter like a marketing flyer. We've all seen good ones and bad ones of those. Approach it the right way and your Twitter profile will stand out from the crowd, and possibly make your competition's Twitter profile look as embarrassing and poorly conceived as Chris Waddle's mullet. Sounds good that doesn't it?

Consider of course that whether it's farmers, traders or the man on the moon that is your target audience, the next generation of men on the moon will have already grown up with and fully embrace social media. They'll expect it.

There's are plenty of do's and don'ts to consider. Some of the pet DON'Ts that I particularly dislike are don't tweet nothing all day and then post a dozen (or sometimes two dozen) in rapid succession. Also don't tweet stuff that was known about days ago, keep it as current as possible. Don't just allocate the job of updating your Twitter account to the office cat either.

Be very wary about using one of the various automated services out there to tweet for you, and don't just use your account as a cheap, numpty-friendly way of updating your website's homepage for Christ's sake. The number of websites where the only thing that has been updated in the last 12 months is the Twitter feed widget is embarrassing:

Day 20, London wheat closed up 50p.
Day 19, London wheat closed down 50p.
Day 18, London wheat closed up a pound.
Day 17, London wheat closed up 25p.
Day 16, England 4 West Germany 2.
Day 15, London wheat closed down 25p.

That's really going to have your followers just gagging to know what happens on Day 21 (when you finally get around to tweeting it at noon on Day 22) isn't it? More to the point, IF anyone is reading it what are they going to think about your company? Rearrange the following letters: YOURESHTIYOUARE to find out.

DO instead use Twitter to engage with your customers or potential customers. Interact with others. Post things that are up-to-the-minute and interesting. Send traffic to your website. Highlight promotional deals, discounts, special offers. Enhance your profile.

If you want any help in getting started, or sorting out the embarrassingly poor Twitter account that you've already got, drop me an email. Bear in mind though, that there's no such thing as a free lunch.

EU Rapemeal Prices

02/09/13 -- Rapemeal prices on the continent are firmer today, possibly with a bit of added protection built in as the US markets enjoy a long weekend, with today being Labor Day.

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

Sep13	218.00	unch
Oct13	221.00	+1.00
Nov13/Jan14	225.00	+2.00
Feb/Apr14	226.00	+3.00
May/Jul14	225.00	+5.00
Aug/Oct14	212.00	+5.00
Nov/Jan14	219.00	+7.00

Egypt Back In For Wheat

02/09/13 -- Egypt's state wheat buyer GASC were back in the market again over the weekend, booking 355 TMT of Black Sea origin wheat in their second tender in a week. The divi cheque that they were waiting on from the Cairo Building Society must have come through, as this little lot is going to set them back around USD9.4 million in round figures by my calculations.

They bought one cargo (55 TMT) of Ukraine wheat at USD254.87/tonne including freight, two cargoes (120 TMT) of Romanian wheat at USD264.69/tonne and three cargoes (180 TMT) of Russian wheat at an average of USD265.15/tonne.

The Ukraine wheat was priced at USD250/tonne FOB, with the Romanian and Russian wheat all around USD253/tonne FOB. The cheapest French (in fact only) offer was USD263/tonne FOB (with freight taking the C&F cost up to over USD282/tonne).