Nogger's Blog

Chicago Grains Closing Comments Friday Night

12/09/14 -- Soycomplex: Beans closed mostly with small gains, save for the expiring front end September contract. That should take some of the extreme nearby volatility that we have witnessed in recent weeks out of the market, now that these are out of the way. Worries over a weekend frost threat for the Midwest were maybe enough to trigger some short-covering. The trade still has the USDA's huge 475 million bushels 2014/15 ringing in it's ears from yesterday though - the highest since 2006/07. The trade also still feels that final US yields this year may still end up higher than the USDA's 46.6 bu/acre that they gave us yesterday, potentially pushing carryout even higher too. The USDA reported 131 TMT worth of new crop soybean sales to "unknown" today. This afternoon’s Commitment of Traders report shows funds now sitting on a record soybean short 81,567 contracts as of Tuesday night. The NOPA crush and latest crop condition ratings are out on Monday, with revised "prevent plant" acreage data from the FSA on Tuesday. Sep 14 Soybeans closed at $10.91, up 29 1/2 cents; Nov 14 Soybeans closed at $9.85 1/4, up 3 3/4 cents; Sep 14 Soybean Meal closed at $408.00, down $18.70; Sep 14 Soybean Oil closed at 32.16, up 72 points. The very technical Sep 14 soybean contract expired up 5 1/2 cents on the week, but the more liquid Nov 14 was down 36 1/4 cents. Sep 14 meal fell $28.10 and Sep 14 oil lost 19 points on the week.

Corn: The corn market closed a couple of cents higher, save for expiring Sep 14. As with beans, the threat of a weekend frost may have encouraged some risk off moves. "Favourable yields in corn point to a bumper harvest, but delayed maturity is a worry. Corn development has been retarded in cool growing season increasing worries about freeze damage. Corn was just 15% ripe as of September 7. That compares to 30% mature, normally, and at least one week delayed. Especially at risk for freeze damage are northern Midwest corn farms where the first hard freeze arrives the first week of October," said Martell Crop Projections. Without a killing frost, many will be feeling that final US corn yields could still end up higher that the USDA's 171.7 bu/acre forecast from yesterday. The USDA reported 116 TMT of new crop corn sold to "unknown" today. Ukraine said that they'd harvested 953 TMT of corn off 5% of the planned area. Russia said that they'd harvested 2 MMT off 15% of plan. The Rosario Grain Exchange said this week that Argentine growers would reduce their corn plantings by 16% this year, down from 4.3 million ha to 3.7 million ha. The latest Commitment of Traders report shows fund money sitting on a very small net long of under 10,000 contracts as of Tuesday night. Sep 14 Corn closed at $3.39, up 7 1/4 cents; Dec 14 Corn closed at $3.38 1/2, down 2 1/2 cents. For the week that puts Sep 14 down 7 1/2 cents and with Dec 14 falling 17 1/2 cents.

Wheat: The wheat market closed lower across the board, with some spectacular declines for expiring Sep 14 contracts in Kansas and Minneapolis. As with beans and corn, the fallout from yesterday's USDA report continues for wheat, pushing prices to new 4-year lows. The backdrop of record world production of all three in 2014/15, along with rising world and US ending stocks has the market under pressure. In the case of wheat in particular, the USDA notes the intensifying competition with rival exporting nations, cutting foreign sales and increasing inventories. Brazil, which gave US wheat exports a welcome boost in 2013/14, will soon start harvesting what could be a record crop of it's own this year. Argentine plantings are also seen up 16.5% to 4.4 million hectares for their 2014/15 harvest which would usually begin in November. Tunisia bought 100 TMT of durum wheat in a tender. Algeria are said to have bought 400 TMT of milling wheat this week. The wheat is of optional origin, but thought unlikely to be French or Black Sea material due to various quality issues with those origins. There's talk of possible frost damage to wheat in Canada and isolated parts of the Northern US Plains where crop development is behind schedule. Sep 14 CBOT Wheat closed at $4.98 1/4, down 4 3/4 cents; Sep 14 KCBT Wheat closed at $5.72 1/4, down 23 1/2 cents; Sep 14 MGEX Wheat closed at $5.68 1/4, down 30 3/4 cents. For the week Chicago wheat was down 32 3/4 cents, with Kansas down 46 1/2 cents and Minneapolis dumping 58 cents.

EU Wheat Rout Continues

12/09/14 -- EU grains closed mixed, with wheat lower and corn and rapeseed a little higher. It is interesting to note that, now London and Paris wheat have fallen below their respective long term support levels of GBP120/tonne and EUR170/tonne, they've quickly slumped this week to approach the GBP110/tonne and EUR160/tonne levels. Paris wheat traded as low as EUR160.50/tonne today in fact.

The day ended with Nov 14 London wheat down GBP1.55/tonne at GBP112.45/tonne, and Nov 14 Paris wheat ultimately ended EUR1.25/tonne lower to EUR162.50/tonne. Nov 14 Paris corn was up EUR1.50/tonne to EUR140.25/tonne and Nov 14 Paris rapeseed was EUR0.25/tonne higher at EUR321.50/tonne.

At the end of a dismal week for most of the sector, that puts the London market down GBP6.55/tonne, or 5.5%, versus last Friday. French wheat meanwhile has fallen EUR9.25/tonne, or 5.4%, during the same period. Corn is down EUR8.75/tonne, or 5.9%, and rapeseed has fallen EUR3.75/tonne, or a more modest 1.2%.

The French wheat contract is something of an enigma, seeing as it's possible to deliver product which is little better than feed wheat against it this season (albeit at an allowance), and feed wheat is something that France has in abundance this year.

In fact, let's use the Farm Ministry's production estimates from earlier in the week, along with FranceAgriMer's statement that only 59% of this year's crop is suitable for breadmaking versus 95% a year ago. The two combined tell us that the volume of this year's crop that isn't suitable for breadmaking is up from less than 2 MMT in 2013 to almost 15.4 MMT this year - a figure above that of the UK's entire wheat crop of the past two seasons and a more than 8-fold increase.

This may go some way towards explaining the scale of the problem that France have on their hands this year, and why they are so apparently willing to undercut UK feed wheat substantially on the international export markets.

A different headache that could also be brewing in the wings is that the French port of Rouen is still the sole delivery point against the Paris future, at least it is until September of next year. Open interest in the front end Nov 14 contract is currently in excess of 7.8 MMT, which is far higher than the port's nominated futures storage capacity. It is theoretically possible therefore that some wishing to make delivery against the contract simply find it impossible to do so as the stores could already be full.

What would happen then? A contract that it could be impossible to deliver against, with a quality specification set by the store, one which potentially changes every year, and we don't know what next year's spec will be yet until after the harvest. That doesn't sound like much of a hedging tool does it?

Meanwhile Germany's BayWa Group said that they had unusually sold around 100 TMT of German milling wheat to France in recent weeks. They are also known to have bought various other origins, including British, to "blend" in with their own sub-standard crop this year.

That immediately gives them a problem in being sellers to Algeria, who's state buyer (OAIC) has already stated that the will not accept wheat from multiple origins in their tenders. They were said to have bought 400 TMT of optional origin milling wheat at around $254.50/tonne cost & freight in tenders this week.

Sharply higher French wheat imports, and reduced demand from non-EU destinations, are likely to push their 2014/15 stocks at the end of the season to a 12-year high of 3.9 MMT, FranceAgriMer said this week. Even that estimate is already starting to look low.

The French analysts today said the the country's 2014 corn harvest had yet to begin, as of Monday. They trimmed the proportion of the crop rated good to very good by one percentage point to 85%, although that's still historically high and far better than only 56% this time a year ago.

At home, the HGCA said that the UK wheat harvest is now 95% done, pegging the average yield at 8.4-8.6 MT/ha. That potentially takes production this year close to the 17 MMT mark. The winter barley harvest is all wrapped up, and there's still 20% of the spring barley crop left to be cut. Spring OSR is now 40% harvested, they added.

Russia's huge grain harvest has now reached the 84.3 MMT mark, off 67.6% of the planned area, including 51.7 MMT of wheat (off 67.5% of plan). The Kazakh harvest stands at just under 6 MMT off 37% of plan, with Ukraine at almost 37 MMT off 68% of the combinable area.

Chicago Grains Tumble On Bearish USDA Report

11/09/14 -- Soycomplex: Beans closed lower across the board as the USDA came out with a higher US 2014 yield and production estimate than the trade expected, along with larger US and world ending stocks for 2014/15. Yields this year were pegged at 46.6 bu/acre, up from 45.4 bu/acre in August and versus the average trade guess of 46.3 bu/acre. Production was forecast at 3.913 billion bushels compared to the average trade estimate of 3.883 billion. "The US season-average soybean price is projected at $9.00 to $11.00 per bushel, down 35 cents on both ends of the range. Soybean meal prices are projected at $330 to $370 per short ton, down $10.00 on both ends of the range," they said. They estimated 2014/15 soybean production in Brazil up 3 MMT from a month ago to a record 94 MMT, with Argentina's crop raised 1 MMT to 55 MMT. World soybean ending stocks in 2014/15 were raised from 85.6 MMT to 90.2 MMT, a record high and well above the 87.24 MMT that the trade was expecting. Chinese imports were increased 1 MMT to a new record 74 MMT. All this data overshadowed the weekly export sales numbers for the new 2014/15 marketing year, which began September 1, which came in at 984,300 MT, with China (658,200 MT) and unknown destinations (105,000 MT) the largest buyers. Sep 14 Soybeans closed at $10.61 1/2, down 9 1/2 cents; Nov 14 Soybeans closed at $9.81 1/2, down 12 1/4 cents; Sep 14 Soybean Meal closed at $426.70, down $16.10; Sep 14 Soybean Oil closed at 31.44, down 14 points.

Corn: The corn market slumped to new lows as the USDA raised their 2014 US yield estimate to a record 171.7 bu/acre. Whist this is not the highest estimate in the market, it was a bushel/acre higher than the trade expected. US production is now forecast at an all time high 14.395 billion bushels versus trade expectations of 14.288 billion. The market is now expecting even further yield and production increases could be in the pipeline next month. China's 2014/15 corn crop estimate was cut 5 MMT to 217 MMT, and Argentina's was trimmed 3 MMT to 23 MMT, whilst Brazil's was raised 1 MMT to 75 MMT. Even so, global ending stocks were still forecast up 2 MMT from their prior estimate to 189.9 MMT. Weekly export sales for the 2014/2015 marketing year, which began September 1, came in at 563,200 MT. "As long as the market continues to put in new lows for the move the technicals have little chance of offering much support. On the cusp of harvest expanding at a much quicker pace and with these numbers and the trade’s future expectations, it’s tough to make much of a bullish case," said Benson Quinn Commodities. The long term historic trend for US corn futures to put in their yearly lows in October is well known. Sep 14 Corn closed at $3.31 3/4, down 7 cents; Dec 14 Corn closed at $3.41, down 4 3/4 cents.

Wheat: The wheat market closed sharply lower as the USDA hiked global production to a record 720 MMT, driven mainly by larger crops in the EU and Ukraine. Lower US exports and increased ending stocks were a feature. US exports were lowered 0.5 MMT to 25 MMT "as competition intensifies with other major exporters". US ending stocks were raised 35 million bushes to 698 million versus 663 million a month ago and the average analysts guess of only a slight increase to 667 million. "Russia’s investment in deep water port capacity and improvements in logistics management are boosting its ability to ship larger quantities of grain. Modernization of grain loading equipment, storage, and rail transportation have eased bottlenecks that caused shipping delays in the past," they noted. "Investments in ports and logistics management have contributed to record shipments. In a typical year, nearly 40 percent of wheat exports are shipped during July-September, immediately following harvest. This year, exports in August were a record 4.2 million tons (20 percent of the total export forecast), up 40 percent from the same month last year. Russia’s wheat and barley exports are both projected at record levels." they added. Weekly export sales came in at a respectable 690,200 MT. Sep 14 CBOT Wheat closed at $5.03, down 15 3/4 cents; Sep 14 KCBT Wheat closed at $5.95 3/4, down 9 1/2 cents; Sep 14 MGEX Wheat closed at $5.99, down 15 cents.

EU Grains Tumble Following Bearish USDA Report

11/09/14 -- EU grains closed lower, helped on their way by a bearish World Supply And Demand Report from the USDA.

The day ended with Nov 14 London wheat down GBP3.00/tonne to GBP114.00/tonne, Nov 14 Paris wheat was EUR3.25/tonne lower at EUR164.00/tonne, Nov 14 Paris corn was down EUR4.00/tonne EUR138.75/tonne and Nov 14 Paris rapeseed was EUR2.00/tonne easier at EUR321.25/tonne.

The USDA raised their global wheat production estimate by almost 4 MMT to a record near 720 MMT, largely due to a 3 MMT hike for the EU to just shy of 151 MMT, close to the all time high set in 2008/09. Ukraine's crop was also raised 2 MMT to 24 MMT.

World wheat ending stocks in 2014/15 were raised from the near 193 MMT forecast last month to nearly 196.4 MMT, which was more than the 193.75 MMT expected.

"Russia’s wheat and barley exports are both projected at record levels. Corn exports are also expected to remain strong, although down from last year’s record," they said.

All four of Europe's largest wheat producing nations all saw their production estimates rise.

The French crop is now estimated at 39.1 MMT versus 38.7 MMT a month ago and last year's 38.5 MMT. Germany's crop was increased to 26.15 MMT from 25.6 MMT, the UK's was upped to 16.25 MMT from the 15.4 MMT forecast a month ago and Poland's wheat crop was now estimated at 10.25 MMT versus 9.6 MMT in August.

The EU corn crop was also increased to 68.35 MMT from 67.05 MMT a month ago and 64.19 MMT last year. The EU barley crop was raised from 56.2 MMT to 56.98 MMT, with production in the UK increased from 5.9 MMT to 6.15 MMT.

Meanwhile the EU rapeseed crop was forecast at 23.40 MMT versus 22.65 MMT a month ago and 21.1 MMT last year.

On the export front, the EU is now seen shipping out 26 MMT of wheat in 2014/15, up 1 MMT from a month ago, although still down almost 6 MMT versus last season.

Wheat ending stocks in Europe are now forecast at 15.1 MMT versus a little under 13 MMT a month ago and 10.2 MMT at the end of last season. These would be the largest since 2009/10.

Algeria's Ag Ministry estimated their 2014 grain crop at 3.4 MMT versus 4.9 MMT last year. The USDA raised their forecast for Algeria's wheat imports from 6 MMT to 7 MMT, although that's still a little under the 7.5 MMT that they bought in 2013/14.

"Weather data confirms that dryness occurred in eastern Algeria during the sensitive reproductive stage for wheat. While the period of dryness was rather brief, it occurred when the crops were flowering and at their most moisture-dependent phase," said the USDA.

Chicago Markets Mixed Heading Into USDA Report

10/09/14 -- Soycomplex: Beans closed mixed ahead of tomorrow's upcoming USDA report. It looks like most have positioned themselves where they want to be heading into that, as there wasn't a great deal of change in prices at the end of the day and the day's trading range was relatively narrow, on beans at least. Meal was a bit more volatile, especially on the soon to expire Sep 14 contract. The new crop benchmark Nov 14 soybean contract managed to trade as high as $9.99/bushel, but couldn't break through the $10/bu barrier, which could be significant the longer it holds below that mark. "News today remained bearish with yield reports coming out of the south monstrous and weather threats seen nominal at best," said Benson Quinn Commodities. They predict a cautious increase in US soybean yields tomorrow, up from 45.4 bu/acre in August to around 46.3 bu/acre this time round, with the real "meat in the sandwich" saved up for the October WASDE report when the USDA will have much more actual harvest data to go on. Yields could eventually end up around the 47-48 bu/acre mark it is thought. The average trade estimate for US soybean production tomorrow is 3.883 billion bushels, with US ending stocks rising from 136 million bu in 2013/14 to 453 million in 2014/15. World carryout in 2014/15 is seen at a record 87.24 MMT. Sep 14 Soybeans closed at $10.71, down 5 1/2 cents; Nov 14 Soybeans closed at $9.93 3/4, up 1 cent; Sep 14 Soybean Meal closed at $442.80, down $10.90; Sep 14 Soybean Oil closed at 31.58, down 1 point.

Corn: The corn market closed around 1-2 cents firmer heading into tomorrow's WASDE report. As with beans, it looks like the trade has already sorted out where it wants to position itself for this event. Last week's excitement over the possibility of a yield damaging freeze proved to be short lived. "The potential for a significant frost/freeze event tends to be relegated to areas not considered key corn and soybean producing regions in extreme NW regions of the corn belt," said Benson Quinn Commodities. The average trade guess for tomorrow's USDA report sees US corn yields at 170.74 bu/acre, with production at 14.29 billion bushels. The USDA's August estimates were 167.4 bu/acre and 14.032 billion bushels. US corn ending stocks are seen rising from 1.19 billion bushels in 2013/14 to just over 2 billion in 2014/15. World corn carryout at the end of 2014/15 is forecast at an average of 190.34 MMT versus the USDA's August estimate of 187.82 MMT. AGPM today estimated the 2014 French corn crop at a record 17.25 MMT. FranceAgriMer estimated French 2014/15 corn ending stocks at 3.9 MMT, the highest in 18 seasons and up 68.4% versus 2013/14. The Rosario Grains Exchange estimated Argentina's 2014/15 corn plantings at 3.7 million hectares, down 700,000 hectares versus 2013/14. China's Ag Ministry said that rain in the last 10 days of August had ended drought in northern and northeast China, which may ultimately boost corn yields there. Sep 14 Corn closed at $3.38 3/4, up 2 1/2 cents; Dec 14 Corn closed at $3.45 3/4, up 1 1/2 cents.

Wheat: The wheat market closed sharply lower. Tomorrow's USDA report is thought likely to be more about corn and soybeans than it is for wheat, although we've said that before and been wrong! The average trade estimate for US wheat ending stocks in 2014/15 is 667 million bushels, little different to last month's 663 million. World 2014/15 ending stocks are seen at 193.75 MMT, from within a range of estimates of 189.42-203.00 MMT, and again little changed from the USDA's August estimate of 192.96 MMT. Russia's harvest juggernaut rumbles on, they've now produced 83.6 MMT of grains this year off barely more than two thirds of the combinable area. They continue to be very active in the export market. Rusagrotrans said that the country exported a record 4.7 MMT of grains in August. Local wheat prices in Russia are said to be holding up quite well on the back of strong demand, from both the export and domestic market, and the weak rouble. Russian feed wheat prices are said to be being supported by good interest from the expanding domestic livestock sector following the introduction of sanctions by the West. Russia's Ag Ministry estimated the country's 2014/15 grain exports at 30.0 MMT, up 18.6% versus 2013/14 exports of 25.3 MMT. FranceAgriMer said that French wheat exports to non-EU destinations would drop by more than a third to only 8 MMT in 2014/15. They see French wheat ending stocks rising to a 12 year high of 3.9 MMT, an increase of two thirds versus 2013/14. Portions of Canada saw killing frost overnight, according to Benson Quinn Commodities. How much damage has been done remains to be seen. Sep 14 CBOT Wheat closed at $5.18 3/4, down 8 3/4 cents; Sep 14 KCBT Wheat closed at $6.05 1/4, down 7 3/4 cents; Sep 14 MGEX Wheat closed at $6.14, down 10 1/4 cents.

EU Grains Set New 4-Year Lows

10/09/14 -- EU grains closed lower across the board, and at fresh 4-year lows on London and Paris wheat, along with Paris corn.

The day ended with Nov 14 London wheat down GBP1.05/tonne to GBP117.00/tonne, Nov 14 Paris wheat closed EUR2.00/tonne lower at EUR167.25/tonne, Nov 14 Paris corn was also down EUR2.00/tonne to EUR142.75/tonne, whilst Nov 14 Paris rapeseed was EUR0.75/tonne easier at EUR323.25/tonne.

The trade is bracing itself for what is expected to be a bearish USDA report tomorrow, which is expected to show record 2014/15 global production of wheat, corn and soybeans, with ending stocks of all three thought likely to rise again from a month ago.

Few are expecting anything bullish, even if the USDA's capacity to spring a surprise borders on the legendary. One or two are maybe hoping that the report might not be as bearish as anticipated, which could spark a rally.

Meanwhile there's a another huge corn crop on the way, not just in the US but also in Europe and the Black Sea.

French corn growers group AGPM forecast the crop there this year at a record 17.25 MMT, up 17% on last year's 14.73 MMT.

The French corn crop has been rated consistently highly all year, FranceAgriMer reported on Friday that 86% of the crop was in good to very good condition versus only 55% a year ago.

Today they said that only 46% of this year's French wheat crop has hagberg levels of 220 or higher, the standard demanded by the majority of the traditional North African export homes. Last year the proportion was 99%. Specific weights are also down this year to an average 76.3 kg/hl from 77.6 kg/hl in 2013. The average protein content in French wheat this year is said to be 11.1% versus 11.2% a year ago.

They also said that only 59% of this year's crop was rated of good to very good quality for bread-making as opposed to 95% a year ago.

This leaves France with an unusually large volume of feed wheat to sell this year, something which they have wasted little time in bringing to market, understandably considering that it now looks like there's a record corn crop almost ready to harvest.

FranceAgriMer said that total French wheat exports would fall 15.4% this season, with those to non-EU destinations seen down 34.5% to a seven year low of only 8 MMT, largely due to these quality issues.

Russia said that it had now harvested 83.6 MMT of its 2014 grain crop off only 66.8% of the planned area. The total includes 51.3 MMT of wheat, 18.8 MMT of barley and 1.9 MMT of corn.

Russia are said to be lining up a deal to export wheat to Iran in exchange for fruit, vegetables and oil following the recent introduction of EU and US sanctions against it. That could cut demand for German wheat which has made significant inroads to the Iranian market in the last 12 months since sanctions against them were eased.

EU Rapemeal Prices

Chicago Grains Continue To Slide On Harvest Pressure, Record Production Forecasts

09/09/14 -- Soycomplex: Beans closed below $10/bu on the benchmark new crop Nov 14 contract, and indeed on the Jan 15 as well, to set fresh contract lows. So too did Dec 14 meal, although the soon to expire old crop Sep 14 manages to defy gravity. The USDA announced 120,000 MT of US beans sold to unknown for 2014/15 shipment, but that's just routine business. The trade is acknowledging that there's a deluge of new crop beans on the way. Early yields from the south remain highly favourable. Anecdotal reports suggest the killer combination of higher pod counts, containing larger than normal beans, thanks to a wet and cooler than normal summer. The crop looks so good one Iowa farmer estimated that this year 2,300 beans will weigh one pound (0.45 kilogram) on his farm, compared with 3,000 in a normal year, according to a report on Bloomberg. Private production estimates are getting ever close to a bin-busting 4 billion bushels. Linn Group today estimated the US 2014 bean crop at 3.959 billion bu, up from a previous estimate of 3.849 billion and nearly 4% above the USDA's August estimate of 3.812 billion. The USDA will update us in what is looking like a very interesting September report tomorrow. Not only is the US crop now looking almost certain to be huge, they're about to start planting another potentially record crop in Brazil, followed up by one in Argentina too later in the year. In Brazil, the Parana Secretary of Agriculture said that growers there would plant a record large soybean area of in excess of 5 million hectares this year. Production could be up 18% in the state to 17.1 MMT if the weather co-operates, they said. No wonder then that the trade remains highly sensitive to any sign of a slowdown in demand from China, who are expected to account for two thirds of all global soybean trade in 2014/15. Conab today released their final 2013/14 Brazilian crop production estimates, pegging the soybean crop at 86.12 MMT versus a previous estimate of 85.7 MMT. AgroConsult estimated Brazil’s 2014/15 soybean area at 31.6 million ha, up 5% versus 30.1 million a year ago. Sep 14 Soybeans closed at $10.76 1/2, down 14 1/4 cents; Nov 14 Soybeans closed at $9.92 3/4, down 15 3/4 cents; Sep 14 Soybean Meal closed at $453.70, up $7.50 (new crop was around $4-5 easier); Sep 14 Soybean Oil closed at 31.59, down 44 points.

Corn: The corn market closed around 3-4 cents lower as the threat of a perceived frost risk was pared back some more. As with beans, there's a giant US corn crop coming by the looks of things, with Linn Group today estimating that at 14.671 billion bushels versus a previous estimate of 14.518 billion and almost 5% higher than the USDA's 14.032 billion. Last night's crop ratings of 74% good to excellent in the US corn crop were said to be the highest on record at this time. Israel bought 80,000 MT of Ukrainian corn in a tender. Conab estimated the final 2013/14 Brazilian corn crop at 79.91 MMT versus a previous estimate of 78.55 MMT. The French Ministry estimated their 2014 corn crop at 16.374 MMT, up 8.9% versus 15.030 MMT in 2013. The corn harvest in Russia and Ukraine is just getting going. Global demand for US corn remains limited by strong competition from the likes of the Black Sea, not to mention a buoyant US dollar and a much larger than normal supply of feed wheat on the market this year. The old adage that ultimately the cure for low prices is low prices might yet take some time to work its magic. The Parana Secretary of Agriculture, who is forecasting record high soybean plantings this year, is also estimating full season corn sowings at a record low of only 572,600 ha in the state, almost 9 times smaller than the area being given over to soybeans in 2014/15 and a 14% decline versus last year. "Depending on the eventual safrinha corn acreage, approximately 10% to 20% of the corn in Parana will be full-season production and 80% to 90% will be safrinha production," noted Dr Cordonnier. "New lows for the move added to the bearish stance that already exists in the technical structure. Momentum studies point to a market that looks for the next downside objective and works its way in that direction. The corn market is migrating into oversold territory, but not grossly oversold," said Benson Quinn Commodities. Sep 14 Corn closed at $3.36 1/4, down 3 cents; Dec 14 Corn closed at $3.44 1/4, down 4 cents.

Wheat: The wheat market closed generally around 5-6 cents lower. "Frost and freezing conditions developed early this morning in western Alberta and central Saskatchewan, but severe damage to the wheat crop is not expected. Near-average growing degree days this season would indicate that spring wheat is virtually ripe and ready for harvest. Had freezing temperatures occurred much earlier, grain quality may have been impaired," said Martell Crop Projections. "Northern spring wheat in upper North Dakota and Montana are expecting frost and freeze conditions both Thursday and Friday mornings. Freezing conditions may not be damaging as wheat is virtually ripe and ready for harvest. Delays in harvesting have resulted from cool summer temperatures and ample rainfall that also increased the yield potential. North Dakota, the US second leading wheat state, is expected to make 47 bushels per acre in the new harvest, setting a new record for spring wheat yields," they added. "Quality and transportation remain the critical issues with the trade at the moment, with the portion of the (US spring wheat) crop that came off this weekend not as poor as many had feared as far as vomitoxin and falling numbers," said Benson Quinn Commodities. Israel bought 50,000 MT of Ukrainian feed wheat in a tender. Japan seeks 109,800 MT of milling wheat for Oct-Nov shipment in it's regular weekly tender. As normal, the business is expected to be split between US, Canadian and Australian origin wheat. Conab estimated the 2014 Brazilian wheat crop at 7.67 MMT versus a previous estimate of 7.50 MMT. The French Ministry estimated their 2014 soft wheat crop at 37.527 MMT, up 1.8% from 36.867 MMT a year ago. Russia said that it had now harvested 83 MMT of grains so far this year off 66% of the planned area. Wheat accounts for 51.1 MMT of that total, also off 66% of plan. Sep 14 CBOT Wheat closed at $5.27 1/2, down 6 cents; Sep 14 KCBT Wheat closed at $6.13, down 12 cents; Sep 14 MGEX Wheat closed at $6.24 1/4, down 5 3/4 cents.

EU Grains Set New Lows

09/09/14 -- EU grains closed mostly lower. Paris wheat ended below long term front month support at EUR170/tonne for the first time in more than 4 years. London wheat also set a new more than 4-year low, as did Paris corn.

The day ended with Nov 14 London wheat down GBP1.45/tonne at GBP118.05/tonne, Nov 14 Paris wheat fell EUR1.00/tonne to EUR169.25/tonne, Nov 14 Paris corn was down EUR3.00/tonne to EUR144.75/tonne and Nov 14 Paris rapeseed was EUR0.75/tonne weaker at EUR324.00/tonne.

The 2014 Russian harvest now stands at a rather portly 81.6 MMT off "only" 64.4% of the anticipated area, with average yields up almost 19% at 2.72 MT/ha.

Wheat accounts for 50.3 MMT of that total, off 64.1% of plan, with barley adding a further 18.4 MMT (off 78.8% of plan). They've also now harvested 1.7 MMT of corn off 11.7% of the combinable area.

Kazakhstan's harvest meanwhile is now 27.8% done, producing a crop of 4.4 MMT so far.

In Ukraine, the 2014 early grain harvest is complete, and progress has now moved onto spring planted crops such as corn. The total grain harvest so far amounts to 36.3 MMT, off 67% of the planned area. That total includes 431 TMT of corn off 2% of the anticipated area, along with 2.6 MMT of sunseed off 33% of plan.

The Ukrainian Hydrometeorological Centre cut their forecast for the country's corn production this year from 29 MMT to 28 MMT, although that's still the second highest ever.

The Ukraine Ag Ministry said that the country would produce 58.5 MMT of grains this year, a 7% reduction versus the 2013 record crop. They said that the country's export potential is still a very healthy 32.3 MMT, including 9 MMT of wheat, 3.1 MMT of barley and 20 MMT of corn.

Whilst UK growers are attempting to ignore current low domestic prices, spare a thought for your cash-strapped counterparts in Ukraine.

Agritel report local prices in Ukraine are around EUR141/tonne for milling wheat (GBP112.80/tonne); EUR121/tonne for feed barley (GBP96.80/tonne); less than EUR100/tonne for new crop corn (GBP80/tonne); EUR257/tonne for rapeseed (GBP205.60/tonne). And these are delivered prices!

The option to simply sit tight and wait for a better day isn't generally one that's open to many Ukraine grain producers. Lack of adequate on-farm storage, and a pressing need for cash, mean that many have to take whatever is on offer straight off the combine. Meanwhile the plunge in value of the domestic currency means that the cost of basic resources such as agrochemicals, and the cost of gas, are up between 20-50% on last year, say APK Inform.

Elsewhere, the Czech harvest is now forecast at 7.7 MMT, a 9.1% rise on last year. That total includes 5.2 MMT of wheat (+10.6%), 1.95 MMT of barley (+21.9%) and 1.51 MMT of OSR (+4.9%).

France’s Farm Ministry increased their 2014 soft wheat crop production estimate from 37.3 MMT to 37.5 MMT, now up nearly 2% from last year. Corn production is now seen up from 15.1 to 16.0 MMT from last month (up 9% versus 2013).

Israel were said to have bought 80,000 MT of Ukrainian corn along with 50,000 MT of Ukrainian feed wheat in a tender.

"Frost and freezing conditions developed early this morning in western Alberta and central Saskatchewan, but severe damage to the wheat crop is not expected. Near-average growing degree days this season would indicate that spring wheat is virtually ripe and ready for harvest," said Martell Crop Projections.

Don't Believe The (Rapemeal) Hype

Chicago Grains Mixed, Frost Fears Ease - At Least For Corn and Soybeans

08/09/14 -- Soycomplex: Beans closed lower on all but the front month as frost fears eased, with weather models for the upcoming week trending warmer than they had been. A once again stronger US dollar was also a bearish factor. So too were concerns that China's economy is slowing, which put crude oil under pressure, dragging WTI to an 8-month low and Brent under $100/barrel for the first time in a year. China's July soybean imports were just over 6 MMT, down 19% versus 7.47 MMT in June and 5% lower than a year previously. They were however confirmed as buying 120 TMT of new crop beans by the USDA today under the daily reporting system. Weekly export inspections came in at 173,732 MT, of which 78,588 MT was for the new 2014/15 marketing year. The trade is starting to position itself for Thursday's upcoming WASDE report from the USDA. That is expected to forecast 2014/15 global soybean ending stocks at a record 87.24 MMT, up from the 85.62 MMT estimated last month. A Bloomberg survey has US 2014 soybean yields at an average of 46.3 bu/acre (record). The USDA were at 45.4 bu/acre in August. Production is estimated at 3.894 billion bushels (also a record) versus the USDA's 3.812 billion. Agroconsult estimated Brazil’s 2014/15 bean crop at a record 95.1 MMT versus a previous estimate of 94.0 MMT. They have Argentina's next crop at 56.6 MMT, which is also an all time high. After the close the USDA said that 72% of the US soybean crop is rated good to excellent, the same as a week ago, although there was a one point increase in the excellent category. They said that 12% of the crop is dropping eaves versus 17% for the 5-year average. Sep 14 Soybeans closed at $10.90 3/4, up 5 1/4 cents; Nov 14 Soybeans closed at $10.08 1/2, down 13 cents; Sep 14 Soybean Meal closed at $446.20, up $10.10; Sep 14 Soybean Oil closed at 32.03, down 32 points.

Corn: The corn market closed around 7 cents lower as Friday's "freeze premium" was taken back out again. As with beans, the firm US dollar was also a negative influence given that large exports will be needed to shift what is expected to be a record US corn crop this year. Exactly how large that will be the USDA are due to tell us on Thursday. A Bloomberg survey put average yields this year at a well above trendline 170.7 bu/acre. The USDA lined up at 167.4 bu/acre back in August. Various private estimates have production this year at a record 14.4-14.6 billion bushels, with the odd estimate even higher. The USDA were a fraction over 14 billion bushels last month. World 2014/15 ending stocks are seen rising from the 187.82 MMT forecast in August to 190.34 MMT this time round. Weekly US corn export inspections were good today at 1.197 MMT, up from 884 TMT the previous week and ahead of expectations for sales of 825,000–950,000 MT. APK Inform forecast Ukraine's 2014/15 corn exports at 26.3 MMT, a 15% fall versus 2013/14, although still a healthy number and the second highest on record. After the close the USDA said that US corn crop conditions held steady at 74% good to excellent, up sharply on only 54% this time a year ago. Maturity still lags though at 15% versus 26% for the 5-year average. They said that 69% of the crop is dented, slightly behind 74% normally at this time, with 95% of the crop at or past the dough stage versus 94% on average. This lateness in maturity might just be enough to continue to jangle one or two nerves ahead of harvesting in the Upper Midwest, we will probably see at least one or two more frost scares yet. For now though the trade seems to view the areas most likely to be hit as relatively minor corn growing regions - northeastern Montana and western North Dakota near the Canadian border. Sep 14 Corn closed at $3.39 1/4, down 7 1/4 cents; Dec 14 Corn closed at $3.48 1/4, down 7 3/4 cents.

Wheat: The wheat market closed a bit firmer. The areas where frost is forecast might not be big corn or soybean producing regions, but there's plenty of spring wheat grown there, not to mention across the border in Canada. Harvesting of that is only 58% complete nationally, versus 74% normally, the USDA said tonight. In North Dakota the harvest is only 42% done compared to 74% for the 5-year average. Spring wheat crop conditions were cut by 3 percentage points from last week to 60% good to excellent. That makes for a 9 percentage point reduction across the past 4 weeks. Winter wheat planting for the 2015 harvest was said to be 3% complete versus 4% on average at this time. Morocco are tendering for up to 386,600 MT of US soft wheat, along with 330,000 MT of US durum wheat, all for Dec shipment. Iran bought 200,000 MT of optional origin wheat. Algeria seeks 50,000 MT of optional origin milling wheat for Dec shipment. ABARES estimated the 2014/15 Australian wheat crop at 24.23 MMT versus a previous estimate of 24.59 MMT. IKAR said Russia had exported a record 4.7 MMT of grain in August. Most of that, 4.2 MMT, was wheat (also a record). The Ukraine Ag Ministry said that the country had exported 5.98 MMT of grain between July 1st – Sept 8th, up 44% from a year ago. APK Inform said that the 2014 Ukraine wheat harvest would total 23.3 MMT, a 5% increase on a year ago. They see barley production up 18% to 8.9 MMT. They forecast winter grain plantings in Ukraine at 8.26 million hectares, down only marginally on last year's 8.31 million. They see winter wheat plantings at 5.98 million ha (down 1.6%) and those of winter barley at 1.11 million ha (up 0.3%). They did suggest though that up to 35% of land traditionally planted with winter grains in the troubled Donetsk and Lugansk regions may go unseeded. Trade forecasts for Thursday's USDA world wheat ending stocks in 2014/15 are seen at an average 193.75 MMT versus 192.96 MMT last month. Weekly US wheat export inspections of 530,773 MT were in line with the expected 550-675 TMT. Sep 14 CBOT Wheat closed at $5.33 1/2, up 2 cents; Sep 14 KCBT Wheat closed at $6.25, up 5 1/4 cents; Sep 14 MGEX Wheat closed at $6.27, up 3/4 cent.

Demise Of Sterling Helps London Wheat

08/09/14 -- EU grains closed mostly lower, although London wheat got a little boost from a sharply weaker sterling.

The day ended with Nov 14 London wheat up GBP0.50/tonne to GBP119.50/tonne, Nov 14 Paris wheat was EUR1.75/tonne lower at EUR170.25/tonne, Nov 14 Paris corn was down EUR1.75/tonne EUR147.75/tonne and Nov 14 Paris rapeseed was EUR0.50/tonne easier at EUR324.75/tonne.

The pound crashed, suffering its largest one day drop against the dollar in a year, after news that the Scottish "Yes" campaign is now leading in the polls with only 10 days left to go to their vote on independence. It now stands at its weakest against the US currency since November.

In other markets, Brent crude fell below $100/barrel for the first time in a year, and WTI crude hit an 8 month low on a slowdown in Chinese imports.

The German stats office said that the country had exported 15.6 MMT of grains in 2013/14, a 14% rise on a year previously. Exports within the EU were down from 8.4 MMT to 7.1 MMT, but shipments outside the bloc were up sharply, from 5.2 MMT to 8.5 MMT.

Wheat exports showed significant advancement, up from 7.4 MMT in 2012/13 to 10.5 MMT in 2013/14.

German grain imports also rose, up from 9.1 MMT to 9.8 MMT, including a sharp rise in incoming corn shipments, up from 2.1 MMT to 3.0 MMT.

The USDA's FAS in Germany estimated this year's grain crop at 51.8 MMT, up 8.4% versus a year ago. Wheat accounts for 27.9 MMT of that total, with barley a further 11.6 MMT.

APK Inform said that Ukraine seaports shipped out 540 TMT of grains in the first week of the month, down from almost 664 TMT the previous week. Wheat (474 TMT) accounted for the majority of the volume.

The Ukraine analysts also forecast this year's grain crop at 60.6 MMT, second only to last year's 63.1 MMT. They see this year's wheat crop up 5% to 23.3 MMT, and barley output up 18% to 8.9 MMT. Corn production will fall 15% to 26.3 MMT, they estimate.

They also forecast Ukraine grain exports in 2014/15 at 30.5 MMT, a 6% decline on last season, but a very respectable total nevertheless.

The Ukraine Ministry said that winter rapeseed planting is 74% complete. Winter wheat planting is just about underway at 1% done on 53k hectares, they added.

In other news, French analysts Strategie Grains raised their forecast for the 2014/15 EU rapeseed crop from 22.9 MMT to 23.2 MMT, a 10% increase on last year, and a record volume.