EU Grains End Mixed, Helped By Weak Currencies
24/06/16 -- EU grains finished mixed, and in fact mostly a bit higher despite the shock UK "leave" vote on Europe.
The day ended with Jul 16 London close up GBP4.50/tonne at GBP109.00/tonne, Sep 16 Paris wheat was up EUR1.25/tonne at EUR160.25/tonne, Aug corn was EUR10.75/tonne lower at EUR175.25/tonne and Aug 16 rapeseed was down EUR4.25/tonne to EUR352.00/tonne.
The UK referendum vote took the market by surprise, sending the pound tumbling to levels not seen since the 1980's against the US dollar and a one-year euro low also. The euro itself was weakened by the news, which may explain some of the strength displayed in Paris grains later in the day.
Some of that may also come from a continuation of the decline in French crop conditions as seen by FranceAgriMer. They cut good to very good French winter wheat ratings 4 percentage points today, down to 71% from 75% a week ago and versus 81% this time last year.
Winter barley conditions fell even more, down 6 points to 67% good to very good, and compared to 85% this time last year. Corn conditions were down 4 points to 69% (83% last year).
Few saw the UK referendum result coming, with 6/1 apparently available with the bookies for a successful "leave" vote as lat as 11pm Thursday night.
So, where do we go from here?
"Currency volatility has been a trend throughout most of this season and one of the main factors driving markets," say the HGCA. "It is likely that this volatility will continue in the short-medium term and therefore the importance of keeping an eye on markets has never been so essential," they add. Wise words.
A weak sterling, and euro, won't harm exports. These are already only 1% behind last year's record levels at 30.66 MMT for soft wheat, including the latest 556,000 MT worth added this week.
It should also help keep out cheap foreign imports of corn, spurring more consumer demand for feed wheat. At least that's the theory.
Despite having the strongest case from a fundamental supply and demand viewpoint rapeseed continues to fall, following soybeans and palm oil for now.
Nogger's Blog And "The Results"
The blog is still here as you can see under the slightly less memorable http://nogger-noggersblog.blogspot.co.uk/ address.
Perhaps even more importantly anyone sending me emails to anything@nogger.co.uk will find that these are not getting through, so please delete any such email addresses that you have in your contacts and stick with the old one(s) @ntlworld or @agtrader.co.uk will suffice.
* these have involved me doing nothing about the reminders that this domain was about to expire, and assuming that my auto-renew facility would sort that out. Well it would, were it not for the case that my old credit card also expired at the end of May and so the new one didn't "auto-update" did it. It auto failed.
And so my domain expired. No problem I thought. I'll simply take it out again. No chance. Some punter called Jamie Dallas of 11 Meadow Road London SW8 1QD has already taken it. In like shit off a shovel.
Short of writing to Jamie begging him to sell me my own domain back and/or playing the "I've not been very well" card it's a situation I'm stuck with.
Still, I hope that Jamie likes pizza as he's going to be getting rather a lot of it across the next few weeks, and taxis at all hours.
Still, the results are in ladies and gentlemen, as I genuinely haven't been very well this past few months as some of you know.
The treatment has been very successful. But (you knew that word was coming didn't you?), there are still one or two areas of concern. "We can never really say anything has gone away for 100% sure" so it's fingers crossed and come back for another scan in 3 months time.
If the "one or two areas of concern" haven't got any bigger/brighter during this time, or reappeared anywhere else, then we might me OK. Possibly.
If they have then you're buggered son. Still, keep up the good work and the nil by mouth until further notice. Next...
Chicago Grains End Lower
23/06/16 -- Soycomplex: Soybeans closed lower on unease ahead of the UK vote on Europe. Weekly export sales of 660,690 MT for old crop and 661,500 MT of new crop were in line with expectations. Argentina’s Ag Ministry had raised their 2015/16 Soybean crop outlook to 58.0 MMT. Brazil’s Abiove lowered its 15/16 crop estimate 0.6 MMT to 97.3 MMT today. Jul 16 Soybeans settled at $11.24 1/2, down 13 cents; Nov 16 Soybeans settled at $11.01 1/2, down 15 1/4 cents; Jul 16 Soybean Meal settled at $383.20, down $7.80; Jul 16 Soybean Oil settled at 31.75, up 20 points.
Corn: The corn market closed lower as part of a general "risk-off" moved ahead of the UK vote on European membership. Weekly export sales of 870,744 MT on old crop and new crop sales of 550,318 MT were in line with trade ideas. Private exporters announced private exporters announced that 138,000 MT of US corn was sold to South Korea under the daily reporting system. The Buenos Aires Grain Exchange increased their ideas on Argentine corn production by 3 MMT, raising that from 25 MMT to 28 MMT. Jul 16 Corn settled at $3.87 1/4, down 5 3/4 cents; Sep 16 Corn settled at $3.92 1/2, down 5 3/4 cents.
Wheat: The wheat market closed lower in line with the rest of the sector. Weekly export sales were fair at 462,700 MT. Better than expected yields are what is getting reported back from the early winter wheat harvest on the Plains. Japan purchased 59,150 MT of US wheat, along with a combined 60,838 MT from Australian and Canadian sources in its regular weekly tender. European wheat closed lower again ahead of the referendum results form the UK on EU membership. Jul 16 CBOT Wheat settled at $4.54 1/4, down 4 1/2 cents; Jul 16 KCBT Wheat settled at $4.27 3/4, down 5 1/4 cents; Sep 16 MGEX Wheat settled at $5.31, down 3 3/4 cents.
Pound Hits Lowest Since 1985 Vs USD As UK Votes "Leave"
The day ended with Jul 16 London close down GBP1.50/tonne at GBP104.50/tonne, Sep 16 Paris wheat was down EUR2.50/tonne at EUR159.0/tonne, Aug corn was EUR1.00/tonne easier at EUR176.00/tonne and Aug 16 rapeseed was down EUR2.75/tonne to EUR356.25/tonne.
As I write this the morning after the night before, the market was wight to be nervous, and the bookies were wrong to be offering 3/1 about a successful "Leave" vote over "Remain", with the former claiming a 52:48 point win.
Cameron has decided that he can't really continue to lead a country out of a Europe that he so vehemently campaigned to stay in, and will step down by October.
The pound has crashed below 1.40 - to levels not seen since 1985 - against the dollar this morning, having closed at 1.50 last night. It is also sharply lower against the euro.
In theory that should provide some support for London wheat as it improves our export competitiveness. Last night's close in London was the lowest for a front month since April.
The news is bearish for grains in general though, and the overnight Globex market is a sea of red this morning. Change is one thing that commodities don't like, and this certainly falls under that category heading that's for sure.
EU Grains Mixed, Brexit Vote Looms
The market seems a bit more relaxed about the UK referendum tomorrow, and confidence is growing that the "stay" vote will prevail, preventing a drop in value of sterling and a commodity sell-off.
Algeria were reported as buying 500,000 MT of optional origin milling wheat in their tender, with Baltic supplies getting a mention as being some of the cheapest offered.
Jordan are back in the market for 100,000 MT each of milling wheat and feed barley.
The results of the UK referendum are expected "around breakfast time" Friday morning, according to the BBC.
According to the oddschecker website the bookies are lining up around 3/1 against a "Leave" vote being successful and around 1/4 for a "Remain" vote to win the day.
A "Remain" win could see further sterling appreciation which might harm London wheat prices further.
Chicago Grains Tumble
21/06/16 -- Soycomplex: Beans closed with fairly steep losses for a second day, especially on new crop. Last night's crop progress report showed unchanged good to excellent conditions whereas a 1-2 point decline had been expected. Under the daily reporting system, private exporters announced that 132,000 MT of US soybeans were sold to China for 2016/17 delivery, and an additional 126,000 MT was sold to unknown destinations. Jul 16 Soybeans settled at $11.33 1/4, down 10 1/4 cents; Nov 16 Soybeans settled at $11.10 3/4, down 22 cents; Jul 16 Soybean Meal settled at $393.30, down $9.40; Jul 16 Soybean Oil settled at 31.36, down 28 points.
Corn: The market closed sharply lower. An improved weather outlook was all it took to encourage some longs to exit the market. Believe it or not, recent prices have been the highest available to the grower d=for 12 months, so some liquidation should not come a surprise. There's still a long way to go. Russia reported that their corn crop for the 2016 harvest is 93.8% planted on 2.8 million ha. South Korea's KFA are in the market tendering for 126,000 MT of optional origin corn. Jul 16 Corn settled at $3.96 1/4, down 25 cents; Sep 16 Corn settled at $4.02 1/4, down 24 1/2 cents.
Wheat: The wheat market finished lower across the board. Russia reported spring wheat plantings complete on 13.6 million ha, which is 103.3% of the plan. Jordan cancelled on their tender to import 100,000 MT of optional origin milling wheat and immediately re-tendered for the same, as well as 100,000 MT of optional origin barley. Algeria are in the market for 50,000 MT of optional origin soft wheat. There are reports of early harvesting having started in Ukraine/Crimea. Jul 16 CBOT Wheat settled at $4.58 1/2, down 14 1/2 cents; Jul 16 KCBT Wheat settled at $4.35, down 16 1/4 cents;Sep 16 MGEX Wheat settled at $5.34 1/2, down 9 1/4 cents.
EU Grains Lower As Harvest Nears
21/06/16 -- EU grains closed lower across the board, with Jul 16 London wheat down GBP1.10/tonne at GBP106.00/tonne, Sep 16 Paris wheat falling EUR1.75/tonne at EUR162.50/tonne, Aug corn was EUR4.25/tonne lower at EUR175.25/tonne and Aug 16 rapeseed was down EUR7.25/tonne to EUR359.75/tonne.
This was the lowest close for London wheat since Jun 1, and in Paris it was a match for the lowest wheat close since May 19.
A growing belief that the UK will vote to remain in Europe on Thursday is calming a few nerves, seeing sterling stabilise, and bringing back a bit more willingness for investors to take a risk on commodities.
Ever-nearing harvest pressure outweighs concerns over French crop conditions. Sharply weaker US corn prices today were a negative for feed wheat, as well as corn.
A Reuters survey estimated the French soft wheat crop at 37.5-38.5 MMT versus 41 MMT last year, reflecting reduced yields due do pests and disease damage because of persistent wet weather.
On Monday, MARS pegged French yields at 7.32 MT/ha, down 6% versus 7.79 MT/ha a year ago. The French Ministry however estimate plantings this year to be up on 12 months ago and at the highest levels since before World War 2.
That, combined with the old adage that rain makes grain, might temper production losses - meaning that it is quality not quantity that is compromised. I'd plump for a French crop of closer to 39.5 MMT this year.
Germany has seen some of the wetness that has afflicted most of France in southern areas, but has been dry in the north. The German farm cooperative currently estimate overall production down 2.9% at 25.77 MMT.
Chicago Slides - Weather Dominates
20/06/16 -- Soycomplex: Soybeans closed with some fairly steep losses. Weekly export inspections came in at 314,990 MT. After the close the USDA cut US soybean good to excellent crop ratings one point to 73% (65% a year ago). Emergence is at 89%, up 10 points on the week and 5 above the 5-year average. Planting is 96% complete. US weather holds the key. "The forecast is hopeful for Midwest rainfall this week. A series of short-wave disturbances would track west-to-east across the northern United States, promoting periods of scattered showers and thunderstorms. These would be “hit-or-miss” showers with a 40-60% chance of occurrence. Near normal Midwest temperatures are expected to resume, as warm, humid air is suppressed by a cool Canadian air mass descending from Canada," said Martell Crop Projections. Jul 16 Soybeans settled at $11.43 1/2, down 16 cents; Nov 16 Soybeans settled at $11.32 3/4, down 15 1/2 cents; Jul 16 Soybean Meal settled at $402.70, down $4.70; Jul 16 Soybean Oil settled at 31.64, down 29 points.
Corn: The corn market finished the day with hefty losses, falling from last night's one-year high. A wetter outlook for the week ahead sparked the sell-off. Weekly export inspections of 1.235 MMT were pretty good, even if they were down nearly 28% from the previous week. Customs data shows that Ukraine seaports exported 105 TMT of corn last week, and Russian seaports only 12,7 TMT. Russia's corn exports to date this season ate 4.62 MMT. South Korea bought 328,000 MT of optional origin corn in a tender for Oct/Nov shipment over the weekend. They are also seen buying feed wheat in preference to corn. After the close the USDA said that 75% of the US corn crop was in good to excellent condition, unchanged on last week. It was generally expected to be 1 to 2% lower due to last week’s high temperatures. No figure was given on emergence which is now assumed at 100%. Jul 16 Corn settled at $4.21 1/4, down 16 1/2 cents; Sep 16 Corn settled at $4.26 3/4, down 16 cents.
Wheat: The wheat market closed lower, reversing most of Friday's gains. Weekly export inspections are showing signs of picking up. These were 571,724 MT last week, up from 363,803 MT the previous week and nearly 68% larger than the same week in 2015. The USDA said that the 2016 US winter wheat harvest was 25% done, 3 points behind average, but 14 up on the week. Crop conditions were unchanged at 61% good to excellent. Spring wheat conditions in the good to excellent category fell 3 points to 76%. Spring wheat at the headed stage was 28%, double the norm. Ag Canada estimated grain stocks there at 9.95 MMT versus 10.2 MMT previously, They see 2016/17 carryout at 9.38 MMT, with exports at 38.43 MMT. Saudi Arabia and South Korea bought bought wheat, and Jordan are tendering for wheat. Russia said that it's grain exports so far this season were 12% ahead of last year at 33.28 MMT, of which wheat accounts for 72.45%. Jul 16 CBOT Wheat settled at $4.73, down 8 1/4 cents; Jul 16 KCBT Wheat settled at $4.51 1/4, down 9 1/2 cents; Sep 16 MGEX Wheat settled at $5.43 3/4, down 5 cents.
EU Grains Mixed, Yields Seen Lower
20/06/16 -- EU grains finished mixed, with Jul 16 London close down GBP1.85/tonne at GBP107.85/tonne, Sep 16 Paris wheat was up EUR1.25/tonne at EUR164.25/tonne, Aug corn was EUR1.75/tonne lower at EUR179.50/tonne and Aug 16 rapeseed was up EUR0.75/tonne to EUR367.00/tonne.
MARS lowered their forecast for total EU-28 soft wheat yields this year from a previous 6.11 MT/ha to 6.07 MT/ha, "the downward revision for Germany and France was not completely compensated by the upward revision for Spain, Italy and Portugal," they said.
French yields were pegged at 7.32 MT/ha, down 6% versus 7.79 MT/ha a year ago, although still slightly above the 5-year average of 7.20 MT/ha. UK average yields were estimate down 10% year-on-year at 8.09 MT/ga, although again this is still above the 5-year average of 7.89 MT/ha.
In France, winter barley yields are seen falling 5.4%, with those of spring barley down 2.9%. UK barley yields are forecast 10.1% and 5.6% lower respectively.
Spain is one of the stand-out gainers this year, with wheat yields up more than 20%, and barley yields rising nearly 40% compared to last year.
French rapeseed yields are estimated 8.6% lower this year, with the UK down 0.5%, Germany up 3.8% and Poland 12.6% lower.
South Korea were said to have purchased 112,000 MT of probably EU feed wheat for Aug/Sep shipment. Saudi Arabia bought 315,000 MT of 12.5% hard milling wheat, believed by many to be German/the Baltic/Polish origin for September delivery.
Jordan tendered for 100,000 MT of option origin milling wheat.
Russian seaports grain exports dwindled to only 51,500 MT last week, customs data shows. Ukraine's were much better at 445,800 MT, including 331,500 MT of wheat.
Still, Russia's Jul 1 to Jun 15 total grain exports are up 12% at 33.28 MMT., That total includes 24.11 MMT of wheat, 4.22 MMT of barley and 4.62 MMT of corn.
IKAR estimated on Friday that Russia would produce another record grain crop in 2016.
Chicago Grains Post Strong Gains Friday
17/06/16 -- Soycomplex: Soybeans closed strongly higher on the day, but lower for the week in choppy trade. The USDA reported 66 TMT of soybeans sold to China for old crop delivery and 63 TMT for new crop. They also reported 263 TMT of old crop to "unknown" along with 132 TMT of new crop to the same buyer. The Buenos Aires Grain Exchange estimated that Argentinean soybean harvest is 91% complete, with production seen at 56 MMT. Jul 16 Soybeans settled at $11.59 1/2, up 25 cents; Nov 16 Soybeans settled at $11.48 1/4, up 29 cents; Jul 16 Soybean Meal settled at $407.40, up $9.70; Jul 16 Soybean Oil settled at 31.93, up 77 points. For the week nearby beans were 18 3/4 cents lower, meal down $6.60 and oil 83 points easier.
Corn: The corn market closed higher on the day and for the week. Forecasts for a hot and dry Midwest weekend encouraged some short-covering. Tonight's close on the July contract was the highest on a front month since June 2014. The Argentinean corn harvest was estimated to be 35% complete by the Buenos Aires Grain Exchange, with production also unaltered at 25 MMT. Russia's IKAR said that the country might produce a 13.5 MMT corn harvest this year. Weather models Monday will decide next week's direction. A bit cooler but still little rain is what's in the latest forecasts. Jul 16 Corn settled at $4.37 3/4, up 12 1/2 cents; Sep 16 Corn settled at $4.42 3/4, up 12 1/4 cents. For the week that puts Jul corn up 14 cents, with Sep up 16 1/4 cents.
Wheat: The wheat market closed higher, helped by rising bean and corn values. Strategie Grains were unchanged on EU soft wheat production at 146.7 MMT. They see exports are only 29.9 MMT versus the USDA's all wheat estimate of 35.5 MMT. FranceAgriMer cut French wheat crop ratings by 3 points to 75% good to very good, now 10 points behind year ago levels. IKAR raised their view on this year's Russian grain crop to a post-Soviet era record 108.8 MMT (up 4 MMT on last year). They see wheat output at 34.5 MMT (record), with barley at 15.5 MMT and corn at 13.5 MMT. Saudi Arabia are tendering for wheat over the weekend. Result due Monday. The Rosairo Board of Trade estimates that intended Argentinean wheat plantings are 40% complete. Jul 16 CBOT Wheat settled at $4.81 1/4, up 8 3/4 cents; Jul 16 KCBT Wheat settled at $4.60 3/4, up 10 cents; Sep 16 MGEX Wheat settled at $5.48 3/4, up 10 cents.
EU Grains Mixed On Day, Lower For Week
At the finish front month Jul 16 London wheat closed up GBP0.40/tonne at GBP108.95/tonne, Sep 16 Paris wheat was EUR0.50/tonne steadier at EUR163.00/tonne, Aug corn closed EUR1.25/tonne lower at EUR181.25/tonne and Aug 16 Paris rapeseed closed EUR2.00/tonne weaker at EUR366.25/tonne.
For the week that puts London wheat GBP2.65/tonne lower, with Paris wheat down EUR5.50/tonne, corn falling EUR4.75/tonne and rapeseed ending EUR13.00/tonne easier.
Fresh news is lacking, and the impending arrival of harvest 2016 seems to be enough to keep prices on the defensive even if there are one or two bullish news items out there.
The state of the French crop is one such item, with FranceAGriMer again downgrading crop ratings, this time by 3 percentage points to 75% good to very good (85% a year ago). Spring barley conditions were cut 5 points in the top two categories to 86% and corn ratings fell 2 points to 73%.
They said that the entire French winter wheat crop is now heading, along with 77% of the spring barley. Corn sowing is 99% complete, with the crop 98% emerged and 65% of it having six visible leaves.
Brussels reported 869 TMT worth of export licences being granted last week. That was far better than the 374,000 MT released the previous week.
Saudi Arabia are in the market for hard wheat over the weekend. with the results expected Monday. German wheat may stand a good chance of picking up at least some of that business.
Next week could be nervous with the UK Brexit vote on Thursday. The stay campaign has nudged into a narrow lead, according to the latest press releases.
It wouldn't be a surprise to see the pound do something dramatic Friday/the following week following the result of that.
IKAR said that Russia could produce a post-Soviet era record 108.8 MMT of grain this year, including a record 64.5 MMT of wheat.
A record Russian crop is rarely good news for arable farmers elsewhere.
