CBOT - A Game Of Two Halves
Soybeans
August soybeans closed at $10.33, up 23 ½ cents, whilst November soybeans finished at $9.23, down ½ cent. August Soybeans gained substantial ground over the new crop months with inspections showing continued Chinese demand for US soybeans on tight US supplies. About half of the soybeans inspected today were for China. Old crop US supplies look set to stay tight, despite the widely publicised sale of beans this week by China to domestic consumers.
Corn
September corn closed at $3.23 ¼, up 1 cent, whilst December finished at $3.33 ¾, up 2 ¼ cents. Weather forecasts call for widespread moisture through out the central and eastern United States. Amounts are predicted to range from ½ inch to an inch, with many isolated locations receiving 1 ½ to 2 inches over the next five days. Heat in the southwest, moving into the Rockies will be above normal but temperatures Nebraska east are forecast to be below normal over the next five days. Mexico and Egypt bought corn overnight.
Wheat
September wheat closed at $5.42 ¼, up ½ cent. The US winter wheat harvest is well advanced, and the combines are now rolling in Europe and the FSU. Production problems still exist however in Canada, Argentina and elsewhere. Whilst US weather is fine for corn an beans, wet conditions are less than ideal for winter wheat harvesting, and may also lead to quality problems.
EU Wheat Drifts Lower
EU wheat futures continue to drift lower despite lack of farmer selling on mounting harvest activity in eastern Europe.
November Paris milling wheat closed down EUR3.00 at EUR140.75.tonne, and London November feed wheat ended down GBP0.75 at GBP111.25/tonne.
European weather is less than ideal with rain in the forecast for many parts of the UK, France, Germany and Poland as low pressure rolls in from the west.
A weak dollar also did little to help European futures today.
Trading remains quiet, with dealers largely confined to book-squaring activities as we enter the holiday season.
eCBOT Close, Early Call
The overnight eCBOT grains closed higher, but off session highs backed by a weak dollar and firmer crude oil.
Beans closed with gains of 14 cents, having earlier been 18-22 cents higher, with wheat up around 6 cents and corn flat to 2 cents steadier.
Firmer equities also added some support to the complex, along with a generally slightly more optimistic mood.
Crude appears to have an eye on attempting to break through $65 on increased refinery activity in China.
US weather conditions remain beneficial for crop development with corn at the key pollination stage and soybeans about to start setting pods.
The Chinese government's sale this week of 500,000 MT soybeans is not expected to attract too much buying interest, as the minimum bid price is too high. With China estimated to be holding as many, if not more, soybean stocks than the US themselves and it's own bean harvest expected in October there will probably be more sales to come.
Imports are seen slackening off, albeit from a record pace, over the next few months.
After the close of CBOT tonight we'll have the latest USDA crop conditions report.
Early calls for this afternoon's CBOT session: corn called steady to 2 higher; beans called 8 to 12 higher; wheat called 4 to 6 higher.
Ukraine Harvest Latest
Harvesting in Ukraine is progressing well with 34% of the planted area cut as of July 17, according to the Agriculture ministry.
To date 11.5 MMT of grains have been harvested on 4.4 M hectares, it says.
The wheat harvest has so far amounted to 6.4 MMT off 2.3 million hectares, which is 35% of the planted area, with an average yield of 2.74 MT/hectare.
That's a slight improvement on last week, and now implies a finial wheat crop of around 18.25 MMT, that would still be almost 30% down on last year's production of 25.9 MMT.
An estimated 38% of the nation's barley crop has been cut, producing 4.7 MMT off 1.8 million hectares.
Agriculture In the News
Assorted agri-related news stories of interest from around tinterweb:
El Nino Threat Blows Commodity Prices Higher
Argentine Farmers See Record Harvests From Tax Cuts
Financial Crisis Slashes Ag Commodity Prices
Shortage of Home-Grown Organic Crops
Waitrose Practise Farming Beneficial To Wildlife
Crude Climbs Close To USD65
Crude oil is over a dollar higher this morning at USD64.67/barrel on news that Chinese refiners increased their operating rates to the highest levels in sixteen months.
A weak dollar also added to crude's gains along with bullish housing data from the US. Construction of new homes in the US rose more than expected in June, according to government data, boosting hopes of signs of an economic revival.
Large spec funds increased their length last week, according to the CFTC, indicating a little risk appetite might also be returning.
In addition a fire at a Texas refinery over the weekend might trim US supplies a tad over the next few weeks.
Wiseman Ups Milk Price
In a smart attention-grabbing move, Robert Wiseman Dairies have increased it's milk price effective from 1st August, guaranteed for two months.
OK, it's only 0.3 ppl to 24.32 ppl, but every little helps.
Stronger returns from bulk cream in the last quarter are actually being passed on, at least in part, to milk producers. What a novel idea!
KFC In Trouble
Everybody's favourite well-balanced nutritional snack, a bargain bucket with Vienetta and 2 litres of coke, KFC are under fire following their recent UK TV advertising campaign that claims "KFC. Fresh, on the bone chicken, every store, every day."
In fact the Advertising Standards Authority have discovered that the meat was delivered to branches only three times a week.
I'm surprised it's as often as that.
Hands up who's heard the urban myth about the guy who orders a chicken burger from KFC stipulating 'no mayo' only to get home to find that the stupid eastern European monkey behind the counter has given him mayo after all. So he takes it back to complain only to find that it's not mayo, it's a chicken with a huge abscess.
Or the one about the girl who tucked into Kentucky Fried Mouse.
Would you like to go large with that?
