EU Rapemeal Prices
08/02/11 -- Latest guide prices for EU rapemeal.
Basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:
| Feb11 | 218.00 | -6.00 |
| Mar/Apr11 | 220.00 | -2.00 |
| May/FH Jul11 | 220.00 | -1.00 |
| Aug/Oct11 | 186.00 | -1.00 |
| Nov11/Jan12 | 190.00 | -1.00 |
| Nov/Apr12 | 192.00 | -1.00 |
A Lot Can Happen In A Year
08/02/11 -- This time twelve months ago Russia was forecasting a 2010 grain crop of 97 MMT and exports at 22 MMT. March London wheat was GBP96/tonne, March Paris wheat was EUR126/tonne and barley was pouring into intervention all over Europe. In America soybeans were under USD10/bushel, corn was sub USD4/bushel and wheat below USD5/bushel.
And this was posted on the blog: Fasten Your Seatbelts, We're Going Sharply Higher
"At least that's according to Professor Harald von Witzke of Humbolt University. He says that assuming that oil will be back up above USD100/barrel by 2017 (which seems perfectly reasonable), then we could see wheat prices 70% higher by then, with corn up over 100%.
"It is an interesting theory, and not one that I would argue ferociously against. That said, when asked why prices currently don't reflect this, the professor said that the sharply higher levels we saw a few years ago had stimulated increases in production.
"Won't that happen again then if wheat goes back to GBP200/tonne?
"Maybe we are in for a decade of extreme volatility, where we get these mad price spikes more frequently, followed by deep troughs of despondency as everybody jumps on and off the various bandwagons all at the same time? That wouldn't surprise me in the slightest.
"Pig farming I think they call it."
Morning Vibe
08/02/11 -- There's not a lot doing on the overnight trade with wheat down 2-3c, beans up 2-4c and corn either side of unchanged. There isn't much change on the currency front either, with the pound at 1.61 against the dollar and just over 1.18 against the euro.
It looks like we maybe will tread a bit of water ahead of tomorrow's USDA numbers. What will that bring? Who can tell, maybe tighter US ending stocks but larger South American production?
Private Brazilian firms now estimate the soybean crop there at 69-71 MMT, versus the USDA's Jan estimate of 67.5 MMT. In Argentina although private firms have been upping their soybean production estimates of late, the USDA were probably overstated last time at 50.5 MMT.
China are due back to work tomorrow after Chinese New Year celebrations.
Iraq bought 300,000 MT of wheat yesterday, of which 250,000 MT was Australian and 50,000 MT US origin. They then promptly issued another tender for a further 100,000 MT.
Turkey are also expected to buy 300,000 MT of wheat this week, with Algeria back in again too. Japan are shopping for almost 165,000 MT of US/Canadian wheat in their regular weekly tender on Thursday.
On the weather front "Black Sea wheat received moderate-heavy rain/snow Sunday, more is expected; northern wheat area Volga and Black Earth are already wet, and expecting more heavy precipitation in the week ahead; soil moisture keeps improving," say Martell Crop Projections.
That sounds like a significant improvement then.
Warmer weather in Europe is coaxing winter wheat out of dormancy. The seven day forecast calls for temperatures 2-6 degrees F above normal for most of England, northern France and Germany, they add.
Chicago Close - Wheat Up, Beans And Corn Down
07/02/11 -- Soybeans
March soybeans closed down 9 cents at USD14.24 1/2; March soymeal fell USD0.80 or to USD382.40; March soyoil ended 57 points lower at 58.41. The Brazilian Oilseed Processors Association ABIOVE increased their Brazilian production forecast to 68.8 MMT, 1.3 MMT higher than the USDA. The latter will issue revised world production estimates on Wednesday. They will also report on US ending stocks, which may be trimmed further from last months estimate of 140 million bushels.
Corn
March corn fell 3 3/4c to USD6.74 3/4; May corn declined 3 1/2c to USD6.85 3/4. Fresh 30-month highs were set in the overnight session, but corn failed to hang onto those gains in the face of light profit-taking ahead of Wednesday's key USDA numbers. That report is seen dropping US corn ending stocks by around 10 million bushels from last month. Weekly export inspections were strong, but funds were estimated to have sold 5,000 contracts on the day.
Wheat
CBOT March wheat ended up 5c at USD8.58 3/4; KCBT March rose 10 3/4c to USD9.53 1/2; MGEX March gained 2 3/4c to USD9.91 1/4. Egypt bought 170,000 MT of soft wheat for March shipment over the weekend, with the business split between the US, Argentina and Australia. A variety of other tenders are in the marketplace this week too, keeping the wheat market bubbling away nicely. The USDA are expected to trim their US wheat ending stocks estimate by around 8-10 million bushels on Wednesday.
EU Wheat Posts Fresh Highs
07/02/11 -- EU wheat closed higher again with Mar London wheat up GBP1.50 to GBP206.50/tonne and new crop Nov GBP3.00 higher at GBP177.50/tonne. Mar Paris wheat rose EUR3.00 to EUR277.75/tonne, with Nov up EUR3.50 to EUR241.75/tonne.
All contracts posted lifetime contract highs today, barring July 12 London wheat and August 12 Paris wheat.
Egypt passed on French wheat in it's weekend tender, booking a cargo each of Australian, Argentine and US grain. There are however plenty of other buyers kicking about with Algeria back in the market again this week. So too are Turkey, shopping for 300,000 MT, along with Bangladesh and Iraq.
Reports suggest that Iran might also be entering the market soon. So as you can see there isn't exactly a shortage of international buying interest around at the moment.
There are still concerns about what America's wheat crop is going to look like when it emerges from winter dormancy. Heavy snow is expected in US hard red winter wheat areas this week where moisture is badly needed, say Martell Crop Projections.
Meanwhile strong warming is on the cards for the North China Plain this week where wheat is coming out of dormancy, with highs topping 60 F. Moisture is badly needed soon here after cold and very dry winter, they add.
In Europe too winter crops are starting to think about breaking dormancy as the weather warms up. Central and northern parts of the UK got a welcome widespread soaking over the weekend after a fairly dry winter thus far.
Early Call On Chicago
07/02/11 -- The overnight grains closed higher with wheat up around 8c, beans 9-10c firmer and corn around 3c higher.
Egypt bought three cargoes of wheat over the weekend, sharing their business around between Australia, Argentina and the US. That would indeed suggest that for now they are buying only "normal" amounts.
News that Algeria is back again tendering for more wheat today is possibly more bullish than news out of Egypt. The Algerians have already bought at least 1.75 MMT of wheat, and possibly more like 2 MMT including durum wheat, in the past four or five weeks.
Iraq, Bangladesh and Turkey have got the chequebook out too, so there's no shortage of wheat buyers even at these levels.
A second cold front is due to hit the US this week, which may damage winter wheat although it also brings with it the chance of a protective snow covering.
If we do finish higher tonight, and that's what the early call is, then we may see a turnaround Tuesday tomorrow on profit-taking ahead of the USDA's Feb WASDE report out on Wednesday. That said, the trade is expecting the USDA to further tighten US ending stocks of corn and soybeans, so it wouldn't be too difficult to envisage the rally to re-extending itself later in the week after those ar out.
Early calls for this afternoon's CBOT session: corn up 2-4c; beans up 8-10c; wheat up 8-10c.
Eight Ninety Five For A Battered Sausage?
07/02/11 -- Just back from a long weekend away on the lash with the divine MrsN#3. Old romantic that I am I decided to treat her to a cottage by the sea near Whitby, where we met some people from Leeds who were incredulous to report on the price of battered sausages in what is probably Whitby's most famous "fish and chip emporium".
You don't see a lot of battered sausage on MasterChef do you?
"Robert, who's an assistant chef at La Maison d'Paris in Gstaad, has decided to present chef Michel with battered sausage on a bed of mushy pois with a vinegar drizzle and a couple of slices of bread to show off his presentation skills."
Which reminds me of Stacey, who I used to work with and was an ardent vegetarian, who frequently and bizarrely used to break her meat free vows on a Saturday night for the sake of a battered sausage and then hate herself again in the morning.
In the queue at the kebab house at 2am with boyfriend Russ, she'd grab sight of said delicacy and that was it. I could never figure that out, she could flatly refuse a bacon butty or a hot roast beef and onion sarnie quite easily, but show the girl a battered sausage and that was it, she was like putty in your hands.
Dust Anybody?
07/02/11 -- The Ozzies must be wondering what's coming next, Nazi Killer Zombies? They've had drought in the west, floods in the east, Cyclone Yasi and this little rascal which "carried a lot of topsoil from north to south for about 300 km" in Western Australia, according to my chum Down Under, Bill Crabtree, who sent me this picture. You won't spot the ashes in this picture though Bill, they live over here these days.
