Chicago Closing Comments - Thursday
16/02/12 -- Soybeans: Mar 12 Soybeans closed at USD12.58 1/4, down 2 3/4 cents; Nov 12 Soybeans closed at USD12.55 1/4, down 5 1/4 cents; Mar 12 Soybean Meal closed at USD330.80, down USD2.00; Mar 12 Soybean Oil closed at 53.05, down 30 points. The USDA reported weekly export sales of 436,700 MT for 2011/12 and 178,000 MT for delivery in 2012/13 - in line with the predicted 600-750 TMT. A Chinese trade delegation is said to have agreed to buy 8.62 MMT of US soybeans, with that amount maybe rising to around 12 MMT, but this is more of a publicity stunt than fresh business. Weather conditions in South America appear to have stabilised the crop there.
Corn: Mar 12 Corn closed at USD6.36 1/4, up 9 1/4 cents; Dec 12 Corn closed at $5.68, up 8 1/4 cents. Weekly export sales of 1,005,900 MT for 2011/12 and a further 61,500 MT for delivery in 2012/13 were significantly higher than the 550-750 TMT expected. Funds were said to have bought 12,000 contracts on the day. Having taken a dip last week the weekly ethanol grind was back up again, which proved to be something of a surprise. Production was 928,000 barrels/day during the past week. China are said to have struck an accord with Argentina to import corn.
Wheat: Mar 12 CBOT Wheat closed at USD6.28 3/4, up 2 3/4 cents; Mar 12 KCBT Wheat closed at USD6.83, up 13 cents; Mar 12 MGEX Wheat closed at USD8.17 3/4, up 6 3/4 cents. Weekly export sales of 420,400 MT for old crop and 7,500 MT for new crop were a bit lower than the 450-650 TMT expected. Weekly shipments were better at 479,100 MT but generally still lag the level required to hit the USDA's 2011/12 final target. Still, US wheat did pick up a second success in a week in today's Egyptian tender selling 180,000 MT. French wheat proved too expensive and Russian/Black Sea wheat wasn't even offered.
EU Wheat Mixed, Exports Drag
16/02/12 -- EU grains finished mixed with front month Mar 12 London wheat falling GBP1.00/tonne to GBP163.00/tonne and Mar 12 Paris wheat rising EUR3.75/tonne to EUR212.75/tonne.
Paris wheat was supported by a sharply weaker euro on signs that the Greek saga is far from over yet. For London wheat this was actually the lowest close for a front month in eighteen trading sessions.
Meanwhile Brussels granted just 47,000 MT of soft wheat export licences this week, easily the lowest weekly total of the marketing year so far, highlighting the uncompetitive nature of EU wheat prices.
That brings the 2011/12 marketing year to date total to 8.4 MMT compared to 13.12 MMT at this time a year ago.
Strategie Grains said that, for all the hype, the recent EU-wide cold snap probably won't have caused any more damage than in a normal year. They peg the 2012/13 EU-27 all wheat crop at 141.5 MMT, 3% up on last year. Barley production is seen at 54.6 MMT and corn output at 62.6 MMT.
They also said that EU exports will be curtailed in the remainder of 2011/12 by the resurgence of US wheat. To emphasize that point Egypt bought 180,000 MT of US wheat in a tender today, passing on more expensive French offers.
In further evidence that EU wheat is pricing itself out, Bloomberg reported that shipments out of France's main export port of Rouen fell 46% in the week ended yesterday - their lowest total in five weeks.
Whilst the futures market continues to hold up well the differential with cash prices is widening, particularly in the north. End-user interest is minimal at these levels.
The Small Ads
16/02/12 -- As some of you may know I've been having a bit of bother with the motor lately which seems to have picked up one of those annoying "we can't quite say exactly what the problem is" kind of problems.
So I was browsing the small ads in the paper today and saw this:
CHEAP! High mileage old style Escort, orange, handles well, just been serviced, some rear end damage & a bit tatty hence the price: just £150 ono.
So I rang the number and was surprised to hear MrsN#1 answer the phone!
Early Call On Chicago
16/02/12 -- The overnight grains see beans 6-7 cents lower, corn around 2 cents easier and wheat flat to a cent lower. Crude is down 77 cents.
The dollar is firmer as the market adopts a bit more of a risk off strategy, with the Greek problem now looking like rumbling on past elections there in April.
The USDA have reported corn weekly export sales of 1,005,900 MT for 2011/12 and a further 61,500 MT for delivery in 2012/13, significantly higher than the 550-750 TMT expected. Wheat sales were 420,400 MT for old crop and 7,500 MT for new crop, a bit lower than the 450-650 TMT expected. Soybean sales were 436,700 MT for 2011/12 and 178,000 MT for delivery in 2012/13 - in line with the predicted 600-750 TMT.
Egypt bought three cargoes of US wheat at USD259/tonne FOB, confirming that US wheat prices are at last competitive into North Africa. Taiwan has also bought US wheat today.
Early calls for this afternoon's CBOT session: beans down 6-8 cents, wheat and corn flat to down 2 cents.
EU Rapemeal Prices
16/02/12 -- Rapemeal prices on the continent are a bit firmer today in line with modest gains in CBOT soymeal last night. Spot availability is tight.
Guide prices, basis FOB Lower Rhine in euros/metric tonne, with change from previous day:
| Feb12 | unq | n/a |
| Mar12 | 189.00 | +2.00 |
| Apr12 | 185.00 | +2.00 |
| May/Jul12 | 179.00 | +4.00 |
| Aug/Oct12 | 164.00 | +1.00 |
| Nov12/Jan13 | 168.00 | unch |
| Feb/Apr13 | 170.00 | unch |
Morning News Snippets
16/02/12 -- A Chinese trade delegation to the US has signed a "shop window" deal to buy 8.62 MMT of US soybeans. More is expected to be done before they fly home. That might sound impressive but in reality the significance of this is minimal, these are beans that we all knew that they were going to buy anyway.
Saudi Arabia is in the market for 330,000 MT of optional origin 12.5% protein milling wheat. Egypt are also tendering for wheat again today.
Strategie Grains are forecasting that the recent EU-wide cold snap will not have caused any more damage than in a normal year. They peg the 2012/13 EU-27 all wheat crop at 141.5 MMT, 3% up on last year. Barley production is seen at 54.6 MMT and corn output at 62.6 MMT.
Despite the recent freeze said to be disrupting grain movements out of the Black Sea, Bloomberg are reporting that shipments out of France's main export port of Rouen fell 46% in the week ended yesterday to the lowest total in five weeks.
The pound is back up above 1.20 against the euro as EU finance ministers play a bit more hardball with Greece. Just 24 hours after the news that Holland and Italy are now officially in recession we discover that Spain's economy shrank for the first time in two years in Q4 of 2011.
Chicago Soybeans Up, Grains Down
15/02/12 -- Soybeans: Mar 12 Soybeans closed at USD$12.61, up 6 cents; Nov 12 Soybeans closed at USD12.60 1/2, up 3 cents; Mar 12 Soybean Meal closed at USD332.80, up USD2.70; Mar 12 Soybean Oil closed at 53.35, up 33 points. Funds were said to have bought 5,000 soybean contracts on the day, pushing them higher for the fourth session in a row. The USDA announced the sale of 116,000 MT of soybeans to China for 2011/12 delivery. Weekly export sales from the USDA tomorrow are expected to be in the range of 600 to 750 thousand MT. The expected meeting of EU financial leaders to approve the new Greek austerity measures was downgraded to a conference call as that particular circus drags on.
Corn: Mar 12 Corn closed at USD6.27, down 6 1/2 cents; Dec 12 Corn closed at USD5.59 3/4, down 4 1/2 cents. Funds were said to have sold 9,000 corn contracts on the day. Corn looks overbought heading into a long weekend in the US - it's President's Day on Monday. Also coming up next week is the USDA's annual February Outlook Forum when we get often a fairly accurate idea on US planting ideas for the spring. A significant increase on last year's 91.9 million acres is expected with prices above six dollars, although soybeans are staging something of a mini fight back. Trade estimates for tomorrow’s weekly export sales report range from 550 to 750 thousand MT.
Wheat: Mar 12 CBOT Wheat closed at USD6.26, down 9 cents; Mar 12 KCBT Wheat closed at USD6.70, down 5 1/2 cents; Mar 12 MGEX Wheat closed at USD8.11, down 1 cent. Funds were said to have sold 4,000 Chicago contracts on the day. Egypt are tendering for wheat again tomorrow, it will be interesting to see if the US can build on last weekend's victory there. The world is not short of wheat. Global ending stocks are expected to be at all time highs in 2011/12 and Australia has just announced record production and exports for the current marketing year. Tomorrow's weekly export sales are expected to come in around 450 and 650 thousand MT.
EU Wheat Ends Mostly Lower
15/02/12 -- EU grains finished mostly lower with front month Mar 12 London wheat flat at GBP164.00/tonne and Mar 12 Paris wheat down EUR2.00/tonne to EUR209.00/tonne.
News, once again, that the Greek "deal" on austerity was maybe not quite all that it originally seemed sent the euro lower. There's talk now of some form of "pro-tem" deal being done to avoid a Greek default in March, but not hand over anything but the bare minimum of cash until after the elections that are due there due in April take place.
It is now being quietly suggested that opposition to their membership of the eurozone bloc is privately increasing amongst unnamed member countries.
News that Holland and Italy are now officially in recession and that Germany has just had its first negative growth quarter since 2009 added to the general feeling of discontent. UK unemployment at 8.4% is now at the highest level in 16 years hardly improved things either.
The feeling is still that European wheat is overvalued on the world stage. Most of the UK merchants meanwhile are bemoaning the stagnant end-user interest and general lack of business around at the moment.
After the close Egypt announced a second wheat tender within a week, US wheat won the last one hands down.
The recent cold snap across Europe and the Black Sea area, the effects of which are still to be evaluated, appears to have abated for now.
