Nogger's Blog

EU Rapemeal Prices

28/06/12 -- Rapemeal prices on the continent are higher once again, reflecting overnight strength in Chicago soymeal.

Guide prices, basis FOB Lower Rhine in euros/metric tonne, with change from previous session:

Branson (Again)

28/06/12 -- Yes folks, he's at it again, the bearded bell-end. Today's Virgin Media inspired let-down is a total email failure. How long it will be until it's fixed is anyone's guess. They are probably working on it in Mumbai right now though I'm sure. "How are you, is nice day, no? Yes. My name is Patrick (yeah, sure it is), how may I help you? No, no, everything is fine at our end, it must be something you've done wrong. Try wiping your entire computer, dismantling all the internal components one by one, then reassemble them - making sure that you put everything back where it came from, then reboot your machine whilst reciting the entire works of Shakespeare verbatim. Yes, I'll hold......there now, has that fixed it? No? You must have put one of the pieces back in the wrong place. Now here's what I want you to do, have you got a baseball bat handy?"

Needless to say, if you email me today don't go expecting a rapid response.

Chicago Ends Well Off Session Highs

27/06/12 -- Soycomplex: Beans finished mixed and well off session highs that saw Jul 12 26 1/2 cents higher at one stage on profit-taking ahead of Friday's upcoming USDA reports. Funds were estimated to have been light sellers of around 2,000 soybean contracts on the day. Whilst weather concerns remain, many analysts point to the fact that there is still time for the crop to recover and that Jul/Aug rains have more impact on final yields for soybeans. Will those rains come though? The GFS weather model keeps promising, but failing to deliver. Weekly export sales estimates for soybeans tomorrow are 500-700 TMT. After that all eyes will be on Friday's June acreage numbers and the quarterly stocks report.

Corn: Corn also closed well off session highs, with the Dec 12 more than 30 cents higher at one stage in typically choppy weather market trade. Funds were said to have bought a net 10,000 corn contracts on the day. If correct that would make them adding around 62,000 to their net length this week alone. US ethanol producers lowered production by more than 17,000 barrels a day last week according to the Dept of Energy weekly report. Valero Energy said that they are temporarily closing another ethanol plant - this one is in Linden, Indiana - due to high corn prices and tight availability. Chicago temperatures are expected to hit 100F tomorrow before cooling off a little into the weekend. Weekly export sales for tomorrow are expected to be in the region of 300-500 TMT. Unlike soybeans, the USDA aren't expected to alter the US corn planted area by too much on Friday from the already 75-year record 95.9 million acres.

Wheat: Just like the other two main commodities, wheat also closed modestly higher but well below the highs of the day. Funds were said to have been net buyers of around 3,000 Chicago wheat contracts on the day. Russia’s Ag Ministry said that Russia’s grain harvest has started 10 days earlier than normal due to the crops maturing faster due to the hot and dry conditions. Early yields are said to be 30-40% down on last year although quality is very good. Jordan bought 50 TMT of Black Sea origin wheat for October shipment. Tunisia bought 125 TMT of optional origin wheat for Aug/Sept shipment. Egypt stays out of the market, but despite the predicted lower exports out of the Black Sea in 2012/13 Russian wheat is still likely to undercut US and EU origin supplies at least until the end of the year. Estimates for tomorrow's weekly export sales are 450-650 TMT.

EU Wheat Close - Wednesday

27/06/12 -- EU grains finished mostly higher again although Jul 12 London wheat was GBP0.50/tonne lower at GBP189.50/tonne, new crop Nov 12 was GBP2.70/tonne higher to close at GBP170.50/tonne. Aug 12 Paris wheat rose EUR3.25/tonne to EUR229.75/tonne, whilst Nov 12 was also EUR3.25/tonne firmer at EUR229.25/tonne.

Nov 12 London wheat closed within GBP2.50/tonne of the lifetime contract high spurred on by weather concerns in America and the Black Sea.

Early grains harvesting is underway in southern Russia, with wheat yields reported to be around 30-40% lower than last year, although quality is good. Ukraine winter barley yields are also said to be disappointing.

Meanwhile triple digit temperatures in America, combined with a general lack of rainfall, are seeing crop ratings tumble and yield prospects diminish sharply.

StatsCanada pegged wheat plantings there slightly lower than expected at 23.81 million acres, although that is still 11% up on last year. Rapeseed sowings are seen at a record high 21.27 million acres, 13% higher than a year ago and above the 20.9 million that the trade expected.

The next set of important planting data out is from the USDA on Friday. They are expected to put the US all wheat area around a million acres higher than they said in March at 56.9 million acres. Corn plantings are only expected to show a modest increase by most, although one or two think that up to a million acres more there could also be on the cards.

Record Canadian Rapeseed Plantings

27/06/12 -- StatsCanada are out today with their latest revised planting estimates for the 2012 harvest. They forecast the all wheat area at 23.81 million acres, 11% up on last year, although fractionally below the 23.9 million that the trade was expecting.

Barley plantings are pegged at 7.37 million acres, 14% up on last year but lower than the 7.9 million anticipated. Rapeseed sowings are estimated at a record 21.27 million acres, 13% higher than a year ago and above the 20.9 million that the trade expected.

The Daily Sheet

27/06/12 -- The electronic grains see beans and corn both around 8-10 cents higher and wheat down 2-3 cents. Crude is 28 cents weaker at USD79.08/barrel.

Early grain harvesting has begun in the south of Russia. Wheat quality is good, but yields are not I am told. Barley yields are also poor, although as ever it is often the worst of the crop that gets harvested first.

India is actively trying to find buyers for it's very large wheat surplus, aided by a weakening rupee.

The European debt crisis continues. In what could be a hint towards a full-blown national bailout request the Spanish Prime Minister has said that they cannot afford to finance themselves for long at current rates.

Yields on 10-year Spanish bonds are nearing 7%.

The EU leaders summit gets underway tomorrow. Germany appear to be holding most of the picture cards. German Chancellor Angela Merkel yesterday said that the idea of jointly-issued debt wouldn't happen "as long as I live" which would appear to knock that one on the head for the time being.

How the crisis can be resolved whilst the Germans play hardball is difficult to envisage. Some experts foresee a German exit from the eurozone as the best way out of an increasingly difficult situation. The rest of the bloc can then get the printing presses out and hey presto!

Of course that would lead to a sharp drop in the value of the euro, and likely make a new deutsche mark a highly desirable currency. Neither of which would aid German exports to its neighbours, which wouldn't be in Germany's interest.

And so we continue to go round in ever decreasing circles.

Revised US weather models this afternoon will be eagerly awaited. Yesterday's GFS model was showing decent rains from southern Minnesota, through Iowa and into northern Illinois in the 4-7 day period. It is noted though that other models were offering far less precipitation, and that recent GFS forecasts have largely failed to deliver.

StatsCanada are out later with their planting estimates for 2012. The market is expecting an all wheat area of 23.9 million acres (+11% on last year), a barley area of 7.9 million acres (+22%) and a rapeseed area of 20.9 million acres (+11%).

EU Rapemeal Prices

27/06/12 -- Rapemeal prices on the continent are mixed today. Nearby availabilty remains tight, supported by fully steady soymeal prices. The EU Commission forecast rapeseed yields in Europe to come in 2.87 MT/ha this year, 4% down on the five year average.

Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:

Chicago Closing Comments

26/06/12 -- Soybeans: Jul 12 Soybeans closed at USD14.70 1/2, down 12 cents; Nov 12 Soybeans closed at USD14.13 1/4, down 12 1/4 cents; Jul 12 Soybean Meal closed at USD427.20, down USD5.60; Jul 12 Soybean Oil closed at 50.88, down 39 points. Funds were said to have sold an estimated 7,000 soybean contracts on the day in profit-taking and light liquidation ahead of Friday's upcoming USDA reports. The trade is expecting them to increase their US soybean area by around 1.5 million acres from their March estimate. June 1st stocks are expected to come in at around 635-640 million bushels, slightly higher than the 619 million twelve months ago. A variety of private analysts are pegging soybean yields this year in the 41-42 bu/acre region versus the USDA's 43.9 bu/acre.

Corn: Jul 12 Corn closed at USD6.46, up 15 cents; Dec 12 Corn closed at USD6.24, up 30 cents. There was good follow through from yesterday's limit up move with funds buying an estimated 31,000 contracts on the day, taking their net purchases to over 50,000 lots in the past two days. Private forecasts for US corn yields this year currently line up around 155-157 bu/acre versus the USDA's 166 bu/acre estimate. The corn planted area is seen only increasing marginally from the USDA's 95.9 million acres estimated in March. June 1st stocks are pegged at 3.182 billion bushels versus 3.670 billion in 2011. Argentina’s Ag Minister said that in a trade visit there China’s Premier Wen said that they are interested in buying more corn from Argentina. The Chinese recently announced that they were adjusting their quarantine regulations in a precursor to importing more corn from South America.

Wheat: Jul 12 CBOT Wheat closed at USD7.29, up 4 3/4 cents; Jul 12 KCBT Wheat closed at USD7.35 3/4, up 2 3/4 cents; Jul 12 MGEX Wheat closed at USD8.53, down 27 cents. Funds were said to have bought a net 7,000 Chicago wheat contracts on the day in short-covering encouraged by spillover support from resurgent corn. On Friday the USDA is seen placing the US all wheat planted area at 56.85 million acres, almost a million up on their March estimate. June 1st stocks are pegged at 726 million versus 862 million a year ago. Stats Canada are out tomorrow with their planting estimates. The Canadian all wheat area is forecast at 23.9 million acres, an 11% increase on last year's washed-out effort. Flooding is an issue again this year, although not as bad as it was twelve months ago. India is flexing its muscles in the export market, reportedly selling 200,000 MT of wheat to Middle East buyers at heavily discounted prices, with at least another 800,000 MT up for sale. It's domestic stocks are huge, storage of which is a serious issue.