Chicago Grains Add To Monday's Gains As Fund Money Pours In
04/03/14 -- Soycomplex: Beans finished a choppy session with gains of 10-15 cents. Early trade showed evidence of this being an infamous "Turnaround Tuesday" as prices retreated following a slight calming of tensions between Ukraine and the West and Russia. Nevertheless, renewed spec buying (funds added an estimated further net 5,000 soybean contracts to their already impressive existing long) pushed the market higher into the close. Dr Cordonnier cut his Brazilian bean crop estimate to 87.0 MMT from a previous estimate of 88.5 MMT. He said that harvesting in Mato Grosso is 60% complete, and that they are around 42% done nationally. He left his Argentina bean crop estimated unchanged at 53.5 MMT. Informa cut their Brazilian soybean production estimate to 88.8 MMT versus the USDA's 90 MMT, and also dropped Argentina from 57 MMT to 54 MMT. AgRural said that, as of Friday, 39% of the Brazilian bean crop has been harvested versus 36% a year ago and 31% on average. They estimated the Brazilian bean crop at 87 MMT. Oil World forecast global bean production at 278.8 MMT versus a previous estimate of 287.8 MMT and compared to 2012/13 production of 267.4 MMT. They have Brazil at 84 MMT and Argentina at 53 MMT. Global bean ending stocks were estimated at 72.5 MMT versus a previous estimate of 79.2 MMT and compared to 2012/13 ending stocks of 63.1 MMT. They see US 2013/14 soybean ending stocks at 3.5 MMT versus a previous estimate of 4.1 MMT and compared to 2012/13 ending stocks of 3.8 MMT. In their first peek into the season ahead, ABARES estimated the Australian 2014/15 canola crop at 2.948 MMT versus 3.548 MMT a year ago. Strategie Grains forecast the EU-28 rapeseed crop in 2014/15 at 21.5 MMT versus a previous estimate of 21.4 MMT and 21.1 MMT last year. Mar 14 Soybeans closed at $14.18, up 10 3/4 cents; May 14 Soybeans closed at $14.23, up 13 3/4 cents; Mar 14 Soybean Meal closed at $458.80, down $2.50;Mar 14 Soybean Oil closed at 43.46, up 135 points.
Corn: The corn market shot higher, with the Mar 14 contract hitting the best levels for a front month since 12 September 2013. As with soybeans we saw two-sided trade today, but a surge of buying late in the session saw prices close near the day's highs. Despite an apparent slight softening in Russia's stance on Ukraine, fund money looks like it thinks it sees an opportunity and is now pouring into grains. They were estimated as net buyers if around 18,000 corn contracts on the day, to add to the 20,000 that they were thought to have stepped in for yesterday. Dr Cordonnier estimated the Brazilian corn crop at 68.5 MMT, unchanged from his previous estimate. He increased his Argentine corn production forecast to 23.0 MMT versus a previous estimate of 22.5 MMT. Informa cut their Brazilian corn production forecast by 1.1 MMT to 65.45 MMT, which is well below the USDA's 70 MMT estimate. Rains continue to delay the Brazilian soybean harvest, and therefore the planting of second crop corn. Informa left their forecast for the Argentine corn crop unchanged at 22.6 MMT versus the USDA's 24.0 MMT. Both Bunge and ADM said that their Ukraine operations are running as normal. The Ukraine Ministry said that the country had exported 2.82 MMT of grains in February, up 1.3% compared with January. That total included 2.33 MMT of corn. They also said that Ukraine had exported a further 340 TMT of grains in the first three days of March. Ukraine's corn exports for the period Jul-Feb now stand at a little under 15 MMT, making the USDA's forecast for the entire season of 18 MMT seemingly well within reach if things carry on as they are. Reports that Russia had blocked the Kerch Strait, which provides access to the Black Sea for ships carrying grain, were denied by the Ukraine infrastructure ministry - at least with respect to the movement of non-military vessels. Mar 14 Corn closed at $4.76 3/4, up 12 3/4 cents; May 14 Corn closed at $4.84 1/4, up 13 3/4 cents.
Wheat: The wheat market closed higher, with the exception of the technical nearby Minneapolis contract. As with the other grains, wheat was in the red in early "Turnaround Tuesday" style, but clawed its way higher as the open outcry session wore on. Fund buying in Chicago wheat (the only one of the three wheat pits where they are still short) was a feature again. Afternoon reports that Russia had test-fired a intercontinental ballistic missile may have been responsible for further late buying in wheat. Ukraine's wheat shipments so far this season (Jul-Feb) are at 7.43 MMT versus a USDA forecast for full season shipments of 10 MMT, leaving around 2.5 MMT left to go to hit that target. Despite the ongoing problems with Russia, grain exports are said to be continuing relatively unhindered. That doesn't seem to matter though, if the funds suddenly fancy wheat again. The latest monthly crop condition reports show month-on-month declines in US wheat rated good/excellent for Kansas (down 1% to 34%), Nebraska (down 3% to 43%), Oklahoma (down 5% to 31%) and Texas (down 4% to 15%). Japan seeks 111,779 MT of wheat for April–June shipment, in it's routine combination of US, Canadian and Australian origins. Algeria is tendering for 50,000 MT of optional origin milling wheat for May shipment. Australia's ABARES forecast the 2014/15 wheat crop there at 24.8 MMT, down 8% versus output of 27.0 MMT last year. Despite lower production though, they see Australia's 2014/15 wheat exports rising to 19.1 MMT versus 18.5 MMT this season. They forecast wheat plantings rising 130k ha to 13.6 million ha, but currently anticipate lower yields. It's currently very dry Down Under, although this is Australia in the middle of their summer that we are talking about, not the Somerset levels in the midst of a British winter. Wheat planting doesn't begin until May, so there's time for some improvement yet. Mar 14 CBOT Wheat closed at $6.39 3/4, up 13 cents; Mar 14 KCBT Wheat closed at $7.04 1/4, up 3 cents; Mar 14 MGEX Wheat closed at $6.90, down 5 3/4 cents.
EU Grains Mostly Higher, Black Sea Uncertainty Prevails
04/03/14 -- EU grains finished a choppy session mostly a little higher, despite trading lower for much of the day as tensions between Russia and Ukraine eased somewhat. Trade houses such as ADM and Bunge say that operations within Ukraine are "normal" and that exports continue relatively unhindered.
Mar 14 London wheat ended GBP0.50/tonne higher at GBP161.50/tonne, and with new crop Nov 14 GBP0.15/tonne firmer at GBP152.20/tonne. Mar 14 Paris milling wheat was EUR1.25/tonne lower at EUR207.25/tonne, Mar 14 Paris corn was EUR2.00/tonne weaker at EUR170.25/tonne and May 14 Paris rapeseed added EUR2.00/tonne to post a new near 8-month closing high of EUR402.00/tonne.
The local Ag Ministry said that Ukraine's grain exports for the season so far are at 24.7 MMT, up 36.8% on a year ago. That includes 7.43 MMT of wheat, 2.14 MMT of barley and 14.89 MMT of corn. The USDA currently have Ukraine's full season exports at 10 MMT for wheat and 18 MMT for corn, meaning that around 2.5 MMT of wheat and 5 MMT of corn remains unshipped so far.
They Ministry added that Ukraine shipped 2.82 MMT of grains in February, most of which (2.33 MMT) was corn. They said that the country has exported a further 340 TMT of grains in the first three days of March.
Strategie Grains said that the EU-28 OSR crop will amount to 21.5 MMT this year, up from the 21.4 MMT forecast previously and 1.9% up on the 21.1 MMT produced in 2013/14. Despite wetness issues in the UK and France, yield potential hasn't yet been diminished, they added.
Algeria seeks 50,000 MT of optional origin milling wheat for May shipment. Jordan is in for 100,000 MT of optional origin feed barley for May/Jul delivery.
The Turkish Grain Union said that wheat yields there will decline 14% this year due to drought.
ABARES forecast the Australian 2014/15 wheat crop at 24.8 MMT, down 8% versus 27 MMT last year. Despite that though, exports will rise from 18.5 MMT to 19.1 MMT, they added. They see the wheat planted area up 130k ha to 13.6 million ha, but currently forecast yields lower.
The Australian canola crop was estimated at 2.948 MMT versus 3.548 MMT a year ago.
Winter wheat crop conditions in the US remain in decline. The latest monthly reports show Kansas good/excellent down 1% versus a month ago to 34% (although that's still better than only 23% a year ago), with Nebraska down 3% to 43%, Oklahoma down 5% to 31% and Texas falling 4% to 15%.
The current situation remains extremely volatile, and could flip to bearish at any moment, depending upon the latest developments in the Black Sea region. It seems unlikely that the West will want to risk military intervention in the area. It also seems unlikely that Big Bad Vlad will want to back down, however.
Will the West simply allow Russia to annexe the Crimea, or even a larger part of eastern Ukraine? If not, what sanctions/repercussions will the West propose? Bearing in mind that Russia is a very major gas supplier to Europe. Do we need them more than they need us, or is it the other way around?
Chicago Market Reacts To Ukraine News With Wheat Leading The Way Higher
03/03/14 -- Soycomplex: Beans closed mixed, after trading sharply higher in earlier overnight trade. That seems to have been linked to the unwinding of long beans/short corn/wheat spreads once the open outcry session began. Everything was firmer across the board to start the day, as tensions in Ukraine were ratcheted up a few more notches over the weekend. Stocks across the world fell, but grains, gold and crude rose as Russia seized control of Crimea and issued an ultimatum to Ukraine forces in the region to surrender of face assault. Although Ukraine is a soybean and rapeseed grower, it is of course far more active in the corn and wheat market, which may also help explain today's price action. Weather concerns in South America remain, with IMEA cutting it's forecast for the soybean crop in Brazil's leading Mato Grosso state from 26.88 MMT to 26.39 MMT, with yields seen falling 1.8% to 53 sacks/ha. Some farmers are harvesting beans at 20% moisture in between the showers, meaning that they also face significant drying costs, something for which there is a lack of capacity in the region. This apparently means that there are long lines of trucks of beans queueing at elevators in the region capable to drying beans, further stretching out the harvest and causing more logistical problems. Weekly export inspections for beans were 984,181 MT versus 1,312,679 MT last week and expectations of 1.0-1.2 MMT. There's talk that a major port in northern China has been forced to stop unloading soybeans after running out of capacity at its storage facilities. Fund money was estimated as finishing as a net seller of around 4-5,000 soybean contracts on the day. Mar 14 Soybeans closed at $14.07 1/4, down 7 cents; May 14 Soybeans closed at $14.09 1/4, down 4 3/4 cents; Mar 14 Soybean Meal closed at $461.30, down $6.60; Mar 14 Soybean Oil closed at 42.11, up 59 points.
Corn: The corn market jumped around 6-7 cents, although that close was well off the intra-day highs on short-covering and spec buying following weekend events in Ukraine - set to be the third largest corn exporter in the world after the US and Brazil this year. The USDA announced 140,000 MT of corn sold to South Korea for 2013/14 delivery. They also said that 211,500 MT of US corn had been sold to Japan, comprising 47,000 MT for 2013/14 shipment and 164,500 MT for 2014/15 shipment. Agritel said that Ukraine had shipped 500 TMT of corn last week. That may change this week, we will have to wait and see. They estimated that Ukraine still has a further 5 MMT of corn left to ship in 2013/14. Regardless of what is going on in the region, spring plantings are said to be underway in both Russia and Ukraine. Talk of Western sanctions against Russian aggression may take the form of an embargo on imports of Russian corn and wheat possibly? China are reported to have rejected 887,000 MT of US corn since November due to the unapproved GMO strain MIR 162. Fund buying was estimated by some to be as high as a net 20,000 contracts on the day today. Brazilian rains that are slowing the soybean harvest will also be having a negative impact on safrinha corn plantings. Weekly export inspections of just over 1 MMT were above trade expectations and above what is required to hit the USDA's target for the season. Corn planting for the new 2014 season is underway in Texas, with 8% of the crop now in the ground versus 3% last week and 14% this time a year ago. Rumours persist from Friday that the EPA may soon revise upwards the ethanol mandate to come in near 13.5 billion gallons. Mar 14 Corn closed at $4.64, up 6 1/2 cents; May 14 Corn closed at $4.70 1/2, up 7 cents.
Wheat: The wheat market shot higher on the news that the Ukraine crisis had stepped up a gear over the weekend. Wheat in Chicago is the only agri-commodity left that fund money is short of, even if they have reduced that short quite dramatically since the turn of the year. That may help explain why wheat led the rest of the market higher today. Ukraine is just about sold up on wheat for 2013/14 it would seem, although they may have up to 3 MMT of wheat sold and as yet unshipped, according to Agritel. Russia however remain an active seller, as was witnessed in last week's Egyptian tender. Some form of Western sanctions against Russia may include an embargo on wheat imports. That could mean more business for the US and Europe, although I'm sure that China would probably be first in the queue to "help" Russia by increasing its purchases of wheat and corn from them. That's wheat and corn that they would otherwise have bought from the West, so an embargo could be something of a two-edge sword. There's some talk that Canadian growers are struggling to get their bumper 2013 wheat crop onto the cash market. This means that some are struggling for the funds needed to purchase inputs for 2014 spring plantings, it is being mooted. Logistical problems, added to by extremely cold weather are forcing the Canadian railways to operate shorter trains running at slower speeds, continue to restrict the movement of grains. This could ultimately have a negative impact on spring plantings some suggest. Weekly export inspections for US wheat were 609,867 MT versus 482,430 MT a week ago. Mar 14 CBOT Wheat closed at $6.26 3/4, up 27 3/4 cents; Mar 14 KCBT Wheat closed at $7.01 1/4, up 24 1/4 cents; Mar 14 MGEX Wheat closed at $6.95 3/4, up 25 cents.
EU Wheat Jumps As Russian/Ukraine Tensions Escalate
03/03/14 -- EU grains closed sharply higher as tensions between Ukraine (and the West) and Russia scaled up a level or two over the weekend. This is the biggest crisis of the 21st Century for Europe, according to British Foreign Secretary William Hague. Russia's military has given Ukrainian forces in Crimea until dawn on Tuesday to surrender or face an assault, the BBC reports.
Mar 14 London wheat closed GBP5.25/tonne firmer at GBP161.00/tonne, whilst new crop Nov 14 was GBP4.55/tonne higher at GBP152.05/tonne. Mar 14 Paris wheat closed EUR7.25/tonne higher at EUR208.50/tonne, Mar 14 Paris corn was up EUR3.50/tonne at EUR172.75/tonne, whilst May 14 Paris rapeseed was EUR5.25/tonne higher at EUR400.00/tonne.
Crude oil jumped to it's highest since September, and short-covering/spec buying meant that wheat followed suit, despite reports that grain exports out of Ukraine had so far largely continued relatively unhindered by recent developments.
Agritel said that Ukraine exported over 500 TMT of corn last week, along with 57 TMT of wheat, and that Russian ports on the Black Sea had loaded more than 200 TMT of wheat in the final week of February.
Nevertheless, the threat of a sudden halt to Ukraine's exports (of corn in particular) has got the market very nervous. They are scheduled to be the world's 3rd largest exporter of corn in 2013/14, along with being the 6th largest exporter of wheat. Agritel suggest that Ukraine still has around 5 MMT of corn and 3 MMT of wheat left to export this season.
The Ukraine hryvnia and Russian rouble fell to new lows against the US dollar and euro, which in theory makes exports out of the region even cheaper. It also makes imports very expensive though, and raises the question of whether growers in the region will be able to afford to pay for these products later in the year.
What will Europe and the West do, if anything, in retaliation to the Russian invasion of Ukraine? This isn't sending a few thousand troops into Afghanistan to fight the Taliban, after all. Will (most of) the world announce sanctions against the import of Russian grains? If they do, will China follow suit?
As ever, the market doesn't like uncertainty, and so up it goes. As stock markets around the world fall, it now seems like agri-commodities are suddenly back in vogue. That's changed in the blinking of an eye, and could just as easily switch back again of course. Is this a selling opportunity, or the start of a move back to old ground, many are asking?
In other news, the HGCA reported that England and Wales had planted more than 3.8 million hectares of winter wheat, barley, oats and OSR by Dec 1, a 14% increase on last year.
They said that 1.815 million ha of that was wheat, 19% more than the entire harvested area in 2013, before including ant late winter wheat and/pr spring planted crops.
The winter barley area was almost 370k ha, the highest since 2003, and the winter OSR area was just over 700k ha, up 3% from a total (winter and spring) area last year, they added.
“The higher wheat area increases the likelihood of the UK being able to return to being a net exporter of wheat in 2014/15. However, weather conditions during the rest of the growing season will be important in determining the quality and yields, and thus the UK’s export potential next marketing season,” they concluded.
That Was The Week That Was
Friday's Paris corn close was the first sub-zero EUR170 finish in 17 weeks. Conversely, it was Chicago corn's highest close in 26 weeks. The euro was last this high against the US dollar 19 weeks ago. That might have had something to do with it, although it's interesting to see Paris corn close on it's arse when it's all kicking off in Ukraine.
This was the highest soybean oil close in 18 weeks, and the best for beans and meal in 25 weeks.
It was also the first close above EUR200 for Paris wheat in 9 weeks, and the highest close for Paris rapeseed in 25 weeks.
Chicago Market Reverses Thursday's Losses
28/02/14 -- Soycomplex: Beans closed sharply higher, getting back all of yesterday's losses and then some. It was a choppy session with the May 14 contract having a near 40 cent trading range in open outcry trade. Yesterday's "just because" fund-generated lower close was clearly seen as a buying opportunity. The USDA announced the sale of 120,000 MT of optional origin beans to Egypt for 2014/15 shipment. The Buenos Aires Grains Exchange estimated the Argentine soybean crop at 53 MMT, unchanged from last week. Brazilian analyst Safras et Mercado cut their forecast for soybean production there to 86.1 MMT, that's still a record crop, but now some way short of the 90-92 MMT that the market was talking about a few months ago. Brazil's crushing association, Abiove, stood by it's forecast for a record crop of 88.6 MMT. Earlier in the week Oil World said only 85 MMT. Logistics are worsening in Brazil where the Madeira River - an important link between Mato Grosso soybeans and Porto Velho, the capital of the state of Rondonia and gateway to the northern port of Itacoatiara - has reached historic flood levels. As a result soybean receivals from Mato Grosso are said to have ceased. Mato Grosso soybeans, where the harvest is only about halfway done, must now slog it out down Brazil's 1,500km long "soybean highway" the BR-163 en route to ports in the south. This highway was reduced to just one lane after a dam burst its banks earlier in the week. The time taken to repair the damage "could take several months" according to Dr Cordonnier. Funds were estimated to have been net buyers of around 9-10,000 soybean contracts on the day. Their net long as of Tuesday night is now well in excess of 200k contracts. Mar 14 Soybeans closed at $14.14 1/4, up 20 3/4 cents; May 14 Soybeans closed at $14.14, up 24 cents; Mar 14 Soybean Meal closed at $467.90, up $3.90; Mar 14 Soybean Oil closed at 41.52, up 62 points. For the week that puts the front months up 43 1/2 cents on beans, with meal up $12.10 and oil up 57 points.
Corn: The corn market also reversed yesterday's action, with fund money seen buying a net 12,000 contracts on the day - a similar volume to that they were said to have sold yesterday. The ongoing wet weather in Brazil is seen hampering the timely planting of second crop corn. The turmoil in Ukraine is seen potentially hindering corn exports there, and possibly even impinging on spring corn plantings and/or reducing inputs later in the season due to the weak hyrvnia/US dollar exchange rate. At least for now, buying corn from Ukraine doesn't look a very safe option if you want guaranteed delivery, even though some say that the ports are operating more or less normally. The Buenos Aires Grains Exchange said that Argentine corn harvesting is 1.6% complete, barely moved on 1.2% a week ago and well behind the 6% of a year ago. They have the Argentine corn crop estimated at 23.5 MMT, unchanged from their previous forecast. Safras et Mercado cut their Brazilian corn production forecast to 71.2 MMT from the 75.6 MMT estimated previously. CEC estimated South Africa’s 2014 corn crop at 12.40 MMT versus a previous figure of 11.69 MMT. There's talk of a potential increase to the US corn ethanol mandate from the EPA, or at least a reduction not as great as the originally proposed cut to 13 billion gallons from 14.4 billion. The new number being bandied about is 13.5 million gallons. The USDA announced 101,600 MT of corn sold to unknown for 2013/14 delivery. Israel bought 60 TMT of optional origin corn (possibly from the Black Sea) for May/June shipment. The weekly Commitment of Traders report shows fund money continuing to build on their newly established corn long for the week through to Tuesday night. They are now said to be sitting on their largest net long since early last summer. Mar 14 Corn closed at $4.57 1/2, up 9 1/2 cents; May 14 Corn closed at $4.63 1/2, up 9 cents. For the week front month Mar 14 corn was 4 1/2 cents higher.
Wheat: The wheat market also effectively reversed yesterday's sharp losses, posting gains of around 15-17 cents on the day. US weather remains cold and dry. Midwest winter precipitation averages 81% of normal, whilst temperatures have been exceptionally cold - averaging 4.9 F below normal, according to Martell Crop Projections. "A fresh blast of polar air would sink into the US heartland in the wake of an upcoming Midwest storm due Sunday. North Dakota temperatures may plummet to -35 F (-17 C) on Tuesday morning. Subzero F temperatures are predicted as far south as Kansas. Presently wheat fields are bare, but snow is predicted ahead of the cold wave in the weekend storm. Severe drought is plaguing the Southern Plains jeopardizing the wheat crop in Oklahoma and Texas. While Kansas is expecting generous precipitation this weekend, the 2 southern wheat states are not," they add. ABARES are due to released their 2014/15 Australian crop production estimates on Tuesday. A Reuters survey estimates the new season wheat crop at around 25 MMT, although traders note that it's still very early days as plantings there don't get underway until May. The Egyptian state-run Middle East News Agency (MENA) said that the country has enough wheat bought to last it until early June. Tensions in Ukraine are keeping wheat shorts nervous, even though they are effectively more or less out of the export market until new crop. "It's looking increasingly like Russia has taken Crimea; to contextualise it for my UK pals, it's like France taking control of the Isle of Wight," said my Ukraine agronomist chum Mike Lee. "The Commitments of Traders (report) shows that managed money continued to cover shorts at an almost frantic pace in Chicago Wheat," said Benson Quinn Commodities. They cut their net short by around 14k lots on the week through to Tuesday night and now sit on a net short of just over 20k contracts versus over 100k at the end of 2013.
Mar 14 CBOT Wheat closed at $5.99, up 16 3/4 cents; Mar 14 KCBT Wheat closed at $6.77, up 14 3/4 cents; Mar 14 MGEX Wheat closed at $6.70 3/4, up 15 1/4 cents. For the week CBOT wheat was still 10 3/4 cents lower, with Kansas down 5 3/4 cents and Minneapolis rising 6 1/2 cents.
EU Wheat Mostly Lower On The Day, Little Changed On The Week
28/02/14 -- EU grains finished mostly lower on the day, but not really that much changed for the week.
The session closed with Mar 14 London wheat ending down GBP0.35/tonne at GBP155.75/tonne, and with new crop Nov 14 London wheat closing GBP0.40/tonne lower at GBP147.50/tonne. Mar 14 Paris wheat was down EUR0.50/tonne to EUR201.25/tonne, Mar 14 Paris corn was down EUR3.25/tonne to EUR169.25/tonne, whilst May 14 Paris rapeseed fell EUR2.25/tonne to close at EUR394.75/tonne.
For the week that puts Mar 14 London wheat GBP0.15/tonne higher, with new crop Nov 14 down GBP1.40/tonne. Front month Paris wheat gained EUR3.00/tonne, Paris corn fell EUR4.75/tonne and Paris rapeseed added EUR1.75/tonne.
One of the main items open for debate at the moment is how will the developing situation in Ukraine pan out, and how will that affect the grain markets going forward.
As ever these things are rarely clear-cut, and it's possible to make out both a bullish and bearish case. Indeed, simply the weakness of the local currency alone could be seen as bullish (as it makes imports of dollar-priced fertiliser and agrochemicals more expensive) or bearish (as it makes selling wheat or corn in dollars an attractive proposition).
On balance though, the bullish factors probably outweigh the bearish ones, and uncertainty on it's own is generally something that the market doesn't like and it frequently prompts a short-covering and/or speculative rally. A quick and peaceful solution to the region's problems could equally prompt a decline in grain prices, especially with the spring planting season just about upon us.
Elsewhere, FranceAgriMer said that 74% of the winter wheat crop there was in good to very good condition, the same as a week ago and 8 points ahead of this time last year. Winter barley rated good to very good fell a point on last week to 71%, although that's still 4 points ahead of last year.
The French winter wheat crop remains quite forward, aided by the relatively mild conditions, with 94% of the crop at the early tillering versus only 82% a year ago. They reported 2% of the crop to be displaying an ear of at least 1 cm long, versus zero a year ago. Aquitaine is the most advanced region where 31% of the crop is already at this stage.
French winter barley is 99% tillering and 1% of the crop has an ear of at least 1 cm long.
Algeria bought 50,000 MT of Argentine barley for March shipment. Israel bought 60 TMT of optional origin corn (possibly Black Sea origin) for May/June shipment.
Egypt bought 5 cargoes of wheat in yesterday's tender, including 4 of the 8 consignments of Russian wheat on offer, proving that the latter isn't out of the market yet - especially with the rouble remaining weak. Romania also managed to dig up a couple of cargoes, one of which was booked.
There are still enough uncertainties around to underpin current price levels, including a US winter wheat crop that will come out of dormancy in far worse condition than it entered it, and of course Ukraine. Further forward though, downside pressure potential does exist as the northern hemisphere harvest draws closer. That will kick off in India, where a record crop is anticipated, in only a matter of weeks.
Chicago Grains Crash Lower
27/02/14 -- Soycomplex: Beans raced to new highs in early trade, with the front month Mar 14 contract popping its head above the $14.50/bushel mark at one point, before collapsing for no apparent reason. The market is massively overbought, and fund length is at the highest level since at least September 2012, so these sort of capitulations are almost inevitable if everyone wants to cash in their chips all at the same time. The USDA announced that China had bought 112,000 MT of optional origin beans for 2013/14 shipment. They also reported weekly export sales of 327,700 MT of old crop beans (mostly to China), taking 2013/14 commitments now to 106% of the USDA's forecast for the season. The USDA also reported new crop export sales of 315,200 MT along with weekly shipments of an impressive near 1.8 MMT. There's not a lot of bearish news in amongst that lot, but still the market went lower. MDA CropCast cut their Brazilian soybean production estimate by 1.38 MMT to 88.53 MMT. Mar 14 Soybeans closed at $13.93 1/2, down 13 3/4 cents; May 14 Soybeans closed at $13.90, down 7 cents; Mar 14 Soybean Meal closed at $464.00, down $4.30; Mar 14 Soybean Oil closed at 40.90, down 30 points.
Corn: The corn market also crashed lower, with funds selling an estimated 12-15,000 contracts on the day. Weekly export sales of 840,800 MT for 2013/14 and a modest 1,500 MT for 2014/15 were towards the top end of trade expectations. Private exporters also reported sales of 284,480 MT of US corn for delivery to Mexico during the 2013/14 marketing year under the daily reporting system. However, for corn too, it was just one of those days when any bullish news was largely ignored in the face of heavy fund selling. MDA CropCast cut their forecast for the Brazilian corn crop by 180 TMT to 69.74 MMT, and down from 76 MMT a year ago. The IGC left their world 2013/14 corn production estimate unchanged at 959 MMT, but raised consumption by 4 MMT to 932 MMT. World corn production in 2014/15 was forecast to decline modestly. Another bout of very harsh weather conditions in the US is expected to keep feed demand high. Mar 14 Corn closed at $4.48, down 7 1/2 cents; May 14 Corn closed at $4.54 1/2, down 6 1/2 cents.
Wheat: The wheat market, by way of not wanting to be the odd one out, fell into line tumbling 14 to 17 cents lower on the day across the three exchanges. The USDA reported weekly export sales of 365,100 MT of old crop and 199,800 MT of new crop. Weekly shipments of 547,400 MT were respectable enough. The market was disappointed however to see US wheat priced out in Egypt's latest wheat tender, having won a share of GASC's business last time. Russian wheat dominated, wining the lion's share of the 295 TMT order, with one cargo going to Romania. This apparently confirmed the market's fear that US wheat prices have gone up too far, too fast, this month. China sold 406,105 MT of wheat at auction today out of an offered volume of 607,157 MT. MDA CropCast cut their forecast for the Indian wheat crop this year by 0.5 MMT to 96.9 MMT, although that's still a record. They also trimmed 0.8 MMT off their US all wheat production estimate. Mar 14 CBOT Wheat closed at $5.82 1/4, down 17 3/4 cents; Mar 14 KCBT Wheat closed at $6.62 1/4, down 16 3/4 cents; Mar 14 MGEX Wheat closed at $6.55 1/2, down 14 3/4 cents.
