Nogger's Blog

French Crop Concerns Support EU Wheat And Rapeseed Markets

23/07/14 -- EU grains closed mixed with Nov 14 London GBP0.05/tonne lower at GBP127.60/tonne, Nov 14 Paris wheat was up EUR1.50/tonne to EUR179.50/tonne - although just failing to stay above the important EUR180/tonne level. Aug 14 Paris corn was down EUR2.50/tonne at EUR157.75/tonne and Aug 14 Paris rapeseed jumped EUR7.00/tonne to EUR321.75/tonne.

Continued talk of widespread problems with the quality of this year's French wheat harvest supported the Paris market today. The wetness that is causing the problems for wheat is viewed as beneficial for corn however, and it also potentially means that there will be more feed wheat on the market in 2014/15, in direct competition to corn.

Could the London and Paris wheat markets go in opposite directions? In dollar terms tonight's close puts the spread between the two Nov 14 contracts at around $24/tonne. That's the largest differential since May 2013. However "back in the oft-cited year of poor quality of 2007 we saw the spread between the two jump to $60/tonne, so we’re not seeing anything historic just yet," says my Twitter chum Tregg Cronin at Halo Commodities in the US.

"The currency influence and the lighter volume can make these spreads volatile, but the Paris Wheat/UK wheat spread is worth paying attention to," he notes. It may also be worth keeping an eye on the wheat/corn spread too.

Reuters report a French exporter this week buying Polish milling wheat to cover existing sales that they would have expected to fulfil with French material. French traders have also been said to be seeking/buying German wheat this week.

Egypt's GASC bought 235 TMT of Russian, Romanian and Ukraine wheat in their tender for Sep 1-10 shipment. The prices paid were said to be around $256.60 C&F, that's down from around $260-261 C&F paid for Romanian wheat for late August shipment a fortnight ago. Some might see the fact that there were no French offers made as being significant.

Jordan passed on a tender to purchase 100 TMT of optional origin hard milling wheat and immediately re-tendered for the same, in their usual way. Iran is said to be looking for 50 TMT of Black Sea wheat for prompt shipment.

Russia's 2014 grain harvest is now 20.8% complete, producing a crop of 33.6 MMT to date, with average yields of 3.47 MT/ha, an 18.8% increase on this time last year. Wheat accounts for 28 MMT of that total off 30.7% of the planned area. Wheat yields are averaging 3.6 MT/ha versus 3.1 MT/ha a year ago, say the Ag Ministry.

The Ukraine early grains harvest (which excludes corn) meanwhile is already 60% complete producing a crop of 19.1 MMT. Yields are averaging 3.22 MT/ha, up more than 9% on a year ago. Wheat accounts for 13.1 MMT of that total with yields at 3.49 MT/ha. The Ukraine Ministry say that 63% of the wheat harvested so far is of milling standard (versus around 70% a year ago).

The French rapeseed harvest has progressed to the north east of the country, and yields so far are disappointing and seed sizes are small. Wet weather in Germany means that the rapeseed harvest there has stalled, giving rise to yield and quality concerns.

The UK rapeseed harvest meanwhile is said to be around halfway done, with yields "slightly above average" but with the prospect of better yields to come, according to ADAS. Even slightly above average would be a big improvement on a year ago. Earlier in the week MARS increased their forecast for UK yields from 3.76 MT/ha a month ago to 3.81 MT/ha. That's 28.1% up versus 2013 and 11.4% above the 5-year average.

Wheat prospects in the UK also still look promising. After a couple of poor harvests in a row, maybe we were due a change of luck in 2014?

EU Rapemeal Prices

23/07/14 -- Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:

Thoughts From The Frontline On The Milling Wheat Market

23/07/14 -- I'm going to shock you now. I'm starting to turn a little bit friendly to the wheat market, at least the milling wheat market anyway. I will try and quantify my reasons why, although many of the factors at play still very much fall into the "unpredictable" category, but I'll give it a go.

First and foremost we have the ongoing situation in Ukraine and rising tensions between Russia and the West. Exactly how this situation will be resolved is very far from being clear, but Big Bad Vlad is not a man known for his kowtowing to the West is he?

Further US and EU sanctions against Russia look likely, although we don't know in what form these will take. Only an idiot would expect no retaliation from Mr Putin, and he's not exactly short of some nice cards if it turns into a game of poker. For a start he could freeze Western assets in Russia.

Certainly Germany would want to adopt a softly, softly approach, and avoid an all out trade war. German exports to Russia totalled EUR38 billion in 2013 - the highest of any EU nation.

In addition, there's gas. Europe relies on Russia for 24% of its natural gas supplies, and in many countries closer to them than we are in the UK this percentage is very high - pretty much 100% in the case of Estonia, Latvia, Finland and Lithuania for example. In Belarus, the Czech Republic, Slovakia and Bulgaria it's said to be 80-100% reliance, and in Ukraine, Austria and Greece it's 60-80%.

An escalating trade war with Russia would be bullish for world wheat prices, as global demand switches to the West.

Meanwhile who knows what will ultimately happen in Eastern Ukraine? I'm hearing reports of farmers in the region considering it currently to be "too dangerous" to harvest their wheat.

I went to Ukraine a few years ago and remember then of being told stories of men with guns and lorries simply turning up at a farm one day and essentially saying that they'd come to take "their wheat" away. Unless you know bigger, more well connected men with bigger guns then that's the sort of thing that can happen over there I was told. And that was then, not now.

I don't imagine that it's too easy to get contractors in to harvest your crops if you're in the east of the country either.

All this, and the fact that your wheat/corn is/will only be worth less than the cost of production if and when it's harvested will also have your Ukraine farmer pondering "what the fcuk am I going to plant for 2015, if anything?" I'd have thought. "And where's the money going to come from?" Many that do plant will likely be using inferior home-grown seed too.

Right now you'd have to say that the prospects for Ukraine getting a third bumper grain crop in a row in 2015 look relatively low. Meanwhile, if I was a betting man (and I am), then I'd be tempted to suggest that Russia might be due a weather-related production problem of it's own next year. Let's make this clear, I'm not forecasting a Russian drought in 2015, I'm just saying that in a country that's had two market-moving droughts in the last 5 years, getting 3 bumper crops in a row there is also statistically unlikely.

Now let's throw into the equation that fund money is short in wheat. Let's also consider that reports coming out of France suggest they might have a rather large crock of shit on their hands this year as far as milling quality goes. And there are rumours that there could be problems in Germany too when their harvest finally clicks into gear.

Now if the French wheat crop does turn out to be a pile of pooh, then we need to consider that 38-39 MMT of pooh is an awful lot of pooh. I haven't seen that much pooh since I last watched the Lenny Henry Show. Add in some extra German pooh, comparable with say the Vicar Of Dibley. And we potentially to have a large European excrement surplus in 2014/15, which isn't exactly over friendly to feed wheat prices though note.

The jury remains out on Romania's 2014 wheat crop as far quality is concerned, even if they have been picking up sales to Egypt's GASC of late (they are back in the market today incidentally, tendering for Sep 1-10 shipment). Incidentally, even if you feel comfortable buying Ukraine wheat for 2014/15, a greater proportion of their crop is only thought likely to be up to feed grade than normal this year.

French corn prices meanwhile are on their arse, currently down EUR2.50-3.50/tonne again this morning to the lowest levels in over 4 years. It seems like the conditions that have led to the French wheat crop downgrades are seen as positively beneficial for corn, at least for the time being. Another negative for those with feed wheat to sell, I'm afraid. I'd certainly fancy putting some milling wheat cover on at these levels though.

Chicago Markets Mostly Lower, But Downtrend Almost Done Says Analyst

22/07/14 -- Soycomplex: Beans closed mostly lower save for front end Aug 14. Oil World estimated the global 2014/15 oilseed crop at 505 MMT versus 488.4 MMT in 2013/14. That increase is down to soybean production, which they see rising from 284.6 MMT to 305.6 MMT. World rapeseed and sunflower output is seen slightly lower in the season ahead. Global oilseed ending stocks will rise from 85.9 MMT to 102 MMT, again this is essentially all down to soybeans, where world carryout is forecast at a record 88.4 MMT, up sharply from 70.9 MMT in 2013/14. The USDA announced 180,000 MT of new crop US meal sold to Vietnam, along with 225,000 MT of new crop US meal sold to unknown. They also announced 20,000 MT of new crop US bean oil sold to unknown. Argentina’s Rosario port workers ended their strike and went back to work yesterday. It's an uneasy truce though. Another port workers union in Argentina has threatened to go on strike today and customs workers are talking about strike action later in the week. Aug 14 Soybeans closed at $11.84, up 8 1/4 cents; Nov 14 Soybeans closed at $10.57 3/4, down 13 3/4 cents; Aug 14 Soybean Meal closed at $381.80, up $1.10; Aug 14 Soybean Oil closed at 35.93, down 21 points.

Corn: The corn market closed with losses of around 3-4 cents. The first day of a Doane’s crop tour reported largely excellent production potential in NW Illinois where a conservative yield estimate was said to be in the 190 bu/acre plus region, with higher probable. "Scouts in a couple of key corn producing regions report very little stress, high plant population with a chance to fill kernels to end of the cob and strong possibility of high ear weights," said Benson Quinn Commodities. Today is the second day, which will cover Western Illinois, Iowa, Southern Minnesota, Eastern Nebraska and Eastern Missouri. A Commerzbank analyst was quoted on Reuters as saying “We think the favourable US crop outlook should be priced in by now. Corn prices should not go down further, at least not on a lasting basis." He added "We think even the soybeans downtrend is more or less done." EU corn prices fell sharply on the day to set 4-year lows. The ongoing rain and warmth might not be helping the EU wheat crop much, but it will be doing no harm at all to corn, providing "hothouse" conditions. It may also mean that there's more feed wheat about, directly competing with corn. New crop Ukraine corn is said to be offered in the market at $188/tonne FOB the Black Sea for Oct/Nov shipment with bids around $182/tonne. Sep 14 Corn closed at $3.60 1/4, down 3 3/4 cents; Dec 14 Corn closed at $3.68 1/4, down 3 3/4 cents.

Wheat: The wheat market ended around 4-6 cents lower across the three exchanges. Japan is looking for 94,586 MT of milling wheat for September shipment in a routine tender, with 37,689 MT of if to be US dark northern spring wheat. SovEcon said that Russia had harvested around 22 MMT of wheat so far (to Jul 18) with yields averaging 3.6 MT/ha versus 3.1 MT/ha this time a year ago. Improved weather conditions mean that Russia will harvest 56.5 MMT of wheat this year, said IKAR. The USDA currently only have the Russian wheat crop down at 53 MMT versus production of 52 MMT last year. Kazakhstan said that they'd finished 2013/14 exporting 8.7 MMT of grains out of their 18.9 MMT harvest. Production this year is expected to be around 1 MMT lower. They said that they had exported 219,400 MT of grain between July 1-20 versus 374,100 MT in the same period a year ago. Ukraine said that they'd exported 1.2 MMT of grains so far this month, including 232 TMT of wheat. The Ukraine early grain harvest is now at 19.1 MMT, according to the Ag Ministry there. Persistent and heavy rain in France is said to have caused "widespread crop damage" according to a report on Reuters. French hagbergs could only average 150-160 this year whereas last year 99% of the crop made 220 or higher, they said. There are now also said to be similar concerns emerging in parts of Germany. Sep 14 CBOT Wheat closed at $5.24 1/2, down 5 1/2 cents; Sep 14 KCBT Wheat closed at $6.21 1/4, down 6 3/4 cents; Sep 14 MGEX Wheat closed at $6.18 3/4, down 4 1/2 cents.

Is The Rout Almost Over, Especially For Milling Wheat?

22/07/14 -- EU grains markets posted a mini "Turnaround Tuesday" event, closing mostly higher, consolidating from recent heavy losses that have driven prices to multi-year lows.

The day finished with Nov 14 London wheat up GBP060/tonne at GBP127.65/tonne, Nov 14 Paris wheat ended EUR1.75/tonne higher at EUR178.00/tonne, Aug 14 Paris corn was down EUR5.25/tonne at EUR160.25/tonne, whilst Aug 14 Paris rapeseed was up EUR5.75/tonne to EUR314.75/tonne.

Fresh news was relatively thin on the ground. Russia’s Ag Ministry said that as of Jul 21 the country had harvested 31.7 MMT of grain on 9.1 million hectares. Average yields are said to be 3.48 MT/ha, up 19% on a year ago.

Is all the good news coming out of Russia simply too good to be true and at least partly a reaction to the bad press that they have been getting from the West lately?

We still don’t know how this developing situation will pan out. A best case scenario would seem to be an edgy stalemate developing, with Russia pulling back on its apparent support for the rebels in the east of Ukraine.

A deepening of the conflict would cause further destabilisation in eastern Ukraine, with the possibility of greater/extended Russian intervention. That could even lead to Russia attempting to annex Eastern Ukraine- where the majority of Russian speakers and sympathisers reside.

They did after all take Crimea with barely a whimper from the West.

Such a move would undoubtedly lead to tough “level 3” sanctions from Europe. This would make it more difficult for Russian banks and major businesses to access global capital markets. Don't forget that Russia is already teetering on the brink of recession.

Putin would not want that, but climbing down is not his forte. If the country was to be pushed into recession then who better to blame than the West?

Back to the fundamentals. Ukraine said that they'd exported 1.19 MMT of grain so far this month, including 232 TMT of wheat, 660 TMT of barley and 284 TMT of corn. Their harvest is also said to be going well by the Ag Ministry with yields up 7.5%, but who's to say that they aren't also playing the same game as Russia?

Currently international buyers still seem relatively relaxed about buying from Russia, but that’s a situation that could change quickly. Ukraine could also soon be viewed as an “unreliable” supplier if there were question marks raised over its ability to honour its contractual obligations.

Meanwhile, there's growing chatter that all is far from well with France's wheat harvest. The volume might be there, but the quality may not be. Reuters report that premiums for higher quality milling wheat jumped yesterday after more heavy weekend rains. Quality premiums are now "close to levels seen during the poor quality harvest of 2007," they said. Some French buyers are now looking to Germany for their requirements, Reuters suggested.

That could still spell bad news for feed wheat of course, especially with a large EU and FSU corn crop potentially waiting in the wings.

That may also explain the poor performance by Paris corn today, relative to the other grains. The wet weather may be damaging to milling wheat quality, but beneficial to spring planted corn.

Chicago Grains Lower, Corn At New 4-Year Lows

21/07/14 -- Soycomplex: Beans closed lower. Weather forecasts call for a couple of days of Midwest heat followed by a relatively cool and non-threatening start to the key pod filling month of August. "August weather will strongly influence the Midwest soybean yield as this is period when pod filling occurs. Seeds developing pods are enlarged with above-normal rainfall in August, boosting the yield," said Martell Crop Projections. The USDA announced 135,000 MT of US meal sold to unknown for 2014/15 delivery. Exporters keep finding old crop beans to sell too, they USDA also announced 120,000 MT of US beans sold to China for 2013/14 delivery. Chinese customs data shows that the country imported 6.4 MMT of soybeans in June, down 7.76% from a year ago. Jan-Jun imports are now 34.2 MMT, up 24.43% from a year ago. After the close the USDA raised their soybean good/excellent crop ratings by a point on last week to 73% versus 64% this time last year. Last week's ratings were already the best in 20 years. They said that 60% of the crop is blooming, up from 41% a week ago and versus 56% for the 5-year average. They said that 19% of the crop is setting pods compared to the 5-year average of 17% at this time. Fund money is now short on beans for the first time since 2011, according to Friday's CFTC data. They were estimated as adding a further 6-7,000 lots to that position today. Aug 14 Soybeans closed at $11.75 3/4, down 1 cent; Nov 14 Soybeans closed at $10.71 1/2, down 13 3/4 cents; Aug 14 Soybean Meal closed at $380.70, up $0.40; Aug 14 Soybean Oil closed at 36.14, down 43 points.

Corn: The corn market closed around 6-7 cents lower, setting fresh 4-year lows. The market views current weather conditions as non threatening. "The week is beginning on a warm note with mid and upper 80s F, but by Wednesday afternoon much cooler Canadian air would begin descending into Central United States. By midweek, a much cooler weather pattern would develop, mid 70s F for highs and mid 50s F for lows. Coolness in July is a mixed blessing, on the one hand holding down evaporation and conserving soil moisture. However, corn development would be set back increasing worries about potential freeze damage in the fall. July is the warmest month of the growing season, so reduced heat units would have a strong impact," said Martell Crop Projections. Chinese customs data shows them importing only 27,250 MT of corn in June, taking the calendar year to date total to less than 1.4 MMT, down 9.52% from a year ago. The EU Commission's MARS unit estimated EU-28 corn yields at an average 7.23 MT/ha, up from the 7.18 MT/ha forecast last month, 7.6% up on last year and 6.6% above the 5-year average. Talk of more feed wheat around in Europe this year also leans bearish for corn. After the close the USDA held steady with their good/excellent crop ratings for corn at 76% (also said to be the highest rating in years). They said that 56% of the crop was silking, up from 34% last week and in line with the 5-year average of 55%. Fund money was judged to have been a net seller of around 7,000 lots on the day. Sep 14 Corn closed at $3.64, down 7 1/4 cents; Dec 14 Corn closed at $3.72, down 6 1/2 cents.

Wheat: The wheat market closed around 2-7 cents lower across the three exchanges. The market remains concerned that the US is missing export business to foreign competition, especially to the likes of Russia, Romania and Ukraine. The ongoing geo-political problems in the region are keeping shorts a little nervous though, as we saw last Thursday immediately following the news of the shooting down of the Malaysia Airlines jet. Private Egyptian buyers were reported to have bought 60,000 MT of Black Sea origin wheat. Pakistan were said to have bought 130,000 MT of Black Sea origin wheat for Jul-Aug shipment. Russia's Jul 1-16 grain exports were said to be in excess of 1 MMT, up 47% on a year ago. That total included more than 800 TMT of wheat. Algeria bought 200 TMT of optional origin feed barley for Nov-Dec shipment in a tender. Chinese customs data shows them importing 112,254 MT of wheat in June, down 48.83% versus June 2013. Calendar year to date wheat imports are now nearly 2.6 MMT for the half year though, up 82.86% versus the same period in 2013. Ukraine said that they'd harvested over 16 MMT of new crop early grains (excluding corn), including nearly 11 MMT of wheat. The EU Commission's MARS unit estimated EU-28 soft wheat yields at 5.80 MT/ha, marginally down on the 5.81 MT/ha forecast last month (which was also the average yield in Europe last year), but up 4.2% on the 5-year average. The USDA said that the 2014 US winter wheat harvest was 75% done, the same as the 5-year average. Spring wheat crop conditions were unchanged on last week at 70% good/excellent. Sep 14 CBOT Wheat closed at $5.30, down 2 1/4 cents; Sep 14 KCBT Wheat closed at $6.28, down 5 3/4 cents; Sep 14 MGEX Wheat closed at $6.23 1/4, down 7 cents.

EU Grains: The Song Remains The Same

21/07/14 -- EU grains closed lower again, with London and Paris wheat slumping to fresh 4 year lows.

The day ended with new crop Nov 14 London wheat closing GBP1.95/tonne lower at GBP127.05/tonne, Nov 14 Paris wheat was EUR3.00/tonne easier at EUR176.25/tonne, Aug 14 Paris corn was down EUR1.25/tonne to EUR165.50/tonne and Aug 14 Paris rapeseed fell EUR8.25/tonne to EUR309.00/tonne.

Paris wheat prices are now at 4-year lows, along with London wheat. Paris rapeseed meanwhile fell more than EUR20/tonne to EUR296.50/tonne (a 4 1/2 year low) in early dealing, before recovering some of those losses.

The EU Commission's MARS unit forecast EU-28 average soft wheat yields at 5.80 MT/ha, similar to last year and 4.2% above the 5-year average. All barley yields were estimated at 4.54 MT/ha, slightly below 4.85 MT/ha in 2013, although still 1.2% up on the 5-year average. Corn yields were estimated at 7.23 MT/ha versus 6.72 MT/ha in 2013 and 6.6% above the previous 5-year norm. OSR yields were forecast at 3.32 MT/ha versus 3.11 MMT last year and 8.4% higher than the 5-year average.

In the UK specifically, they estimated the wheat yield at 8.13 MT/ha. That's up from their previous forecast of 8.05 MT/ha last month, 10.1% higher than a year ago and 8.5% above the 5-year average.

They said that UK 2014 barley yields would come in at 5.81 MT/ha, down from the 5.86 MT/ha forecast a month ago, and 0.7% below last year's 5.85 MT/ha. That's still 1.2% above the 5-year average however.

As far as UK rapeseed yields go, they increased their forecast from 3.76 MT/ha a month ago to 3.81 MT/ha. That's 28.1% up versus 2013 and 11.4% above the 5-year average.

On face value, if we were to assume that these yield estimates are correct, and that the HGCA/Defra planted area figures are also accurate, then the UK would end up with a 2014 wheat crop of 15.93 MMT (versus 11.92 MMT in 2013), along with 6.33 MMT of barley (7.09 MMT last year) and 2.74 MMT of rapeseed (2.13 MMT). That of course excludes any whole cropping.

"The overall EU-28 cereal yield forecast for 2014 is favourable, at the level of last year and above the average of the past five years (by 4.4%). Aside from durum wheat and spring barley, all cereals are significantly above the five-year average and close to the good yield levels of 2013," MARS said.

In the UK they said that "weather conditions were generally favourable for winter and spring crops. Substantial rain during the first half of July benefited spring crops in particular, but could locally have affected the grain quality of winter cereals."

Elsewhere, the Ukraine Ag Ministry said that the country's early grains harvest (excluding corn) had produced a crop of 16.11 MMT to date off 52% of the combinable area. Yields are up 7.5% at 3.14 MT/ha. That total includes 10.87 MMT of wheat and 4.97 MMT of barley. Ukraine growers have also harvested 1.29 MMT of winter OSR.

The Russian Ag Ministry said that they'd exported over 1 MMT of grain in the Jul 1-16 period, an increase of 47% on a year ago. That total includes 807 TMT of wheat, 164 TMT of barley and 34 TMT of corn. Russia’s Ag Ministry estimated Russia 2014/15 grain exports at 27-30 MMT versus 25.372 MMT in 2013/14.

Reuters reported that private Egyptian buyers purchased 60 TMT of Black Sea milling wheat, including 30 TMT of 12.5% protein material at $257 C&F (around GBP150.50/tonne including freight) and 30 TMT of 11.5% product at $247 C&F (circa GBP144.50/tonne including freight).

Pakistan were said to have bought 130,000 MT of Black Sea origin wheat for July/August shipment.

Chicago Grains Mostly Lower, Large US Crops Loom

18/07/14 -- Soycomplex: Beans closed mixed but mostly lower, save for the front end. Strong Chinese buying has been rumoured this week, following the dip in prices to 2 1/2 year lows. The USDA appeared to confirm this by announcing 116,000 MT of optional origin soybeans sold to China for 2014/15 delivery, along with 464,000 MT to unknown under the daily reporting system. Thailand bought 150,000 MT of South American soymeal for Dec-Feb shipment. Argentina's Ag Ministry that farmers there have sold 45.53% of their 2013/14 soybean crop versus 52.43% a year ago. Negotiations in the labour dispute in Argentina's Rosario between dock workers and the government have been pushed back until Monday, although their strike rumbles on. Argentine truckers may also strike on Monday. SocGen forecast 2014/15 US soybean ending stocks at a weighty 464 million bushels versus the USDA's current forecast of 413 million and well over triple carryout at the end of 2013/14 of 140 million bushels. They estimated the average Q3 soybean average price at $10.85/bu and forecast the Q4 soybean average price rising to $11.17/bu. Oil World forecast the global rapeseed crop at 68.3 MMT, a 2% reduction on last year, led by a sharp decline for Canada - down from 17.96 MMT in 2013 to 14.8 MMT in 2014. They estimated global sunseed output at 40.5 MMT versus 42.1 MMT last year. Aug 14 Soybeans closed at $11.76, up 1 1/4 cents; Nov 14 Soybeans closed at $10.84 1/2, down 9 1/2 cents; Aug 14 Soybean Meal closed at $380.00, down $0.50; Aug 14 Soybean Oil closed at 36.47, up 10 points.

Corn: The corn market slumped to fresh 4-year lows on a continued non threatening US weather outlook. "Reduced rainfall and strong sunshine this week has favoured Midwest corn and soybeans, though crop development has been set back by sharply cooler temperatures. Drier weather in the Midwest this week is beneficial for corn following several weeks of relentless rainfall previously," said Martell Crop Projections. The outlook for bumper 2014 US corn production continues to weigh. SocGen forecast average 2014 US corn yields of 167 bu/acre versus 165.3 bu/acre currently from the USDA. The vast majority of the trade are now factoring in a number of 167-170 bu/acre it would seem. Some estimates, like yesterday's from the Commodity Weather Group (CWG), a US weather forecasting firm, are even higher. The USDA seem likely to revise their estimate upwards next month once we have passed the critical pollination period of middle to late July. Despite potentially higher production in 2014, SocGen however estimated 2014/15 US corn ending stocks at "only" 1.56 billion bushels versus the USDA's current 1.8 billion forecast and 1.246 billion in 2013/14. They aren't too bearish on prices either, forecasting an average Q3 US corn price of $4.44/bu and a Q4 average price of $4.38/bu. Argentina's Ag Ministry said that growers there have sold 49.15% of their 2013/14 corn crop versus 69.49% a year ago. Japan's corn usage in feed was 46.8% in May versus 42% in May 2013 as the discount to wheat returns to more "normal" levels, according to the Ag Ministry there. Sep 14 Corn closed at $3.70, down 9 1/2 cents; Dec 14 Corn closed at $3.77 1/2, down 9 3/4 cents.

Wheat: The wheat market closed anywhere from 6 to 18 cents lower on the day, reversing yesterday's "knee jerk" price reaction to the news of the Malaysian passenger jet being shot down over Ukraine. Despite US wheat prices falling to 4 year lows, they still aren't picking up a great deal of export business, aside from what you might call from "traditional" buyers. Yesterday's weekly export sales of 320,700 MT were far from spectacular. Iraq bought 100,000 MT of hard wheat from Russia and Canada for Oct-Nov shipment. Russia remains a very active and aggressive seller, with their 2014 wheat harvest now 22.7% done and average wheat yields said to be up 14% at 3.61 MT/ha. Average Russian grain yields, including barley, are up by even more. The Argentine Ag Ministry said that farmers there have only forward sold 61.76% of their 2013/14 wheat crop versus 96.10% a year ago. They said that Argentine farmers will plant 4.5 million hectares of wheat for the 2014/15 harvest, an increase of 23% versus last year. Plantings are so far 73% complete, a similar figure to 12 months ago, they added. The final planted area will be dependent upon some waterlogged and flooded areas returning to more normal levels, they said. The Buenos Aires Grains Exchange yesterday cur their Argentine planted area estimate to 4.2 million ha, saying that 80% of the crop was already in the ground. This large jump in plantings in Argentina this year will potentially impact upon demand for US wheat in the first half of 2015, as Brazil (who are also hoping for/expecting a large jump in production of their own this year) have been big "bonus" buyers of US wheat this year. Sep 14 CBOT Wheat closed at $5.32 1/2, down 18 1/4 cents; Sep 14 KCBT Wheat closed at $6.33, down 16 cents; Sep 14 MGEX Wheat closed at $6.30 1/4, down 6 3/4 cents.