Chicago Grains Mixed, Corn Planting Advances But Still Behind Schedule
20/04/15 -- Soycomplex: Beans closed higher on talk of another round of Brazilian trucker strikes/blockades being on the way, possibly as early as the end of the week. News that China had cut bank reserve rates in an effort to stimulate the economy there was also seen as positive. Weekly export inspections were modest though at 147,939 MT versus 450,365 MT the previous week. Still, the fact remains that 45 MMT of the USDA's export forecast for the entire season of 48.7 MMT is already shipped and gone. Only 31,614 MT of this week's export inspections were headed for China, but according to last week’s export sales report unshipped sales to China were only 185,000 MT so this is not an
unexpected drop-off, noted Benson Quinn. The USDA haven't yet started reporting on soybean planting progress on a national level. Some southern states are reporting individually though, with Arkansas at 11% done versus 12% on average. Missouri is 32% complete versus 24% on average and Louisiana is 16% planted versus 27% typically at this time. Oil World said that world soybean production in 2015/16 will fall for the first time in 4 years. They see the US crop at 104 MMT, with production in Brazil at 92 MMT and Argentina chipping in with 57 MMT. May 15 Soybeans closed at $9.77 1/2, up 8 3/4 cents; Jul 15 Soybeans closed at $9.79 1/2, up 8 cents; May 15 Soybean Meal closed at $318.50, up $3.50; May 15 Soybean Oil closed at 31.59, up 7 points.
Corn: The corn market ended 1-2 cents easier despite robust weekly export inspections in excess of 1 MMT, which were above trade estimates of 750-850 TMT. Cumulative season to date inspections are now 55% of the USDA estimate for the season, which is still more than 5 points behind the average for this time. The USDA reported US corn planting at 9% complete on a national level, up 7 points on a week ago, but still 4 points behind the 5-year average. "Weather conditions last week were exceptionally warm raising soil temperatures above the 50 F threshold for corn germination. Producers have begun planting on a wide scale," said Martell Crop Projections. However "a sudden shift in the weather is underway in the Midwest, where much cooler temperatures are predicted this week, some 5-10 degrees below normal," they add. Corn planting is most advanced in TX at 51% (but down compared to 59% for the 5-year average), NC at 40% (versus 54% normally) and KS at 23% (19% on average). Sorghum planting is also a little behind schedule at this early stage, with 19% of the crop in the ground versus 22% for the 5-year average. Ukraine said it had exported 27.7 MMT of grains so far this season, of which 13.42 MMT was corn. Ukraine seaports exported just under 300 TMT of grain last week, of which almost 75% was corn as they now major on that particular grain. Spain's corn crop is seen falling more than 5% this year to 4.23 MMT. Poland's corn crop will fall slightly, down 2% to 4.4 MMT, according to the USDA's FAS in the country. May 15 Corn closed at $3.78, down 1 3/4 cents; Jul 15 Corn closed at $3.84 3/4, down 2 cents.
Wheat: The wheat market closed higher on all three exchanges. This may have been down to short-covering and profit-taking, with fund money revealed to be sitting on a record large short position in CBOT wheat on Friday night. Fundamentally though, nothing much has changed. The USDA left winter wheat crop conditions entirely unchanged from a week ago at 19% poor/very poor, 39% fair and 42% good to excellent. Some were looking for an improvement (the average estimate in a Bloomberg survey was 44% good to excellent), although the crop maybe hasn’t had enough time to show the benefits of rains late last week, suggested Benson Quinn. Winter wheat was 16% headed, up 10 points from a week ago and one ahead of the 5-year average. Spring wheat planting was said to be racing ahead well, at 36% done versus 17% a week ago, 19% for the 5-year average and only 9% complete this time last year. WA is already 88% complete versus 57% normally and SD is 73% done compared to only 31% typically at this time. Canada reported wheat exports (excluding durum) up 4.5% so far this season at 11.1 MMT. Durum exports are up 23% at 3.7 MMT. Egypt bought 300 TMT of a mixture of French, Russian and Romanian origin wheat over the weekend. Bangladesh bought 50 TMT of French wheat. Jordan are tendering for 100 TMT of optional origin wheat for Dec/Jan shipment. IKAR were said to have raised their forecast for the 2015 Russian wheat crop from 52-57 MMT to 54-59 MMT. There's talk of Russia looking to come up with some way of reducing the keenness of some trading houses to aggressively sell grain for export, to the detriment of domestic needs, without giving any specifics of how they might do this. May 15 CBOT Wheat closed at $4.98 3/4, up 4 1/4 cents; May 15 KCBT Wheat closed at $5.12 1/2, up 3 1/4 cents; May 15 MGEX Wheat closed at $5.39, up 6 1/4 cents.
London Wheat Slumps To Fresh 6-Month Lows, Yet Rapeseed At One-Year Highs
20/04/15 -- EU grains closed mixed to start the week, with Paris markets generally firmer, and London wheat lower as the pound rose versus the euro.
At the finish, May 15 London wheat was down GBP0.75/tonne at GBP114.55/tonne; May 15 Paris wheat was unchanged at EUR182.75/tonne; Jun 15 Paris corn was down EUR0.25/tonne at EUR162.50/tonne; May 15 Paris rapeseed was EUR1.75/tonne higher at EUR375.75/tonne.
For London wheat this was the lowest close for a front month since 13 Oct last year. In contrast it was the highest close for a front month on rapeseed since the May 14 contract went off the board on the last day of April 2014.
The reason for the latter may have been FranceAgriMer forecasting French 2014/15 ending stocks at just 83 TMT on 30 Jun. French exports in the current season were raised from 1.275 MMT to 1.36 MMT.
Egypt's GASC took advantage of the recent price drop, buying 300 TMT of wheat over the weekend, consisting of three 60 TMT cargoes of French material and one each of Romanian and Russian origin for June 5-15 shipment.
The prices paid were between $219.50/tonne to just over $223/tonne on a C&F basis.
The cheapest origin was France, which was pitched at around $206.00-208.50/tonne FOB, with Romanian wheat at $212.50/tonne and Russian origin just shy of $214.00/tonne. Although the Russian material was the dearest, on both an FOB and C&F basis, it was interesting nevertheless to see it booked and in the ballpark given the hugely punitive export duty that exists for that period.
Bloomberg reported that the Russian Ministry are looking at ways to "eliminate (the) inordinate appetite of a number of grain traders and their patrons” from aggressively exporting Russian grains, prioritising domestic needs first.
Bangladesh were also said to have bought 50 TMT of French origin wheat in a tender, whilst Pakistan purchased 40 TMT of Ukraine rapeseed. Jordan are tendering for 100 TMT of wheat for Dec/Jan shipment.
APK Inform said that Ukraine's seaports exported 299 TMT of grains last week, down from the near 450 TMT shipped out the previous week. Corn accounted for 74% of last week's volume (221.7 TMT), with wheat the remaining 26%.
The Ukraine Ministry said that the country had now exported 27.7 MMT of grains this season, including 13.42 MMT of corn, 9.83 MMT of wheat and 4.26 MMT of barley.
Russian seaports exported 203 TMT of grains last week, down from the near 329 TMT shipped out the week prior to that. Last week's volume included 142.2 TMT of wheat, 24.5 TMT of corn and 36.1 TMT of barley, APK Inform said.
Agritel said that new crop grain prices FOB the Black Sea are less than $200/tonne for 12.5% milling wheat, with barley around $20/tonne cheaper than that and corn a further $10/tonne below those levels. That's the equivalent of circa GBP134/tonne for the milling wheat, under GBP120/tonne for barley and less than GBP114/tonne for corn.
The price differential between old and new crop London wheat remains historically high at over GBP10/tonne, providing those many carrying old crop with something of a "comfort blanket" that they are doing the right thing.
"Is the UK feed wheat market at risk of carnage?" the HGCA asked last week. With "how much wheat do farmers have to move before harvest" being the big question. Storage and/or cash flow problems could yet force farmers still carrying old crop stocks to sell the majority of the surplus prior to the arrival of new crop, they muse. That could put nearby levels under further pressure yet, until they get to such a discount to new crop that those with storage can no longer say no, and step in to take advantage of the large carry on offer.
The alternative scenario, the HGCA highlight, is one where shorts want/need to buy old crop to cover their requirements, bringing nearby levels up to closer to a more normal differential to new crop. The former case is probably a more likely guess as to have things might ultimately pan out than the latter at this stage though.
It's currently quite difficult to see support for old crop coming from genuine end-users as we enter what is traditionally a low demand for feed time of the year. Meanwhile, one trader I spoke to yesterday told me that full spec milling wheat premiums in his area were down from around GBP50/tonne in January to more like GBP30/tonne in April.
Spain said that it would harvest 10.7% more soft wheat this year at 6.19 MMT. Although plantings are virtually identical to a year previously, yields are seen rising from less than 3.0 MT/ha to over 3.3 MT/ha. Spanish barley production meanwhile will leap almost 24% to 8.34 MMT. Spain of course are traditionally one of the UK's big export homes.
Finally, the USDA's FAS in Poland estimated their wheat crop down 8.6% at 10.6 MMT this year, with exports in 2015/16 falling nearly 13% to 2.7 MMT.
Fund Money Sitting On Record Short Position In CBOT Wheat
I know I've mentioned this sort of thing before, but in my defence not for a while I haven't!
The image shows the relationship between fund length, or otherwise, and price. Even Stevie Wonder can see that there's a clear correlation. Not that the regulators would agree, for every buyer there must be a seller and vice versa, so how can their actions influence price? They are only providing much-needed market liquidity etc, etc. Bless the little lambs, and thank them heartily for the liquidity that they are undelfishly providing for you Mr Farmer when you say your prayers tonight.
The only plus side to all of this (yes - believe it or not there is one) is that you will notice that the last few times they've been anything like this short, something gets them spooked and they all exit their positions en-masse. This then causes a sharp and sudden upside price correction, as eager buyers rapidly outnumber willing sellers.
Still, what do I know....
"A fool must now and then be right, bu chance" - William Cowper
The Results Of Ukraine/Russian Crop Tour Are In...
If you bothered to cough up the relatively small amount of money required to sponsor him that is.
Still, if you didn't it's still not too late, for a dirt cheap minimum contribution of GBP75, EUR100 or USD115 he'll send you a detailed copy of his findings via email and/or from a downloadable link.
It may not surprise you to hear that things don't tie up too closely with the official crop ratings from the various associated Ag Ministries in either country if you are prepared to put the miles in and actually get out there yourself.
The tour covered almost 5,000 km of the main winter crop areas of Ukraine and Russia and essentially looked at the condition of small grains and rapeseed.
There's also a precis of the vibe among various farm managers and industry personnel that they met along the way, regarding their take on crop conditions, the outlook for the rest of the season and how true the reports of lack of credit are.
A June tour is now being planned to see how these crops look then, and also to have a peek at spring sown corn and sunflowers.
You can email Mike at: agronomy.croptour@yahoo.co.uk
Chicago Corn And Beans Post Small Weekly Gains, Wheat Down Again As Fund Money Builds Record Short
17/04/15 -- Soycomplex: Beans closed with small gains on the day (on old crop at least), and finished up with relatively modest advances for the week too. Fund money was seen as ending up a net buyer of around 2,000 soybean contracts on the day. "This afternoon’s Commitment of Traders report shows that the speculative funds piled on the new short positions last week as the market tumbled 34 1/2 cents basis the May future. The spec trader increased his short position by 27,845 contracts to net short 76,269 lots," noted Benson Quinn. Support for old crop beans comes from the fact that US exporters have already sold 48.537 MMT of US soybeans for export this season, with the vast majority of that (almost 45 MMT) already shipped and gone. The USDA forecast for the entire season is "only" for US exports of 48.716 MMT, so shippers are already at 99.6% of that target. This week's better than expected old crop weekly export sales and a March NOPA crush at record levels, and well above even the highest trade estimate, are also supportive to the nears. However, Celeres today estimated the Brazilian bean crop at a record 93.9 MMT. The Buenos Aires Grain Exchange yesterday estimated this year's Argentine soybean crop at a record 58.5 MMT. With the Brazilian soybean harvest winding down, and the Argentine one making rapid progress, attention is now starting to switch to US planting potential. So all eyes will be on the fluctuating US weather forecasts across the coming months. The magnitude of the fund short in beans leaves the market vulnerable to an upside correction should there be a perceived threat to US output this year, which might prompt a re-test of the $10/bu level. If the weather plays ball, then record plantings and likely record US production in 2015 could see prices in the low $9/bu region, we haven't seen beans close below $9/bu since October 2009. May 15 Soybeans closed at $9.68 3/4, up 2 3/4 cents; Jul 15 Soybeans closed at $9.71 1/2, up 2 1/2 cents; May 15 Soybean Meal closed at $315.00, up $2.60; May 15 Soybean Oil closed at 31.52, down 24 points. For the week, front month beans were up 17 1/4 cents, meal advanced $5.80 and oil gained 43 points. The new crop soybean:corn price ratio ends the week at 2.36:1, up from 2.34:1 a week ago.
Corn: The corn market managed small gains on the day and for the week. Fresh news was thin on the ground today. "Monday’s (US) planting progress estimate is expected to confirm limited progress, which may have triggered light short covering," suggested Benson Quinn. The USDA reported US corn plantings at only 2% complete in their first numbers of the season last week. That was one point behind this time last year, and three behind the previous 5-year average pace. Ukraine said that they aim to export 3.5 MMT of corn to China this calendar year. Planting of the 2015 corn crop in Ukraine is now underway at 2% complete. UkrAgroConsult see plantings falling from 4.7 million ha to 4.4 million this year. Agritel estimated the EU corn crop in 2015 down from last year's record 74 MMT to 66 MMT. FranceAgriMer said that sowing of the French corn crop was 27% complete as of Apr 13, up from only 2% done a week previously, but still behind last year's pace of 35% sown. Agritel said that warm and dry weather should see further rapid progress made in the week ahead. Dr Cordonnier said that "the weather in Brazil continues to be beneficial for the development of the safrinha corn crop." Growers in Mato Grosso already have almost half their safrinha corn crop sold versus only 15% committed this time a year ago, say IMEA. The reason for the faster selling this year is the weaker Brazilian real, says Dr Cordonnier. Celeres estimated the Brazilian corn crop at 80.3 MMT, much higher than the USDA's 75 MMT forecast, and up 3.5 MMT on their last prediction. China reportedly only sold 1% of the near 300 TMT of domestic corn offered up for sale at auction today. In contrast all the near 36 TMT of US origin corn was sold. The reason for the difference is the low quality of the domestically produced corn on offer, said CNGOIC. For the week through to Tuesday night, fund money increased their net short in corn by around 39,000 lots to nearly 87,000 contracts. May 15 Corn closed at $3.79 3/4, up 3 1/2 cents; Jul 15 Corn closed at $3.86 3/4, up 3 1/2 cents. May 15 was up 2 3/4 cents on the week.
Wheat: The wheat market ended the day narrowly mixed, but lower across the board for the week on all three exchanges. In Chicago, prices are now below $5/bu, and could be lining up a test of the September lows around $4.75-4.80/bu. We haven't seen prices trade below that since the first half of 2010. The strong dollar, and consequent lack of US exports, is the problem. Concerns over the state of health of the 2015 US winter wheat crop is about the only fundamental left to prevent a total capitulation. Rain is on the radar, moving across parts of Nebraska, Kansas and Oklahoma today, and are forecast to last at least through to Sunday. Have these rains come too late to do much good though? The USDA will update us with their latest crop condition ratings on Monday. Last week they had the US winter wheat crop rated 42% good to excellent, down by two points from previous week. The crop was then rated 19% poor to very poor, up from 16% a week previously. They will also report on spring wheat planting progress, which was 17% complete last Sunday night versus 5% a year ago and 11% done for the 5 year average. Tonight's commitment of traders report reveals fund money sitting on a record net short of around 82k contracts in Chicago wheat. That's over 11 MMT, and more than the expected entire size of the 2015 US SRW crop, so there could be some upside if they get spooked by anything. But what? Russia has said that it will be June before it decides on what to do next with the country's wheat export duty. The Russian Ag Minister is reported to have said that he sees no reason to prolong the duty beyond the end of June. Stats Canada are due out next Thursday April with their Canadian 2015 planting intentions report. A Reuters survey pegs the all wheat average trade estimate at 24.2 million acres versus the 2014 area of 23.835 million. For barley the average estimate is 6.7 million acres versus the 2014 area of 5.88 million. May 15 CBOT Wheat closed at $4.94 1/2, unchanged; May 15 KCBT Wheat closed at $5.09 1/4, up 1 cent; May 15 MGEX Wheat closed at $5.32 3/4, down 2 1/4 cents. For the week that puts Chicago wheat 32 cents lower, with Kansas down 52 1/2 cents and Minneapolis down 48 1/4 cents.
EU Grains Mostly Lower On The Day, And For The Week
17/04/15 -- EU grains were mixed, but mostly a little lower on the day. Rapeseed again bucked the trend, and was the only commodity to post a net weekly gain.
The session ended with May 15 London wheat down GBP0.35/tonne at GBP115.30/tonne, May 15 Paris wheat was down EUR0.50/tonne at EUR182.75/tonne, Jun 15 Paris corn fell EUR1.25/tonne to EUR162.75/tonne and May 15 Paris rapeseed rose EUR2.50/tonne to close at EUR374.00/tonne.
For the week, London wheat fell GBP5.20/tonne, or 4.3%, with Paris wheat down EUR7.50/tonne, or 3.9%. Paris corn lost a more modest EUR1.50/tonne, or less than 1%, and Paris rapeseed rose EUR4.25/tonne, or 1.3%, versus last Friday.
The spread between old crop and new crop London wheat continues to widen, finishing at GBP10.40/tonne tonight, up from GBP9.75/tonne last week and GBP8.80/tonne at the beginning of the month. It's clearly the old crop that's under pressure for the time being.
As mentioned previously, wheat carryover stocks are seen much higher in Europe at the end of the season than they were a year ago - despite exports running at record levels. The firm US dollar means that their export campaign has been a poor one in 2014/15, so their stocks are higher too. In Russia, bumper production last year, and the introduction of the Feb 1 export duty on wheat, also means that they will begin 2015/16 with much higher stocks than a year ago.
Rosstat reported that Russian grain stocks held in commercial hands as of Apr 1 were 22.7 MMT, up 17.3% compared with a year previously. Grain harvesting and processing organisations were sitting on 29.5% more inventory than a year ago, including 20.6% more wheat.
The Russians have now stated that a decision on whether to alter, cancel or prolong the export duty on wheat won't be made any earlier than mid-June.
Meanwhile spring grain planting is about 6.4% complete on 2 million ha in Russia, down from the 2.2 million ha that had been sown this time a year ago.
Ukraine has also planted 2 million ha of early spring grains, which in their case is 86% of the planned area. The majority of that is spring barley, which has been sown on 1.5 million ha, or 85% of government expectations. Ukraine’s statistics agency said Ukraine’s April 1st grain stocks were 16.2 MMT, up 33% from a year ago
Corn planting is also now underway in Ukraine, with an estimated 2% of the 2015 crop now in the ground. Agritel say that most analysts are predicting the Ukraine corn planted area to decline 5-8% this year, estimating plantings themselves at 4.4 million ha, a 6.4% fall compared to 4.7 million ha a year ago.
They also forecast the EU 2015 corn crop at 66 MMT, down 10.8% on last year's record 74 MMT. French sowing is expected to make further rapid progress next week if the weather forecast for warm and dry conditions holds true, they said.
FranceAgriMer today said that a quarter of the anticipated French corn crop was planted in the week through to Apr 13, taking the total area sown to 27%, although that's still down on 35% complete this time a year ago.
French spring barley planting has been finished for a few weeks now, and the crop is 100% emerged and 46% at the early tillering stage versus 18% a week ago and 41% this time last year.
As far as crop conditions go, 92% of French winter wheat is rated good to very good, up a point on a week ago and 17 points ahead of this time last year. Winter barley ratings were unchanged on last week at 91% good to very good versus only 74% at this point in 2014. Spring barley is seen at 96% good to very good, unchanged on last week and up from only 77% this time last year.
In other news, Reuters reported that Germany would load a 60,000 MT wheat cargo destined for Iran next week. The Middle Eastern nation has become a major buyer of German wheat over the last 6 months after Western sanctions against them were relaxed.
Chicago Soybeans And Corn Little Changed, Wheat Ends Higher For Once!
16/04/15 -- Soycomplex: Beans ended with small gains. Weekly soybean export sales of 312,600 MT for 2014/15 were up noticeably from the previous week and from the prior 4-week average. The market was expecting old crop sales of somewhere between net cancellations of 50 TMT to positive 150 TMT. New crop sales came in at 226,200 MT, which was a bit below expectations of 250-450 TMT. MDA CropCast raised their view on Argentine soybean production this year by 500 TMT from last week to 56.62 MMT on better than expected yields. Brazil was unchanged at 94.34 MMT. The Buenos Aires Grain Exchange estimated this year's Argentine soybean harvest to be 32.5% complete, up 18.7 percentage points in a week. They see final production this year at a record 58.5 MMT. The market is now starting to focus on US weather and planting progress. "The new 7-day forecast is wet, not only for the Midwest but also the Great Plains," said Martell Crop Projections. "Drought is a continuing worry in Nebraska, South Dakota and western Minnesota. Elsewhere in the Midwest soil moisture is adequate to begin planting corn," they add. That might take away some of the recent talk of intended corn acres getting switched into beans. However "the 6-10 day outlook calls for strong cooling in the Midwest that would slow corn planting and emergence," they note. May 15 Soybeans closed at $9.66, up 1 cent; Jul 15 Soybeans closed at $9.69, up 1 1/4 cents; May 15 Soybean Meal closed at $312.40, up $0.90; May 15 Soybean Oil closed at 31.76, down 4 points.
Corn: The corn market closed with fractional gains. Weekly export sales of 588,200 MT for delivery in 2014/15 were down 8 percent from the previous week, but up 19 percent from the prior 4-week average. China popped up as a buyer of 65,200 MT. There were also small net sales of 28,500 MT for 2015/16. The Buenos Aires Grain Exchange reported the Argentine corn harvest at 24.1% complete, estimating production at 23 MMT, unchanged from a week ago. The USDA's FAS in Zambia said that the country's corn harvest could halve this year due to drought. They pegged output at just 1.7 MMT versus 3.4 MMT a year ago. ProZerno estimated the Russian corn crop at 10.9 MMT versus 11.3 MMT in 2014. MDA CropCast estimated the US 2015 corn crop at 13.816 billion bushels, down 6 million from a week ago due to acreage adjustments. They see the Brazilian crop at 76.91 MMT, unchanged from last week, but increased Argentina by 480 TMT to 24.03 MMT due to higher yield expectations. The EU corn crop was forecast 4.1 MMT lower than a week ago at 61.5 MMT, a near 10% decline on a year ago. China's CNGOIV forecast corn production there this year at a record near 220 MMT. Crude oil had a choppy day, but ultimately closed higher. It now stands at the best levels since before Christmas and is up around 30% from the March lows. Lower US production on the back of poor margins is being cited as the principal reason for the rally. The USDA reported 108 TMT of sorghum sold to China under the daily reporting system as their appetite for the grain continues unabashed. May 15 Corn closed at $3.76 1/4, up 1/4 cent; Jul 15 Corn closed at $3.83 1/4, up 1/4 cent.
Wheat: The wheat market closed mixed, higher in Chicago and lower in Kansas and Minneapolis. I guess that we can put the firmer Chicago market down to short-covering after the recent rout. Fund money is thought to possibly have established a record short position in Chicago wheat, tomorrow's commitment of traders report will therefore make interesting reading. Concerns still remain over the health of US winter wheat on the Plains. Moderate-to-extreme drought conditions in the six-state High Plains region rose to 41% on April 14 from 36% a week earlier, data from the US Drought Monitor report reveals. Weekly export sales were pathetic at just 47,900 MT on old crop. They were also a marketing-year low, being down 85 percent from the previous week and 80 percent below the prior 4-week average - and the previous 4-weeks have been nothing to write home about. Sales of 112,500 MT for 2015/16 were less than stellar as well. In contrast, the EU issued more than 740 TMT worth of soft wheat export licences, more than fifteen times those of the US, this past week. The EU export total to date is 26.42 MMT, which is now more than 2 MMT ahead of this time last year. MDA CropCast cut their forecast for the world 2015/16 wheat crop by 3.4 MMT to 713.7 MMT, principally due to acreage reductions in the EU. ProZerno estimated the Russian wheat crop this year at 58.1 MMT, a relatively modest decline of 2.7% on a year ago. They see barley production falling 13.7% to 17.6 MMT. The Buenos Aires Grain Exchange estimated Argentine wheat plantings for the 2015/16 crop year to fall to 4.1 million ha from 4.4 million a year ago. Low profitability in planting wheat and difficulties growers face in financing fieldwork were the main reasons given. May 15 CBOT Wheat closed at $4.94 1/2, up 3 3/4 cents; May 15 KCBT Wheat closed at $5.08 1/4, down 6 1/4 cents; May 15 MGEX Wheat closed at $5.35, down 8 1/4 cents.
EU Grains Fall In Line With Slumping US Market, Large Global Stocks
16/04/15 -- EU grains continue to slide, despite the strong export programme. London wheat took out the March lows and settled at the lowest for a front month since October 20. For Paris wheat the March low of EUR181/tonne is still intact, but only just.
Slumping US wheat prices, large global carryover stocks and the ever-nearing 2015 harvest are all adding to the negative vibe.
The latest figures from the USDA put wheat stocks in the US up 16% this year, with those in Russia seen almost 66% higher and those in Europe rising almost 54% at the end of the current season.
The day ended with May 15 London wheat down GBP2.30/tonne at GBP115.65/tonne, May 15 Paris wheat fell EUR2.00/tonne to EUR183.25/tonne, Jun 15 Paris corn was EUR1.50/tonne lower at EUR164.00/tonne and May 15 Paris rapeseed fell EUR3.75/tonne to EUR371.25/tonne.
At the close, the May 15 old crop/Nov 15 new crop spread on London wheat had widened a little more to now stand at GBP10.15/tonne. By comparison the similar May 15/Dec 15 carry on Paris wheat is only EUR2.25/tonne.
Last week's nine month low volume of weekly soft wheat export licences (189 TMT) proved to be just a blip, with Brussels granting more than 740 TMT worth this time round. The season to date total of 26.42 MMT is now more than 2 MMT ahead of this time last year when exports went on to be a record high.
No surprises then that French analysts Strategie Grains raised their forecast for EU soft wheat exports by 2.1 MMT to a record 32.0 MMT. That reduces ending stocks to 16.2 MMT, although that's still a hefty volume to carryover. Ending stocks last season were less than 10 MMT, according to USDA figures.
Bloomberg reported that the French port of Rouen exported more than 240 TMT of soft wheat in the past week, up two thirds on the previous week. The volume was boosted by more than 200 TMT destined for Morocco - said to be the largest weekly total to that destination since at least Aug 2010. The figure also included a consignment of French soft wheat destined for the Philippines, the first such shipment also since at least Aug 2010.
Russian analysts ProZerno estimated the 2015 grain crop there at 100.4 MMT, which is slightly higher even than the official Ministry forecast. They see wheat production at 58.1 MMT (versus 59.7 MMT a year ago), with corn output falling to 10.9 MMT (from 11.3 MMT) and that of barley down to 17.6 MMT (from 20.4 MMT). Despite the reductions, an overall cut in grain production of only 4.6% looks surprisingly optimistic.
MDA CropCast trimmed their forecast for the EU wheat crop by almost 4 MMT to 143.16 MMT, a 4.3% decline on a year ago. The reduction was mostly due to acreage adjustments, they said. Dryness building in the UK, France and Germany got a mention.
The EU barley crop was also estimated lower than previously, down 300 TMT to 56.7 MMT, which is 1 MMT below last year. This was also due to revised acreage estimates.
What's happening to all that land you might ask. They seem to think that it's gone into rapeseed, forecasting the EU crop at 24.53 MMT, which is 3.44 MMT higher than previously and around 3.5 MMT more than the figure suggested by Oil World just a couple of days ago. I'm not aware of anybody else who currently shares this view.
On the international tender front, Ethiopia are in the market for 400,000 MT of optional origin milling wheat for July–August shipment.
New crop Russian 12.5% milling wheat was apparently offered in the market at USD198/tonne for Jul/Aug shipment. Old crop Ukraine 12.5% milling wheat was quoted at USD210/tonne. Both prices being on an FOB the Black Sea basis.
