South American Soybean Output 118.4MMT In 2009
Oil World forecasts South America to harvest 118.4 mln tonnes of soybeans in 2009 after 116.4 mln tonnes in 2008. Brazil is expected to produce 60.0MMT (60.3), Argentina 49.5MMT (47.0), Paraguay 6.7MMT (6.8), Bolivia 1.2MMT (1.4) and Uruguay 1.0MMT (0.9).
EU Rapeseed Production 19MMT - Oil World
Oil World projects EU rapeseed production in 2008/09 (July/June) to amount to 19.0 mln tonnes which is 0.7 mln tonnes above the 18.3 mln t of the previous year. Germany is expected to produce 5.2 (5.3) mln tonnes and France 5.0 (4.7) mln tonnes. Imports into the EU are forecast at 1.7 mln (690,000) tonnes and crush at 19.4 (18.4) mln tonnes.
Review Of The Week
CBOT CORN
Corn lost 45 3/4c on the week as a whole, with the lions share of that coming with Friday's limit down move. This, added to the previous weeks heavy decline, make for corn's biggest two-week plunge in at least 45 years. US corn production will total 12.2 billion bushels this year, up 1.1 percent from 12.072 billion projected a month ago and second only to last year's 13.1 billion-bushel harvest, the USDA said Friday. Unsold supplies of U.S. corn before next year's harvest will total 1.154 billion bushels, up 13 percent from 1.018 billion forecast a month ago, the department said. Analysts expected an estimate of 1.12 billion bushels, on average.
CBOT SOYBEANS
Soybeans closed the week 82c lower, as with corn the majority of that fall coming with Friday's 70c limit down close. US farmers will harvest 2.983 billion bushels of soybeans this year, up from 2.934 billion projected in September, according to the report. U.S. reserve supplies before next year's harvest will total 220 million bushels, up from 135 million forecast last month, the USDA said.
CBOT WHEAT
Wheat lost 76 3/4c on the week, most of it also Friday. U.S. wheat reserves before the next harvest will be 4.7 percent more than forecast a month ago, as increased production more than offsets higher feed use, the USDA said. About 601 million bushels of unsold wheat will be in storage when the current marketing year ends on May 31, nearly double the 306 million on hand at the start of this year. Global stockpiles will total 144.4 million tonnes by May 31, the USDA said. That's up from last month's estimate of 139.9 million and up from 119.8 million tonnes at the end of last May.
LONDON FEED WHEAT
London wheat closed the week £9.50/tonne lower, with front-month November closing below £90/tonne for the first time for a front-month since September 2006. The NFU forecast this year's UK wheat crop at 17.17 million tonnes, which gives us a surplus of over 3mmt.
PARIS MILLING WHEAT
Closed the week with losses of EUR17.25/tonne at levels last seen in Jan 2007, dragged down by lack of export demand (Egypt passed on French wheat, buying US and Russian wheat this week) and the general sell-off in all commodities.
PARIS CORN
Posted a loss of EUR8.50/tonne on the week as a whole on harvest pressure and falling wheat prices. Prices now the lowest since March 2006.
PARIS RAPESEED
Finished the week EUR30.50/tonne lower pressured by falling crude oil and lack of demand. Prices now at their lowest levels since July 2007.
CRUDE OIL
Finished the week posting an overall loss of $16.24/barrel. The biggest one-week decline since March 2003 when a U.S.-led coalition invaded Iraq. The International Energy Agency lowered its 2009 consumption projections by 440,000 barrels a day to 87.2 million barrels a day, citing a weaker economic outlook from the International Monetary Fund.
STERLING
Finished the week 6 1/2c lower against the dollar, hitting its lowest levels in five years, on concern a dispute between the U.K. and Iceland over financial assets in each other's countries will escalate.
FTSE100 Posts Second Worst Weekly Loss Ever
Britain's top share index ended 8.9 percent lower Friday contributing to a 24 percent slump for the week, the second biggest weekly fall ever, as investors ran scared from the spectre of a full global recession.
The FTSE 100 closed down 381.7 points at 3,932.1, its second biggest points loss ever, dropping below the 4,000 level for the first time in more than five years after its worst week since the crash of October 1987.
With another 90 billion pounds wiped off the FTSE 100's value Friday, there was just one gainer -- news and information provider Thomson Reuters, up a penny.
"The FTSE 100 went below 4,000 today, a level it first achieved in September 1996, that means if you invested in equities 12 years ago, you've seen no gain, which is unbelievable," said one trader.
Banks were the top-weighted losers, with the FTSE 350 banks index shedding more than 11.5 percent.
Barclays, Royal Bank of Scotland, HSBC down 5.2 percent, while 3i Group shed 16.2 percent, and insurers Legal & General and Prudential lost 16.1 and 10.5 percent respectively.
Financials also headed another slide on Wall Street which sent the U.S. benchmark S&P 500 index below the 900 level for the first time in five years on fears tighter credit would spawn world recession.
President George W. Bush said on Friday the U.S. government was moving aggressively to address the financial markets crisis, but he acknowledged that anxiety was feeding on itself as stocks continued to plunge.
EU Wheat Ends Sharply Lower
EU wheat futures continued their slide Friday closing sharply lower on burdensome supplies and lack of demand.
Paris November milling wheat fell to a 17-month low closing down EUR7.25 at EUR142.75/tonne.
London November feed wheat closed down GBP4.00 at GBP89.50/tonne. That's the first time a spot month has been below £90/tonne since September 2006.
The USDA revised its 2008-09 world wheat crop estimate to a record 680.2 million tonnes which added to the bearish sentiment. That's an increase of 71 million tonnes on 2007-08.
The NFU say that the 2008 UK wheat crop is 17.17 million tonnes, 25% up on last year.
The credit crisis continues to bite, raising concerns over many potential importing nation's financial status.
CBOT Closing Comments
Corn
Corn futures closed limit down in all contracts Friday. Futures were pushed lower when USDA released a bearish report earlier this morning, corn and other commodities were also pressure by sharp declines in the stock market. USDA increased yield to 154.00 up from 152.3 also increasing total to production 12.2 Billion bushels. Corn ending stocks also increased to 1.154 up from the September number of 1.018. Funds were net sellers of 8,000 CBOT contracts, options that traded indicate prices are valued at least 10 cents less. Trading limits will expand to 45 cents when trading resumes Sunday evening. Dec -30 at 4.08.
Soybeans
Soybeans finished the 70 cent limit lower in all contracts when the final bell rang this afternoon. Funds were net sellers of 3,000 bean contracts, 1,000 meal, and 1,000 bean oil. Limits will expand in soybeans to $1.05, meal to $30/ton, and bean oil up to $3.50. Soybeans received a more bearish report than corn. USDA suggested farmers planted 2.2 million more acres than previously thought, roughly 77 million acres. Ending stocks jumped up from 135mb in September to 220 mb. However, USDA did decrease yield by .5 bu. to 39.5 bu. per acre. Crude oil was off almost $9 per barrel to around $77/barrel, the US Dollar Index is soaring, up more than 1 full point hovering around 82 point mark. Weather is beneficial for harvesting through the weekend but could turn wet at the beginning of next week. Oct meal and bean oil contracts will expire next Tuesday. Nov -70 at 9.10; Oct Meal -19.70 at 251.20; Oct BO -294 at 36.50.
Wheat
Wheat futures closed sharply lower at the three different exchanges today. Concerns about the financial markets and pressure from other commodities weighed in on prices. Funds sold an estimated 4,000 CBOT contracts. Wheat futures did not traded at or near limit as of now, but is being affected by this total melt down in the stock market as well as in commodities as trade volatility has sky rocketed. Investor and trade panic and fear has keyed the much of the volatility. USDA pegged ending stocks at 601 million bushels up from their September estimate of 574 mb. USDA also indicated that all wheat producers will harvest a world record crop of 680.2 million tonnes which is up from 676.3 MT in September. Yemen and Japan were buyers of US wheat, 100,000 tonnes and 51,000 tonnes respectively. Dec CHI -41 at 5.63; KC -33 at 6.05; MLPS -37 at 6.39.
Brown Claims Responsibility For Falling Oil Price
Our glorious leader Gordon Brown, desperate for a bit of positive publicity, claimed Friday that the government "had had some success in getting the price of oil down," adding "I want these price cuts passed onto the consumer, and passed on as quickly as possible."
Brown failed to elaborate on exactly how he'd single-handedly fixed the price of oil to fall.
Maybe he meant that by taxing petrol at 81.5% he'd finally managed to get us all to start consuming less of the stuff.
The prime minister's statement came on the same day that the International Energy Agency (IEA) cut its forecast for oil demand growth to its lowest level for 15 years.
Crude fell almost $9/barrel Friday thanks to Gordon's best efforts to close at $77.70/barrel in New York, Brent finished around $8.50/barrel lower at $74.09/barrel.
Crude has now fallen 47% from its all-time high at the beginning of July.
What The Hell Is Happening In Iceland?
Icelandic assets in Britain have apparently been frozen under anti-terrorism legislation!
Stephen Timms, Financial Secretary to the Treasury, has confirmed that this was indeed the law which had been used, because “that’s where the power happened to be”, as if there was nothing odd in using such legislation for a purpose for which it cannot originally have been intended.
It is becoming apparent that many of the supposed 300,000 British depositors with money in Icelandic banks are town councils.
Mr Timms was again unable to shed any light on what will happen to their (our) money, beyond saying that a meeting was to be held that afternoon at the Treasury.
Now I'm firmly in the camp that thinks, hey you put your money in a foreign bank to earn a bit of extra interest, you have to face the consequences and abide by the laws of the foreign country you decided to invest in.
Suppose that my local council have "invested" my council tax in Iceland & now can't get it back? What are they going to do? Ask me to pay it again? Stop collecting the rubbish & lighting the streets? Or expect Darling to bail them, and all the other local councils, out?
This thing is going to get far worse before it gets better.
