CBOT Closing Comments
Soybeans
May soybeans closed 12 1/2 cents lower at USD9.48/bushel; July soymeal ended USD4.60 lower at USD276.80; July soyoil settled 54 points lower at 37.51. NOPA reported a below average crush number of 131.7 million bushels for April. A weak crude oil market and firm dollar was also bearish. More wet weather will occur in the Midwest over the next 5 days, that may encourage some switching of corn acres into soybeans.
Corn
July corn closed at USD3.63 down 10 cents; December corn ended 9 cents lower at USD3.80. Private exporters announced the sale of 100,000 MT of US corn to Japan, who are apparently shopping for 2.7 MMT of corn for delivery this summer, according to media reports. Weak crude oil and ethanol prices are bearish for corn, as is the strong US dollar. Underlying Chinese interest looks like preventing prices from falling too much however.
Wheat
CBOT July wheat ended down 7 1/2 cents at USD4.71 1/2; KCBT July wheat fell 5 3/4 cents to USD4.91. MGE July wheat declined 5 1/2 cents to USD5.12 3/4. Drier and warmer weather in the northern Plains should allow spring plantings to pick up. Kansas is getting much needed rain for their wheat crop. Condition ratings will be out Monday in the weekly crop progress report. Some significant hail damage was done this week to the top soft red wheat state of Ohio.
EU Wheat Closing Comments
May London wheat closed GBP1.55 higher at GBP104.00/tonne, although November was GBP0.65 lower at GBP105.10/tonne. November Paris wheat closed EUR0.25 firmer at EUR140.25/tonne.
Both the pound and euro continue to remain under pressure, with the latter sinking to it's lowest levels since late 2008 against the dollar today. That will help to underpin prices here.
Algeria reportedly bought 500,000 MT of French wheat for June/July, aided by the weakness of the single currency.
With only seven weeks of the 2009/10 marketing year to go the EU has issued soft wheat export licenses for 15.4 MMT, compared to 18.8 MMT a year ago. Wheat imports however stand at 2.86 MMT versus 5.52 MMT in 2008/09.
Many EU countries were closed yesterday for Ascension Day, which contributed to light trade also today.
Crop conditions in northern and western Europe look OK, but generally nothing more than that, whereas things look mostly pretty good in the east and south of the region.
It is worth noting that the places where things are only looking OK include France, Germany, Poland and the UK. These account for Europe's top four rapeseed and wheat producing countries and three of the top four barley growers.
A German Agribusiness Report for Q2 2010 says that "grain production in Germany now looks set for a poor year in 2010. Cold, wet weather over the winter will likely see yields of both wheat and barley fall."
Ukraine Latest
My Ukraine agronomy chum Mike Lee bemoans on his blog (here) that he's had his water turned off in Kiev for a fortnight now.
Liverpool-supporting Mike (yes they even have them over there,) appears not to have realised that the Ukraine Water Board have probably singled him out for a playful bit of lesson teaching.
Or possibly they thought that as Kopite scum hardly ever wash, they were just doing some research to see how long it would be before he noticed?
Mike has managed to haul his smelly unwashed frame out into the Ukraine countryside and shoot a very interesting video of the state of play with the local wheat and OSR crops over there, which is well worth a watch. He even slipped out of his Stevie G replica top to don a proper shirt before he took it too. He's also thrown in a quick excerpt of what is No1 in Ukraine this week at the end of the video, keep up the good work Mike!
Quick, Send For Charlie Chan, Again
They've just bought their largest consignment of US corn since 2001. Today the Chinese government say that they will limit the amount of corn that individual trading companies can buy, and also ban the resale to others of any corn sold at their weekly auctions.
The reason is to prevent hoarding, they say.
Well, if you've really got 50 million tonnes in state-owned stocks then why would anybody want to hoard corn? Why not auction off so much of it that the domestic price will fall back in line with world prices? That would teach the nasty hoarders a lesson wouldn't it?
Why allow a situation to develop where domestic corn prices are double what they are in the US when you've had year after year of bumper corn harvests? Including a hefty 163 MMT of the stuff last year. The state silos must be groaning under the pressure of it all surely? Just let it all out and that will be the end of the problem.
You did have a bumper crop didn't you? And all those stocks really are still there aren't they?
No UK Intervention Offers This Week
For the week of 7-13th May there were unsurprisingly no offers put up to place barley into intervention at the princely sum of GBP90.97/tonne, minus adjustments, according to the RPA.
A total of 175,859 MT has so far been put up for offer, with cumulative net barley offers standing at 153,052 MT after rejections/withdrawals.
German Grain Production To Decline In 2010
The German Agribusiness Report for Q2 2010 says that:
"Grain production in Germany now looks set for a poor year in 2010. Cold, wet weather over the winter will likely see yields of both wheat and barley fall. Low prices in 2009 also contributed to a fall in area. Barley production will be the worst hit. Bumper crops in 2007/08 and 2008/09 have seen stocks rise. Demand for German barley on the export market is weak owing to bumper crops in other major producers. This will see intervention purchases rise owing to the low market price."
Unfortunately if you want a little more flesh on the bones than that then you have to part with GBP330: Achtung!
CBOT Closing Comments
Soybeans
May Soybeans closed Thursday's trading session at USD9.60 ½, up 1 cent; May Soybean Meal at USD284.40, up USD3.10; May Soybean Oil at 37.80, down 36 points. A firm dollar and weak crude oil kept prices on the defensive, with soon to expire May the only soybean month to close in positive territory. Weekly export sales were 474,616 MT - towards the low end of trade guesses, although China bought both old and new crop.
Corn
May Corn closed at USD3.66 ½, down 5 ¼ cents; December Corn ended at USD3.89, down 3 ½ cents. The USDA reported weekly export sales of 819,100 MT for 09/10 and 120,900 MT for 10/11. none of those were confirmed as being for China. Hot on the heels of that announcement however came the news that China had indeed bought 369,000 MT of US corn under the daily reporting system (where sales in excess of 100,000 MT must be reported immediately). There was also an additional 174,000 MT sold to unknown destinations.
Wheat
July CBOT Wheat closed at USD4.79, down 12 ½ cents; July KCBT Wheat at USD4.96 ¾, down 10 ¼ cents; July MGEX Wheat ended at USD5.18 ¼, down 11 ¾ cents. Wheat export sales were 244,400 MT for 09/10 and 241,100 MT for 10/11, a little better than expectations of 300,000 to 400,000 MT. Japan also bought 142,000 MT in it's usual Thursday tender, of which 80,000 MT will come from the US. Strategie Grains cut their EU-27 soft wheat production estimate by 1.2 MMT, with lower output now seen in the north and west of Europe, and higher production in the east and south.
EU Grains Closing Comments
EU wheat closed mixed Thursday with Paris November milling wheat down EUR1.25 at EUR140/tonne and London November feed wheat up GBP0.25 at GBP105.75/tonne.
It was a quiet session with many places around Europe off on holiday for Ascension Day, which will likely mean a subdued Friday session too.
UK wheat was supported by the ailing pound, which fell to around 1.47 against the dollar, as the UK trade deficit widened and the enormity of the task facing the new coalition government became even more apparent.
Strategie Grains cut their estimate for EU soft wheat production by 1.2 MMT to 133 MMT. EU-27 All wheat output they see at 141.4 MMT, 3.7 MMT less than the USDA predicted on Tuesday.
German soft wheat production was cut 800,000 MT and French soft wheat output was reduced by 500,000 MT. Scandinavia, Poland and the Baltic countries also had their estimates cut, although this was offset by increases in production in eastern Europe.
The recent spell of cold and dry weather is finally forecast to come to an end as winds shift to westerlies. As well as warming things up low pressure will also bring some much needed rain.
