CBOT Closing Comments
Soybeans
August soybeans closed at USD10.17, up 1 cent; August soybean meal closed at USD299.90, down USD0.30; August soybean oil closed at 39.07, up 17 points. Private exporters announced the sale of 175,500 MT of soybeans to China for 2010/11 delivery and also a further sale of 175,000 MT to "unknown" for 2010/11. This strong export interest looks likely to underpin the market for the remainder of 2010.
Corn
September corn closed at USD3.71 1/4, down 5 1/4 cents; Dec corn closed at USD3.84 1/2, down 5 3/4 cents. Corn was down around 24 cents for the week. Mostly favourable weather is expected to benefit the corn crop in the Midwest over the next two weeks. Iowa, the top corn state, has received nearly the same heavy rain as 1993 in June and July. Despite that corn potential this year is way better than 1993, say Martell Crop Projections.
Wheat
Sep CBOT wheat closed at USD5.96 1/4, down 1/4 cent; Sep KCBT wheat closed at USD6.15, up 3 1/4 cents; Sep MGEX wheat closed at USD6.28 1/2, up 5 3/4 cents. Wheat was up between 9 to 17 cents for the week overall. The trade is still focusing on the hot and dry weather in Russia. Argy plantings are running well behind schedule at 79% complete versus 99% a year ago.
EU Grains Closing Comments
Nov London wheat closed GBP1.20 higher at GBP133.95/tonne; Nov Paris wheat ended up EUR1.00 at EUR179.75/tonne. On the week as a whole London wheat gained GBP4.95/tonne and Paris wheat EUR7.25/tonne
Fund money continues to flood into the market, with Paris wheat trading a record volume - in excess of 50,000 lots for the first time ever yesterday.
Perennial bears have also been overwhelmed by the sudden surge in wheat, forcing them to also exit the market, helping to drive prices higher.
Bullish news, such as that coming out of Russia, is immediately being seized upon to drive the market higher. Bearish news such as better than expected French/US yields is being largely ignored.
The last time we whipped ourselves up into such a frenzy was 2008, and that all ended in an enormous puddle of tears as I recall.
The German Farmers' Union DBV yesterday reported that German wheat yields this season would be down by 10-20%. They are Germans, and they're farmers, do I need to say anymore?
I'm not disputing that things are bad in Russia or Kazakhstan, but do they really warrant a global price increase of a third?
You Really Are Doing My Head In Now
Hose? Garden hoes? Oh, you mean letter O's. Erm, hang on *sobs and wipes away tears* no, there's no O's in it either. Now clear off the lot of you, or I'll call the internet police.
Bloody Hell Stop Emailing And Twittering Me Will You
Haven't you got better things to do? It's only been up there five minutes ago and I'm already inundated with requests as to which large grain merchant is going to be bidding £200/tonne for barley whilst simultaneously offering wheat at fifty quid next week.
It's simple, just get some firm offers/bids in hand based on a premium over the futures market will you?
How could a mulit-million pound big bad grain merchant do such a thing to a little cottage industry like me? I'm so upset I probably will have to turn to drink. Again. The danger with that though is who knows what I will decide to put on there after I've had a few? Where did I put that Roger Mellie Profanisaurus again? And stop asking for clues Phil, but no, there's no F in it.
My Faith In Human Kindness
Has been both shattered and restored in the same blinking day! Restoring it, and proving than not everybody needs to turn every single thing they do into an "earner", and that sometimes complete strangers will just do you a favour for the hell of it, is John Hollis of JT Hollis Farms Ltd. Clearly a top man. Thanks for the assistance John.
Now then, which large grain merchant was responsible for doing the shattering this morning then I hear you ask. Oh, that's an interesting one isn't it? The most disappointing thing about it is that I haven't really got the time to have a laugh at their expense this afternoon, that may have to wait until next week. It will be very funny when it happens though, especially on this market, so keep watching!
Which reminds me of the previous occasion that somebody "extracted the Michael" only to subsequently find that an advert for KW had suddenly popped up on their website as if by magic! I LOVE computers and the internet I do.
CBOT Closing Comments
Soybeans
August soybeans closed at USD10.16, up 3/4 cent; August soybean meal closed at USD300.20, down USD3.10; August soybean oil closed at 38.90, up 64 points. Private exporters announced the sale of 110,000 MT of soybeans to South Korea for 2010/11 delivery. In addition weekly export sales of 111,800 MT for delivery in 2009/10 and 1,115,400 MT for delivery in 2010/11 were above trade estimates for sales of 550-950,000 MT. The Census Bureau monthly soybean crush came in below trade expectations at 129.17 million bushels. Argentina said it will impose new import tariffs on various Chinese goods, that will do little to aid it's soyoil export hopes to China.
Corn
September corn closed at USD3.76 1/2, down 3 1/4 cents; Dec corn closed at USD3.90 1/4, down 3 1/4 cents. An early rally in corn faded as the wheat market eased back. Crude oil was stronger as the US dollar lost significant ground, both were supportive to corn. Export sales this morning were a combined total of 1,155,000 MT for both marketing years, a bit above expectations for sales of 850,000 - 1 MMT. China took 58,700 MT of old crop and "unknown" accounted for 304,800 MT of new crop. China has purchased 1.19 MMT of US corn to date.
Wheat
Sep CBOT Wheat closed at USD5.96 1/2, up 8 1/4 cents; Sep KCBT wheat closed at USD6.11 3/4, up 10 1/4 cents; September MGEX wheat closed at USD6.22 3/4, up 9 1/4 cents. Futures closed higher but finished well off the day’s highs. Sharply higher EU futures got wheat off to a strong start as Black Sea production problems remain to the forefront. Weekly export sales of 382,100 MT were in line with expectations. Funds were estimated to have purchased 6,000 contracts of wheat in Chicago and were also noted buyers in Kansas. Russia increased the size of their crop area ruined by drought to 10 million ha.
EU Grains Closing Comments
Nov London wheat closed GBP3.25 higher at GBP132.75/tonne; Nov Paris wheat ended up EUR3.75 at EUR178.75/tonne. Futures posted significant gains but also closed below session highs.
Nov Paris corn finished EUR4.50 higher at EUR168.25/tonne; Nov Paris rapeseed advanced EUR3 to EUR367.75/tonne; Nov Paris malting barley closed up EUR0.75 at EUR186.75/tonne.
Nov London wheat rose to a fresh 13 month high of GBP137/tonne at one point as "smart investment money" continues to flow into the market. Although end-users are largely still sitting on their hands, they are becoming rather spooked to say the least by the swiftness and magnitude of this recent price spike.
More imminent production cuts look likely to be on the cards for Russia, whilst output in Kazakhstan may well also fall below current estimates.
The German Farmers' Union Deutscher Bauernverband (DBV) helped to keep the pot boiling by saying that wheat yields there are likely to be 10-20% down on last year.
The Ukraine Ministry forecast 2010/11 wheat exports 27% lower than last season at only 6.7 MMT.
Algeria bought 300,000 MT of option origin wheat yesterday, which is likely to be fulfilled by French grain. Although our mates Egypt bought Russian wheat again this week, it was at least almost USD50 up in price on a few short weeks ago. They may find that the Russian (and Kazakh) shops are shut come the new year.
So there you have it, lots of bullish news to get your teeth into.
Normally shy and reticent UK farmers are apparently falling over themselves to sell wheat at these prices, and I don't blame them. Pretty much the only buyers are the City boys who probably haven't even started shaving yet, or kissed a girl, let alone seen a field of wheat.
It has to be worth noting that the differential between front month August Paris wheat and November finished at almost EUR22/tonne tonight. That's rather a large differential for only three months isn't it? The two month difference between Nov and Jan is just EUR1.25/tonne, that's a very striking disparity.
The fresh-faced young batty boys with the braces aren't buying August you see, that's far too nearby for comfort. They prefer the safety zone of four months away November, for now. Tarquin and his mates will start shaking like a flatpack MFI wardrobe in a force nine gale as November approaches however. After all they don't want 100,000 MT of wheat turning up at Canary Wharf do they?
Help Wanted
Has anyone got a spreadsheet of the daily front month closes for London wheat going back several years, as many as possible in fact?
A virtual coconut to anyone who can assist.
xx
