Chicago Close
28/01/11 -- Soybeans
March soybeans closed down 1 3/4c at USD13.97 3/4 a bushel; March soymeal traded USD0.40 lower at USD377.00; March soyoil ended 14 points lower at 57.27. Beans were sharply higher in early trade but failed to hold onto those gains on profit-taking. Traders seemed unwilling to sit on longs over the weekend with North Africa in political turmoil, which has also now spread to Yemen. Private exporters announced the sale of 110,000 MT of old crop soybeans to China.
Corn
March corn finished down 6 3/4c at USD6.44 a bushel. May corn finished down 6 1/2c at USD6.54 1/2 a bushel. The market looked a little tired heading into the weekend after hitting 30-month highs a week ago. Private exporters announced the sale of 151,638 MT of corn to Japan. The recent arrival of wetter weather for Argentina may have come too late for corn is what many are saying. A flurry of feed wheat sales for Australia of late though indicates that corn can't have things all it's own way on the international export stage.
Wheat
CBOT March wheat plunged 20 1/2c to USD8.25 3/4 a bushel; KCBT March wheat fell 20 1/2c to USD9.12; MGEX March wheat lost 14 1/2c to USD9.61 1/2. Wheat seems to be giving up some of it's recent gains propelled it to 29 month highs. Profit-taking ahead of an "anything can happen" weekend in North Africa, particularly in Egypt, took some money off the table. Recent excitement that the Arab world's most populous nation will follow the lead of neighbouring Algeria and Tunisia and step up it's wheat purchases is now giving way to caution that the opposite may be true if the government faces overthrow.
EU Wheat Close
28/01/11 -- EU wheat closed mixed, but mostly lower, with Mar London wheat down GBP0.75 to GBP203.25/tonne and new crop Nov GBP0.60 lower at GBP173.90/tonne. Mar Paris wheat rose EUR1.25 to EUR266.00/tonne, with Nov down EUR1.75 to EUR231.50/tonne.
A weaker US market took the shine off things today, although wheat still closed with significant gains on the week, especially for old crop months.
On the week as a whole Mar London wheat rose GBP4.50/tonne, with Nov up GBP1.90/tonne. Mar Paris wheat gained EUR6.50/tonne, with Nov up EUR1.75/tonne.
Yesterday's export figures showed EU soft wheat exports slowing somewhat to 240,000 MT in the past week, but they've hardly ground to a halt. Indeed, they need to slow as we are already 2.35 MMT up on this time last year.
Brussels said that they will make a decision on whether to scrap the existing EUR12/tonne import duty on wheat next month. Spain and other EU nations are already said to be eyeing imports of Australian feed wheat.
Meanwhile it would seem that almost three quarters of the EU barley intervention stocks earmarked for sale (some have been given away to the needy) have now been sold.
Continued unrest in Egypt, where the stock market fell 10% yesterday following declines of more than 6% the day before, is forecast to flush out the world's largest wheat buyer into issuing an import tender any day soon.
And Here's Another
28/01/11 -- It's now half past beer o'clock. On a Friday. And I've met my deadline, so there's nothing pressing. And the phones are a bit quiet. And I'm ever so slightly thirsty. And one or two kind souls have hit the donate button this week, so I have some funds burning a hole in my pocket.
So, shall I:
a) go to the pub
b) go to the pub
c) carry on blogging, there's no other decent market info out there Nogger, I'm begging you please stay
d) go to the pub
BTW looking for spot(ish) EU wheat distillers and/or citrus pulp pels in Liverpool if anyone has any spare. Value GBP210 and GBP180 respectively.
Here's Another Thought
28/01/11 -- How many of this season's mush, sorry sugar beet, growers are going to say enough is enough at GBP26/tonne.
Immediately followed by the thought "blimey, look at the price of wheat."
Closely followed by "I do believe that they're building another massive bioethanol refinery right on my doorstep dontyaknow, part of an ill-conceived plan to save the planet that is actually doing the opposite and encouraging us to ship wheat in from the other side of the world 'cos we've already used all of ours, which just happens to be inadvertantly driving up the local price of wheat to unprecedented levels. And the missus wants a Jag."
Here's A Thought
28/01/11 -- Our chums at the excellent Agrimoney.com carry an interesting story today suggesting that before the combines have stopped rolling and the mops & buckets have been put away, Australian farmers are already thinking about next season.
They may not be very good at winning the Ashes back, but even they can spot a golden opportunity when one presents itself. Unsurprisingly, they fancy planting a bit more wheat next time round, 10% more in the east of the country in fact.
Heavy rains may have cut quality this season but they've also boosted yields, and maybe more importantly replenished the water table rather significantly.
Now you have to remember that this season's say 25 MMT crop, comes despite a harvest disaster in Western Australia, which usually chips in with 35-40% of the total wheat crop Down Under. If they'd have managed a "normal" crop in WA this season then we'd be looking at a total Australian wheat crop of around 30 MMT this time round. And now they're planning on planting 10% more for next season.
And let's face it, the Australian's aren't going to be the only ones looking at the current wheat prices and having these kind of thoughts are they?
Go figure, as they say.
Barley Pouring Out Of Intervention
28/01/11 -- Brussels sold 489,000 MT of intervention barley this past week - more than they sold in the whole of December. They're certainly rattling through what not so very long ago was considered "burdensome" stocks that's for sure - by my calculations this month's sales are almost 1.4 MMT. That brings the total sold since sales began in November to around 2 MMT, around three quarters of what was earmarked to be sold-off. What happens though when that runs out?
Chicago Close
27/01/11 -- Soybeans
March soybeans settled 14 cents higher at USD13.99 1/2 a bushel; March soymeal ended USD3.00 higher at USD377.40; March soyoil ended 71 points higher at 57.41. Export sales were 780,900 MT for 2010/11 and 159,400 MT for 2011/12. China took a combined total of 511,300 MT of that. The December soybean census crush was 153.05 million bushels, above the average estimate of 152.0 million. Argentine port workers are striking, so exports from there may be disrupted, meanwhile Argentine rains have arrived in force which should help newly planted beans.
Corn
March corn closed down 7c at USD6.50 3/4 a bushel; March corn also closed down 7c at USD6.61 a bushel. Weekly export sales for corn were poor at 547,500 MT in total, of that 414,700 MT was for 2010/11 delivery and 132,800 MT for 2011/12 delivery. Late in the day pressure from falling wheat prices also weighed on corn today. Crude oil was also under pressure, finishing below USD86/barrel, which added some more negativity in a heavily overbought corn market.
Wheat
CBOT March wheat closed down 10 1/4c at USD8.46 1/4 a bushel; KCBT March declined 7 1/2c to USD9.32 1/2; MGEX March fell 1c to USD9.76. As you can see the differential between CBOT wheat and it's higher quality neighbours keeps widening. It all started well for wheat, with March CBOT material coming within 3/4 cent of the early August Russian export ban contract high in early trade, before profit-taking kicked in. Export sales were robust for wheat, coming in above 1 MMT for the second week running.
EU Wheat Close
27/01/11 -- EU wheat futures closed mixed with Mar London wheat GBP0.50 higher at GBP204.00/tonne, and Nov down GBP0.35 at GBP174.50/tonne. Paris wheat closed with Mar down EUR1.25 to EUR264.75/tonne and Nov down EUR0.75 to EUR233.25/tonne.
March London wheat set another all-time high close for a front month on the back of a weaker pound/euro this past couple of weeks. The pound has fallen form over 1.20 to 1.16 in little more than a fortnight. Tuesday's insipid Q4 GDP data didn't help.
Paris wheat also set contract highs earlier in the day before settling slightly lower later on.
News that Brussels only issued 240,000 MT of soft wheat export licences this past week maybe took some of the wind out of the bull's sails, although there is no doubting that they still have a very strong headwind behind them. We've maybe dropped back to a force eight or nine on the Beaufort scale, that's all.
US weekly export sales were strong at over 1 MMT and tender results from a variety of different buyers are expected imminently. At this stage it probably doesn't matter if US, EU, Australian or Argentinean wheat wins - the point is that somebody will and that takes another million or two off the table.
As well as confirming having bought "at least" 1.75 MMT of wheat since the turn of the year, Algeria is also thought to have purchased a further 800,000 MT of durum wheat in recent weeks.
Much of the latter is expected to have come from France, where durum wheat prices delivered to Port La Nouvelle have risen from EUR270-275/tonne to EUR335-340/tonne since the turn of the year - an increase of around 25%.
