Nogger's Blog

Chicago Close - Friday

27/01/12 -- Soybeans: Mar 12 Soybeans closed at USD12.19, down 3 3/4 cents; Nov 12 Soybeans closed at USD12.22 1/4, up 1/2 cent; Mar 12 Soybean Meal closed at USD322.20, down USD1.40; Mar 12 Soybean Oil closed at 51.59, down 35 points. Beans were up 32 cents on the week, with meal up USD10.30 and oil 116 points. Funds sold 3,000 soybean contracts on the day in a bit of light pre-weekend profit-taking. The Commitment of Traders report shows large funds increasing their net long by around 11,500 on the week to Tuesday. China are expected to be back in the market next week following a week off for their Lunar New Year celebrations. A dry weekend is forecast for Argentina, but rain is seen moving up from the south Monday and pushing northwards through the middle of the week. The Buenos Aires Grain Exchange said that the soybean crop in Argentina would come in at 46.2 MMT, one of the lower estimates around and 4.3 MMT below the USDA.

Corn: Mar 12 Corn closed at USD6.41 3/4, up 7 1/4 cents; Dec 12 Corn closed at USD5.71, up 5 cents. Corn was up 30 1/4 cents on the week. Funds were said to have bought 8,000 contracts on the day, stretching their net buying run to seven sessions in a row. That would have them buying around 40,000 on the week. Private exporters announced the sale of 170,200 MT of corn to Mexico for 2011/12. Coming hot on the heels of yesterday's robust export sales that will cheer the market. US exporters will be welcoming China back from it's week-long holiday on Monday too. The Buenos Aires Grain Exchange estimated the Argentine corn crop at 22.0 MMT, some 4.0 MMT below the USDA.

Wheat: Mar 12 CBOT Wheat closed at USD6.47 1/4, down 6 1/4 cents; Mar 12 KCBT Wheat closed at USD7.00, down 9 cents; Mar 12 MGEX Wheat closed at USD8.26 1/4, down 1 cent. Chicago wheat was up 36 3/4 cents on the week, with Kansas rising 33 cents and Minneapolis up 27 1/2 cents. Today was maybe a bit of consolidation ahead of the weekend after wheat posted some decent gains on the week. The Commitment of Traders report shows funds covering in some of their shorts in Chicago on the week to Tuesday, but still reveals them having a net short of almost 58,000 contracts. That looks set to continue to support CBOT wheat. In contrast funds are long 13,000 Kansas lots and 11,000 in Minneapolis. The USDA announced the sale of 133,200 MT of US wheat for unknown.

EU Wheat Mixed On The Day But Posts Solid Weekly Gains

27/01/12 -- EU grains ended narrowly mixed Friday, with Mar 12 London wheat up GBP0.05/tonne to GBP164.55/tonne and Mar 12 Paris wheat down EUR0.25/tonne to EUR209.00/tonne.

Despite a subdued day today, overall London wheat has gained an impressive GBP7.55/tonne and Paris wheat EUR10.50/tonne during the course of the week.

Defra have made a few minor tweaks to the supply and demand numbers this week, reducing wheat imports and 2011 production slightly and increasing domestic consumption a fraction.

They've also introduced a new format to the way the balance sheet numbers are presented, introducing an "estimated operating stock requirement" which this season is pegged at 1.4 MMT. They now subtract that figure from the total available stocks less consumption before coming up with an exportable surplus. All clear?

That exportable surplus is said to be 2.54 MMT, around 180,000 MT less than in 2010/11. However they also tell us that we've already exported half of that amount by the end of November, which at a glance makes things look pretty tight with seven months of the season remaining.

Bear in mind though that this is now with 1.4 MMT skimmed off and "kept back for a rainy day" so to speak.

It is also notable that they have human and industrial consumption at only 300,000 MT less this season than it was in 2010/11. Without naming names they say that they are working on the assumption that "the one existing bioethanol plant" will be back in production Apr/Jun.

They also say that "usage by the bioethanol plant currently under construction is not included; its status will be reviewed in March."

EU Rapemeal Prices

27/01/12 -- Rapemeal prices on the continent continue to rise.

Guide prices, basis FOB Lower Rhine in euros/metric tonne, with change from previous day:

Feb12	187.00	+6.00
Mar12	184.00	+3.00
Apr12	180.00	+3.00
May/Jul12	174.00	+3.00
Aug/Oct12	161.00	+1.00
Nov12/Jan13	166.00	+2.00
Feb/Apr13	167.00	+1.00

The Sort Of Thing That Really Irritates Me

27/01/12 -- Media reports, one firm in particular is especially guilty of this, that ALWAYS include the same piece of blindingly obvious information that everybody already knows.

They must employ freelance journo's in these far-flung places who write any old tosh just to see if they can get it past the editor and send another invoice in. Kerching, kerching.

Breaking News: Chicago Board Of Trade To Close

The Chicago Board of Trade, a large trading centre in Chicago, Illinois will close at the normal time today, just like it normally does. Dealers say that it will then remain closed for two days in honour of it being the weekend. Normal trade will resume Sunday night, just like normal. I am thanking you very much. Copyright.

Get a grip, you know who you are, just read your own reports.

The Moring Vibe And Some Food For Thought

27/01/12 -- The overnight grains are mixed with wheat a couple of cents lower, beans a couple higher and corn up 3-4 cents.

Egypt rejected a cargo of Kazakh wheat yesterday on the grounds of it containing "unauthorised seeds" and promptly switched another three cargoes bought as Kazakh origin to Russian instead.

It also announced that it only needs to buy another half a million tonnes to see it through to the end of the 2011/12 marketing year.

Demand for wheat is strong, that's what they keep telling us. Yesterday's US export sales were in line with expectations after all. Except "sales" aren't shipments, some could be optional origin for a kick off. Others may never get shipped at all, at least not in this marketing year.

The US carried over more than 2 MMT of outstanding "sales" from last season into this. Meanwhile yesterday's actual shipments fell short of the average level required to hit the USDA's 25 MMT target for the current season. That's the fourteenth week in the past sixteen that this has been the case. How strong a trend do you want?

Meanwhile, yesterday's news that Brussels only issued export licences for 218 TMT of soft wheat in the past week tells a similar story. Thirty weeks into the marketing year the EU has exported only 7.9 MMT, which puts us in line to have shifted a measly 13.7 MMT by the end of the 2011/12 season.

Bear in mind that the bulk of that has gone out early in the season. If we were to continue to ship at the January average from here on in then we'd finish the current season shifting little more than 11.5 MMT.

OK, these are the numbers for soft wheat, not all wheat products that the USDA report on. The fact remains though that soft wheat exports are currently 36% down on last year, and slowing. If we finish up exporting 36% less "all wheat" in 2011/12 then we'll export 14.62 MMT this season, far less than the 17 MMT that the USDA currently have on the world balance sheet.

Incidentally I was speaking to a group of local farmers last night, and happened to mention in my presentation that world wheat stocks were forecast to be at, or near, a record high at the end of 2011/12.

At the ending questions and answers session one farmer asked how accurate are all these stocks figures that we have thrown at us. A very good question. My fellow speaker rightly replied that the USDA is about the best option that is available to us on a global scale so, rightly or wrongly, we kind of have to go with their numbers most of the time.

I said that I'd had it put to me not that long ago, based on the fact that UK exports last season were way ahead of early forecasts and using the stocks numbers that we had at the time, that the UK should have run out of wheat before harvest came along. Indeed somebody allegedly got their fingers badly singed on the back of making the assumption that there wasn't enough domestic wheat to go round using the information available.

Thing is, there was enough wheat. At 200+ quid or whatever, wheat was suddenly and magically "found" all over the place. Could it be that it was not unusual for cereal growers to officially and routinely underestimate the size of their crops I asked, to silence and wry smiles all around the room.

Answers on a postcard please to the usual address...

Chicago Close - Thursday

26/01/12 -- Soybeans: Mar 12 Soybeans closed at USD12.22 3/4, up 9 1/4 cents; Nov 12 Soybeans closed at USD12.21 3/4, up 8 cents; Mar 12 Soybean Meal closed at USD323.60, up USD2.50; Mar 12 Soybean Oil closed at 51.94, up 55 points. Weekly export sales were 466,300 MT for 2011/12 and 126,000 MT for 2012/13, below trade estimates for combined sales of 700-850 TMT. Undeterred funds bought 5,000 contracts on the day. Production numbers in South America keep declining with Brazil's Parana state lowering their soybean crop estimate to 11.67 MMT from 12.7 MMT.

Corn: Mar 12 Corn closed at USD6.34 1/2, unchanged; Dec 12 Corn closed at USD5.66, up 3 cents. Funds were buyers for the sixth session in a row, coming in for an estimated 10,000 contracts overnight and a further 3,000 in the day session. Corn prices have risen for each of those six sessions. Weekly export sales were 958,100 MT for 2011/12 and 82,500 MT for 2012/13, above expectations of 650-850 TMT. There's decent rains in the forecast for Argentina Tuesday through to Thursday next week, but the market seems to think that the damage has already been done.

Wheat: Mar 12 CBOT Wheat closed at USD6.53 1/2, up 12 1/4 cents; Mar 12 KCBT Wheat closed at USD7.09, up 12 cents; Mar 12 MGEX Wheat closed at USD8.27 1/4, up 14 1/2 cents. Wheat led, with funds buying an estimated 2,000 Chicago contracts on the day. Export sales of 604,700 MT for 2011/12 and 14,000 MT for 2012/13 were in line with trade ideas of 500-700 TMT. Egypt were reported to have rejected one of four consignments of Kazakh wheat on the grounds of it containing "unauthorised seeds" and had the remaining three cargoes swapped to Russian origin.

EU Wheat Prices Continue To Rise

26/01/12 -- EU grains finished mostly higher again with Mar 12 London wheat GBP1.25/tonne higher at GBP164.50/tonne and Mar 12 Paris wheat rising EUR1.25/tonne to EUR209.25/tonne. New crop London wheat was unchanged.

There wasn't a lot of fresh news, but the bulls have the bit firmly between their teeth at the moment. Bears are running for cover with the market now almost GBP25.00/tonne higher than it was six weeks ago. Nobody saw this sudden sharp correction coming.

The HGCA made some minor tweaks to the final 2011 production estimates, reducing UK wheat production very slightly to 15.26 MMT, still 3% higher than in 2010 despite the spring and early summer drought.

Human and industrial usage was also revised only fractionally lower to 6.9 MMT, despite Ensus showing few signs of springing back into life.

Brussels issued soft wheat export licences for 218 TMT this past week, the best total of 2012 so far but a long way from where you would expect things to be at this time of year.

The marketing year-to-date total now stands at 7.9 MMT, versus 12.3 MMT at the same time in 2010/11. So despite a slightly larger crop in 2011/12 EU-27 soft wheat exports are actually 36% lower than they were a year ago.

EU Rapemeal Prices

26/01/12 -- Rapemeal prices on the continent are on the rise again today, in line with last night's gains in Chicago soymeal.

Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session: