Chicago Close - Friday
03/02/12 -- Soybeans: Mar 12 Soybeans closed at USD12.32 1/2, up 15 1/2 cents; Nov 12 Soybeans closed at USD12.37 1/4, up 13 1/2 cents; Mar 12 Soybean Meal closed at USD328.60, up USD5.20; Mar 12 Soybean Oil closed at 51.65, up 46 points. For the week overall nearby beans gained 13 1/2 cents, with meal adding USD6.40 and oil 6 points. Funds were said to have come in for 6,000 soybean contracts on the day, which would have them buying 23,000 since Monday's collapse. Informa cut very slightly their forecast for US soybean plantings this year to 74.568 million acres. They also dropped their forecast for Argentine production to 46.5 MMT from 51 MMT and lowered Brazil to 70 MMT from 72 MMT. The USDA attaché in Argentina pegs the soybean crop there at the same 46.5 MMT as Informa, 4 MMT below the USDA's January number.
Corn: Mar 12 Corn closed at USD6.44 1/2, up 1 1/2 cents; Dec 12 Corn closed at USD5.81 1/2, up 2 1/2 cents. Front month March was only marginally higher on the week, up 2 3/4 cents, but it's 51 cents up in a fortnight and a day. Informa cut their Argentine corn production estimate by 1.5 MMT to 22.5 MMT and left their Brazilian estimate unchanged at 61.0 MMT. The USDA attaché in Argentina pegs corn production there a little lower at 21.8 MMT, compared with the USDA's own estimate of 26.0 MMT last month. They will issue a revised forecast next Thursday. The Commitment of Traders report shows large funds adding 32,300 corn contracts to their overall length in the week through to last Tuesday.
Wheat: Mar 12 CBOT Wheat closed at USD6.60 3/4, down 2 cents; Mar 12 KCBT Wheat closed at USD7.12 3/4, down 5 cents; Mar 12 MGEX Wheat closed at USD8.38 1/2, up 2 1/2 cents. On the week as a whole Chicago wheat added 13 1/2 cents, Kansas gained 12 3/4 cents and Minneapolis put on 13 1/4 cents. The Commitment of Traders report shows trend-following funds reducing their overall Chicago short position by around 19,000 contracts in the week ending Tuesday. Informa increased their estimate for US all wheat plantings for the 2012 harvest to 57.9 million acres, 3.5 million up on last year. Russia indicated a more relaxed response to it's grain exports than many had anticipated.
EU Wheat Ends Higher Despite Russian News
03/02/12 -- EU grains finish mixed but mostly higher with Mar 12 London wheat up GBP0.45/tonne to GBP167.45/tonne and Mar 12 Paris wheat rising EUR1.50/tonne to EUR217.25/tonne.
On the week overall London wheat was up GBP2.90/tonne and Paris wheat rose EUR8.25/tonne. London wheat set a near five month high this week, with Paris wheat rising to its best levels in almost eight months.
Russia surprised the market by saying that it was putting off a decision on restricting grain exports to another day, and then promptly announcing that 27 MMT was a level it would be comfortable with and that the government "doesn’t see grounds for any kind of grain export restriction in April this year".
It had been suggested by many that the latter scenario was likely given the existing rate of shipments.
They are said to have exported just over 19 MMT in the July/Jan period, with January's figure being around 1.1-1.3 MMT, so the rate of exports has certainly slowed considerably. That is partly a function of the weather, but it also seems clear that a lot of it is down to Russian offers not being as uber-competitive as they were.
Now that this issue has been cleared up, at least for now, the trade can fret over something else. Step forward this week's ultra cold weather in eastern Europe, pushing west into France and Germany. How much damage will that do to winter crops? The jury will remain out on that one for some time yet.
Elsewhere, the USDA attaché in Argentina estimates corn production there at 21.8 MMT, more than 4 MMT below the current USDA figure. Exports are seen at 14 MMT, 3.5 MMT below the current USDA estimate.
Stats Canada estimate wheat stocks there at 20.962 MMT, a little higher than the trade expected.
Brussels issued soft wheat export licences for 178 TMT this past week, bringing the year to date total to 8.1 MMT, 36% down on year ago levels. Exports have been pretty poor for the last six weeks, which is a long time to get over a Christmas hangover!
Russia Latest
03/02/12 -- Having said that they were going to make an announcement on grain exports yesterday, and then changing that to today. And then changing that to "at some date in the future, but I can't tell you when" earlier today. They are now saying that they CAN export 27 MMT of grains in 2011/12, up from the 24-25 MMT previous suggested cap, without any restrictions. They go on to say that there are no grounds for an kind of export restrictions to be introduced in April.
Reminds me of many a shopping trip with MrsN#1 that does. You know the form, traipse round every shop in town and end up buying the dress/shoes that she saw in the first shop seven hours previously. "You never tell me I look nice," used to get that quite often. Apparently bursting out laughing and saying "believe me if you ever do look nice I will tell you" wasn't the response she was expecting.
Late Call On Chicago
03/02/12 -- The overnight grains finished with beans 6-7 cents firmer, wheat up 4-5 cents and corn mixed up a cent or so to down a cent or so. Crude is a bit firmer, but still languishes just under USD97/barrel. The US dollar is little changed.
Fresh news is limited. Informa are out with their global production numbers mid-session. Stats Canada came out with an all wheat stocks number of 20.962 MMT, a bit higher than trade estimates.
Russia have deferred their planned announcement on grain exports.
South American weather has improved, but production estimates haven't, as yet.
For the week overall so far beans are down 2 cents (to last night's close), with corn up 1 1/4 cents and wheat up 15 1/2 cents.
Late calls for this afternoon's CBOT session: corn up 1-2 cents, wheat up 3-5 cents, beans up 6-8 cents.
Snippets
03/02/12 -- Russia's First Deputy Prime Minister Viktor Zubkov is set to make an announcement on the country's grain export situation later today, according to Reuters*
However, other well-sourced information coming my way via Bloomberg says that the press conference has in fact been rescheduled from today to an undetermined date in the future.
The latter makes sense. They don't want to come right out and introduce an export ban as that makes them look like an unreliable supplier. But they do want Russian exports to ease up, so keep the threat of a possible maybe hanging over the wheat market so buyers will think twice about Russian offers in any future tenders. Nice poker play Viktor.
Poor old "jack high" Kazakhstan must be spitting with all the wheat they've got to sell. The only problem is Russia has all the aces like railcars and the deep water access.
What's the alternative if you're a Kazakh farmer with wheat to shift? Sell it into government intervention. The price? Well, this is Kazakhstan you know, not Rouen.
There's overheads, and cashflow, and the yak to feed and everything. Storage, fixing the roof, feed the yak, he's a hungry yak, more overheads, wages. What? The price? Look I'm doing you a favour here mate. The price on offer is a princely one hundred euros a tonne. Delivered. And I'm doing myself at that.
Yes my little farmy folks, spare a thought for your Kazakh bretheren as that genuinely is the price of currently putting your quality milling wheat into intervention in Kazakhstan. And the doors are only open for 3 MMT even at that price, after that you need to order it a taxi for the Black Sea yourself.
Elsewhere, Brussels issued soft wheat export licences of 178 TMT this past week, bringing the year to date total to 8.1 MMT. Not a very impressive figure, in fact the fifth week in the last six that exports have been under 200 TMT.
Taiwan has bought 50,000 MT of Argy corn overnight.
There's still no agreement between slippery Greece and its private bondholders. As a side issue the Beeb are reporting that they "cooked the books" to comply with the Maastricht treaty and join the euro in the first place.
The Guardian and Telegraph are today reporting that international debt inspectors have discovered a EUR15 billion "black hole" in its public finances. Hmmmmmm.
Stats Canada are out later this afternoon with their latest Canadian stocks data and Informa are due out around 16.30 London time with their world crop production numbers.
*Reuters now concur, today's meeting is off, "shifted to another day, the source added, but declined to say when."
Chicago Close - Thursday
02/02/12 -- Soybeans: Mar 12 Soybeans closed at USD12.17, up 1 3/4 cents; Nov 12 Soybeans closed at USD12.23 3/4, up 5 1/2 cents; Mar 12 Soybean Meal closed at USD323.40, up USD1.10; Mar 12 Soybean Oil closed at USD51.19, up 1 point. Funds bought an estimated 3,000 soybean contracts in a fairly lacklustre session. Soybean sales were poor at 308,400 MT for 2011/12 and 60,000 MT for delivery in 2012/13. Trade expectations were for sales of 450-750,000 MT. Year to date sales are down by almost a third on a year ago, yet the USDA only project at 15% decline at the end of 2011/12. Shipments are down by a quarter. Rain is in the forecast again for Argentine soybeans which are mostly in the flowering stage now.
Corn: Mar 12 Corn closed at USD6.43, up 1 cent; Dec 12 Corn closed at USD5.79, up 2 1/4 cents. Funds were said to have bought around 3,000 contracts on the day. Weekly export sales of 912,000 MT for 2011/12 and 63,000 MT for 2012/13 were towards the top end of trade estimates. Year to date shipments are 16.9 MMT versus a final 2011/12 number from the USDA of 41.9 MMT. Informa are due out mid-session tomorrow with their latest take on world production, ahead of the USDA's own figures a week from today.
Wheat: Mar 12 CBOT Wheat closed at USD6.62 3/4, down 11 1/2 cents; Mar 12 KCBT Wheat closed at USD7.17 3/4, down 4 3/4 cents; Mar 12 MGEX Wheat closed at USD8.36, down 3/4 cent. Chicago wheat led the complex lower for once, with funds selling an estimated 2,000 CBOT contracts on the day. The USDA reported weekly export sales of 518,900 MT of 2011/12 and 35,200 MT of 2012/13 for wheat - in line with trade forecasts. The trade is now expecting an announcement regarding Russian exports tomorrow. Bitterly cold conditions there and across Europe remain a concern.
EU Wheat Declines, But Ends Well Off Session Lows
02/02/12 -- EU grains finished mixed with front month Mar 12 London wheat down GBP0.10/tonne to GBP167.00/tonne and Mar 12 Paris wheat down one euro to EUR215.75/tonne.
Wheat was down all day on ideas that prices have got a bit ahead of themselves stifling demand. End user interest is very thin on the ground at these levels, with merchants reporting that most of the calls coming in today are from farmers wanting to sell at yesterday's levels.
Even so the close was well off session lows, just as yesterday's finish was well off session highs. Mar 12 London wheat was GBP3.35/tonne lower at one stage with Mar 12 Paris wheat showing a decline of EUR4.00/tonne at one point.
Very cold temperatures are gripping most of Europe, giving rise to winterkill fears for crops without a protective snow covering. Most of European Russia is however well insulated from the cold under 35 cm of snow, says the the Federal Hydrometeorological Centre there.
The anticipated announcement on Russian grain exports was not forthcoming, with some reports suggesting that it has been deferred until tomorrow. Some are expecting a ban, but others think that a reassessment of the current suggested maximum export ceiling of 24-25 MMT is more likely, and that this self-imposed limit could in fact be raised.
Stony silence was also the order of the day in Athens, where negotiations between the government and private creditors drag on, despite repeated insistence from Greek officials that a deal is a "formality".
Elsewhere India has revised it's 2012 wheat production estimate up to a record 88.3 MMT, a 2.8% increase on last year. Harvesting there is expected to begin in around six weeks time.
Jordan bought 150,000 MT of unspecified origin wheat in a tender, but other international orders are scarce.
Around 400,000 MT of grain is said to be sitting on demurrage off the coast of Iran after the recently introduced sanctions against them brought trade with the Arab nation to a sudden and grinding halt.
A Tricky Market To Call
02/02/12 -- Seeing as we're in a tricky market to call I thought that I'd do you a little card trick. I've done this once before, and on a quiet day I'm going to attempt to do it again. Cue drum roll.....
Look at the image below and pick a card, any card, hold it in your mind (if you can find it) but don't tell me what it is right? OK, keep that card in your mind.
DON'T CLICK IT! DID I SAY CLICK IT? YOU'RE SO BLOODY IMPATIENT AREN'T YOU? DON'T CLICK ON IT UNLESS I TELL YOU TO, DON'T EVEN HOVER YOUR MOUSE OVER IT. Stop mucking about, you're interfering with the airwaves and upsetting my mojo, fiddling with my karma and twisting my melons all at the same time. It's a hard enough trick as it is, just bloody concentrate for once will you?
Right, hold that card in you head, NOW click anywhere on the image below (if you are capable of doing two things at the same time that is) and I will, via my legendary telepathetic powers, remove your card from the pack.
Hahaha. I did it. The bugger has vanished hasn't it? Applause!
Tomorrow I'm going to saw the dog in half live online.
NOTE: No animals were hurt in the making of this trick. That happens tomorrow.
