Chicago Closing Comments
09/12/10 -- Soybeans
Jan CBOT soybeans ended 14 1/2c lower at USD12.81 1/2c; Dec soymeal finished USD5.50 lower at USD339.90; Dec soyoil was down just one point to 53.79. Profit-taking ahead of tomorrow's USDA report was the name of the game. Brazilian crop production estimates are starting to shrink a little with ABOIVE estimating the crop at 67.2 MMT, down from the previous estimate of 67.9 MMT and below last year's 68.7 MMT. Weekly export sales were bang in the middle of trade ideas at 870,800 MT.
Corn
Dec 10 corn ended at USD5.60 1/4, up 3/4 of a cent; Mar 11 corn closed at USD5.72 1/4, down a 1/4 cent. There was not a lot doing for corn today. Both the US dollar and crude oil showed little change. Israeli buyers bought 60,000 MT of US corn in a private tender. Tomorrow's USDA report is expected to show US ending stocks for 2010/11 declining as demand from ethanol refiners remains strong. Weekly export sales were in line with expectations at 807,500 MT.
Wheat
Dec 10 CBOT wheat finished at USD7.48 1/4, up 6 1/4 cent; Dec 10 KCBT Wheat was at USD8.34 1/4, up 7 cents; Dec 10 MGEX wheat closed at USD8.54, up 11 1/4 cents. It was another day of the same old story. Quality wheat stocks are in decline as the Australian crop drowns and the gap between Chicago and the other two US exchanges continues to widen to multi-year highs. The market shrugged off the US losing out in Egypt's latest tender as weekly export sales came in above expectations at 726,500 MT, including private sales to Egypt.
EU Wheat Close
09/12/10 -- Jan London wheat closed GBP1.10 higher at GBP188.00/tonne and new crop Nov as GBP0.25 higher/tonne at GBP157.50. Jan Paris wheat closed up EUR2.00 to EUR240.25/tonne, whilst new crop Nov climbed EUR2.25 to EUR213.25/tonne.
French wheat stocks continue to tighten as importing nations scour the world for quality wheat, finding few shops left open. FranceAgriMer peg ending stocks there for the current season at 2.1MMT, down by more than a third on 2009/10, and many people think that their export estimate is understated.
Despite the perception that US wheat is the cheapest on the world export stage, Egypt today bought 180,000MT of French and 60,000MT of Argentinean wheat in it's latest tender.
The question now is how dear does French wheat need to be to cut demand? The weak euro, which fell below 1.19 against the pound, continues to give EU wheat a competitive advantage.
The USDA is out tomorrow with it's latest WASDE report. US wheat ending stocks are expected broadly unchanged from last month, with corn stocks seen declining on robust demand from the ethanol sector.
USDA Weekly Export Sales
09/12/10 -- USDA weekly export sales for the period ending Dec 2nd 2010:
| Product | Actual | Forecast |
| Soybeans | 870,800 MT | 700 TMT- 1.0 MMT |
| Wheat | 726,500 MT | 450-650,000 MT |
| Corn | 807,500 MT | 750-950,000 MT |
EU Rapemeal Prices
09/12/10 -- Latest guide prices for EU rapemeal.
Basis FOB Lower Rhine in euros/metric tonne, with change from previous trading day:
| Dec10 | 215.00 | unch |
| Jan11 | 215.00 | unch |
| Feb/Apr11 | 215.00 | unch |
| May/FH Jul11 | 215.00 | +1.00 |
| Aug/Oct11 | 185.00 | unch |
| Nov11/Jan12 | 190.00 | +1.00 |
| Nov11/Apr12 | 191.00 | +1.00 |
Brazil Wheat Crop Best In Years
09/12/10 -- Brazilian wheat growers are wrapping up what the describe as their best wheat harvest in years. Despite lower plantings than last season, near ideal weather conditions and increased fertiliser usage has boosted yields - with a crop of 5.6 MMT expected, according to Conab.
That beats last season's production by 12%, and quality is also said to be much better this season. Late rains last year meant that only half of Brazil's wheat crop made milling grade.
Record yields are seen in Parana state, which accounts for around half of the nation's wheat crop.
Morning Vibe: Ice, Ice, Baby
09/12/10 -- There's no sign of the "big thaw" yet in North Yorkshire this morning. There's another freeze setting in across the pond that is causing a few problems by all accounts too.
More than twenty ships are at anchor around the Great Lakes waiting to load grain as high winds and icy conditions hamper navigation. Barge traffic has slowed significantly on the mid-Mississippi north of St. Louis sending freight rates sharply higher.
This is restricting supplies of grains from the US interior to the Gulf of Mexico where vessels are also now starting to back up, according to reports.
Elsewhere analysts continue to scratch their heads over ABARE's Australian wheat production estimates earlier in the week.
The chairman of Grain Producers Australia says that the report was out of date before it was released and that "it seriously underestimates the damage to the Australian winter crop from recent wet weather, in both quality and quantity."
ABARE disagree, saying that their report took weather conditions up to Monday this week into account. Apparently Miss Tibb's sister Shelia works for ABARE, I understand.
Egypt are back in the market issuing tenders for both hard and soft wheat today. Japan has bought 51,000 MT of Canadian wheat in an overnight tender.
Good end-user interest, the firm soybean market and a tight supply/demand scenario is keeping the rapeseed market firm. The EU is likely to be around 2 MMT deficient in the oilseed in 2010/11, and supplies from it's normal cheap and cheerful neighbour Ukraine are tight after their own harvest was cut be drought.
Paris rapeseed posted sharp gains yesterday having risen for nine sessions in a row. Front month Feb Paris rapeseed is up almost EUR90/tonne since the beginning of October. Canadian canola futures meanwhile closed higher for the seventh session in eight last night.
Chicago Close
08/12/10 -- Soybeans
Jan CBOT soybeans ended 10 1/2c higher at USD12.96c; Dec soymeal finished USD2.40 higher at USD345.40; Dec soyoil was 41 points higher at 53.80. Year end profit-taking was short-lived. Funds were estimated to have been net buyers of roughly 5,000 soybeans on the day. Trade estimates for tomorrow's weekly soybean export sales range from 700,000 MT to 1 MMT.
Corn
Dec 10 corn ended at USD5.59 1/2, up 12 1/4 cents; Mar 11 corn closed at USD5.74 1/2, up 12 3/4 cents. The anticipated pre-Christmas ell-off already seems to be attracting buyers. Funds were estimated to have bought approximately 8,000 contracts at the close. Tomorrow's weekly export sales report is expected to show sales of 750-950,000 MT.
Wheat
Dec 10 CBOT wheat finished at USD7.42, down 1 cent; Dec 10 KCBT Wheat was at USD8.27 3/4, up 5 3/4 cents; Dec 10 MGEX wheat closed at USD8.42 3/4, up 7 3/4 cents. Higher protein wheat led the way with Minneapolis and KCBT nearby December contracts reaching their widest levels yet relative to Chicago wheat. Tomorrow's USDA report is expected to see export sales of 450-650,000 MT.
