Chicago Closing Comments
11/02/11 -- Soybeans: March soybeans finished down 17c at USD14.16 a bushel; March soymeal closed USD4.40 lower at USD378.10; March soyoil fell 55 points to 58.49. The market had a hangover from yesterday's news of China cancelling/switching out of existing old crop US purchases into South America as it's harvest comes on stream. Talk is gathering of a record crop in Brazil this year. A firm dollar and weak crude oil, which fell below USD85.50/barrel, also weighed on the market today.
Corn: March corn ended up 8c to USD7.06 1/2; May corn ended up 7 3/4c to USD7.17 1/4. News of Egypt's premier finally capitulating spurred corn to close above USD7/bu for only the 19th time in history. Egypt has purchased 1.5 MMT of corn so far this year from the US compared to 812,000 MT this time last year. South Korea bought 55,000 MT of US corn today and Mexico have booked 210,000 MT of the same. Mexico's own domestic corn drop has been badly damaged by recent frosts.
Wheat: March CBOT wheat closed up 4 1/4 cents at USD8.67/bushel; March KCBT wheat closed up 5 cents to USD9.73; March MGEX wheat settled up 3 cents to USD10.17 3/4. Egypt bought 170,000 MT of soft wheat split three ways between the US, Canada and Australia. Tunisia is tendering for 50,000 MT of soft milling wheat. After a sharp cold blast strong warming in the US is predicted for next week, with massive snowmelt expected in the Midwest, say Martell Crop Projections.
EU Wheat Ends Mostly Lower
11/02/11 -- EU wheat futures closed mixed but mostly lower to end the week with Mar London wheat down GBP1.25 to GBP207.75/tonne, and Nov up GBP0.25 to GBP180.25/tonne. Paris wheat closed with Mar down EUR3.00 to EUR273.00/tonne and Nov falling EUR1.50 to EUR243.50/tonne.
Egypt's premier finally bit the bullet late in the day, too late to make much difference to the grain markets. Earlier today their state-run agency GASC bought three cargoes of wheat, none of them French origin. Australia, Canada and the US got the nod today.
Yesterday's news that weekly export licences granted by Brussels only managed to muster 128,000 MT, and today's missing out on the Egyptian tender maybe made traders think that EU prices are now high enough to ration demand.
It is worth noting that to reach the USDA's projected export target of 21.5 MMT the EU needs to export at the rate of 419,000 MT/week for the remainder of the 2010/11 marketing year.
That is starting to look quite unlikely given recent volumes and the success of the US, Australia, Canada and Argentina at recent international tenders. In addition the likely removal of the EU12/tonne levy on feed wheat imports into the bloc may also cap further attempts at a rally.
In the UK, compound feed sales are understandably sluggish at these levels, and February is of course a short month. Little old wheat at GBP200/tonne ex farm is currently more expensive than 35% protein rapemeal.
Northern Europe crops are finally getting beneficial rain, although soil moisture is still deficient in Spain, France, northern Italy and the Balkans where hardly any rain has been received in the past 6 weeks. The latest forecast is now finally calling for rain in the droughty areas, say Martell Crop Projections.
Early Call On Chicago
11/02/11 -- The overnight grains were mixed with wheat 2-3c higher, corn 1-2c lower and beans fractions either side.
The markets maybe haven't moved as much as you might think this week. On the week as a whole so far we see CBOT March wheat up 9 cents, March corn up 20 cents and March soybeans down 1/2 cent.
Egypt has bought another three cargoes of wheat today, split between the US, Canada and Australia. South Korea has bought 55,000 MT of Canadian wheat and Tunisia is tendering for 50,000 MT.
South Korea have also bought 55,000 MT of US corn and Mexico have booked 210,000 MT of the same.
The wheat market may be a tad disappointed that US grain hasn't won a larger share of Egypt's business this week. The political situation there took another twist yesterday with Mubarak's "resignation" speech turning out to be anything but.
South American weather looks non-threatening, and a potential record soybean crop could be on the cards from there, with Brazil more than compensating for any shortfall out of Argentina.
The Indian wheat harvest will soon be upon us, with a record 82 MMT crop expected.
The Chinese weather outlook is improving, with "significant" precipitation in the 7-10 day outlook for wheat and rapeseed crops in central and southern areas, according to QT Weather.
Things look a little tired today, and I wouldn't be surprised to see the market drift lower on lack of enthusiasm to push the button ahead of the weekend.
Early calls are wheat 1-3c higher, corn and beans mixed 2c higher to 2c lower.
EU Rapemeal Prices
11/02/11 -- Latest guide prices for EU rapemeal.
Basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:
| Feb11 | 217.00 | -2.00 |
| Mar/Apr11 | 217.00 | -2.00 |
| May/FH Jul11 | 216.00 | -1.00 |
| Aug/Oct11 | 186.00 | unch |
| Nov11/Jan12 | 191.00 | -1.00 |
| Nov/Apr12 | 193.00 | -1.00 |
Burgers Banned
11/02/11 -- Fancy a nice burger, or a sausage bap maybe? Then don't go to Forest Green FC, because their eco-warrior I know what's good for you vegan owner hasn't just banned the players from eating them, he's took them off the menu inside the ground on matchdays too. Hummus wrap anyone?
Ukraine Crop Conditions
11/02/11 -- Crop conditions in Ukraine are looking pretty good compared to twelve months ago, with the Ag Ministry there reporting 94% of winter grains in good/satisfactory condition.
Good/satisfactory conditions are seen for 94% of winter wheat and 91.5% of winter barley. Winter rapeseed meanwhile is rated 91.6% good/satisfactory, a year ago that was only 79%.
Chicago Close
10/02/11 -- Soybeans: Beans fell around 17-18 cents on consolidation and profit-taking from yesterday's gains. Overall weekly export sales were in line with expectations, but old crop disappointed at only 20,800 MT. China decreased their original purchases by 261,700 MT for 2010/11 delivery. That's a bit of a blow for the bulls forecasting USD16/17 beans. March soybeans finished down 18 cents at USD14.33 a bushel.
Corn: Corn rose above USD7/bushel, but closed below that level again by the end of play, with front month March ending at USD6.98 1/2/bushel. Export sales were strong at 1,107,300 MT for 2010/11 delivery and 104,500 MT for 2011/12 delivery. Talk that 40% of the US corn crop now going into ethanol manufacture is unhealthy is gathering support. Will the US government do anything about it though? As rising food prices gain more headlines on the popular press then maybe they just might do.
Wheat: CBOT wheat futures closed around 23c easier, with KCBT down 20c and MGEX 12-13c lower. Global demand remains strong, but large spec length is always going to be vulnerable to booking profits at these lofty heights. Japan booked mostly US wheat at it's usual weekly tender. Algeria was in the market buying 200,000 MT of what was probably French wheat in the end. There are still plenty of tenders for US wheat to aim at, but stocks aren't that tight and the harvest in the south isn't really that far away.
