Chicago Close
14/02/11 -- Soybeans: beans fell around 13-14 cents, meal was down around USD2-3 and oil was 75-80 points lower. The NOPA Jan soybean crush came in at 144.6 million bushels, matching expectations and also still ahead of the pace needed to reach the USDA's target for the 2010/11 season. The USDA export inspections report this morning came in at 33.823 million bushels. South American weather conditions look generally non-threatening.
Corn: corn closed around 10-12 cents lower with funds estimated to have sold around 10,000 contracts on the day. Frost damage to Mexican corn may not be as bad as was first reported, and replanting could sort the problem out. They did however buy 145,000 MT of corn from the US today, along with 129,600 MT of sorghum. The USDA export inspections report this morning was a little bearish at 26.149 million bushels.
Wheat: CBOT wheat ended around 5c higher, with KCBT wheat up by a similar amount and MGEX down 4-7c. Tunisia tendered for 50,000 MT of soft milling wheat, but bought 100,000 MT of optional origin wheat over the weekend. Iraq also bought 200,000 MT of US and 150,000 MT of Australian wheat. USDA export inspections reported this morning were on the low side at 24.196 million bushels. Drought in China remains a concern even though some light snow has arrived.
New Crop EU Wheat Ends At Record Highs
14/02/11 -- EU wheat closed higher again with Mar London wheat climbing GBP2.25 to GBP210.00/tonne and new crop Nov GBP1.75 higher at GBP182.00/tonne. Mar Paris wheat rose EUR1.75 to EUR274.75/tonne, with Nov up EUR3.00 to EUR246.50/tonne.
It was a record high close for new crop London and Paris Nov wheat.
Tunisia bought 100,000 MT of optional origin wheat and Iraq bought 200,000 MT of US and 150,000 MT of Australian wheat, bringing their total purchases to 850,000 MT so far this year.
Unusually low temperatures in Mexico appear to have caused some damage to the corn crop there, although replanting is an option. There are also question marks over Chinese and US wheat potential this year.
EU wheat sales seem to be slowing at these levels, with US, Canadian and Australian wheat winning the lion's share of recent global tenders.
Brussels are set to vote on whether to temporarily waiver the EUR12/tonne import duty on feed wheat and EUR16/tonne tariff on barley later this month. With Australia having an abundance of feed wheat about it this year that could stem the way for large scale exports into the EU.
That could cap any further upside for EU feed wheat already struggling to feature in compounder's rations.
EU Rapemeal Prices
14/02/11 -- Latest guide prices for EU rapemeal.
Basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:
| Feb11 | 218.00 | +1.00 |
| Mar/Apr11 | 217.00 | unch |
| May/FH Jul11 | 215.00 | -1.00 |
| Aug/Oct11 | 186.00 | unch |
| Nov11/Jan12 | 192.00 | +1.00 |
| Nov/Apr12 | 193.00 | unch |
Early Call On Chicago
14/02/11 -- The overnight grains were mixed with wheat up 8-12c, beans down 1c to up 2c and corn unchanged to up a half.
Wheat led the pack on more concerns over China's winter crop in the Northern Plains, otherwise there wasn't too much fresh news. Crude oil is static around USD85.50/barrel.
Tunisia bought 100,000 MT of optional origin wheat and Iraq bought 200,000 MT of US and 150,000 MT of Australian wheat, bringing their total purchases to 850,000 MT so far this year.
The USDA hold their annual Outlook conference next week when we get our first hints at how spring planting in the US might go, before we get the more official data at the end of March. Generally they've proven to be more accurate than some of the other early high profile private estimates over the past couple of years.
At the moment of course all the talk is about the "battle for acres" - with corn at USD7/bushel and demand from the ethanol monster in full swing then a significant increase in corn plantings could be on the cards.
The NOPA Jan soybean crush came in at 144.6 million bushels, matching expectations and still ahead of the pace needed to reach the USDA's target for the 2010/11 season.
Frost damage to Mexican corn is also in the headlights today with 1.5 million acres possibly affected and in need of replanting. To ensure that they don't run out of tacos they've just bought 145,000 MT of corn from the US today, along with 129,600 MT of sorghum.
Chinese customs data shows Jan edible oil imports at 610,000 MT, 12% up on this time last year.
Early calls for this afternoon's CBOT session: corn steady, beans down 1-2c, wheat up 9-11c.
Wheat Market Braces Itself
14/02/11 -- London wheat seems to be attempting to press on to new highs this week, judging on today's price action so far, but how much consumer interest in wheat will there be with May futures at GBP212/tonne?
Possibly not too much with summertime wheatfeed pellets offered at GBP150/tonne and falling. In fact 10% protein wheat is now GBP20-25/tonne dearer than 35% protein rapemeal and priced higher than just about every other ingredient in a compounder's ration barring 48% soya.
Export interest has slowed to a trickle, in fact there's more interest in buyers selling existing purchases back than booking fresh cargoes at these levels from what I am hearing.
The expected tightness in availability hasn't yet manifested itself in the physical market. It seems that there may be more people than you might think hanging onto wheat in anticipation of a making a last minute killing.
Meanwhile I fully expect feed demand from the livestock sector to fall off a cliff come May once current market levels are fully factored into finished feed prices.
When the only buyers are Tarquin and his paper-purchasing batty boy mates, it might be time to get out.
Farm For Sale
14/02/11 -- With grain prices at these levels some of you might fancy buying a bit of extra farmland right? Well when I say a bit, I mean quite a large bit. The largest farm in the world has just come up for sale: Location, Location, Location
The Morning Vibe
14/02/11 -- It's Valentine's Day, another chance for retailers to attempt to wring a few quid more out of us. As it happened I had to go into Adsa yesterday and was dismayed to see thousands of identical bunches of a dozen red roses carefully placed next to a pallet of giant toblerones. That's the way to show your woman how much she means to you, you old romantic. Still I suppose that it's one tiny step up from the Esso station on the way home option.
Talking of romance MrsN#3 keeps hinting about wanting a "large rock" and a long engagement. She does unfortunately read this blog, and so is fully aware of the MrsN#1 and the cubic zircona ruse, so that particular avenue of deception is closed to me. So it's best not to disappoint her and play safe by getting her nothing again this year methinks in a lone protest against rampant consumerism.
London wheat has opened higher, with May coming in up GBP3 to GBP213.50, just GBP0.50 shy of last week's all time contract high. A close above GBP212.75 would be a record high close for the contract.
Paris wheat is also higher, coming in around EUR3-4/tonne firmer on spillover support from Globex wheat which currently stands around 12-14c firmer.
Mexico's corn crop may have been damaged by unusually cold temperatures bringing frost to "up to" 1.5 million acres of the crop in the north of the country. That's one of the reasons behind this morning's excitement. The corn could be replanted, but we're ignoring that bit for now.
We've also got the old chestnuts of drought in China and concerns over US wheat on the Plains. Plus the market seems to feel that with Mubarak out of the way things will regain some degree of normality in Egypt. It probably won't mean them buying any more wheat, but we're ignoring that bit as well.
At least the Suez Canal isn't under threat of closure, that's a bonus, although to be fair that is bearish for oil not bullish. NYMEX Crude has slid to USD85.49/barrel currently, within a smidge of it's lowest since November, so we'd better ignore that bit too.
Egypt bought Canadian, Australian and US wheat on Friday, passing over on French wheat which was too dear. Ignore.
For now the European market seems almost relieved to be missing Egypt's business, availability is after all tighter than a shark's arse at fifty fathoms isn't it? Canadian wheat was USD20/tonne cheaper (before freight) than French wheat on Friday. Australian wheat meanwhile was more than USD33/tonne cheaper and US wheat was USD24/tonne less. Ignore.
By my calculations we need to average sales of 419,000 MT/week to hit the USDA's projected 21.5 MMT for the current marketing year. We've only beat that weekly total once since Christmas. Ignore.
