World Crop Weather Highlights
25/02/11 -- World agri-weather highlights from the excellent Martell Crop Projections:
- Heavy precipitation mostly rain fell yesterday Mid South, Eastern Midwest; moisture needed to replenish dry fields; more of the same predicted next week; bitter cold persisting Canadian prairies and Northern US Plains, spring wheat areas
- Brazil Mato Grosso state still super wet, daily thunderstorms; more rain would be welcome in South Brazil, rather dry past 7-10 days; moisture needed in Rio Grande do Sul, soybeans filling pods; dry finish to growing season would hurt the yield
- Argentina weather dry and very cool; night lows in the 50sF; autumn weather arriving early; soil moisture excellent in Cordoba, Santa Fe, Entre Rios; coolness promotes pod filling in soybeans; field moisture vastly improved from heavy rain, 8-11 inches since mid January; minor soy states in northeast Argentina super-wet last week
- Dryness in France easing, scattered showers this week; more rain needed , 2-3 inch moisture deficit central France Jan-Feb; snowfall in SE Europe yesterday; moisture is needed; temperature contrast persisting, West Europe warm, East Europe and Ukraine cold
- Australia rain set to return to Northern New South Wales, has been dry in February; Western Australia winter wheat area still hot, highs in the 90s; showers expected, not enough to offset heat; planting still a couple months off
- China rainfall in winter wheat still has not materialized; GFS model insists rain is coming 0.75 to 1.5 inch eastern Henan, Anhui, Jiangsu; forecast not too wet northern wheat area Shandong, Hebei; warming temperature forcing wheat out of dormancy
- Hot 80-90s F returned to India subcontinent; winter rapeseed (rainfed) is too warm and dry; Northwest India wheat faring better, scattered showers, cooler temperatures; temp forecast still favourably cool NW India
- Still bitterly cold Russia Volga wheat region; night lows -18 to -23 F; Black Earth wheat relatively mild, lows zero to -10 F; Black Sea and Ukraine wheat areas much warmer, closer to average late Feb weather; Black Sea wheat needs moisture, past 4-6 weeks rather dry; best precipitation keeps developing to the south in Turkey, Middle East
Chicago Regains Lost Ground
25/02/11 -- Soybeans: Mar 11 soybeans closed at USD13.65 1/2, up 47 1/4 cents; Mar 11 soybean Meal closed at USD359.70, up USD9.30; Mar 11 soybean oil closed at 56.95, up 234 points. Despite an incredibly volatile week soybeans were virtually unchanged on the week as a whole, with Mar closing just 2 1/2c lower overall. Meal lost just USD2.30 and oil actually gained 46 points. Weekly export sales were 396,400 MT, compared to trade estimates of 300-500,000 MT. Chinese purchases were just 79,500 MT of old crop and 45,000 MT of new crop, the lowest for many weeks as they switch their attention to South America.
Corn: Mar 11 corn closed at USD7.12, up 26 1/4 cents; Dec 11 corn closed at USD6.01 3/4, up 18 3/4 cents. As with beans, at the end of a very choppy week corn closed virtually unchanged overall, adding 2 1/4 cents on the week. Weekly old crop USDA export sales were a marketing year high of 1.5 MMT, with sales of a further 150,000 MT of new crop. Fund buying was heavy at an estimated 20,000 contracts. Mexico cut their corn crop estimate by 1.7 MMT to 23.3 MMT following frost losses earlier in the month.
Wheat: Mar 11 CBOT wheat closed at USD7.76 1/2, up 29 1/4 cents; Mar 11 KCBT wheat closed at USD8.87 1/2, up 26 cents; Mar 11 MGEX wheat closed at USD9.15 3/4, up 22 cents. On the week as a whole Mar CBOT wheat fell 45 1/2 cents, Mar KCBOT wheat 42 1/4 cents and Mar MGEX wheat 39 3/4 cents. Weekly export sales were strong at 1,008,300 MT of old crop and 105,000 MT for new crop against trade expectations of 700 TMT to 1 MMT. Egypt took 295,200 MT of the old crop sales. In China, rainfall in winter wheat still hasn't materialized, although the GFS model insists that rain is coming, say Martell Crop Projections.
EU Wheat Ends Lower On The Week, But Well Off Midweek Lows
25/02/11 -- EU wheat futures closed sharply higher, rebounding from some steep losses over the past couple of days with Mar London wheat up GBP4.00 to GBP201.50/tonne, and new crop Nov up GBP3.00 to GBP166.75/tonne. Paris wheat closed with Mar EUR12.00 higher to EUR259.00/tonne and Nov rising EUR6.50 to EUR222.50/tonne.
It's been one hell of a week, not that you'd realise it from a casual glance at the weekly chart. That would simply show you Mar London wheat losing GBP3.50/tonne on the week, with Nov down GBP7.30/tonne.
At one stage on Wednesday Mar London wheat stood GBP17.50/tonne below last Friday's close, with Nov was down GBP25.55/tonne. Mar Paris wheat was showing losses of EUR32.50 at one point before ending the week just EUR3.75/tonne lower.
In Paris, open interest in Mar has declined from 32,000 lots to less than 4,000 in the past fortnight as longholders unwind their positions. However, in the more active May and Nov positions we've seen open interest there increase from 70,000 and 153,500 to almost 79,000 and over 176,000 lots respectively in the same period. In the latter case that's 8.8 MMT.
Brussels issued soft wheat export licences for 439,000 MT this past week, most of which was for France (332,000 MT). That brings the total for the marketing year to date to 13.6 MMT, 2 MMT ahead of this time last year.
With eighteen weeks of the current 2010/11 MY remaining we need to continue to export at that rate every week to hit the USDA's 21.5 MMT target for this season. The euro strength we've seen this week may hinder that progress, faced with competition from Argentina, Australia and the US.
Developments in the Middle East look likely to continue to dominate trade in the weeks ahead. Brent crude has a quiet day Friday, closing just USD0.78/barrel higher at USD112.14/barrel, well off the high of USD119.79/barrel set Thursday.
Some Hulls, Some Hulls, My Kingdom For Some Hulls
25/02/11 -- It's a pretty poor pun I know, and it's buyers I'm looking for not sellers. Right who wants some soya hulls then? Liverpool or Humber I don't mind. Don't be shy, I make special price for you beautiful lady etc.
I might have some sugar beet too if you're quick.
CBOT Close
24/02/11 -- Soybeans: May soybeans ended 2 1/4c lower at USD13.29 1/4 a bushel; May soymeal fell USD1.20 to USD354.90; May soyoil ended 42 points lower at 55.28. The USDA said that US farmers will sow a record 78 million acres of soybeans in the 2011-12 crop marketing year. This is expected to produce a record 3.345 billion bushel crop.
Corn: Mar corn closed down 5 3/4c to USD6.85 3/4 a bushel; May corn ended down 5 3/4c to USD6.96 1/2 a bushel. The USDA Outlook Forum is underway pegging the US corn area this spring at 92m acres, the second highest since 1944. Trade estimates for tomorrow's weekly export sales report range from 850,000 to 1,000,000 MT.
Wheat: Mar 11 CBOT Wheat closed at USD7.47 1/4, down 15 3/4 cents; Mar 11 KCBT wheat closed at USD8.61 1/2, down 17 1/4 cents; Mar 11 MGEX wheat closed at USD8.93 3/4, down 13 cents. Weekly export sales for tomorrow's report from the USDA range from 700,000 to 1,000,000 MT. The IGC increased it's world 2010/11 wheat crop estimate by a million to 648 MMT today. Output in 2011/12 is seen rising 24 MMT, or 3.7%, to 672 MMT.
EU Wheat Close
24/02/11 -- EU wheat closed higher with Mar London wheat up GBP5.50 to GBP197.50/tonne and new crop Nov GBP4.50 higher at GBP163.75/tonne. Mar Paris wheat rose EUR0.50 to EUR247.00/tonne, with Nov EUR2.75 higher at EUR216.00/tonne.
It was yet another topsy turvy day, with London probably closing higher than it should have done even though the pound fell on the back of poor retail sales data.
London and Paris wheat traded on both sides today, with Libyan uncertainty keeping players nervous.
Unless there is any major change overnight then I would expect things to correct themselves in the morning and London to start lower.
The pound fell on the back of poor Feb retail sales, hitting below 1.17 against the euro which rose on the back of improving economic confidence.
Early Call On Chicago
24/02/11 -- The overnight grains were lower with wheat down around 4-6c, corn around 2-3c easier and beans falling 9-11c.
Crude is higher again, although well off intraday highs, with NYMEX up USD2/barrel and Brent up USD3/barrel. Saudi Arabia has said that it can make up for any shortfall in production from Libya if necessary.
The USDA Outlook Forum is underway, and they are pegging corn area at 92m acres, with bean plantings at a record 78m acres, both are around half a million higher than the average trade estimate.
Both are in line with last month's baseline estimates. Also unchanged was the wheat area at 57m acres, although they dropped the harvested area by a million in light of the relatively poor over-wintering of the US crop.
The IGC increased it's world 2010/11 wheat crop estimate by a million to 648 MMT today. Output in 2011/12 is seen rising 24 MMT, or 3.7%, to 672 MMT.
It looks like this afternoon could easily go either way, although early calls are lower in line with the overnight session and anticipated further fund liquidation. Odd that funds pulling away can cause the market to fall so dramatically when their presence in the market has nothing to do with high prices, according to some.
Early calls for this afternoon's CBOT session: corn down 2-3c, wheat down 4-6c, beans down 8-10c.
