Chicago Close
04/03/11 -- Soybeans: Mar 11 soybeans closed at USD14.07 3/4, up 2 1/4 cents; Mar 11 soybean meal closed at USD363.80, down USD3.00; Mar 11 soybean oil closed at 58.96, up 70 points. Beans traded both sides within a fairly wide trading range with early strength tied to China buying 120,000 MT of old crop, along with reports of the Argentine port workers strike spreading. Later in the session however weakness came from Informa Economics upping their estimates for South American soybean production this year by a combined 5.1 MMT. Brazil will produce a record 71.4 MMT and Argentina a second highest ever 52 MMT, they said.
Corn: Mar 11 corn closed at USD7.21 1/4, down 8 1/2 cents; Dec 11 corn closed at USD6.09 1/2, down 6 1/4 cents. Corn closed lower on profit-taking ahead of the weekend after setting a fresh 32-month high earlier in the day. Even so Mar corn was 9 1/4 cents higher on the week. Informa dropped it's Argentine corn production estimate by 1 MMT to 21 MMT, but increased it's Brazilian estimate by 2.8 MMT to 53.8 MMT. Overall however global production was decreased by 1.7 MMT, partly due to lower South African and Mexican production.
Wheat: Mar 11 CBOT wheat closed at USD8.00 1/2, up 10 cents; Mar 11 KCBT wheat ended at USD9.18, up 9 3/4 cents; Mar 11 MGEX wheat finished at USD9.53, up 6 1/2 cents. Wheat finished with with CBOT up around 24 cents on the week, with KCBT up 30 cents and MGEX up 37 cents. The US Midwest is too wet and the Plains are too dry. "The Midwest forecast is stormy and very wet, with heavy rain coming early next week to Illinois, Indiana, Ohio and Michigan. Kansas wheat continues to be starved for moisture, and may miss out on rain again next week," say Martell Crop Projections.
EU Wheat Declines Late In The Day
04/03/11 -- EU wheat futures closed mostly lower with Mar London wheat down GBP2.80 at GBP196.55/tonne, and new crop Nov falling GBP0.30 to GBP163.00/tonne. Paris wheat closed with Mar down EUR1.50 to EUR253.00/tonne and Nov EUR2.00 easier to EUR217.00/tonne.
On the week as a whole that leaves Mar London wheat down GBP8.45/tonne and Mar Paris wheat EUR9.75/tonne lower.
Wheat was higher earlier in the day but fell away in afternoon trade as Chicago grains came under pressure. That appears to have been due to rising crude oil, talk is that this is forcing spec money out of grains.
It could also be a feeling that a weekend is a long time in Libya and anything could be on the cards come Monday morning.
At home it's been a funny old week on the weather front with reasonably warm daytime temperatures and a few frosty nights under clear skies. A bit of sunshine and spring warmth certainly seems to be waking the crops up, with local fields that I see on a regular basis certainly having grown visibly in the past week.
Elsewhere "pretty good rain last week helped crops in France and Spain, although subsoil dryness is still a worry in France. Eastern Europe remains stuck in a cold pattern with snow predicted for the weekend in Poland," say Martell Crop Projections.
Whilst EU wheat exports are well ahead of last year, the pace has slowed dramatically since Christmas. Euro strength is one of the reasons behind this, with the single currency pushing through 1.40 against the dollar for the first time in almost four months today.
Worrying Signs
04/03/11 -- The warning signs have been there for some time as we near the end of what has been a long and extremely difficult winter for the livestock industry not just in the UK, but in Europe and worldwide too.
As the supermarkets continue to rack up obscene profits, whilst doing their best to hold back price increases - strictly and selflessly with the best interests of the housewife in mind you understand - livestock farmers are feeling more than their fair share of the pinch.
A report out yesterday from BPEX reveals that in the 12 weeks to 23 January 2011, British pig producers accumulated losses of GBP35 million. Yet in the same period the processing sector's profits are estimated at GBP100 million, and retailers raked in combined profits of GBP192 million from pork and pork product sales.
There are similarly depressing stories to be found across the beef and poultry sector too.
Unsurprisingly, against a backdrop like this, much of the trade gossip reaching my ears this week has been about cashflow getting squeezed hard.
Merchants and compounders, whilst fully sympathising with the farmers plight, are bemoaning how difficult it is now becoming to get the monthly feed bill settled.
Contagion is the buzz word at the moment, with all the goings on in North Africa and the Middle East, and there's certainly plenty of that in evidence in the feed industry at the moment too.
Cashflow down the line is now starting to slow up from what people are telling me.
Meanwhile after last week's wobble, wheat, corn and soybeans have not just stabilised in price but actually started moving back up again. The only problem is end users who want to buy anything are nigh on impossible to find.
If you don't believe me email me to let me know what you want to buy as I have resellers of just about everything.
The only volume trades I am currently hearing of involve longs being sold back to shippers unwinding their shipping programmes.
London wheat might be GBP200/tonne, but wheatfeed pellets are now around GBP50/tonne less than that because it's physical kit that needs a home, not a piece of paper being passed around by batty boys.
As the livestock boys bail out we also have the hurdle of increased short-term meat supplies to get over. Ultimately of course that will create a shortage, and a corresponding increase in price, but we aren't there yet.
For the feed industry that means a long quiet summer lies ahead methinks, it certainly looks like it's going to get worse before it gets better from where I am standing. Still, look on the bright side, if there's no demand for feed then at least your cashflow is going to improve! Every cloud and all that.
Right, now I've got that little lot off my chest it is now most definitely beer o'clock....
Early Call On Chicago
04/03/11 -- The overnights closed mixed, but mostly higher, with beans up 5-7c, corn up 3c to down 1c and wheat 6-9c firmer.
There's some talk that not all of Argentina's soybean crop is looking too great. There are also reports of quality and potential yield issues in Brazil due to incessant rains.
The USDA have confirmed a fresh sale of 120,000 MT of old crop beans to China today, indicating that they haven't switched their buying attention away to South America entirely.
There are question marks over the health of US wheat as it emerges from winter dormancy, meanwhile Russian and Ukraine wheat areas have been dry and bitterly cold of late.
There is also some talk of high US corn prices leading to more interest in wheat from the feed sector.
Japan has announced the purchase of 150,000 MT of Brazilian corn overnight, switching interest away from the US due to high prices.
NYMEX crude is up a dollar and a half. Reports suggest that Brazil is buying US ethanol.
Early calls for this afternoon's CBOT session: beans up 5-7c, corn flat to up 2c, wheat up 8-10c.
The Week So Far
04/03/11 -- Having finished a torrid week astonishingly almost unchanged last week, I thought I'd take a quick peek at where we are this week so far.
Including the latest overnight Globex market we currently see Mar CBOT wheat up 14c, Mar beans are up 42 1/2c and Mar corn is 18 1/4c higher. On our side of the water we currently see Mar London wheat down GBP2.15, Mar Paris wheat down EUR4 and May Paris rapeseed up EUR20.50 to be Europe's star performer of the week.
Those are all based on prices at 11am this morning compared to last Friday's close. It's interesting to note that despite the more sedate pace of this trading week, we've actually seen prices generally move by more overall than a week ago.
What the significance of any of that is I'm buggered of I know, but just knowing and sharing it makes me feel better.
Is it beer o'clock yet?
Cauliflower Cheese?
04/03/11 -- Lincolnshire cauliflower growers are cheesed off that the winter weather has knobbled not just the sugar beet harvest in the county. As much as 80-90% of the crop could be lost in some cases, I am hearing.
I hope that the roast potato, Yorkshire pudding and gravy harvest goes OK for them.
I wonder how many of these sugar beet and veg growers are going to be thinking, bollox to this malarkey with wheat at two hundred pounds a tonne and a nice hungry shiny new bioethanol refinery down the road?
Early Vibe
04/03/11 -- It's been a very quiet week, let's hope that demand picks up a little as we get into the month, although currently I don't hold out a great deal of hope. Domestically, end user interest in anything is very thin on the ground.
Japan has announced the purchase of 150,000 MT of Brazilian corn overnight. US corn it would seem has priced itself out of the equation at current two year highs.
The Halifax say that UK house prices fell by 0.9% last month, and are down 2.8% year on year. That's worse than analysts were expecting (0.4% and 2.5% respectively). That hardly strengthens the case for raising interest rates, which may give the pound a bit of a wobble this morning.
Striking workers at the under construction Vivergo bioethanol plant at Saltend returned to work yesterday after employees "unfairly" picked out for redundancy were reinstated, according to my sources.
EU soft wheat exports are running 16% ahead of last season at 13.8 MMT as of March 1st, although the pace has slowed considerably from earlier in the season - before Christmas we were 36% ahead of 2009/10 levels. Euro strength and dollar weakness has hit demand, so too has the ever-widening differential between EU and US wheat prices.
Argy workers are still on strike at two terminals in Rosario, although operations are continuing at other facilities in the port. Overall only around 16% of the nation's crushing capacity is affected according to Reuters.
Luxury handbag and silk scarf maker Hermes saw net income in 2010 rise 46% to EUR422m after the artist formerly known as Prince popped into one of their shops.
Rumoured to be considering a public floatation, Glencore announced tidy little profits of USD3.79 billion yesterday, up 40%. Ensus might want to mention that one next time they are haggling over the price of wheat!
Ukrainian customs procedures (lack of adequate bribes) are delaying importation of grain and sugar-beet seeds for the spring sowing campaign, say the Ukraine equivalent of the NFU. That may cut this year's grain harvest to around 40 MMT from early hopes of 45-47 MMT, they warn. They are Ukrainian though, so they're probably lying.
And finally a bloke with what has to be one of the strangest farm-related fetishes going has been at it again it would seem. He is from Devon, mind: Your sister is your mother, your uncle is you brother etc
