CBOT Close
18/03/11 -- Soybeans: May 11 soybeans closed at USD13.62 1/2, up 27 1/4 cents; May 11 soybean meal closed at USD367.90, up USD9.30; May 11 soybean oil closed at 55.77, up 125 points. Beans were up around 28 cents at the end of a topsy turvy week. Today's CFTC report shows an overall Index Fund and Managed Money decrease of around 36,000 bean contracts - although they still hold a combined long of around 214,000 contracts. That report is as of Tuesday night, so it will be interesting to see how that changes in next week's report. Rain is still affecting the Brazilian harvest which is seen at 30% complete by Celeres, compared to 46% done this time last year.
Corn: May 11 corn closed at USD6.83 1/2, up 37 cents; Dec 11 corn closed at USD5.98 1/2, up 19 1/4 cents. Corn was around 19 cents higher on the week, with old crop gaining heavily on new crop today as strong US export sales keep 2010/11 ending stocks tight. The CFTC report shows an overall Index Fund and Managed Money decrease of around 81,000 corn contracts. They were alleged to have bought up to 30,000 of those contracts back today on rumours of Chinese buying of US corn. Informa released their 2011 corn planting estimate coming up with an acreage figure of 91.758 million, slightly lower than the USDA's Feb Outlook Forum guesstimate of 92 million.
Wheat: May 11 CBOT wheat closed at USD7.23, up 12 3/4 cents; May 11 KCBT wheat closed at USD8.45, up 14 cents; May 11 MGEX wheat closed at USD8.67 1/2, up 12 3/4 cents. Chicago wheat posted gains of around 4 cents on the week, with Kansas up 20 cents or so and MGEX around 9-10 cents higher. Index Funds and Managed Money decreased their CBOT length by around 11,400 contracts as of Tuesday. Informa reduced their harvested acreage by more than half a million acres and cut yields by 1.3 bu/acre. "Growing conditions are very dry on the High Plains suggesting a sharp loss of production for the 2011 harvest," say Martell crop Projections.
EU Grains End Crazy Week Higher
18/03/11 -- EU grains finished possibly one of their craziest weeks in history higher, with Mar London wheat closing up GBP5.30/tonne at GBP194.35/tonne and new crop Nov up GBP5.10 to GBP163.30/tonne. May Paris wheat rose EUR8.00/tonne to EUR231.75/tonne whilst Nov was up EUR4.75/tonne to EUR207.50/tonne.
Mar London wheat was up GBP12.50 on the week as a whole, and finished GBP27 up on the intra-week low set Tuesday. Nov was up GBP9.80 on the week and GBP15.30 higher than Tuesday's intra-week low.
Russia's Deputy Prime Minister Viktor Zubkov reduced his estimate for the 2011 grain crop to 84-85 MMT from 85-87 MMT previously. SovEcon estimate the crop at 75-85 MMT versus 60.9 MMT last season.
The German wheat crop is seen at 24.6 MMT compared with 24.0 MMT in 2010.
"Europe got moderate rainfall yesterday in Germany, western Poland, the Czech Republic and Slovakia, which will be welcome after 30-40 days of dryness," say Martell Crop Projections.
US winter wheat crop conditions remain pretty dire. "The USDA crop progress report of March 12 revealed severe, worsening drought on the High Plains. Western Kansas topsoil moisture was 90-95% short-very short. Kansas wheat ratings fell to 40% poor-very poor, 34% fair, and 26% good-excellent. Texas wheat was even worse at 56% poor-very poor, 26% fair and 18% good-excellent," they add.
I Predict The Unpredictable Will Or Might Happen, Unless It Doesn't
18/03/11 -- Nobody seems to know what to do at the end of an astonishingly volatile week. So many are opting for the "if in doubt do nowt" strategy. After a very strong opening European grains are slipping back slightly. Which may be a function of who'd want to sit on a large open position over this particular weekend?
The overnight Globex market is also a little off it's highs attained on the back of rumours that the early week slump in corn prices flushed China's COFCO out as a buyer. We did however see a spate of similar reports a couple of months back, and it all turned out to be baloney on that occasion.
Any orders over 100,000 MT have to be reported the next day to the USDA. The notion that they bought a significant volume in multiple lots of one cargo each from a dozen different sellers seems more than a tad far-fetched.
There's been no official news from the USDA on corn sales to China, or anybody else, so far today, although there was 110,000 MT of corn sold to "unknown" yesterday.
The early call on Chicago is going to be higher, where will it finish? Limit up, limit down or somewhere in between is my confident prediction.
They're Still Bouncing
18/03/11 -- The overnight grains are still bouncing higher, with the carryover of unfulfilled buy orders on corn sending the Globex market 25c higher again on nearby contracts. Wheat is up a similar amount, with beans showing a more modest 4c firmer.
I think that most traders will be glad to see the back of this week. One guy I spoke to yesterday said he hadn't slept for three days, fretting over his open position.
Brent crude is more than a dollar firmer at USD116/barrel as the UN approve the creation of a no-fly zone over Libya. I'm sure that Gaddafi will absolutely love that as he appeals to his people to stand united against the foreign infidel aggression.
The pound is down to 1.1440 against the euro, a level last seen on Bonfire Night as the market seems less confident that UK interest rates will rise in the next few months.
Japan's nuclear crisis still seems to be out of control, as if they're trying to put out a forest fire with a teacup. News this morning suggests that they are now considering covering the entire festering mess with sand and concrete. A bit like Blackpool but with lights that power themselves.
Reports are filtering through that incessant rains in some parts of Brazil have adversely affected yields and the quality of this season's soybean harvest. Second crop corn planting may also be under threat.
The major Brazilian port of Parangua was partially closed earlier in the week as mudslides caused by heavy rains blocked roads leading into the port, casuing tailbacks of up to 30km.
EU grains look set to open firmer at the end of an astonishing week.
Anything Can Happen In The Next Half Hour
17/03/11 -- As they used to say on Stingray. Watching the news tonight I wouldn't want to put too much of my own money on where we go from here.
Am I the only one who's thought IF those nuclear reactor housings ARE safe, and nice and intact and all that, then why are they dropping water on them? If the rods ARE OK inside a lovely intact housing then what difference is that going to make?
But IF they are open to the elements, what does that mean?
Meanwhile we could have a no fly zone in force over Libya by the morning. Is that bullish or bearish for grains? Nobody seems to know. Suppose that the entire Med becomes a no go zone as far as shipping is concerned, what does that mean?
War usually means grains go up. But if you can't actually deliver them to where they are wanted isn't that really bearish not bullish?
Confused? So am I.
CBOT Closing Comments
17/03/11 -- Soybeans: May 11 soybeans closed at USD13.35 1/4, up 48 1/4 cents; May 11 soybean seal closed at USD358.60, up USD14.10; May 11 soybean oil closed at 54.52, up 156 points. What can we say? We've had possibly one of the most volatile weeks in the history of the grain markets. Heavy losses early in the week matched by heavy gains later in the week. Where will we be tomorrow, who knows? Weekly export sales from the USDA were poor at a combined 214,500 MT.
Corn: May 11 corn closed at USD6.46 1/2, up 30 cents; Dec 11 corn closed at USD5.79 1/4, up 30 cents. Unlike for soybeans weekly export sales were robust at over 1.3 MMT. South Korea purchased 110,000 MT of corn today and the USDA announced 110,000 MT of corn sold to unknown. Having supposedly sold a huge volume of corn this past few days, fund money was alleged to have bought more than 15,000 lots back in today. There were apparently over 120,000 of unfulfilled buy orders left over bidding limit up at the close of play.
Wheat: May 11 CBOT wheat closed at USD7.10 1/4, up 48 1/4 cents; May 11 KCBT wheat closed at USD8.31, up 52 3/4 cents; May 11 MGEX wheat closed at USD8.54 3/4, up 48 3/4 cents. The USDA's weekly wheat export sales were above trade estimates. Spillover support from limit up corn also helped wheat today. Where we go after here is anybody's guess though. This market has already turned on a sixpence twice in the space of a week. We can be sure that the market is more well aware of downside risk than it was a couple of weeks ago.
EU Wheat Leaps
17/03/11 -- EU grains continued with their stunning rebound from recent steep losses with Mar London wheat closing GBP13.70/tonne higher at GBP189.05/tonne and new crop Nov up GBP9.60 to GBP188.20/tonne. May Paris wheat rose EUR17.50/tonne to EUR223.75/tonne and Nov was EUR12725/tonne higher at EUR202.75/tonne.
Having fallen GBP14.50/tonne in the first two days of the week, London wheat has now regained all of those losses back and then some in the last two sessions - putting on an amazing GBP21.70/tonne. Even so, we are still GBP21.20/tonne below the Feb all time highs. I think that this safely qualifies us as being a volatile market!
NYMEX crude oil jumped more than USD3.50/barrel and Brent by more than USD4.50/barrel on continued unrest in Bahrain and Libya.
Strategie Grains reduced their EU-27 2011 soft wheat production estimate by 300,000 MT from last month to 135.5 MMT, although that is still up 7% on last year.
They also upped their 2010/11 EU soft wheat export estimate from 18.4 MMT to 19 MMT.
Brussels issued soft wheat export licences for 540,000 MT this past week, a sharp increase from what we have witnessed of late and the second highest weekly total of the year.
That brings the total for the marketing year to date to 14.6 MMT, almost 2 MMT higher than this time last year.
On the weather front "in Europe there showers again today in the south of France, Italy and the former Yugoslavia. Dryness is still prevailing elsewhere however with hardly any rain in a over a month in Central Europe and unseasonable warmth in the past 7 days in continental Europe at 5-7 F above normal," say Martell Crop Projections.
