Ask Nogger
28/03/11 -- Today's problem comes from Paul of Teignmouth, who writes:
Q: Dear Nogger, I keep waking up in cold sweats with these totally off-the-wall and irrational nightmares that everybody in the feed trade hates me, what can I do?
A: These dreams are neither off-the-wall or irrational Paul. Night, night.
Chicago Close
28/03/11 -- Soybeans: May 11 soybeans closed at USD13.48 1/2, down 9 3/4 cents; May 11 soybean meal closed at USD353.60, down USD3.60; May 11 soybean oil closed at 56.53, down 31 points. Early gains gave way to profit-taking and book squaring ahead of Thursday's all important acreage report. Outside markets were also negative with the US dollar firmer and crude oil weaker. Despite all the rain the Brazilian harvest is ahead of the five year average pace at 56% done. Safras & Mercado pegged the crop there at 71.5 MMT on Friday, well above other private estimates.
Corn: May corn fell 18 1/2c to USD6.71, whilst Dec corn tumbled 12 1/2c to USD5.97. The so called "battle for acres" is expected to see a substantial rise in US corn plantings this spring. That will be reported by the USDA on Thursday. After widespread reports of significant Chinese buying of US corn of late nothing concrete has been actually confirmed. Friday's sale of 1.25 MMT of old crop corn to "unknown" was widely touted to have been followed up today by "further announcements" that never happened.
Wheat: CBOT May wheat fell 8c to USD7.25 1/4 a bushel, KCBT May lost 6 1/2c to USD8.48 1/2 and MGEX May dropped 6c to USD8.75. Whilst US winter wheat conditions are pretty poor they have improved somewhat of late. The Kansas Agricultural Statistics March 28 Crop Progress report shows 31% of the crop rated good/excellent and 35% rated poor/very poor, which is up from 26% and 40% respectively a week ago. Jointing is rated at 13%, ahead of last week's 5%, and bang on the five-year average.
EU Wheat Close
28/03/11 -- May London wheat closed GBP3.25/tonne firmer at GBP200.50/tonne with new crop Nov up GBP3.00 also to GBP200.50/tonne. May Paris wheat rose EUR5.50/tonne to EUR242.25/tonne and Nov was up EUR2.25/tonne to EUR209.25/tonne.
The pound fell to it's lowest levels against the US dollar for two months, and to a five month low versus the euro on ideas that a stalling UK recovery will put any thoughts of an interest rate rise on hold.
Almost all of Europe has had a very dry last two months compared with normal, click the map from the excellent Martell Crop Projections to enlarge it, with all but Italy, Spain, Portugal, Scotland and Ireland getting only between 20-60% of normal precipitation.
Rains are in the forecast for many of the areas in moisture deficit later in the week, which will hopefully improve the situation, although normal soil moisture profiles are unlikely to be fully restored.
Coceral peg the EU-27 soft wheat crop at 131.44 MMT, an increase of 3.5% on last year. The UK is seen accounting for 15.5 MMT of that, a 7.6% increase on 2010, with France and Germany chipping in with 36.4 MMT (+ 2%) and 24.4 MT (+4.7%) respectively.
Barley production is forecast at 54.5 MMT, up 3.1%, with the UK crop coming in at 5.3 MMT, up 6.3% on 5.0 MMT last year.
Whilst European weather is of some concern, the situation for US wheat looks far worse where "the big picture is one of severe drought in the Southwest Plains with too much heat and not enough rain," say Martell Crop Projections.
Early Call On Chicago
28/03/11 -- The overnight grains closed mostly firmer with beans up 6-8c, and with corn & wheat around 2-4c higher.
Fresh news is limited. Libyan rebels have made inroads into Gaddafi held territory over the weekend, aided by NATO, and are now advancing on his hometown of Sirte. Rebels have also announced that they've done a deal wit Qatar to market crude oil from fields under their control in the east. Crude oil is more than a dollar lower on the back of these developments. A firmer US dollar looks like hindering upside potential today.
The market is waiting for direction from Thursday's planting intentions report. Traders are also watching out for any potential further announcements of US corn sales this afternoon, which are being widely touted.
Some limited moisture relief is on the cards for Eastern Kansas later in the week, but the trade is conscious of significant abandonment potential in the state. Ditto Oklahoma and Texas. At least some net drying is on the cards for drowned out spring wheat states to the north.
Safras & Mercado came out with a Brazilian soybean production estimate of 71.5 MMT on Friday, they said that yield losses in Mato Grosso would at least be partially compensated for by bumper crops further south. That corroborates independent reports from "my man in Brazil."
Early calls for this afternoon's CBOT session, ahead of any possible announcements from the USDA on corn sales: corn up 1-2c, soybeans up 6-8c and wheat 2-3c higher.
Vivergo Latest
28/03/11 -- Engineering and construction workers locked out of the under-construction Vivergo bioethanol plant at Saltend will protest in Hull City Centre today, according to this report. Better nip out and get the butties in early this lunchtime then Milty?
Record UK Rapeseed Crop In Store
28/03/11 -- A 9.2% jump in plantings to 696,000 ha will see the UK harvest a record 2.325 MMT of rapeseed this year, according to Coceral. The area estimate is very much in line with that of Defra, although they haven't put an figure on production yet.
Coceral are using a yield estimate of 3.34 MT/ha, 3% lower than last season's 3.45 MT/ha, if we were to match last season's yield then we'd potentially be looking at a crop of 2.4 MMT.
Coceral see the overall EU-27 rapeseed crop broadly unchanged on last year at 20.2 MMT, with output in France at 4.97 MMT (up 6.7% on 4.77 MMT last year), Germany at 5.15 MMT (down 10% on 5.75 MMT last year) and that of Poland at 2.18 MMT (up 3.8% on 2.11 MMT last year).
Morning Vibe
28/03/11 -- Once again new news is thin on the ground so far this morning. We still don't know if it was China, Japan or even anyone else who bought US corn on Friday. There are also reports around that another announcement on corn sales will be made when America wakes up later today.
With the clocks here having gone forwards an hour over the weekend, everything is "back to normal" with regards Chicago opening times, with a 15.30 BST start and a 19.15 BST end to the daytime trading session with the Globex market open from midnight to 13.15 BST.
The pound is down below 1.60 against the dollar, it hasn't closed under that level for two months. The weekend Sunday Papers assessment of George Osborne's budget, coupled with rising inflation and stagnant growth may have flushed some bears out by the looks of it, including this guy: UK: Death by Debt
The UK, northern France and Germany look like they are in for a decent and welcome soaking Wednesday, according to the BBC 7-day forecast yesterday. My part of North Yorkshire has received no measurable rain for the last eleven days.
In the US there is a chance of some net drying in the soggy Corn Belt and Northern Plains and some rain for parched Eastern Kansas, Oklahoma and Texas, say QT Weather.
Brazilian analysts Safras & Mercado peg the soybean crop there at a record 71.5 MMT, somewhat higher than many recent estimates.
The trade remains focused on Thursday's USDA planting intentions and quarterly stocks report.
