Chicago Close
08/04/11 -- Soybeans: May 11 soybeans closed at USD13.92 1/4, up 28 3/4 cents; Nov 11 soybeans closed at USD13.96, up 30 1/2 cents; May 11 soybean meal closed at USD357.20, up USD6.30; May 11 soybean oil closed at 59.77, up 145 points. Crude oil was sharply higher, with NYMEX closing at a 30-month high and Brent at a 32-month high. The dollar slumped close to it's lowest levels since late 2009 on the budget impasse between the White House and Congress. The USDA's US soybean ending stocks number was left unchanged at 140 million bushels and Brazilian production was raised 2 MMT to 72 MMT. That put world ending stocks 2 MMT up on trade expectations at 60.9 MMT.
Corn: May 11 corn closed at USD7.68, up 9 cents; Dec 11 corn closed at USD6.53, up 8 3/4 cents. May corn ended up 32 cents on the week, with Dec increasing by 15 1/2c, further widening the old crop/new crop spread. A weak dollar and firm crude oil market added support. The market shrugged off the USDA leaving 2010/11 US ending stocks unchanged at 675 million bushels, contrary to the average trade estimate of a sharp cut to 586 million. Brazil's corn crop was estimated at 52 MMT, 2 MMT up on last month. The USDA's perception that corn usage will fall in the 3rd and 4th quarters, meaning that ending stocks won't tighten any further, is clearly being questioned by the market.
Wheat: May 11 CBOT wheat closed at USD7.97 1/2, up 24 1/4 cents; May 11 KCBT wheat closed at USD9.32 3/4, up 10 cents; May 11 MGEX wheat closed at USD9.53 1/4, up 12 1/2 cents. Chicago wheat narrowed the sizable gap between it and the higher quality wheats traded in Kanasas and Minneapolis on ideas that spiraling corn prices will lead to more wheat being fed in the US this summer. US ending stocks came in lower than expected at 839 million bushels in today's USDA stocks report. World ending stocks were up slightly to 182.8 MT against the 181.9 MMT estimated in March. The market is now concentrating on the fate of the US winter wheat crop after another week of hot and dry conditions on the southern Plains.
EU Grains Close
08/04/11 -- May London wheat closed GBP1.25/tonne higher at GBP206.75/tonne with new crop Nov up GBP0.25 to GBP169.50/tonne. May Paris wheat fell EUR2.50/tonne to EUR247.25/tonne whilst Nov was down EUR3.50/tonne to EUR215.00/tonne.
A firm euro on the back of the ECB's decision yesterday to raise eurozone interest rates by a quarter to 1.25% put Paris wheat under pressure. Even so French wheat stocks remain very tight with France having picked up 83% of the EU's 15.7 MMT worth of soft wheat export licences so far in the current 2010/11 marketing campaign.
An unusually dry March has given way to an unusually dry and warm April thus far, with temperatures in Cambridge hitting 23C earlier in the week. A glorious weekend lies in store for most parts of the UK, before colder and wetter weather sets in from the middle of next week and into the run-up to Easter. If it does arrive then these rains will be heartily welcomed by most growers.
May London feed wheat closed at around a EUR14/tonne discount to May Paris milling wheat, whereas November in London is around EUR25/tonne cheaper than in Paris.
Either May London wheat is too dear or Nov is too cheap. At well over GBP200/tonne again wheat finds only soyameal priced more expensive than it when looking down the list of popular raw materials featuring in a most feed manufacturers rations.
"They like to so it (wheat) on the ticket," said one to me this week. Meaning that livestock farmers like to see wheat featuring high on the list of raw materials included in their finished feed. They might like it on the ticket, but do they like the price of it on their invoice?
The USDA's world supply and demand numbers released today were largely bearish, particularly for corn where US 2010/11 ending stocks were left unchanged, as opposed to the sharp cut the trade was anticipating. After opening lower though Chicago quickly turned higher as the trade shrugged the numbers off as being unrealistic.
Egyptian wheat production was dropped 1.3 MMT to 7.2 MMT, although consumption there was also reduced by 900,000 MT to 17.5 MMT. World ending stocks were increased by 1 MMT to 182.8 MMT, 15.1 MMT or 7.6% down on last year, but pegging stocks to usage at a more than ample 27.6%.
Early Call On Chicago
08/04/11 -- The overnight grains closed higher with beans up 16-17c, corn up 6-8c and wheat 2-4c firmer. However the Globex session closed before the USDA came out with their April WASDE and US ending stocks estimates.
Whilst the market was expecting a further erosion of US 2010/11 corn ending stocks, the USDA once again chucked in a curve ball leaving stocks unchanged from last month at 675 million bushels. Meanwhile although world ending stocks were reduced slightly from last month they still came in 1.4 MMT higher than trade expectations as a result of Brazil's corn crop coming in 2 MMT higher than previously at 52 MMT.
The soybean numbers were a bearish too, although not as much as they were for corn, with US ending stocks there also left unchanged and Brazilian output rising 2 MMT to 72 MMT. That placed world ending stocks 2 MMT up on trade expectations at 60.9 MMT.
The wheat numbers were perhaps modestly friendly being to only one of the three to see US ending stocks decline, and that contrary to expectations of a small increase. World ending stocks were up almost 1 MMT however to 182.8 MT.
A weak dollar and firmer crude oil may underpin early losses, and it would be of no surprise at all to see "bargain-hunting" (if you can call it that at these levels) kicking-in depending on how low prices fall this afternon.
Where the market ends tonight is perhaps far more important than where it opens, and will tell us more about current trade sentiment.
Early opening calls for this afternoon's CBOT session: corn down 10-15c, wheat do2wn 8-10c, beans down 15-20c.
USDA Numbers
08/04/11 -- Here's the all important numbers guys and gals. Quite bearish for corn (not that is likely to deter the corn bulls for long), a bit bearish for beans and a bit bullish for wheat:
WHEAT
US ending stocks came in lower than expected at 839 million bushels, against the average estimate of 857 million and 843 million last month. World ending stocks were up, pegged at 182.8 MT against the 182 MMT estimated and 181.9 MMT in March. There were no significant changes to wheat production around the world.
CORN
US ending stocks were left unchanged at 675 million bushels, against the average estimate of a sharp cut to 586 million. World ending stocks came in at 122.4 MT against 121 MMT estimated and 123 MMT in March. Brazil's corn crop was estimated at 52 MMT, 2 MMT up on last month. Argentine output was unchanged at 22 MMT.
SOYBEANS
US ending stocks were also unchanged coming in at 140 million bushels, against the average estimate of 137 million. World ending stocks pegged at 60.9 MT against 58.9 MMT estimated and 58.3 MMT in March. That increase came from Brazilian where output was increased 2 MMT to 72 MMT. Argentine production was left unchanged at 49.5 MMT, as too was China at 15.2 MMT.
CBOT Close
07/04/11 -- Soybeans: May 11 soybeans closed at USD13.63 1/2, down 13 cents; Nov 11 soybeans closed at USD13.65 1/2, down 10 3/4 cents; May 11 soybean meal closed at USD350.90, down USD4.70; May 11 soybean oil closed at 58.32, down 46 points. Weekly export sales were lower than anticipated at 190,300 MT compared to pre-report estimates of 300,000 to 450,000 MT, that's three of the past four weeks where sales have been below expectations. News of another major earthquake and tsunami alert for Japan ahead of tomorrow's USDA reports was enough to prompt some profit-taking and book-squaring. For beans the trade expects only minor adjustments, with 2010/11 ending stocks seen falling slightly from 140m bu to 137m bu.
Corn: May 11 corn closed at USD7.59, down 4 cents; Dec 11 corn closed at USD6.44 1/4, down 3 1/4 cents. Weekly export sales were 808,900 MT, towards the top end of estimates of 550-850,000 MT. China didn't feature. Ending stocks estimates for tomorrow's USDA report are around 586-595m bu, depending on who's figures you rely on. Global corn stocks are also forecast to decline from around 123 MMT to 121 MMT. Once tomorrow's report is out of the way the trade will start to focus on US planting progress, or lack of it.
Wheat: May 11 CBOT wheat closed at USD7.73 1/4, down 9 cents; May 11 KCBT wheat closed at USD9.22 3/4, down 16 3/4 cents; May 11 MGEX wheat closed at USD9.40 3/4, down 13 3/4 cents. Weekly export sales were robust at 722,900 MT against trade ideas of 350-450,000 MT. Projected US and global ending stocks in tomorrow's USDA reports are seen as relatively non-threatening for wheat. Another corn surprise though shouldn't be ruled out, which could have a spillover effect on wheat.
EU Grains Close
07/04/11 -- EU grains closed with May London wheat down GBP0.50/tonne to GBP205.50/tonne and with new crop Nov falling GBP2.10 to GBP169.25/tonne. May Paris wheat fell EUR0.75/tonne to EUR249.75/tonne and Nov was down EUR1.25/tonne at EUR218.50/tonne.
As strong earthquake and subsequent tsunami warning for NE Japan got the markets rattled late afternoon ahead of tomorrow's USDA reports. That was probably enough of a jolt to encourage some spec money to be taken off the table overnight.
London wheat fell GBP17.50/tonne and Paris wheat EUR31.00/tonne in three trading session immediately after the last major quake hit the region on March 11th.
Northern Europe has had a few showers over the past couple of days, but more is needed to restore depleted subsoil moisture, with very warm temperatures still in the forecast, according to Martell Crop Projections.
Tomorrow's USDA reports are likely to be of more importance for corn and soybeans than wheat, although the corn numbers in particular will also have a bearing on wheat demand.
US 2010/11 ending stocks for wheat are seen increasing from 843m bu (22.9 MMT) last month to 857m bu (23.3 MMT) this time round, whilst global ending stocks are forecast more or less unchanged at 182 MMT.
Corn stocks however are forecast to decline, from 17.1 MMT in the US to 14.9 MMT and globally from 123 MMT to 121 MMT.
Elsewhere, wheat continues to pour out of Australia with shipments from the east coast hitting record highs in February. The Australia & New Zealand Bank thinks that it's current estimate for wheat exports of 16 MMT in the current marketing year may be on the low side, even though that figure is 2.5 MMT higher than the USDA's March estimate.
Brussels issued 286,000 MT of soft wheat export licences for the week to Apr 4th, bringing the current marketing year to date total to 15.7 MMT, 2 MMT higher than at this time last year.
Lunchtime News
07/04/11 -- Not much time for blogging today as I'm up to my eyeballs in stuff, so here's a quick summary of what's gone on this morning:
The Bank of England left UK interest rates on hold at 0.5%, the ECB raised theirs by a quarter to 1.25%.
Weekly USDA export sales came in at 808,900 MT for corn, towards the top end of estimates of 550-850,000 MT. Wheat sales were 722,900 MT against ideas of 350-450,000 MT. Bean sales were disappointing again at 190,300 MT compared to estimates of 300,000 to 450,000 MT.
China didn't feature as a corn buyer once again.
China sold 628,000 MT of the wheat on offer at this week's government auction, bringing the total sold so far this year to 7.9 MMT.
On the overnight Globex market old crop corn ended around 7c firmer, with new crop one up to one down. Beans ended mostly 3-5c firmer and wheat was up 3-6c.
Crude oil and the dollar are slightly firmer.
The USDA are out tomorrow with their latest S&D numbers. US corn ending stocks for 2010/11 are seen falling around 100m bu from last month to 586m. Wheat stocks are expected to rise slightly to 857m bu and beans stocks to fall very slightly from 140m to 137m.
Early calls for this afternoon's CBOT session: Corn 5-7 cents higher, Soybeans 3-5 cents higher, and Wheat up 4-6 cents
