Ask Nogger
16/04/11 -- Today's problem comes from Pete of Stamford, he writes:
Q: Dear Nogger, I'm 42 and straight as a die but I've never come close to getting married, I long to be like all the other lads like you, what can I do?
A: Matrimony is one of my many specialist subjects Pete, so you've certainly come to the right shop with this one. There's a few little things you can do to get yourself "in the zone" as it were. Try switching the FA Cup Final over to Corrie just as the game enters extra-time, or hang around outside the changing rooms in Monsoon looking at your watch and shifting uncomfortably from foot to foot for a couple of hours. Drag yourself all round the shops aimlessly every Saturday before throwing fifty pound notes down the grid. Stretch yourself to the limit by buying a lovely big house, give it to somebody you don't like and then put all you clothes in bin bags outside in the rain. Next...
Chicago Close
15/04/11 -- Soybeans: May 11 soybeans closed at USD13.31 3/4, up 3/4 cent; Nov 11 soybeans closed at USD13.39 3/4, down 5 1/2 cents; May 11 soybean meal closed at USD345.20, up USD2.70; May 11 soybean oil closed at 56.84, down 3 points. May beans were down 60 1/2 cents on the week, with new crop Nov falling 56 1/4c. The USDA confirmed the sale of 165,000 MT of new crop US soybeans to China today. As buying interest switches to South America though, generally US sales are flagging, with only one of the last five weeks seeing sales in excess of 150,000 MT.
Corn: May 11 corn closed at USD7.42, down 12 1/4 cents; Dec 11 corn closed at USD6.56, up 1/2 cent. May lost 26c on the week whilst new crop Dec gained 3c. A violent storm is bringing unwanted snow to the Northern Plains before moving east, which will inevitably delay spring plantings there, supporting new crop months. The USD7.44 level was seen as a pivotal support point for May corn, a close below there could signal a major downwards correction, according to the chartists out there. As you can see corn did indeed close below that level, so next week's action could be interesting.
Wheat: May 11 CBOT wheat closed at USD7.44 1/4, up 3 3/4 cents; May 11 KCBT wheat closed at USD8.65 1/2, up 1 1/2 cents; May 11 MGEX wheat closed at USD8.89, down 3/4 cent. CBOT wheat fell 53c on the week, with Kansas wheat down 67 1/4c and Minneapolis declining 64 1/4c. The forecast rains may improved conditions for HRW wheat in Kansas/Oklahoma, but may hinder spring wheat plantings further north. CBOT wheat manged to close the week only a marginal 2 1/4c higher than corn. Two months ago that differential was more than 170c!
EU Grains Close
15/04/11 -- May London wheat closed GBP0.75/tonne lower at GBP207.00/tonne with new crop Nov down GBP1.00 to GBP164.50/tonne. May Paris wheat was up EUR0.50/tonne at EUR238.25/tonne whilst Nov was down EUR0.25/tonne to EUR208.00/tonne.
London wheat was under pressure from a combination of factors including a firmer pound and ideas that old crop is overpriced relative to French wheat, May's close at GBP207.00/tonne is the equivalent of around EUR234.00/tonne, little more than four euros underneath where the better quality Paris contract closed.
Front month May in London is clearly getting technical in a relatively illiquid market, running at a GBP3.00/tonne front-end premium to July.
The Nov London/Paris differential is around a more ample EUR22.00/tonne.
Brussels issued 198,000 MT of soft wheat export licences this past week, bringing the year to dat total to 15.9 MMT, 13% up on year ago levels. That's the lowest weekly figure in the last nine weeks.
In the UK the weather is seen turning a little cooler and wetter, although with these weather fronts moving in from the west how much rain manages to make it's way into eastern counties is questionable.
There's some rain relief ahead for HRW wheat areas in Kansas, improving crop prospects there. The crop maybe isn't looking quite as bad as you might imagine judging on these pictures posted on Twitter yesterday: Hutchison, Kansas and Pratt, Kansas.
Ukraine are gearing up to double their grain exports in 2011/12, according to local analytical firm UkrAgroConsult, and there is a growing feeling that Russia may not be absent from the export arena for as long as had originally been thought.
Meanwhile, wheat production in Kazakhstan is forecast by FAO at around 16 MMT this year, 60% above the 2010 level of 10 MMT.
On the week as a whole May London wheat managed to finish slightly higher, up GBP0.25/tonne whereas Nov fell GBP5.00/tonne. May Paris wheat fell EUR9.00/tonne and Nov lost EUR7.00/tonne.
Ukraine 2011/12 Grain Exports To Double
15/04/11 -- There's a long way to go before the harvest is in, but UkrAgroConsult are already predicting Ukraine to export 22-23 MMT of grain in 2011/12, double the 11 MMT that they are expected to export in the current MY.
It doesn't matter if it doesn't rain between now and harvest, these lads are salivating so much at the prospect of getting some foreign wonga in that they're self-irrigating the crops themselves.
As reported earlier in the week Kazakhstan are eyeing up a "return to normal service" this year. All we need now is for Russia to get their finger out and we'll have Primark, Matalan and TK Maxx all fully restocked and ready to throw the great summer sale doors open come harvest time, and the rest of the High Street can go hang.
Early Call On Chicago
15/04/11 -- The overnight grains closed mostly lower with wheat down around 2-4c and corn & beans both 5-7c easier. Crude oil is also lower. Goldman Sachs issued another "it's time to reduce your commodity longs" rallying call, the second in a week.
"The morning satellite image shows a violent storm in the United States midsection. Snow is developing in North Dakota. Northwest Kansas has a blizzard warning for 3-7 inches of snow today. Kansas has another chance for rain next week in a new developing storm," say Martell Crop Projections.
That should be beneficial for HRW wheat, although not so kind for early plantings of spring wheat and corn further north and also across the border into Canada.
Inflation in China is now running at 5.4% prompting fears of waning demand for commodities in general. That said, they've just been confirmed as buying 165,000 MT of new crop US soybeans this afternoon.
Bean production in South America keeps creeping higher. The Buenos Aires Grain Exchange upped their estimate for Argentine soybean output from 48.8 MMT to 49.2 MMT yesterday. They also increased their corn production estimate by 0.5 MMT to 20 MMT.
Including the overnight price action we now see May beans down 67 1/4c, May corn down 21 1/2c and May CBOT wheat down 61c on the week so far.
Early calls for this afternoon's CBOT session: corn and beans seen 5-7c lower with wheat down 2-4c.
EU Rapemeal Prices
15/04/11 -- Latest guide prices for EU rapemeal.
Basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:
| Apr11 | 180.00 | -2.00 |
| May11 | 180.00 | -2.00 |
| May/FH Jul11 | 182.00 | unch |
| Aug/Oct11 | 172.00 | -2.00 |
| Nov11/Jan12 | 176.00 | -2.00 |
| Feb/Apr12 | 178.00 | -2.00 |
Interesting
15/04/11 -- A report on the official Itar-Tass website quotes First Vice Prime Minister Viktor Zubkov as saying that sales of grain out of the government-owned intervention fund has stopped due to lack of demand.
"The decision was made that the minimum price per tonne would be 6,000 roubles...but the price reached 6,000 roubles and continued to go further down. And there are no bids now," he is quoted as saying.
Six thousand roubles is around GBP130/tonne. Other reports I have read suggest that internal wheat prices are closer to 4,000 roubles/tonne (around GBP87/tonne) as farmers and merchants are unable to take advantage of world prices at much higher levels.
They have sent an open letter to the President imploring him to remove the existing sales embargo, throwing in a little arm-twisting "without that extra revenue we won't be able to afford to buy the seed to plant anything for the 2012 harvest."
Hmmmm, maybe the export ban will be lifted a bit sooner than expected?
