Chicago Slide Continues

30/08/16 -- Soycomplex: Beans extended their run to the downside, ignoring a 126,000 MT sale to unknown for 2016/17 announced by the USDA under the daily reporting system. There's also a Chinese delegation in town which is likely to announce a large "showcase" soybean purchase with prices below $10/bu and the US the most competitive seller in the world right now. Still, the trade is focused on the potential for the 2016 US crop to break all previous records, some are even talking of a bin-busting 50 bu/acre average yield this year (USDA currently 48.9 bu/acre). Indonesia say that 2016 palm oil production there is likely to be 31-32 MMT versus the USDA's current 35 MMT. Sep 16 Soybeans settled at $9.65 1/2, down 17 3/4 cents; Nov 16 Soybeans settled at $9.50 3/4, down 13 1/2 cents; Sep 16 Soybean Meal settled at $313.80, down $5.70; Sep 16 Soybean Oil settled at 32.81, down 27 points.

Corn: The market closed around 4-6 cents lower, pressing onto fresh contract lifetime lows. September closed at 3.04 which is approaching the 2009 continuation low of 2.96 3/4. Seasonal lows are often set around September/early October for corn and beans. Wheat at 10-year lows remains a negative downwards pull for corn. The trade is not as convinced that this year's corn crop will beat the current USDA forecasts (15.153 billion bushels and 175.1 bpa) as it is for beans. Similar to beans, the US corn offer is the cheapest around right now, so whatever export business is about, it should be relatively easily picked up by US exporters. Will that be enough for a 15 billion bushel crop though? The Ukraine corn harvest is reported to be underway, with Agritel and the USDA forecasting production this year at 26 MMT (23.33 MMT last year). Sep 16 Corn settled at $3.04, down 7 3/4 cents; Dec 16 Corn settled at $3.15 3/4, down 5 cents.

Wheat: The wheat market closed at fresh 10 year lows on the continuous chart in both Chicago and Kansas. Egypt released a tender for wheat for October shipment under the new zero tolerance to ergot mandate. The results are expected tomorrow. It will be very interesting to see how many offers it picks up, and what the new stance does to prices compared to last time. They already regularly pay "over the odds" at their tenders compared to other Middle Eastern buyers. Russia are said to be proposing to eliminate their current export tax on wheat. The EU Commission lowered their expectations on this year's wheat crop and export potential to 142 MMT and 26.3 MMT respectively. The USDA are at 147.5 MMT and 27.0 MMT. Jordan bought 50,000 MT of optional origin hard wheat in a tender. Tunisia tendered for 134,000 MT of soft wheat and 75,000 MT of feed barley. Sep 16 CBOT Wheat settled at $3.63 1/4, down 7 1/4 cents; Dec 16 KCBT Wheat settled at $3.96 3/4, down 5 1/2 cents; Dec 16 MGEX Wheat settled at $4.85 3/4, up 1 1/2 cents.

EU Grains Dip Again, London Wheat Plays Catch-Up

30/08/16 -- EU grains finished mixed, but mostly lower again. London wheat re-opened from the Bank Holiday playing catch-up with Chicago wheat which hit 10-year lows yesterday.

The day ended with Nov 16 London down GBP1.85/tonne at GBP123.90/tonne, Sep 16 Paris wheat was EUR1.75/tonne firmer at EUR155.75/tonne, although new crop 2017 months were lower. Nov 16 corn was down EUR0.50/tonne at EUR161.50/tonne and Nov 16 rapeseed fell EUR0.75/tonne to EUR370.50/tonne.

The EU Commission cut their forecast for this year's domestic wheat harvest from 144.5 MMT to 142.0 MMT, cutting exports from 29.0 to 26.3 MMT. Production in 2015/16 was 151.6 MMT and exports amounted to 32.7 MMT.

Forecasts for this year's corn harvest were trimmed from 65.5 MMT to 65.2 MMT, but still 12.4% above the 58.0 MMT produced last year.

Jordan bought 50,000 MT of optional origin hard wheat in a tender. Tunisia tendered for 134,000 MT of soft wheat and 75,000 MT of feed barley.

Algeria said that severe drought had cut their 2016 grain harvest by 17.5% to 3.3 MMT. That will hurt their aim to try to reduce their dependency on foreign imports.

Russia said that it's grain harvest was 65.3% done at 89.3 MMT. Wheat is 68.5% harvested at 61.8 MMT and barley 79.9% done at 16.3 MMT.

Russian autumn grain plantings for the 2017 harvest are already complete on 1.9 million ha, or 11.3% of the planned area.

Ukraine said it's 2016 harvest is 68% done, producing a crop of 38.27 MMT to date. The 2016 corn harvest has now started. Planting of winter rapeseed for 2017 is 63% complete on 456k ha.

The 2016 French malting barley harvest is down 20-30% according to private estimates. Prices have increased 15-20% since harvest, report Reuters. Exports are expected to be curtailed as the bulk of the crop will be consumed on the domestic market this season.

Chicago Wheat Slumps To 10-Year Lows

29/08/16 -- Soycomplex: Beans stumbled lower despite weekly export inspections of a robust 921,137 MT and the USDA announcing a 393,000 MT sale of US soybeans to unknown destinations for 2016/17 this morning under the daily reporting system. The trade noted the tendency for ProFarmer to be below the USDA final production number in 10 of the last 14 years. On Friday they gave us 49.3 bpa and a 4.093 billion bushel crop. The USDA were at 48.9 bpa and estimated production at 4.060 billion bushels earlier this month. The trade thinks the crop is therefore getting larger. The USDA didn't do that notion any harm by raising the proportion of the crop rated good to excellent by 1 point after the close to 73%. They said that 94% of the crop is setting pods (92% typically) and that 5% of the crop is dropping leaves (in line with the 5-year average). Sep 16 Soybeans settled at $9.83 1/4, down 7 1/2 cents; Nov 16 Soybeans settled at $9.64 1/4, down 3 cents; Sep 16 Soybean Meal settled at $319.50, down $1.70; Sep 16 Soybean Oil settled at 32.81, down 14 points.

Corn: Corn closed lower, with most contracts setting new life of contract lows. Weakness in wheat didn't help. The notion that big crops get bigger is also weighing. Friday's data shows ProFarmer projecting 14.728 billion bushels of production with a 170.2 bpa national average yield. The USDA gave us 15.153 billion bushels and 175.1 bpa earlier this month. Today they held steady with crop ratings, saying that 75% of the crop is rated good to excellent. They have 92% of the crop at the dough stage (87% typically), 60% of the crop dented (52% normally at this time) and say that 9% of the crop is mature (11% on average). Weekly export inspections were strong at 1.422 MMT, but the trade chose to ignore that point. On the weather front "it appears the tropical storm is going to stay east of the areas in the center Gulf, would help take some of the pressure off the harvest in that region," said Benson Quinn. Ukraine reported that it had shipped out 478 TMT of corn so far this season. Agritel forecast production in 2016 at 26 MMT. Sep 16 Corn settled at $3.11 3/4, down 4 1/2 cents; Dec 16 Corn settled at $3.20 3/4, down 4 1/4 cents.

Wheat: Wheat closed with double digit losses in Chicago an Kansas. Chicago wheat is now trading at 10-year lows. Harvest pressure amid bumper global production just about everywhere bar France is the reason. Weekly export inspection of 511,965 MT were down 5% on last week and 18% below the same week a year ago. The USDA reported the 2016 US spring wheat harvest at 81% complete versus only 62% normally at this time. Egypt confused the market by again re-visiting the ergot issue and again deciding on a zero tolerance level for all imports. This caused consternation the last time they did this, with offers at their tenders drying up to a trickle. It might also suggest Russian/Black Sea wheat may have to search a bit harder for some homes. Iran reported a wheat crop of 14 MMT versus 11.5 MMT a year ago. The German Ag Ministry reported their crop at 24.6 MMT, down 7.5% on a year ago. FranceAgriMer reported than only 28% of their harvest has a specific weight of over 76 kg/hl. Apart from that hagberg and protein levels are pretty good. Russian wheat exports inexplicably fell back to only 200 TMT last week. Sep 16 CBOT Wheat settled at $3.70 1/2, down 13 cents; Sep 16 KCBT Wheat settled at $3.74 1/4, down 15 1/2 cents; Sep 16 MGEX Wheat settled at $4.88 1/4, down 4 1/4 cents.

French Grains Fall Quite Hard To Start The Week

29/08/16 -- EU grains closed lower to start the week. London wheat was closed for the August Bank Holiday and will play catch-up tomorrow.

Despite the lack of UK input, French grains fell quite hard as wheat in Chicago slumped below $4/bu to the lowest levels seen since 2006.

The day ended with Sep 16 Paris wheat down EUR4.50/tonne at EUR154.00/tonne, Nov 16 corn was down EUR2.25/tonne at EUR162.00/tonne and Nov 16 Paris rapeseed fell EUR3.00/tonne to EUR371.25/tonne.

FranceAgriMer said that the quality of the new crop French wheat can now be analysed, now that he harvest is over. Some 65% of the French crop has a protein level of over 12%, and only 6% has a protein level that falls below the minimum 11.5% required for export.

Some 79% of French wheat has a hagberg falling number of over 240 (95% last year), but that's still not too bad, so where's the problem?

Only 28% of it has a specific weight of 76kg/hl or more, opening the door for large-scale imports of better bushel weight grain for blending purposes.

Overall, as it stands, only 10% of the crop makes French #1 standard of 11.5% protein, 77 kg/hl and 240 hagberg.

Egypt muddied the waters again over the weekend by stating that all wheat imports must (again) meet an ergot inclusion level of zero. The last time they did this offers at their tenders dried up to virtually nothing as 0.05% is the accepted industry standard. We shall have to wait and see how things pan out from here. Rejections and demurrage are a very expensive risk that nobody wants to take.

The German Ag Ministry said that wheat production there this year will fall 7.5% to 24.6 MMT due to wet weather.

Iran said that their 2016 wheat crop had come in at 14 MMT versus only 11.5 MMT a year ago.

Ukraine seaports exported 552.7 TMT of grains last week, said APK Inform, down from 647.7 TMT a week previously. That total included 391.1 TMT of wheat, 150.9 TMT of barley and 10.7 TMT of corn.

Russian seaports exports fell to only 203.1 TMT from 406.8 TMT the previous week, they added. Wheat accounted for 200 TMT of that total.

Russian exports to date are up 0.6% on a year ago at 4.48 MMT (wheat 3.7 MMT; barley 712 TMT; corn 39 TMT). Ukraine exports are 3.95 MMT (wheat 1.74 MMT; barley 1.71 MMT; corn 478 TMT).

Chicago Grains End Lower

26/08/16 -- Soycomplex: Soybeans closed lower on the day and for the week. Fund selling and a lack of supportive news were bearish factors this week, alongside ideas that the already record large US crop is continuing to get larger. There have been no daily announcements of sales to China/unknown for the past few days either. The ProFarmer crop tour released a bearish yield estimate of 49.3 bu/acre, up 0.4 bu/acre from the USDA's current figure. US weather forecasts lean bearish/neutral. Sep 16 Soybeans settled at $9.90 3/4, down 7 1/2 cents; Nov 16 Soybeans settled at $9.67 1/4, down 8 1/4 cents; Sep 16 Soybean Meal settled at $321.20, down $3.10; Sep 16 Soybean Oil settled at 32.95, up 4 points. For the week Sep 16 beans were down 36 1/4 cents, with Sep 16 meal $8.80 lower and oil down 119 points.

Corn: The corn market closed around 7 cents lower on the day, and 18 cents easier for the week. Fresh (bullish) news was lacking. The ProFarmer crop tour pegged US corn yields at 170.2 bu/acre, almost 5 bu/acre below the USDA's most recent estimate, but the market was widely anticipating such a move. They see production at 14.728 billion bushels. Keep an eye on Gulf storm “Invest 99-L” which is expected (60% chance) to develop into a tropical storm this weekend. The US Delta region is already wet, hindering harvest activity and could do without any more precipitation. Sep 16 Corn settled at $3.16 1/4, down 7 1/4 cents; Dec 16 Corn settled at $3.25, down 7 cents. For the week Sep 16 corn was 18 cents lower and Dec 16 was down 18 3/4 cents.

Wheat: The wheat market closed lower on the day and for the week. Egypt bought Russian wheat in their tender. US wheat wasn't offered and neither was French. They've purchases exclusively Russian, Romanian or Ukraine wheat so far this season, and look set to continue to do so. The Russian harvest is now estimated at around 72-73 MMT, some 10 MT higher than a few months ago, almost entirely compensating for French losses on it's own. Sep 16 CBOT Wheat settled at $3.83 1/2, down 17 3/4 cents; Sep 16 KCBT Wheat settled at $3.89 3/4, down 15 3/4 cents; Sep 16 MGEX Wheat settled at $4.92 1/2, down 5 1/4 cents. For the week Chicago wheat was 43 1/2 cents easier, Kansas wheat lost 41 cents and Minneapolis shed 38 1/4 cents.

EU Grains Lower On The Day And For The Week

26/08/16 -- EU grains closed mostly lower. London wheat was lower on the back of a slight improvement in sterling.

At the close Nov 16 London wheat was down GBP0.95/tonne at GBP125.75/tonne, Sep 16 Paris wheat was EUR1.50/tonne lower to EUR158.50/tonne, Nov 16 Paris corn was down EUR1.25/tonne at EUR164.25/tonne, Nov 16 Paris rapeseed was EUR1.25/tonne weaker at EUR374.25/tonne.

For the week that puts London wheat GBP6.25/tonne weaker (-4.7%), Paris wheat down EUR4.25/tonne (-2.6%), corn down EUR2.50/tonne (-1.5%) and rapeseed EUR3.75/tonne (-1%) easier.

There's been some sterling strength in evidence this week, which explains why London wheat fared the worst compared with last Friday.

There's also probably the factor at play that it there's going to be a shortage of any type of wheat this season then it's going to be quality milling wheat not feed wheat.

Egypt's GASC bought 180,000 MT of Russian wheat for Sep 21-30 shipment in their tender. There's some talk that they may need to devalue the Egyptian pound, and seek financial help from the IMF as they only have sufficient cash reserves to cover 3 months of imports.

Russia's wheat harvest was placed at 70 MMT (up from 61 MMT a year ago) yesterday by the IGC. Others have it even higher. Harvesting so far (62% complete) has brought in a crop of over 60 MMT, and in excess of 16 MMT of barley.

They look like making up for the vast majority of any French shortfall this year on their own.

The IGC estimate world 2016/17 wheat production at an all time high 743 MMT, up 8 MMT from last month and 7 MMT above the previous 2015/16 record. Consumption is only seen at 732 MMT, with ending stocks rising by 12 MMT from last season to a highest ever 229 MMT.

It's particularly unfortunate for wheat that this year also brings along a record world corn crop (forecast at 1069 MMT by the IGC). Ending stocks for corn are also seen sharply higher year-on-year.

It's going to be tough to rally much from here with global stocks at such lofty levels. If you want UK wheat prices up then further sterling depreciation is your best hope, but London wheat hasn't even had that crutch to lean on this week.

Chicago Beans Crash Back Below $10

25/08/16 -- Soycomplex: Beans crashed lower despite solid weekly export sales. These came in at 115,100 MT for old crop and 1,939,600 MT for new crop - primarily for China (1,001,000 MT) and unknown destinations (771,000 MT). That was well above trade expectations. Reports from the ProFarmer crop tour showed better pod counts for IL and western IA, indicating bumper production there. The IGC estimated world soybean production at 325 MMT vs 321 MMT last month and 316 MMT last year. A Bloomberg survey into trader/analyst sentiment on beans found 6 bulls, 12 bears and 8 neutrals. More rains are due for the central and southern part of the soy belt the next 7 days. The trade continues to see the rains as beneficial for grain fill. Sep 16 Soybeans settled at $9.98 1/4, down 32 1/2 cents; Nov 16 Soybeans settled at $9.75 1/2, down 29 3/4 cents; Sep 16 Soybean Meal settled at $324.30, down $7.20; Sep 16 Soybean Oil settled at 32.91, down 66 points.

Corn: The market closed around 4 cents lower. Weekly export sales of 71,100 MT for 2015/16 were a marketing-year low, but then again there are only a few weeks left in that campaign. Sales of 1,059,900 MT were reported on new crop corn. The Buenos Aires Grain Exchange estimates Argentine corn harvest 93% complete. The IGC estimated the world corn crop at 1030 MMT vs 1017 MMT last month and 969 MMT last year. A Bloomberg survey into trader/analyst sentiment on corn found 5 bulls, 8 bears and 13 neutrals. China shifted 0.5 MMT of the 3.2 MMT of corn on offer at their latest corn auction. The ProFarmer crop tour is getting close to wrapping up its crop findings for the year. They are generally below the USDA on corn yields, and this year is expected to be no exception. Current guesses are 169-172 bpa vs the USDA's recent 175.1 bpa. Sep 16 Corn settled at $3.23 1/2, down 4 cents; Dec 16 Corn settled at $3.32, down 4 1/4 cents.

Wheat: The wheat market closed around 2-4 cents lower. Weekly export sales came in at 379,700 MT for 2016/17 - down 22 percent from the previous week and 21 percent from the prior 4-week average. Exports of 564,000 MT were down 21 percent from the previous week, but unchanged from the prior 4-week average. The primary destinations were Indonesia (83,200 MT), Taiwan (56,900 MT), Colombia (56,600 MT), Chile (46,800 MT) and Venezuela (41,000 MT). A Bloomberg survey into trader/analyst sentiment on wheat found 3 bulls, 13 bears and 10 neutrals. The Russian wheat crop keeps getting larger with SovEcon raising their estimate to 73 MMT. The French wheat harvest is officially over, and despite their production problems Nord Cereales have suspended delivery into their Dunkirk silo due to lack of available space. The IGC raised world wheat production to 743 MMT, up from 735 MMT last month. Sep 16 CBOT Wheat settled at $4.01 1/4, down 2 3/4 cents; Sep 16 KCBT Wheat settled at $4.05 1/2, down 2 1/4 cents; Sep 16 MGEX Wheat settled at $4.97 3/4, down 4 cents.