CBOT Closing Comments


March soybean futures closed at USD9.51 ½, down 2 ½ cents, March soymeal futures at USD286.40, down USD1.10, and March soy oil futures at 36.71, down 0.29 points. Export sales were good at 929,600 MT for the current MY plus a further 61,000 MT for 2010/11 (expected: 750-950,000 MT). Heavy rain is slowing early soybean harvesting in Brazil, which keeps China coming back to feed at the US table, they booked 700,400 MT of this week's soybean sales. Informa raised their US soybean acreage estimate for this year to 77.9 million acres from their December report of 77.0 million acres, and the USDA's 77.5 million acres in 2009.


March corn futures closed at USD3.64 ¾, down 7 ¼ cents, May corn futures ended at USD3.75 ½, also down 7 ¼ cents. Corn weekly export sales came in at a very respectable 1,610,400 MT, plus a very small 400 MT sale of 2010/11, against expectations of 650,000 - 1,000,000 MT. Informa pegged 2010 corn plantings at 89.6 million acres, slightly higher than their previous estimate of 89.5 million, and a 0.4 million increase on what the USDA say was planted in 2009. Funds sold an estimated 11,000 contracts and weak outside markets also pressured corn today, as did the continued hangover from Tuesday's unexpected increase in 2009/10 production from the USDA.


March CBOT wheat futures closed at USD4.98 ½, down 1 cent, March KCBT wheat futures ended at USD5.02, down 1 ½ cents, and March MGEX wheat futures at USD5.12 ½, unchanged. Wheat export sales were strong for once at 825,800 MT for old crop, a marketing year high, plus a further 60,500 MT for delivery in 2010/11 (expected 250-350,000MT). The Philippines (187,600 MT), unknown destinations (113,300 MT) and Nigeria (107,100 MT) were the main buyers. There are about four months left in the marketing year, and despite today's sales wheat has a way to go to meet USDA projections of 825 million bushels for export (22.5 MMT).

EU Wheat Resumes Downwards Path

After one day of brief respite, EU wheat futures continued their downwards slide Friday closing lower for the eighth session out of the last nine. London March feed wheat ended down GBP0.65 at GBP100.85/tonne, with Paris March milling wheat down EUR0.75 at EUR126.50/tonne.

The International Grains Council increased their global wheat production estimate for 2009/10 from 668 MMT to 674 MMT. They also raised world ending stocks from their previous estimate of 191 MMT to 197 MMT, a 32 MMT (or 19%) increase on 2008/09.

In addition they added 8 MMT to their forecast for world wheat production in the coming 2010/11 season, pegging output at 653 MMT, the third highest on record.

The report comes hot on the heels of a Strategie Grains release yesterday, pegging EU soft wheat output up 3% to 133.7 MMT in the coming season, aided by better yields.

Despite increasing human & industrial use, Strategie Grains see next season's EU ending stocks almost 24% higher at 22.4 MMT, up by 4.3 MMT.

November London feed wheat has now fallen by GBP8.20/tonne, or more than 7%, in the three weeks since the end of 2009. November Paris milling wheat is down EUR6.50 (5%) and December CBOT wheat down 38c, or nearly 6%, in the same time frame.

USDA Weekly Export Sales

For the first time in ages the USDA's weekly export sales report beat trade expectations for all three of the main commodities: corn, beans and even wheat.

Corn sales came in at 1,610,400 MT, plus a very small 400 MT sale of 2010/11, against expectations of 650,000 - 1,000,000 MT. Soybean sales were 929,600 MT for the current MY plus a further 61,000 MT for 2010/11 (expected: 750-950,000 MT). Wheat sales were 825,800 MT for old crop, a marketing year high, plus a further 60,500 MT for delivery in 2010/11 (expected 250-350,000MT).

China is still around, taking 700,400 MT of this week's soybeans, actual exports of beans were also pretty robust again at 1,546,600 MT, with 859,600 MT pf that headed for China.

Corn exports of 835,900 MT were up 27 percent from the previous week and 22 percent from the prior 4-week average.

The Philippines (187,600 MT), unknown destinations (113,300 MT) and Nigeria (107,100 MT) were the main wheat buyers. Actual exports of 316,600 MT were just so so.

EU 2010/11 Wheat Prospects

Early ideas on cereal production prospects for the coming season are now starting to filter through. Of course, unlike their North and South American counterparts, EU farmers don't realistically have the luxury of soybean planting to fall back on. So with barley prices offering even poorer returns than wheat, and no intervention crutch to lean on next season, here growers are caught between a rock and a hard place.

Strategie Grains have released their first production estimates for 2010/11 this week, and are pegging the EU soft wheat area 1% higher, and output up 3% to 133.7 MMT in the coming season, aided by better yields.

They increase human and industrial usage by 2.1 MMT, or 3.6%, to 59.6 MMT. Of that an increase of 6.1 MMT, or 21% comes from the biofuel sector. In the UK, consumption from this sector is seen trebling, up 0.85 MMT, to 1.25 MMT.

It may not have escaped your notice at this point that UK biofuel usage of 1.25 MMT is equivalent to one Ensus running at full-tilt for the entire year. There are assorted imponderables here, like what about Vivergo you might well ask. Their website still says "first product expected Summer 2010". Of course we've heard that one all before, but there must be a pretty good chance they will use something in 2010/11? Additionally of course, it can't be easy to predict how close to full capacity Ensus will be able to run at, before the magic button has even been pressed.

Despite this increase in human & industrial use, Strategie Grains see EU ending stocks almost 24% higher at 22.4 MMT, up by 4.3 MMT. This is on the back of a 2.6 MMT decrease in feed usage to 50.0 MMT.

The bottom line there would seem to be that even if Vivergo opens on time and immediately shoots up to full capacity, EU ending stocks will still be substantially higher at the end of 2010/11.

The EU barley area is seen down 7%, and production falling by 6%, to 58.2 MMT. That's a decrease of 3.5 MMT. Despite the fall in output, ending stocks are seen up slightly to 12.8 MMT, largely due to the large carry-in of intervention stocks from the current 2009/10 marketing year.

EU Rapemeal Prices

Basis FOB Lower Rhine in euros/tonne;

Feb 169,00 +4,00
Mch/Apr 157,00 unch
May/1st h Jly 128,00 unch
Aug/Oct 10 122,00 +2,00
Nov/Jan 11 130,00 +2,00
Nov/Apr 11 132,00 +2,00

What's Going To Get The Wheat Market Up?

The International Grains Council have increased their global wheat production estimate for 2009/10 from 668 MMT to 674 MMT. They've also raised world ending stocks from their previous estimate of 191 MMT to 197 MMT, a 32 MMT (or 19%) increase on 2008/09. Global stockpiles have now increased by more than 66% in the last two years, as output has comfortably exceeded consumption.

There may be a very small glimmer of hope for cereal growers somewhere down the line. The Canadian Wheat Board this week estimated world wheat production for next season (2010/11) at 644 MMT, some 30 MMT below the current marketing year. Even so, that figure is only in line with the current global consumption figure from the USDA.

What do we need to get this market up? Increased consumption from more bioethanol plants? It's going to take more than 150 new Ensus/Vivergo's to get through the existing surplus. A crop disaster somewhere like China/India? It's coming to something when you're praying for disasters isn't it? Maybe a more radical, well if we've got too much of it let's stop planting the stuff approach? "But I've got to plant something, and I've got all these fixed costs to pay."

Hmmmm. None of that lot is very likely right now is it. So I guess we've got to wait on speculative money coming back, pushing prices up to totally unrealistic levels on a whim with no foundation? Things are pretty desperate when that's all you've got to hang your hat on.

CBOT Closing Comments


March soybean futures closed at USD9.54, up 4 cents, March soymeal futures at USD287.50, up USD1.30, and March soy oil futures at 37.00, up 43 points. The USDA today have announced private exporters sold 230,000 MT of mostly 2010/11 crop soybeans for delivery to China. Weekly export sales estimates range from 750,000 to 950,000 MT for soybeans, 200,000 to 300,000 MT for bean meal and 10,000 to 20,000 for bean oil.


March corn futures closed at USD3.72, up 4 cents, and May corn futures at USD3.82 ¾, up 4 cents. Trade estimates for tomorrow's weekly export sales range from 650,000 to 1,000,000 MT. The Midwest and eastern Corn Belt again experienced winter storms leaving many side roads icy and impassable. Warmer weather is on its way for the weekend however. Corn production in China might be significantly lower than estimates from the USDA and the Chinese government, but I don't see that being a precursor to start importing.


March CBOT wheat futures closed at USD4.99 ½, up 2 cents, March KCBT wheat futures are at USD5.03 ½, down 1 cent, and March MGEX wheat futures at USD5.12 ½, up 1 ¾ cents. Tomorrow's USDA weekly export sales estimates range from 250,000 to 350,000 MT. Japan bought 111,000 MT of mostly (86,000 MT) US wheat today. Canadian farmers will plant less wheat for the 2010/11 harvest, reducing output to around 24 MMT, according to early estimates from the CWB.

EU Wheat Closing Comments

EU wheat closed higher for the first day in eight with Paris March milling wheat ending up EUR1.50, at EUR127.25/tonne, and London May feed wheat closing up GBP1.35 at GBP104.75/tonne.

After several successive days of downside, it is maybe not too surprising that we finally have an upside day, although this does not mean that the downtrend is broken.

Demand is what we need to resurrect this market, and that is maybe the one thing that we haven't really got.

In the UK, the new Ensus bioethanol refinery at Teesside will finally go into production on Monday, according to market reports.

They were going to ask me to go up there and press "the big green button" myself but they know that I've got a bad back, and Mrs Nogger#3 is a very domineering woman.

EU Soymeal Prices

Basis CIF Rotterdam/Amsterdam in USD/tonne unless otherwise stated:

Brazil pellets 48%

Afloat 415,00
Jan 415,00
Feb 415,00
March 385,00
Apr 353,00
May/Sep 338,00

Argentine pellets 44/45%

Afloat 405,00
Jan 405,00
Jan/March unq
May/Sep 326.00

Dutch Hipro 49% profat

Jan 430,00 fob
Feb 430,00 fob
March 430,00 fob
Apr 416,00 fob
May/Jul 364,00 fob
May/Oct 364,00 fob

Argentine Hipro 49% profat

Afloat 420,00
Jan 420,00
Feb 420,00
March 403,00
Apr 364,00
May/Sep 346,00
Oct/Dec 352,00

EU Rapemeal Prices

Basis FOB Lower Rhine in euros/tonne:

Feb 165,00 -5,00
Mch/Apr 157,00 +2,00
May/1st h Jly 128,00 +3,00
Aug/Oct 10 120,00 -1,00
Nov/Jan 11 128,00 -1,00
Nov/Apr 11 130,00 unch

eCBOT Close, Early Call

The overnight markets closed mixed, with beans around 3-4 cents higher, corn flat either side of unchanged and wheat just fractions of a cent easier.

The dollar and crude oil haven't been showing a lot of change either this morning, for once, although that might be about to change.

Data just out reveals that US jobless claims rose last week by 36,000 to a seasonally adjusted 482,000. Analysts had been expecting a 4,000 decrease. That could send the dollar higher this afternoon, depressing the grains sector.

The sharp decline we've seen in prices since last Tuesday's USDA report seems to have been arrested, at least for now. Some pundits are suggesting that prices have fallen too far, too quick, and that this presents a buying opportunity. Others that we have merely paused for breath before continuing the downwards spiral.

I'd have to say that I fall into the latter camp.

At this exact moment in time crop prospects in South America look generally very promising. There is some talk of too much rain in Brazil increasing rust reports, but this can be controlled with adequate spraying. With bean prices having held up nicely for a large part of the last twelve months there should be enough money in the kitty to cover the cost.

China will surely be switching it's buying attention to South America before very long. That said, the USDA today have announced private exporters sold 230,000 MT of mostly 2010/11 crop soybeans for delivery to China.

Corn production in China might be significantly lower than estimates from the USDA and the Chinese government, but I don't see that being a precursor to start importing.

Taiwan is seeking 40,000 to 60,000 MT of either US or Brazil corn, and South Korea is looking for 55,000 MT of any origin corn. Taiwan purchased 48,000 MT of Brazil soybeans overnight and Japan bought 111,000 MT of mostly (86,000 MT) US wheat.

Other orders for US wheat are few and far between, with Russia now making inroads as far afield as Brazil, highlighting how wide it is now able to cast it's export net.

The usual Thursday export sales report from the USDA is delayed until tomorrow due to Monday's holiday, wheat exports in particular could be in for another poor week.

Canadian farmers will plant less of the grain for the 2010/11 harvest, reducing output to around 24 MMT, according to early estimates from the CWB. They're obviously taking a leaf out of their US counterparts book.

Unfortunately this isn't the case in Europe, where Strategie Grains see the soft wheat area 1% higher, and production up 3% in the season ahead. Corn output will also rise, by 2% they say, with barley production decreasing by 6%.

Early calls for this afternoon's CBOT session: corn called mixed; soybeans called 2 to 4 higher; wheat called flat to 2 lower.

EU Sunpellet Prices

Basis Rotterdam/Amsterdam in euros/tonne unless stated:

Arg/Urg Sunplts 37/38%

Dyna Voyager USD165,00 FOB

EU Sunplts 29%

Feb 142,50 fot
Mch 136,00 fot
Apr 128,00 fot
May 113,00 fot
Jne 113,00 fot
July 112,00 fot
Sept/Dec 115,00 fot

Canadian Wheat Output Seen Declining In 2010/11

Depressed world prices and ample stocks will lead to a reduced acreage this spring, which combined with a return to normal yields, will see Canadian wheat output declining in the coming season to around 24 MMT. That's a 9.4% decrease on the 26.5 MMT produced in 2009/10, say the Canadian Wheat Board.

Barley plantings will also fall by around 5%, although an improvement in yields here should see production maintained, or even improved upon slightly from last season's 9.5 MMT, they say.

Wynnstay FY 2009 Results

AIM-listed agricultural supplies to pet store group Wynnstay say pre-tax profit for 2009 was GBP5.2m, the same as the year before, with revenues down to GBP215m from the previous year’s GBP234.6m.

That's a very respectable performance given that 2008 was a pretty exceptional year for most players in the market.

Operating profit was GBP5.5 million, with agricultural supplies accounted for GBP2.5m (2008: GBP3.9m) of this result and the retail businesses for GBP3.0m (2008: GBP2.5m).

The Group’s balance sheet remains strong, it said, with net assets at 31 October 2009 increasing to GBP39.5m (2008: GBP36.3m).

Chief executive Ken Greetham said: “Overall, the business performed strongly in a trading environment significantly tougher than the last financial year, in which the group benefited from substantial one-off inventory gains as a result of rising raw material prices."

Russian Wheat Loading For Brazil

After months of protracted negotiations Russian wheat has finally got a foothold in Brazil after an eight year absence.

The Russian arm of Bunge, Bunge CIS, is currently loading a 25,000 MT cargo of Russian milling wheat at the port of Novorossiysk destined for Brazil, according to media reports.

The Brazilian and Russian governments have been keen to forge closer ties, possibly involving Russia taking back Brazilian poultry, in exchange for looking upon Russian grain more favourably.

In the light of another year of sharply lower wheat production from Argentina, it has even been suggested that Brazil might waive it's import tariff for wheat imported from outside the Mercosur trade bloc, specifically for Russian grain.

Whilst this hasn't happened yet, Russian wheat has still managed to overcome geographical advantages for US grain and price itself into the Brazilian market. Flour producers there would much rather have US wheat from a quality angle, so it will be interesting to see how this first shipment in almost a decade goes.

Rosstat say that Russia's wheat harvest finally came in at 62 MMT in clean weight in 2009, 2.7% down on production of 63.7 MMT in 2008. Once again that is significantly higher than official estimates earlier in the season.

Italian Farmers Plant Less Wheat Amidst Price Fixing Allegations

Italian farmers have planted around 25% less durum wheat this winter, according to the Coldiretti farmers' union.

Farmers are upset by the low domestic prices being paid by the country's pasta makers, despite retail pasta prices rising.

With everybody in Italy from the Prime Minister downwards accused of assorted underhand practices, it is no surprise to hear that farm leaders are accusing the nation's pasta makers of price fixing.

In October the Lazio regional administrative court upheld fines totalling 12.5 million euros slapped on 26 pasta producers for creating a cartel with the aim of stifling competition and driving up prices.

Last month, Italian tax police raided the headquarters of Italy's biggest pasta makers looking for evidence to further support price-fixing charges.

India 'Stealing Water' From Pakistan - Affecting Wheat Crop

There's never been a lot of love lost between Pakistan and neighbouring India, now the former is accusing the latter of stealing it's water.

Pakistan's 2010 wheat crop could be cut to around 19-20 MMT, from a government target of 25 MMT and 2009's production of 24 MMT, say analysts.

The reason for the reduction is India cutting up to 50 per cent of the water flow in the Chenab River, putting wheat crops in Punjab at stake, says Pakistani daily The Nation.

The Indian construction of the controversial Baglihar Dam in Occupied Kashmir has caused the closure of three Pakistani canals which met 75 percent of the canal water requirement of Punjab, says the Pakistan President.

Punjab provides around three quarters of Pakistan's wheat crop which is harvested in April/May. Despite winter wheat plantings being seen up 30 percent in irrigated areas, yields could be significantly reduced due to lack of water in the main feeder canals, say experts.

Below normal winter rains have led to a 20 percent decline in land under wheat cultivation in non-irrigated areas this winter, say the Agriculture Ministry.

Despite lower production, imports are unlikely before early 2011 as the country has sufficient carryover stocks, traders said on Wednesday.

Chinese Whispers - Again

As long ago as September, Shanghai-based JC Intelligence flagged up that all was not quite right with the Chinese corn crop. Back then they said that the crop would drop by around 20 MMT to 146 MMT. This week they have said that it could be nearer 140 MMT.

That's fully 23 MMT below the current official estimate and 15 MMT below the USDA. Even the normally over cautious US officials in Beijing have been voicing concern over the accuracy of the official government estimates of late.

With the USDA estimating Chinese consumption at 159 MMT in 2009/10, if the private Chinese estimates are correct, the we are looking at a shortfall on production of 19 MMT in the current season.

Before you all get too carried away, Chinese ending stocks are forecast at almost 49 MMT this year (and that is using the USDA's production number, not the official estimate), so it would appear unlikely that imports are imperative this year.

In addition, although Chinese corn prices have risen somewhat recently, they are still around USD35-40/tonne cheaper than importing corn from the US.

There are question marks too over the size of the 2009 Chinese wheat crop. Official and USDA estimates of around 114-115 MMT may also have been overstated many private analysts think, with production nearer 100 MMT more realistic.

Again though, with a domestic consumption of 102 MMT, that's hardly going to make much of a dent in government stockpiles, estimated by the USDA at more than 60 MMT.

Other news out today says that China's economy expanded by 8.7% in 2009, according to the National Bureau of Statistics. That comfortably beat government forecasts, and might be aiding inflation, which explains the recent tightening of monetary policy.

Of course, just because the Chinese government say that growth is up 8.7%, doesn't mean that it actually is.

Certainly China wants keeping an even closer eye than normal on in 2010.

CBOT Closing Comments


March soybean futures finished at USD9.50, down 13 ½ cents, March soymeal futures at USD286.20, down USD4.70, and March soy oil futures at 36.57, down 58 points. A stronger dollar and weaker crude oil set the tone, with weakness from equities and other outside markets adding to a bearish feel. The market still continues to look weak following last weeks USDA report and improved production numbers out of South America.


March corn futures ended at USD3.68, down 1 ¼ cents, May corn futures at USD3.78 ¾, down 1 ½ cents. Futures did at least manage to close off early session lows as farmers hold off selling at current levels. Weekly export sales normally released on a Thursday will be put back a day due to Monday's Martin Luther King holiday. Last week's USDA numbers still hang over the market, although traders are becoming a bit more vocal in their belief that whilst this season's crop is larger than early expectations, Washington may have overstated things somewhat. However, the jury is out until March on that one.


March CBOT wheat futures closed at USD4.97 ½, down 3 cents, March KCBT wheat futures at USD5.04 ½, down ½ cent, and March MGEX wheat futures at USD5.10 ¾, down 2 ¾ cents. As with corn, wheat managed to close well off earlier session double digit losses, as traders consolidated their positions and booked some profits after recent heavy declines. Although the downtrend remains well intact, the market rallied about 8 cents in the last 15 minutes of the day.

EU Wheat Closing Comments

EU wheat futures closed flat to mostly lower with Mar London wheat ending down GBP0.90 at GBP100.25/tonne and Mar Paris wheat unchanged at EUR125.75/tonne.

London wheat was lower across the board as sterling rose above 1.15 against a beleaguered euro, only another very poor showing from the single currency prevented all Paris contracts from also ending in negative territory too.

Front month January London wheat closed below the psychologically important GBP100/tonne mark for the first time since the September lows were set. Front month March Paris wheat also came close to breaking through EUR125/tonne, but fell just short.

Export interest remains scant however, and whilst prices are falling at the current rate who can blame buyers from staying away from the market?

Despite seemingly mopping up just about every tender going at the moment, Russian wheat exports are actually running behind last season's pace halfway through the marketing year.

Crop conditions in Ukraine are lagging last season, and development is also two to three weeks behind schedule. Current low prices and lack of credit may also discourage farmers there from upping inputs, which may further reduce yield prospects for the 2010 harvest.

eCBOT Close, Early Call

The overnight markets closed with beans around 7 cents lower, wheat down 6-8 cents and corn off around 3-4 cents.

A firmer dollar and crude oil down the best part of USD1.50/barrel are just adding to the market's woes. Still reeling from last week's USDA numbers, we now also have increased soybean production estimates from Oil World for both Brazil and Argentina, plus further evidence of China tightening monetary policy.

The latter might trim China's seemingly insatiable appetite for soybeans, in addition to demand surely switching to South America before too long. Still, the US have certainly had a pretty good run at things from the Chinese demand perspective in the last six months, and can hardly complain too loudly.

An ice storm moving into the heart of the US corn belt will do little to help what is still standing in the fields.

Wheat remains friendless. Bangladesh may buy up to 400,000 MT of wheat in a tender in the next week or so, but neither US or EU wheat is holding out much hope of getting a look in.

Early calls for this afternoon's CBOT session are wheat 8-10 cents lower, corn 2-4 cents easier and soybeans down 4-6 cents.

Soybean Harvesting And Cotton Planting In Mato Grosso

Did you see Jimmy's Global Farm on BBC recently? The first episode was from Brazil and featured lots of interesting footage of Brazilian agricultural methods. If you missed it see if you can find it on catch up if you have it, or if not (or for my foreign viewers) try searching for it on BBC iPlayer, the show was originally screened on the 7th Jan I think.

These two clips highlight the astonishing speed with which they get a second crop in immediately after harvesting beans. In the case below it's cotton, in the BBC programme it was corn.

Here's what's going on in Mato Grosso, from the excellent Kory Melby blog, with early planted fast maturing beans being harvested right now, swiftly followed by cotton. No sign of the heavy rains in this case and yields are coming in better than expected for early varieties.

The Pound Is The Euro Without Greece

Sterling is up against the euro but down against the dollar amidst a flurry of data this morning.

The release fo the BoE minutes from the MPC's meeting earlier this month revealed a unanimous vote to hold interest rates at a historic low of 0.5%, in addition all nine members of the committee members voted not to increase QE.

They did note that part-time working had increased during the recession and that there was a risk that the jobs market "could deteriorate further."

Other data showed that unemployment fell slightly to 7.8% from 7.9% in the three months ending November (compared to the three months ending October), but underlining the MPC's concerns about jobs were figures revealing that full time employment fell by 113,000 during the period.

The mixed data further muddies the waters as far as any potential interest rate rises are concerned, following on from yesterday's news that inflation has risen to 2.9%.

MPC member Andrew Sentance last week said that he thought that a rise in UK interest rates was not out of the question later this year, and the inflation news seemed to support the chances of that.

However a shaky jobs market would undermine the economic recovery, such as it is, and reduce the chance of any rate rises.

Regardless of all that, the news from Euroland is worse at the moment, with the prospect of a Greek bailout haunting the single currency. The pound has popped up to 1.15 against the euro despite the mixed picture for the UK. That's the first time the pound has been up there since 24th August 2009.

One comment I read yesterday went something like "the pound is the euro without Greece". Which sums things up quite nicely I think.

Against the dollar the UK currency is a little easier at around 1.6270, roughly in the middle of a fairly broad sideways trading range that has been in place since last May.

Ukraine Crop Conditions

Crop conditions in Ukraine during December and early January have improved, although overall development lags and conditions are worse than in 2009, say the Farm Ministry.

An estimated 90% of the winter grains area was in good to satisfactory condition as at January 14th, they say. Of that, 46.1% of crops are rated in good condition, an improvement on 45.3% last week, but behind last year when more than 60% of the winter crop was rated as good.

Winter wheat was rated in good condition on 46.4% of the planted area, and 43.8% was rated satisfactory, with 9.7% of the crop looking weak and thinned, say the Ministry.

The barley crop was rated 41.8% good, 46.6% satisfactory and 11.6% weak/thinned.

Winter rapeseed plantings were said to be 38.9% good, 40% satisfactory and 21.1% weak/thinned.

Low grain prices and a lack of credit are also expected to lead to reduced inputs this year, which could see yields down in 2010.

Exceptional dryness from August through to mid October, means that wheat entered winter dormancy without gaining maximum hardiness to withstanding sub-zero temperatures with no ill effects, says Gail Martell of Martell Crop Projections.

EU Sunpellet Prices

Guide prices basis Rotterdam/Amsterdam in euros/tonne unless stated:

Arg/Urg Sunplts 37/38% fob

Dyna Voyager USD163,00 fob
Feb/Apr dely USD165,00 fob
May/Jly dely USD165,00 fob

EU 29% Sunplts

Feb 137,00 fot
Mch 136,00 fot
Apr 128,00 fot
May 113,00 fot
Jne 113,00 fot
July 112,00 fot
Sept/Dec 115,00 fot

EU Rapemeal Prices

Guide prices basis FOB Lower Rhine in euros/tonne:

Feb 170,00 unch
Mch/Apr 155,00 -2,00
May/1st h Jly 125,00 +1,00
Aug/Oct 10 121,00 +1,00
Nov/Jan 11 129,00 +1,00
Nov/Apr 11 130,00 -1,00

CBOT Closing Comments


March soybean futures finished at USD9.63 ½, down 10 ½ cents, March soymeal futures at USD290.90, down USD0.80, and March soy oil futures at 37.15, down 38 points. Although last weeks USDA numbers still weigh on the market, the trade drew some comfort from reports that heavy rains in Brazil might be affecting quality and harvest progress, if not quantity. The USDA backed that up to a degree by today reporting a 2009/10 sale to China of 100,000 MT.


March corn futures closed at USD3.69 ¼, down 2 ½ cents, May corn futures were at USD3.80 ¼, down 2 ¼ cents. As with beans, last weeks USDA production forecasts still loom over the market. South Korea bought 85,000 MT of optional origin corn overnight. The USDA have also today reported a sale of 116,000 MT of US corn to unknown. That's about as bullish as it gets right now.


March CBOT wheat futures closed at USD5.00 ½, down 9 ½ cents, March KCBT wheat futures at USD5.05, down 7 cents, and March MGEX wheat futures at USD5.13 ½, down 7 cents. CBOT did manage, just, to close above the USD5.00/bushel level. Apart from that the size of the USDA's ending stocks numbers, and the very clear lack of export interest in US wheat, seems to indicate that this market can only go one way. The US consumes little more than half the amount of wheat it produces. A reduction in the US winter wheat acreage for the 2010 harvest isn't going to make that great a dent in stocks to usage when you look at it like that.

EU Wheat Futures Drift Lower

EU wheat futures continued to drift lower Tuesday with March London wheat closing GBP1.10 lower at GBP101.15/tonne, and Paris March wheat ending down EUR0.25 at EUR125.75/tonne.

There really isn't a huge amount of fresh news to impart, the fallout from last week's bearish USDA numbers is still hanging over the market a week later.

Export business remains scant, and what little interest is around doesn't seem to be going the way of EU wheat to any great extent.

A strong pound was again particularly bearish for London wheat, with unease over the situation in Greece weighing on the euro. Even the apparent reluctant agreement by Cadbury's to the Kraft takeover supported sterling, thereby weighing on wheat. It's funny what affects the wheat market these days.

Paris March wheat is now perilously close to contract lows set at harvest time in early September, when prices fell to EUR123.20/tonne. Even London March wheat is now in danger of falling into double digit territory if the current decline continues for the remainder of the week.

Reports emanating from the leading Senalia grain storage facility at the port of Rouen suggest that they are full and have again stopped taking further deliveries of grain.

eCBOT Close, Early Call

The overnights closed lower, with beans and corn 3-4 cents easier and wheat around 10 cents down.

Prices were in positive territory early on, but fell back mid-morning as the dollar came off session lows.

Once again US wheat is proving about as popular as a ginger-haired stepson. Saudi Arabia bought 440,000 MT of wheat of unspecified origin late last week, Iraq is shopping for 100,000 MT of any origin wheat. Only good old reliable Japan is in for anything specific - 110,000 MT of mixed origin wheat of which 85,000 MT is US. So at least that's one sale they should make this week.

Not that we are exactly awash with export interest here in Europe either, Russia and now Kazakhstan seem to be winning most of the tenders going at the moment.

There certainly hasn't been a problem with lack of rainfall in South America this season, if anything parts of the region have had too much rain. But warm temperatures and plenty of the wet stuff seems to be creating greenhouse like conditions, and analysts continue to raise their production forecasts. I haven't seen 66 MMT for Brazil yet, but it may only be a matter of time.

The only benefit for the US in all of that is that it may keep China coming back for American beans for a little while longer yet, as the harvest in Mato Grosso trundles along at around 3% done. The USDA today report a 2009/10 sale to China of 100,000 MT.

South Korea bought 85,000 MT of optional origin corn overnight. The USDA have just reported a sale of 116,000 MT to unknown.

Early calls are for corn and soybeans to open 2 to 4 lower and CBOT wheat called 8 to 10 lower.

Pigs, Geese And Chickens

One of the potentially most interesting problems of 2010 is how is Europe going to solve the problem with the PIGS? Particularly Greece, the most ailing porker of the lot.

Unemployment there is set to top 20% this year, according to the country's Labour minister Andreas Loverdos, and Greece’s national debt will hit 120% of GDP this year, possibly getting close to 140% by 2012.

Wasn't it Groucho Marx who said that he wouldn't want to join any club that would have him as a member? How the financially stronger nations in Euroland must be wishing that they hadn't been quite so keen to welcome all-comers now.

It seems to me that the Greek government are playing a game of chicken with ECB chief Jean-Claude Trichet. How sick do you want us to let the nation get before you send the paramedics in? You can't just let us die.

For all his hard words, Trichet will mount a Greek rescue if it becomes the only way to save the break-up of EMU, that is what most pundits seem to believe. But of course Greece isn't the only patient on the critical list, and if you save one then what's good for the goose & all that means you have to save them all, surely?

That comes bundled with enormous financial and political cost implications, and would certainly be a gigantic millstone around the euro's neck.

Maybe I will book that Spanish villa this summer after all...

What Was Happening A Year Ago

Some things have changed a lot in twelve months, whilst others have hardly altered at all. Here's a brief summary of what was going on in the market during January 2009:

China buys 50,000 MT of UK wheat. BoE drops UK interest rates to 1.5% - the lowest since the central bank was founded in 1694. Britain’s trade gap hits 8.330 billion pounds, the largest since records began in 1697. Statistics finally prove that we are officially in a recession. Pound hits a 23-year low of $1.35 against the dollar, and threatens to go to parity with the euro hitting 1.0285. Shares in Royal Bank of Scotland tumble by almost two-thirds in one day after it announces the biggest loss in British corporate history. Russia cuts off gas to Europe via Ukraine. March Paris milling wheat ends the month worth EUR151.00/tonne, whilst London May feed wheat is at GBP119.50/tonne. March soybeans are worth USD9.80, March corn USD3.79 and March CBOT wheat USD5.68 a bushel.

EU Rapemeal Prices

Guide prices basis FOB Lower Rhine in euros/tonne:

Feb 170,00 -5,00
Mch/Apr 157,00 -5,00
May/1st h Jly 124,00 -5,00
Aug/Oct 10 120,00 -3,00
Nov/Jan 11 128,00 -3,00
Nov/Apr 11 131,00 -2,00

Pound Up As UK Inflation Rises

The pound is up this morning, extending recent gains, following news that UK annual inflation increased to 2.9% in December, that's the highest level since last March, and a full one point increase on November.

Whilst punters had been expecting an increase (to around 2.5-2.6%), this is more than was anticipated, and might just mean that interest rates may have to rise sooner rather than later.

It would also appear to indicate that a rise above 3% is on the cards for January, given the return to 17.5% VAT. That would be more than one point above the government's target rate of 2%, meaning that poor old Mervyn King will have to get his pen and paper out to write a sorry note to Alistair Darling.

The euro remains weak, dragged down by Greece, with the US dollar faring little better fuelled by investor worries about the huge amount of debt taken on to push the country out of recession.

The Telegraph is reporting that Golden Sacks now expect the UK economy to grow faster than many other major economies. UK interest rates will start to increase by the end of the year they say, whereas US rates will stay where they are until 2012, they reckon.

The pound is now at it's best levels in more than a month against the dollar, having been as high as 1.6450 this morning, and at it's best in two months against the euro at around 1.1450.

New Kid On The Block

Kazakhstan is flexing it's muscles on the international export arena following a record grain harvest in 2009.

The former Soviet state produced a grain harvest of around 23 MMT in bunker weight in 2009/10 (20.8 MMT in clean weight), that's a 35% increase on the previous season, leaving them the potential to export around 10 million tonnes this marketing year.

According to the Kazakh Agency of Statistics grain stocks in the country as at Jan 1st 2010 were 16.45 MMT, an increase of 54.3% compared to 2009. The vast majority of that was wheat at 14.49 MMT, up 58.2%.

The head of the national grain company KazAgro has just announced a 1.5 MMT export deal with the world's largest wheat buyer, Egypt. He also says that the country will be casting it's export net east to China and the countries of South-East Asia, with plans afoot to also expand soybean production too in the region.

Kazakhstan and China also plan to launch grain terminal at their border, to help aid grain exports to the East.

Having already teamed up with Russia and Belarus in an attempt to fast-track accession into the WTO, Kazakhstan is also keen to form a Black Sea grain pool with Russia and Ukraine that would give it more direct access to some of its neighbours export facilities.

EU Wheat Closing Comments

EU wheat closed lower for the fifth straight session Monday with Paris March milling wheat ending down EUR1.25 at EUR126.00/tonne, and London March feed wheat closing down GBP1.75 at GBP102.25/tonne.

There were no clues from the American markets, which were shut for the Martin Luther King holiday. Nevertheless, EU wheat continued to grind lower, still reeling from the aftermath of last Tuesday's USDA numbers.

A stronger sterling did little to aid London wheat's cause, holding above 1.63 against the dollar, a level which it had been struggling to hold of late.

The emergence of Kazakhstan as a new force to be reckoned with on the wheat export front seems to have been one of the main drivers today.

Agrimoney.com report that the former Soviet state has agreed a deal via trading house Venus International to supply Egypt with up to 1.5 million tonnes of wheat this year.

With last springs quality spat with Russia now seemingly sorted, and no sign of a resolution to last weeks discussions with France over recent stringent changes to import rules, Egypt appear to be setting out their stall to buy most of their wheat requirements from the Black Sea in 2010.

When the world's largest wheat buyer doesn't want to know you, it speaks volumes. Of course Russia and Kazakhstan won't have a bumper harvest every year, but they've now had two on the trot. That's more than enough to service Egypt's needs at least through the first half of 2010.

Twelve Months Ago Today

Shares in Royal Bank of Scotland tumble by almost two-thirds after it announced a loss of over 20 billion pounds, the biggest loss in British corporate history.

Alastair Darling confirms another GBP100 billion rescue package for UK banks.

The news sends the pound crashing below 1.40 against the dollar and below 1.08 against the euro.

Crude oil falls to USD33/barrel.

Paris March milling wheat closed at EUR151/tonne, whilst London May feed wheat ends at GBP118.50/tonne.

Totally Unsubstantiated Gossip

Every months delay to the opening of the Ensus bioethanol refinery on Teesside, starting from December 12th 2009, costs the engineering and construction group behind the project a cool five million pounds.

At least that's according to this website: here

That might be more profitable than opening!

EU Soymeal Prices

Basis CIF Rotterdam/Amsterdam in USD/tonne unless otherwise stated:

Brazil pellets 48%

Afloat 426,00
Jan 426,00
Feb 426,00
March 397,00
Apr 361,00
May/Sep 343,00

Argentine pellets 44/45%

Afloat 405,00
Jan 405,00
Jan/March unq
May/Sep 337,00

Dutch Hipro 49% profat FOB

Jan 435,00
Feb 435,00
March 434,00
Apr 414,00
May/Jul 366,00
May/Oct 368,00

Argentine Hipro 49% profat

Afloat 423,00
Jan 423,00
Feb 423,00
March 407,00
Apr 372,00
May/Sep 353,00
Oct/Dec 359,00

EU Rapemeal Prices

Basis FOB Lower Rhine in euros/tonne:

Feb 175,00
Feb/Apr 165,00
May/1st h Jly 129,00
Aug/Oct 10 123,00
Nov/Jan 11 131,00
Nov/Apr 11 133,00

Martin Luther King Day

Yup, it's another public holiday the other side of the pond, so there's no Chicago market today. It's Martin Luther King's birthday today, well not actually today as such as he was born on Jan 15th, but it's a Monday pretty close to his birthday, so that's enough for an extra day off.

Next month the septics have another day off for Washington's birthday. What's next? Michael Jackson Day, where everybody dons white gloves and moonwalks backwards into the kids bedrooms?

We could have a Da Day Dat Di & Dodi Died Day.

Wasn't that a song by the Police? Talking of Sting, I hear that he's heavily into that tantric sex malarkey. Apparently he can go at it for five or six hours without, erm, "going off" shall we say. That's pretty impressive, I mean Mrs Nogger#1 was no oil painting, but even so, five or six hours? Phew. I think about four and a half was my personal best. Not that I was timing myself you understand, but we did used to have a digital clock on the microwave.