EU Wheat Declines On Hangover From USDA Data

10/02/12 -- EU grains finished lower with front month Mar 12 London wheat falling GBP2.25/tonne to GBP165.00/tonne and Mar 12 Paris wheat down EUR2.50/tonne to EUR210.50/tonne.

The hangover from yesterday's bearish USDA data continues.

On the week as a whole London wheat was down GBP2.45/tonne and Paris wheat fell EUR6.75/tonne. At the end of the day, these are still very impressive prices considering that we have the largest projected wheat ending stocks that the world has ever known.

Also the constant nagging pain that is Greece means that the threat of a disorderly default simply refuses to go away. Five cabinet ministers there resigned today shortly after finance ministers in fellow Eurozone countries dismissed their austerity deal as incomplete.

Greece also still needs to agree a deal with private creditors to take a haircut before it can secure the next round of bail-out funds.

Late breaking news Friday was that S&P downgraded no less than 34 Italian banks. It would seem that the European debt crisis is getting worse not better.

There are also now concerns emerging that export dependant China's economic growth simply cannot continue at recent rates given the seemingly impending demise of Europe.

Ukraine said that it's marketing year-to-date grain exports are up 63% on last season at 11.76 MMT, of which 6.75 MMT is corn, 2.96 MMT wheat and 1.90 MMT barley.

Brussels issued 247 TMT of soft wheat export licences this past week, it says it all that this fairly modest amount is the best total in nine weeks.

Early Call On Chicago

10/02/12 -- Apologies for the lack of blogging activity today, I've been busy with other things. The fallout from last night continues I see, with the overnight grains finishing lower across the board. Beans ended 8-10 cents lower with wheat down 6-8 cents and corn 3-4 cents weaker.

Crude is down USD2/barrel, which won't help the grains sector this afternoon. Neither will the fanfare heralded Greek "deal" on austerity that fellow EU member countries are lining up to say is toilet paper.

Chinese economic data this week has been poor, the worst since the last financial crisis in fact, to add a bit more uncertainty concerning the world recovery - if there really is one.

Britain feels like it's in a recession to me. If GBP275 billion hasn't done the trick what difference is another GBP50 billion going to make?

The dollar is higher on a touch of "flight to safety" which won't help US exports too much, and is also bearish grains.

The word on the streets is that US ethanol margins suck, which would appear to be confirmed by a slump in production last week. The loss of the blenders' tax credit now appears to be biting, although the USDA held it's corn for ethanol demand steady at 5 billion bushels yesterday.

The USDA have confirmed the sale of 120,000 MT of soybean to China and 240,000 MT of corn to Egypt, but that's as bullish as it gets today.

I see red. Early calls for this afternoon's CBOT session are: beans down 8-10 cents, wheat down 6-8 cents, corn down 2-4 cents. This will be an interesting close tonight, will our old bottom picking mates the funds pile in looking to bag a pre-weekend bargain? If they fancy getting out then there may not anyone else looking to step in and we could see some significant losses by the close of play.

USDA Report Sends Chicago Lower

09/02/12 -- Soybeans: Mar 12 Soybeans closed at USD12.27 1/2, down 4 cents; Nov 12 Soybeans closed at USD12.38 1/2, down 1 1/2 cents; Mar 12 Soybean Meal closed at USD321.00, down USD0.70; Mar 12 Soybean Oil closed at 52.54, down 4 points. The long awaited USDA numbers came in more or less in line withe expectations for beans. Argentina's soybean production was cut 2.5 MMT to 48.5 MMT and Brazil's output was reduced 2 MMT to 72.0 MMT. World ending stocks were decreased to 60.28 MMT from 63.43 MMT and US carryout was pegged at 275 million bushels, exactly what the trade forecast. Weekly export sales of 603,200 MT for 2011/12 and 55,000 MT for delivery in 2012/13 were also bang in line with expectations of 550-750 TMT. Even so, bearish wheat data dragged the market lower.

Corn: Mar 12 Corn closed at USD6.37, down 5 1/2 cents; Dec 12 Corn closed at USD5.68, down 5 1/2 cents. As with beans corn was dragged lower by wheat despite the USDA coming up with pretty much what the trade expected. Argentine corn output was lowered 4.0 MMT to 22.0 MMT, although it may have been a slightly bearish surprise to see Brazilian production left unchanged at 61.0 MMT. World corn ending stocks were dropped to 125.35 MMT from 128.14 MMT. US corn ending stocks were reduced by marginally less than anticipated to 801 million. Weekly ethanol production slowed to 923,000 but it's too early to say that this is the start of a trend.

Wheat: Mar 12 CBOT Wheat closed at USD6.46, down 14 3/4 cents; Mar 12 KCBT Wheat closed at USD6.92, down 18 cents; Mar 12 MGEX Wheat closed at USD8.31 3/4, down 9 3/4 cents. The stand out number of the whole day was the USDA raising world wheat ending stocks to an all-time high 213.1 MMT. That beat the previous record of 210.4 MMT set in 1999/2000. US exports were raised half a million to 25.5 MMT, Argentina's were increased by a similar amount, with Russia's gaining by 1 MMT. India saw it's production raised to a record 86.9 MMT. Global consumption was reduced this month to 680.5 MMT and now falls 12.4 MMT lower than world production.

EU Wheat Mostly Lower As Trade Digests USDA Numbers

09/02/12 -- EU grains finished mixed but mostly lower with Mar 12 London wheat ending up GBP0.25/tonne to GBP167.25/tonne and Mar 12 Paris wheat down EUR3.00/tonne to EUR213.00/tonne.

The long awaited USDA production and stocks numbers were called neutral by many, despite the fact that they gave us the largest world wheat ending stocks of all time.

Coming in at 213.1 MMT that was 3 MMT up on last month and comfortably eclipses the previous record of 210.4 MMT set in the 1999/2000 season. As an interesting aside on this day in that particular production year front month London wheat was trading at GBP71/tonne. How times have changed, we've got more wheat in the world than we did then yet prices are almost 2 1/2 times higher!

The other pertinent bits of the USDA report include an increase in Russia's wheat exports this season by 1 MMT matched by a similar reduction in those from Ukraine. Overall world wheat production was increased 1.3 MMT and world consumption reduced by 1 MMT.

World corn production fell by 4 MMT courtesy of Argentina, a little surprisingly there was no reduction for Brazil.

Elsewhere there were reports of "under the counter" wheat business being done with Iran, despite international sanctions. They were said to have bought 200,000 MT each of Brazilian & German wheat in the past few days, with rumours suggest they are paying with gold bullion, oil & yen.

Iraq were also said today to have bought 100,000 MT of Australian wheat.

The Russian Ag Minister said that plantings for the 2012 grain harvest will increase 2.4%, and that winterkill of 6% is below average, adding that 2012 output "will exceed" 90 MMT.

The Bank of England decided to increase QE by a further GBP50 billion, that initially boosted the pound although by the close of play sterling was back down to the 1.19 mark against the euro and little more than 1.58 versus the US dollar.

The Early Call On Chicago

09/02/12 -- The overnight grains were quiet ahead of the USDA report with corn ending 2-4 cents weaker, wheat mostly 1-2 cents lower and beans 1-2 cents firmer. Crude is around three quarters of a dollar higher.

The USDA appears to have already thrown most of its curve balls, as today's reports didn't contain any overly dramatic surprises.

Catching the eye though was an increase in world wheat ending stocks to a new all time high of 213.1 MMT, 3 MMT up on last month.

For wheat, US exports were raised half a million to 25.5 MMT, Argentina's were increased by a similar amount, with Russia's gaining by 1 MMT. Ukraine's were cut by a million and Canada's reduced by a half million.

Overall world wheat production was increased 1.3 MMT and world consumption reduced by 1 MMT.

World corn production fell 4 MMT courtesy of Argentina. There was no reduction for Brazil. Global corn stocks fell to 125.3 MMT, the lowest since 2006/07.

World soybean production was reduced 5.5 MMT, largely courtesy of Brazil (-2 MMT), Argentina (-2.5 MMT) and Paraguay (-1.2 MMT). Global consumption was down 2.2 MMT, and world stocks cut by 2.2 MMT.

Weekly export sales for wheat came in at a marketing-year high of 707,900 MT with unknown taking the lion's share of that (183,000 MT). That beat expectations of 450-700 TMT. Actual shipments were 464,000 MT.

Corn export sales of 694,100 MT for 2011/12 and 63,700 MT for delivery in 2012/13 were below expectations of 800 TMT-1.3 MMT.

Soybean sales were 603,200 MT for 2011/12 and 55,000 MT for delivery in 2012/13 compared to expectations of 55-750 TMT.

Overall the data is being called neutral, although how the highest wheat stocks in history can be that is beyond me. As the market was expecting a supportive/bullish slant rather then a neutral to slightly negative one we could see prices work lower than the initial opening calls which are: corn and wheat down 2-3 cents, soybeans down 2-4 cents.

The USDA Numbers

09/02/12 -- The USDA's eagerly awaited raft of important numbers are out and for once are mostly in line with trade expectations.

Catching my eye however is world wheat ending stocks increasing by 3 MMT to an all time high 213.1 MMT whereas a drop of around 1 MMT had been expected.

Brazilian corn production wasn't dropped as expected but left unchanged at 61.0 MMT, Argy corn output was lowered to 22.0 MMT, roughly in line with trade guesses.

Argy soybean production was cut 2.5 MMT to 48.5 MMT, Brazil's ouput was reduced 2 MMT to 72.0 MMT.

US soybean ending stocks came in as per expectations at 275 million bushels, wheat stocks were cut a bit more than expected to 845 million due to increased US exports. Corn ending stocks were reduced by a little less than anticipated to 801 million.

Interesting Little Pre-USDA Snippet

09/02/12 -- And a great excuse to get the Brazilian arses out of the bottom drawer again. The government-backed CONAB have today increased their Brazilian corn production estimate from 59.2 MMT to 60.8 MMT, I hear. That's within 0.2 MMT of what the USDA said in January, and besides our chums in Washington the highest number on the table.

The reason for the increase seems to be optimism surrounding winter corn production, which is just starting to go into the ground now, right behind summer harvesting of corn and/or soybeans.

In contrast they've trimmed their soybean estimate from 71.8 MMT to 69.2 MMT, almost 5 MMT below the USDA's January estimate and one of the lowest numbers around at the moment.

EU Rapemeal Prices

09/02/12 -- Rapemeal prices on the continent are a bit lower today in line with modest losses in CBOT soymeal last night and again this morning.

Guide prices, basis FOB Lower Rhine in euros/metric tonne, with change from previous day:


The Morning Vibe

09/02/12 -- The overnight grains are flat to slightly firmer in what looks likely to be a subdued session ahead of the eagerly awaited USDA numbers this afternoon.

I've given up trying to predict what estimates the USDA will come out with, but there is certainly a possibility that the numbers will surprise.

In the February report last year, out of interest, they slashed US corn ending stocks by far more than the trade had been anticipating (to 675 million bushels) driving front month March 11 up above USD7/bushel for the first time in more than 30 months.

US corn stocks to use then came in at 5%, the lowest since 1936/37. World corn ending stocks were also cut to 122.5 MMT - a 37-year low.

Last month they did the diametric opposite, placing 2011/12 US corn ending stocks around 100 million bushels higher than expected at 846 million and the market closed limit down.

Maybe today's shock will be everything coming in bang on expectations! We can only wait and see. It's fair to say that by now nobody underestimates their capacity to surprise.

Also not surprising us this morning is news that the Greek PM and his coalition buddies didn't manage to thrash out an agreement on austerity acceptable to all sides. So that particular cheese and pickle laden meeting table broke up, only for our sandwich guzzling hero, Lucas Papademos, to go straight into another meeting with with officials from the "troika" EU/ECB and IMF. As the troika are more important there were probably a few prawns on offer at this one, almost certainly some thinly sliced ham and maybe even a bit of pork pie and a few crisps.

EUR600 million worth of pension cuts seems to be the main sticking point. There are some reports this morning that the troika has given them another 15 days to find a way of making these cuts elsewhere. And so the whole sorry charade stumbles on.

Chicago Quiet Ahead Of USDA Numbers

08/02/12 -- Soybeans: Mar 12 Soybeans closed at USD12.31 1/2, down 1/2 cent; Nov 12 Soybeans closed at USD12.40, down 1 1/4 cents; Mar 12 Soybean Meal closed at USD321.70, down USD3.70; Mar 12 Soybean Oil closed at 52.58, up 41 points. There was little change ahead of tomorrow's important USDA numbers, it seems that most have already positioned themselves how they want to be and are happy to sit tight. Recent heavy rains in Argentina had the Rosario Grain Exchange saying that "the prospects for the soy crop have significantly improved." More rain in in the forecast for tonight and tomorrow. Estimates for tomorrow's weekly export sales report are 550 and 750 TMT.

Corn: Mar 12 Corn closed at USD6.42 1/2, up 1/4 cent; Dec 12 Corn closed at USD5.73 1/2, down 1 3/4 cents. Funds were said to have sold 3,000 contracts ahead of tomorrow's reports which are expected to show reduced US ending stocks and sharp losses in production in South America. Reports of good soaking rains for Argentina are not widely expected to add too much extra yield to corn where losses are already said to be locked in. It should be of some benefit to later planted corn though. Weekly export sales for tomorrow are expected to be in the region of 800 and 1,300 thousand MT.

Wheat: Mar 12 CBOT Wheat closed at USD6.60 3/4, down 1 1/2 cents; Mar 12 KCBT Wheat closed at USD7.10, down 2 cents; Mar 12 MGEX Wheat closed at USD8.41 1/2, up 3 cents. Tomorrow's USDA report is not thought likely to throw up too many surprises for wheat, with US ending stocks seen reduced slightly from last month's 870 million bushels. World carryout is also forecast to decline a little from 210 MMT. Tomorrow's weekly export sales report will be of interest, with the trade predicting sales of 450 and 700 thousand MT. Who bought will merit a look with reports of recent sales to Spain. Weekly shipments will also catch my eye as these have been floundering in the past 3-4 months.

EU Wheat: Have Recent Rises Been Overdone?

08/02/12 -- EU grains finish lower with Mar 12 London wheat down GBP2.50/tonne to GBP167.00/tonne and Mar 12 Paris wheat slumping EUR5.50/tonne to EUR216.00/tonne.

Consolidation after recent rises was perhaps a sensible thing ahead of tomorrow's USDA reports.

There's also a feeling that EU wheat may have got a little ahead of itself, backed up by talk that Spain has bought 200,000 MT of US wheat in recent weeks. That's business that Britain and France would normally expect to get a slice of.

Since the mid-December lows Paris wheat had increased in price by over 23.5%, with London wheat rising 20% as opposed to US wheat "only" going up by 14% - based on yesterday's closing levels.

Certainly weekly soft wheat export licences issued by Brussels have been lagging during this period. We haven't seen one week with sales above 250,000 MT since the market started to rise, and in fact only two out of the past six have scraped above the 200,000 MT mark.

The Siberian conditions across Europe are restricting grain movements, which may provide some small window of opportunity for one or two countries to make sales for immediate shipment to where wheat is needed. Domestic consumer demand in the UK however is poor at these levels.

The Rosario Grain Exchange said today that recent rains have greatly improved chances for soybean production there. There were heavy falls of up to 3.5 inches overnight and there's more in the forecast for tomorrow.

Early Call On Chicago

08/02/12 -- The overnight grains finished with beans around 6-8 cents higher, corn up 3-5 cents and wheat around 3 cents firmer. Crude is more than a dollar higher on nervousness over Iran and Syria.

Soybeans closed at their best levels for a front month since mid-October in overnight trade.

Maybe nobody heard that Argentina got 0.75-3.5 inches of rain overnight, with more in the forecast for tomorrow. The National Weather Service has issued a heavy rain alert for central and northern Entre Rios, Santa Fe and Cordoba.

The trade is relying on the USDA coming up with some bullish impetus for the sector tomorrow. What could possibly go wrong?

US corn ending stocks are seen at around 800 million bushels vs 846 million last month. Soybean stocks at 270 million vs 275 million last time and wheat stocks are forecast at around 865 million from 870 million in January.

Brazil and Argentina will get cuts to their corn and soybean production forecasts of a combined 5.0 MMT and 5.5 MMT respectively, according to the average trade guess.

There are rumours of US wheat undercutting EU origin into Spain. There is also talk that a US sale to "unknown" last week is in fact destined for Egypt.

Severe weather continues to disrupt grain movements out of the Black Sea. It is unclear if some of these rumoured "sales" are really just switches of origin due to short-term logistical problems in Russia and Ukraine.

Tunisia is said to have bought 50,000 MT of optional origin wheat. Taiwan is tendering to buy US wheat and Oman has bought 50,000 MT of Kazakh wheat.

Early calls for this afternoon's final day session prior to tomorrow's USDA report: beans up 5-7 cents, wheat up 2-4 cents, corn up 3-5 cents.

EU Rapemeal Prices

08/02/12 -- Rapemeal prices on the continent are lower on ideas that recent rises have been overdone and a weaker Chicago soymeal market last night.

Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:


The Morning Rant

08/02/12 -- There's no deal on Greek austerity measures yet, but guess what, there's another meeting scheduled for later today. Greek protesters set fire to a German flag outside parliament yesterday I gather, clearly unhappy at what they see as foreign interference in their internal affairs.

Caught between a rock and a hard place the government there are desperate to push the new austerity measures through parliament to get one more big payday from the EU/ECB/IMF. The thing is, you, I and everybody else knows that this is a bit like lending money to a drug addict who is going to use half the money to pay off his dealer who is threatening to kill him, snort the rest of it and then want more cash next week before the first repayment is even due.

The euro is a bit steadier, reassured by reports that a deal is "very close".

This isn't even the deal with Greece's private bondholders either, that's different deal which is still on the back burner despite being called "a formality" the week before last.

In other news crude oil is up on heightened tensions in the Middle East as protesters in Tehran "stormed" British Embassy compounds. Suggestions that military intervention may be needed to halt the escalating violence in Syria is also supporting crude.

There's not much action in the grain markets as we all sit tight waiting for the USDA's next wild stab in the dark on Thursday.

Chicago Quiet Ahead Of Thursday's USDA Reports

07/02/12 -- Soybeans: Mar 12 Soybeans closed at USD12.32, down 1 cent; Nov 12 Soybeans closed at USD12.41 1/4, up 2 1/4 cents; Mar 12 Soybean Meal closed at USD325.40, down USD2.10; Mar 12 Soybean Oil closed at 52.17, up 1 point. This was a pretty featureless session ahead of Thursday's USDA report in which the trade is expecting US ending stocks to come in around the 270 million bushel mark, some 5 million down on last month. Brazil's soybean crop is being estimated around the 71 MMT level by most, 3 MMT below the USDA's January number and the Argentine crop at around 48 MMT (50.5 MMT last month).

Corn: Mar 12 Corn closed at USD6.42 1/4, down 2 cents; Dec 12 Corn closed at USD5.75 1/4, down 6 cents. New crop lost ground on old crop on talk that US farmers will plant a modern day record corn area this spring. The USDA is seen cutting US corn carryout by around 50 million bushels on Thursday from last month's 846 million. Reductions in corn production in South America are also highly likely with the trade looking at Argentine output of around 22.5 MMT (from 26.0 MMT in January) and a Brazilian crop of around 59.5 MMT (from 61 MMT last month).

Wheat: Mar 12 CBOT Wheat closed at USD6.62 1/4, down 6 1/4 cents; Mar 12 KCBT Wheat closed at USD7.12, down 7 cents; Mar 12 MGEX Wheat closed at USD8.38 1/2, down 2 1/2 cents. Wheat takes a back seat on Thursday, with only minor changes expected for it from the USDA. Funds have cut the size of their short in Chicago wheat in recent weeks. European temperatures are seen moderating, but premature talk of winterkill still exists. Tunisia and Algeria are in the market for wheat.

EU Wheat Closing Comments

07/02/12 -- EU grains finished mixed with front month Mar 12 London wheat up GBP1.35/tonne to GBP169.50/tonne and Mar 12 Paris wheat down EUR0.75/tonne to EUR221.50/tonne.

Paris wheat was mostly down on ideas that recent gains have been overdone, although it closed well off the lows. Consumers are well covered through to the end of March, export interest is minimal and with London futures prices pushing GBP170 paper is the only buyer.

"The volume of wheat which has hit the market since prices broke through the £150 mark ex farm has tipped the market to over supplied, with grain now having to be carried off farm into stores to tender on the futures market," said one merchant.

"Traditional spreads between farm grain and the futures have widened as a consequence with a wide North/South price divide appearing," he added.

Extremely cold conditions in Europe seem to be moderating slightly. Black Sea export activity has been hampered by freezing temperatures.

Rusagrotrans say that Russian grain exports in January were less than half those in December at 1.36 MMT. They forecast February exports at 1.6-1.7 MMT with March shipments seen recovering to 2.4-2.5 MMT.

Based on those numbers exports will be around 23.6 MMT by the end of March. They think that the full Jul11 to Jun12 marketing year potential for grain exports is 27-28 MMT, leaving around 1.5 MMT/month left to ship in the Apr/Jun closing quarter of the season.

The trade is expecting a bullish WASDE report on Thursday, but will not be underestimating the USDA's capacity to spring a surprise. That maybe encouraged a bit of book squaring and profit-taking on Paris wheat today.

Looking further ahead, a Bloomberg survey suggests that US farmers to plant the largest area of corn, soybeans and wheat for the 2012 harvest since 1984 at 226.9 million acres.

A Reuters poll is indicating US corn plantings at 94.2 million acres, up 2.3 million from 2011. Not quite as high as Informa's recent estimate of 94.75 million, but still above the current post war record high of 93.5 million set in 2007.

Let's Pray This Doesn't Get Out Of Hand

07/02/12 -- My butcher mate tells me that there's a real panic going round the livestock markets at the moment. The culprit is the Schmallenberg virus. That might sound like a former German heavyweight champion of the world to you, but in fact it is a horrible midge spread disease that up until now had only been found on a few sheep farms in the south east.

Worryingly the Farmers' Guardian today report that the disease has now been found in cattle too, taking the number of confirmed cases up from 11 last week to 29 today. Doubly worrying is that they say that "the number of confirmed cases could just be the tip of the iceberg" as the disease generally only shows itself during lambing or calving.

For more info see here: Schmallenberg found in cattle on Sussex farm

Early Call On Chicago

07/02/12 -- The overnight grains are lower with wheat down around 7 cents, corn down 4-5 cents and beans falling 3-4 cents. Crude is a dollar easier, trading below USD96/barrel for the first time in seven weeks on ample US stocks and sluggish demand from a stuttering global economy.

German Chancellor Angela Merkel says that time is running out for Greece to resolve and implement it's austerity issues.

Rusagrotrans say that Russian grain exports were 19.5 MMT to the end of January and are likely to total 1.6-1.7 MMT this month, bringing the 2011/12 year to date total to a little over 21 MMT at the end of February. They also say that the country could export 27-28 MMT this season (Jul/Jun).

Kazakhstan's Agricultre Minister says that the landlocked nation's grain exports are now running at around 1.2 MMT/month.

A Bloomberg survey suggests that high prices will encourage US farmers to plant the largest area of corn, soybeans and wheat for the 2012 harvest since 1984 at 226.9 million acres.

PotashCorp recently forecast that 7m acres of land will exit the US Conservation Reserve Program this year and "with most of that land expected to be planted to wheat." Informa meanwhile are predicting the largest US corn acreage since WWII.

There's some rain in the forecast for Argentina tomorrow, before a bloody good soaking arrives on Thursday, according to the GFS model.

After the recent rally it looks like we are going to see some money taken off the table today ahead of the upcoming USDA WASDE report on Thursday.

Early calls for this afternoon's CBOT session: corn down 3-4 cents, beans down 3-5 cents, wheat down 6-8 cents.

Another Day, Another Meeting

07/02/12 -- It's been running longer than the Mousetrap this particular saga, but the Greek tragedy rumbles on. The only ones doing well out of this particular farce must be the people who supply the tea and sandwiches for these meetings, they must be rolling in it. I bet there's not a prawn left to be had in Athens.

And why do prawn sandwiches always go first when you're in a meeting? It's because they're the most expensive thing on offer isn't it? Happens the world over that does. First the prawns, then the meat, and finally the stupid poxy egg or cream cheese and chive concoction. They've been trying to get shot of the same cream cheese with chive butty at the last half dozen meetings I've been to. You've probably been offered it yourself.

"No thanks, I'm full," you say, even though if there were any prawn sarnies left on offer you'd be filling your fat face 'til the cows came home wouldn't you. But of course the "mixed tray" only had two prawn butties on it didn't it. There might be one or two passable chicken or ham salad on offer if you're quick, but otherwise the tray is awash with cream cheese and chives and some cacky egg thing that looks like baby food.

Once the cheese and chives have been swept into the bin you can feast on crisps and cans of pop. Maybe a cup of tea and a few biscuits, chocolate hobnobs if you're really lucky, but a plain old digestive will suffice for most occasions I find.

Unless you're in Rotterdam. There it is the norm in my experience to have a glass fronted fridge full of beer in the board room. They know how to have a meeting the Dutch. Loads of beer, followed by an adjournment for loads of beer, followed by a visit to a club for more beer. And not any old club, we're not talking the flat cap, a whippet and a pint of bitter for £1.30 sort of a club. We're talking semi naked page 3 girls eager to pull you a large one. And after they've finished pulling it for you they whip the top off your froth with a special little thing that they have. I'm telling you, I've seen it with me own eyes.

All meetings should be in Rotterdam, that's where the Greeks are going wrong.

EU Rapemeal Prices

07/02/12 -- Rapemeal prices on the continent are a bit lower in line with modest losses in CBOT soymeal last night and again this morning.

Guide prices, basis FOB Lower Rhine in euros/metric tonne, with change from previous day:


Chicago Close - Monday

06/02/12 -- Soybeans: Mar 12 Soybeans closed at USD12.33, up 1/2 cent; Mar 12 Soybean Meal closed at USD327.50, down USD1.10; Mar 12 Soybean Oil is at 52.16, up 51 points. Beans just about managed to close higher for the fifth session in a row. Weekly export inspections were 37.3 million bushels. Year to date shipments lag last year's pace by some considerable margin. The USDA is seen pegging 2011/12 US soybean ending stocks at 269 million bushels on Thursday compared with 275 million last month.

Corn: Mar 12 Corn closed at USD6.44 1/4, down 1/4 cent; Dec 12 Corn closed at USD5.81 1/4, down 1/4 cent. Weekly export inspections were robust at 39.4 million bushels, meaning that year to date shipments are in line with a last season despite the USDA forecasting a 10% decline year on year. The USDA is expected to cut 2011/12 US corn ending stocks from 846 million bushels to 797 million on Thursday. Brazil & Argentina should also see cuts to their production potential.

Wheat: Mar 12 CBOT Wheat closed at USD6.68 1/2, up 7 3/4 cents; Mar 12 KCBT Wheat closed at USD7.19, up 6 1/4 cents; Mar 12 MGEX Wheat closed at USD8.41, up 2 1/2 cents. Weekly export inspections of 14.5 million bushels were less than half year ago levels. Despite that the size of fund shorts in Chicago wheat continues to support the market. Talk of potential crop losses in the Black Sea and Europe also underpinned the market today. The USDA are not expected to make any dramatic changes to US wheat ending stocks on Thursday.

EU Wheat Begins Week In The Ascendancy

06/02/12 -- EU grains began the start of the week higher with Mar 12 London wheat ending up GBP0.70/tonne to GBP168.15/tonne and Mar 12 Paris wheat rising EUR5.00/tonne to EUR222.25/tonne.

Paris wheat garnered particular support from the weak euro, against which the pound rose close to 1.21 after weekend talks between the Greek government and it's bondholders yet again proved to be another false dawn. It was June 10th 2011 when Paris wheat last closed higher than this.

A report on Reuters suggests that 10-15% of EU wheat and 15-20% of it's rapeseed crop had suffered some winterkill damage at the hands of the recent Arctic blast, without saying where these figures came from.

The words "some winterkill damage" don't necessarily mean "killed" but it won't take long for that to get misreported. It's far too early to start writing off the crop just yet.

Crop losses are certain however in Ukraine, although the dry autumn is more likely to be responsible for that than the recent cold spell. From September 1 to mid-December only 50 mm of precipitation fell compared to around 140 millimeters normally, according to Martell Crop Projections.

Crops in central Ukraine are currently protected by 50 cm of snow, according to Agritel. Closer to the Black Sea frost may have damaged some rapeseed and barley, but it's too early to tell the extent of any such damage, they add.

This will mean a reduced wheat crop in 2012, with some estimates suggesting that production could as much as halve compared with 22 MMT last year. The spin-off is that corn plantings in the spring though will undoubtedly be sharply higher, a decent growing season would see a record corn crop harvested in Ukraine for the second year in a row.

The gap between Nov 12 and Nov 13 London wheat has narrowed to show next year's crop now running at just a GBP0.75/tonne discount to 2012's.

The trade is fancying a bullish slant to Thursday's upcoming USDA reports - always a bad sign and one that would make a bearish theme a double blow.

Trying to second guess the USDA is a bit like attempting to explain the offside rule and the workings of the internal combustion engine to a woman me Grandad always used to say. He ran over and killed me Gran when she strayed offside during a game of footie in the park when I was six. A hard man, but fair.

Early Call On Chicago

06/02/12 -- The overnight grains ended mixed with beans up 5 cents or so, wheat down 1-3 cents and corn up a fraction to 1 1/2 cents lower. Crude is a dollar or so easier on concerns that a Greek debt deal is never going to get sorted, and the implications for the global economy that that entails.

The IMF warned today that Chinese growth could be cut in half if the European debt crisis gets any worse.

There's a distinct lack of fresh concrete fundamental news about, with the market already looking set to drift along impatiently waiting for the USDA reports due out on Thursday.

The main issues being currently discussed are difficult to quantify at this stage.

It's too early to say how much, if any, damage has been done to winter crops across Europe, Russia and Ukraine by the recent cold snap, although certainly it seems that 20-30% of Ukraine's area will need replanting once the thaw sets in.

There are also voices being raised over a dry, mild and snow free winter for much of the US corn belt ahead of spring planting.

Meanwhile there are plenty of weather issues in South America too, although decent rains are in the forecast for Argentina again midweek.

It looks certain that corn & soybean production estimates will be cut for both Brazil and Argentina on Thursday, and probably corn output in Mexico too.

Celeres have cut their Brazilian corn crop estimate from 62.0 MMT to 60.2 MMT, and say that the harvest is around 8% complete.

Rains may have come just in the nick of time for Argentina's soybean crop with the Ministry of Agriculture there placing good/excellent conditions at 64%, an 8 point increase in a week. Unfortunately only 35% of the corn crop gets the same thumbs up.

China says that it will import 24% fewer soybeans in February, despite rumours that they have been active buyers of US beans this past week since returning from their New Year celebrations.

Russia has dismissed the idea of export restrictions for now, raised it's 2011 grain production estimate and increased its self-imposed maximum limit to 27 MMT for 2011/12.

Early calls for this afternoon's CBOT session: beans up 3-5 cents, wheat & corn mixed, up 2 cents to down 2 cents.

A Greek Earn And Other Stuff

06/02/12 -- The answer to the old Morecambe and Wise joke of "What's a Greek Urn" is not "about ten bob a week" but actually just under EUR12,000/year in 2010, according to Eurostat.

It's not surprising then that the average Stavros on the street is resisting the proposed 25% reduction in the minimum wage and tougher public sector spending and job cuts.

Crude is down more than a dollar on worries that a deal is never going to be struck with it's private bondholders, yet the grain market seems strangely resilient to the chance of a Greek-led European meltdown.

It's frequently at times like this that the USDA take it upon themselves to throw a spanner in the works. So what, I wonder, are they going to come up with this time?

Lower soybean and corn production in South America are surely a given? Last month they gave us bean output of 50.5 MMT in Argentina and 74.0 MMT in Brazil. Trade estimates elsewhere are now centred around 48 MMT and 71-72 MMT respectively.

For corn they gave us 26.0 MMT in Argentina and 61.0 MMT in Brazil. The trade reckons more like 21-22 MMT and 58-59 MMT respectively.

What they may come up with for wheat is being given less consideration. It is possible that they could increase world production, and therefore ending stocks, courtesy of Russia upping their official grain crop estimate on Friday. Anything but a very modest increase in world carryout from last month's 210 MMT estimate would probably therefore beat the 1999/2000 all-time high of 210.335 MMT.

Yet, despite the potential for record stocks, wheat prices are on the rise.

It is of course also entirely possible that they may reduce wheat ending stocks by virtue of increased consumption due to falling corn production in South America.

US wheat exports may also get lowered as shipments consistently fall behind the level needed to hit 25 MMT in 2011/12. US soybean exports are running well behind last year's levels so there is potential for those to take a cut too, thereby increasing US stocks at the end of the season.

Like a Christmas Day episode of EastEnders you can sense that something dramatic is going to happen on Thursday, but you can never be sure who is going to get stiffed under the arches.

On the day of last month's report corn closed down the daily 40 cent limit plus a further 12 cents the next day after the USDA increased 2011 yields (when a reduction was expected) thereby raising US ending stocks by around 100 million bushels to 846 million.

EU Rapemeal Prices

06/02/12 -- Rapemeal prices on the continent are sharply higher on the back of gains in Chicago soymeal on Friday. There are also concerns over damage potential to rapeseed crops in Ukraine, Poland, France and Germany caused by the recent extreme cold spell.

Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:


The Morning Vibe

06/02/12 -- The overnight grains are narrowly mixed with beans 1-2 cents firmer and wheat & corn 1-2 cents lower. Crude is down more than a dollar.

London wheat has yet to trade, but Paris wheat is looking to extend it's winning run with front month March currently up EUR1.75/tonne tot EUR219.00/tonne.

It's all talk and no action from Athens after weekend meetings between Greece and it's creditors yet again failed to reach an accord. The euro is weaker on the back of that news which may help Paris wheat today.

Bristol seem to have the right idea, they're printing their own money, according to this report on the BBC: The Bristol Pound

Russia poured cold water on suggestions that grain export restrictions are on the cards this season late on Friday, they also increased the size of the 2011 harvest to 93.9 MMT.

We could be in for a quiet few days ahead of Thursday's Feb WASDE report from the USDA. Perhaps we will see some light profit-taking on Chicago ahead of that?

Crops in central Ukraine are protected from frigid cold there by 50 cm of snow, according to Agritel. Closer to the Black Sea frost may have damaged some rapeseed and barley, but it's too early to tell the extent of any such damage, they add.

We had around 4 inches of snow here in North Yorks on Saturday, which started falling bang on cue at around 1.30pm and lasted until around 10pm. Nogger's dog loves snow.