Straights Direct – Traders Notebook

The U.S. dollar responded to the European Central Bank’s move to Quantitative Easing by storming higher Thursday. This put pressure on most commodities, including grains.

Wednesday saw low trading volume in grains, even after USDA said China bought back the soybeans they had cancelled on Tuesday. Soybeans were a little higher while traders wait to see if adequate rains will materialize in central Brazil later this week.

March soybeans closed lower Tuesday after USDA reported China cancelled another sale, this time for 6.4 million bushels of soybeans. Corn and wheat started the day lower, but finished higher with light volume revealing a lack of motivated selling interest at these lower prices.

Prices are easier again today for Soyameal & Rapemeal other commodities are unchanged and cereal based straights are a tad firmer. We are actively trading into 2016

We are seeing £5 to £7.00 per tonne falls on UK Soya meal today. Rape meal also easier by £1 or so.

March corn fell to its lowest close in five weeks, worn down by generally favorable growing conditions in South America and coming just one day after USDA made bullish changes to its corn estimates. Soybeans also finished lower with March meal dropping to its lowest close in eleven weeks.

Buying by China of US Maize Distillers Grains has put the price up £10 in the UK and had a knock on effect on Maize Gluten & Rape meal.Soya meal eased in Chicago yesterday but Soybeans still managed to end positively.

U.K Soya meal prices are lower by £6.00 per tonne, however Maize Gluten, Wheat Distillers & Corn Distillers are firmer by £5.00 per tonne, Rape meal is also a £1 firmer despite the fall in Soya.

December demand has kicked in today with, ADM Erith having withdrawn their price for December 2014 Rapemeal. Resellers are still offering the position at a £3 premium over Jan-Apr The Wheatfeed market is tightening swiftly trading at £120 Ex mill Southern England that is about £130.00 onto farm.

There was no Chicago Trade yesterday due to Thanksgiving. Sterling has slipped back a little overnight against the dollar but it is the Euro that is weak. Paris Wheat is up by E1.50 London Wheat mainly unchanged to £0.30 higher on what is likely to be a very quiet day.

Corn and wheat prices closed higher on a quiet day of pre-holiday trading, helped by a lack of farmer selling and concern about the effects of cold temperatures on Russia’s winter wheat. Soybean prices finished lower with chances for rain expected to help crops in central Brazil over the next 10 days. U.K Rapemeal settled back a couple of pounds today. U.S Markets are closed today for Thanksgiving.

Wheat and oilseeds area for harvest 2015 down in favour of barley and pulses – An HGCA survey reveals farmers’ planting intentions for 2015

As well as the outbreak at the Duck breeding farm in Driffield Yorkshire, Dutch authorities have reported an outbreak of H5N8 birdflu in central Holland & will destroy 150,000 birds to contain the outbreak. One to watch!

December corn and wheat closed higher Monday after USDA reduced the U.S. corn crop estimate to 14.41 billion bushels and the estimate of U.S. ending wheat stocks to 644 million bushels. Soybeans finished the day lower with disappointment that USDA’s increased estimates of crush and export demand were not large as hoped. UK Rapemeal has also fallen by £2 per tonne in sympathy.

January soybeans closed higher Friday with ongoing support from commercials returning in the latter half of the week. Corn and wheat finished lower, bracing for USDA’s next round of estimates in Monday’s WASDE report.

December corn was 1 cent lower, January soybeans 5 cents lower, and December Chicago wheat 2 cents lower. In earlt trading today a small event in an overall larger picture.World food prices tracked by the United Nations fell for a seventh month in October, the longest slide since 2009, as the cost of dairy and meat fell amid an outlook for rising production.

December corn posted its highest close in seven weeks, November soybeans and December Chicago wheat had their highest closes in six weeks, as grains continued to shake off the bearishness of record harvest expectations. Thursday’s trading also saw commercial buying in soybeans after USDA’s weekly report of export sales provided more bullish evidence for 2014-15.

December Chicago wheat posted its highest close in six weeks Wednesday, some 56 cents above its low of late-September as prices continue to correct back from September’s selling. Corn and soybeans finished modestly lower, showing hesitation at their recent highs with mostly favorable harvest weather ahead.

All three grains closed higher Tuesday with short-covering triggered after USDA reported slower-than-average harvest progress for corn and beans late Monday. December soybean meal posted its highest close in six weeks after China’s GDP report turned out better-than-expected for the third quarter.

December corn ended slightly higher, soybeans and wheat lower on a quiet day of trading. Pleasant harvest weather over the weekend and more expected this week is keeping a bearish tone on grain prices.

This obviously has the effect of increasing import prices but will also help UK Grain exports.

Crude Oil prices continue to fall now just above $90 a barrel, this is due to softening demand from China. Just like 2007/8 as traders ran to commodities during the financial crisis this impacts on agri commodities through reducing input costs but also through the falling ethanol and biodiesel prices.

Trident are to close their first offer for this years home produced sugarbeet on Friday 26th September.

Rapemeal down £6.00 per tonne at Erith Mill serving Southern England all positions.

Wheat fell to a four-year low, extending a weekly slump, after demand for U.S. shipments dropped as global production headed for a record. Soybeans were poised for the longest run of weekly losses since June 2010.

London Wheat closed up between £1.15 to £4.50 for Nov 16. A Strong performance as Sterling was stromg too.

Wednesday’s trading in grains was marked by narrow ranges and low volume with corn, soybean, and wheat prices staying close to their contract lows. At 1 p.m., the U.S. dollar index traded higher after the Federal Reserve kept its outlook for interest rates essentially unchanged from a month ago.

Sterling steadying ahead of Scots referendum. £/$ 1.6329 . Lets hope it is not in free fall by Friday!

Corn is lower ; soybeans are lower; wheat is lower.

December corn and wheat futures set new contract lows Friday, weighed down by Thursday’s bearish estimates from USDA. November soybeans gained a few cents on the day, thanks to noncommercial buying, but are still not far away from their lows for the year.

It might be possible to near or break £180.00 onto farm
in Nth Eng near the ports for Rapemeal today.

When all was said and done, the sell-off in grains It It could have been far worse following the release of USDA’s September Crop Production and Supply and Demand reports.

French wheat export expectations to non EU countries have fallen by over a third as France struggles to compete against the competition,and face issues from a low quality harvest.

New-crop corn and soybeans closed a little higher on light volume with nervousness ahead of Thursday’s WASDE report. December Chicago wheat fell to a new contract low with rain in the forecast for the southwestern Plains and reports that Russian troops were leaving Ukraine.

The prospect of a record US corn crop and talk of a ceasefire in Ukraine have caused markets to ease.

As sterling falls so London Wheat as risen but EU grains have staeted the week lower. US Grains have continued Friday’s rally into the new week.

Wheat is easing again today. £1 to £1.75 down in London. A Euro down on nearby positions in Paris and two to three point two cents per bushel down on the e CBOT (Chicago)

While I am finding it pleasantly warm the Italians are complaining about the coldest Europe wide Summer for Decades. Global warming ?

The Ukrainian government has claimed that fighting has had a massive impact on grain production in the Black Sea state, a major wheat producer and exporter.

We have crimped maize available.

I think that prices are edging away and we have had the low. Others in the office think things will turn bearish again. The prospect of an interest rate rise look more remote again so Sterling may well continue to drift, and we now know how good all the harvests have been. So any negative news will feed the Bulls. Simon is a natural Bear and beleives that fundamentals are weeak and that weather patterns remain benign thus producing more good crops in the next six months.

Sterling is has taken a hit this morning after poorer-than-expected inflation numbers just released (1.6% annually.)

Chicago Soya sharply up.

Up £3/t across the board.

EU-28: 2014/15 wheat production forecast revised up further to 144.1 million tonnes.

USDA have raised their forecast for the world 2014/15 wheat crop by almost 11 MMT to a record 716 MMT

Tomorrow the USDA issue their latest world supply and demand report.

The Yanks love a bit of drama, the US markets are sharply up. European markets are down a tad.

Speculators reduced thier bearish positions for wheat for the first time since June as mounting concern that Black Sea supply will be disrupted boosted prices to a one-month high.

Falls all round ahead of the upcoming USDA report with record crop sizes expected.

Russia’s ban on food imports from the likes of the European Union and the US may lift domestic prices, but could raise food inventories in exporting countries

Water companies have issued stark warnings over the government’s plans to allow shale gas exploration across half of the UK mainland.

First Milk drops its farmgate prices as volatility takes its toll
Ongoing volatility in the dairy market has led First Milk to cut its manufacturing and liquid pools from September 1.

Chicago Markets pushed higher by continued concerns over Russia and lingering US weather doubts.

Soya has dropped £10 in the last week.
Rape has dropped £5

The forecast for the next ten days across the Midwest is for cooler and wetter than usual weather. Just what is needed during pod setting over the next week or so.

EU Rape prices slide, following Soya.

Soybeans fell, after the biggest advance in a week, on speculation that rains forecast for the U.S. Midwest will ease the dry weather threatening to reduce yields in the world’s top grower.

The wait for a weather market continues – Up $5 at close yesterday, down again this morning.

Rain across France has resulted in a much larger proportion than usual only making feed grade.

Rain forecasts across the US Midwest combined with heavy fund selling led to the Soya market closing lower on Friday night.

With EU grain prices at 4-year lows we’re importing cheap Ukrainian corn into Europe. Brussels yesterday confirmed that they’d issued 336,625 MT worth of corn import licences this past week alone, along with approving 191,600 MT worth of Ukraine wheat imports.

We have a few loads of Feed barley for immediate movement available at a ridiculously low price.

Good supply is putting the price of Soya Hulls under pressure.

Yesterday saw Chicago close unanimously in the green across all soy complex positions, providing the stimulus to lift bean prices from their 45 month lows, which inevitably pulled meal and oil higher with them, as concerns started to grow yesterday towards adverse weather across the growing area in the coming weeks. The rally was centred around predictions of drier conditions over the next 2 weeks across the southern Mid-West, which will increase the chances of stress on the crop. However, with the crop currently rated as 73% Good to Excellent, at least there is some room for manoeuvre should crop condition be affected. It is also possible that this news was suitable impetus to bring some level of correction to what would appear an oversold market.

Soybeans closed lower on deferred position, spurred by a 1% improvement in the crop condition report on Monday night. This saw November futures falling 1% to $10.57 per bushel after knocking out the previous contract low of $10.65 recorded earlier in the month. The weather remains ideal with cooler weather coming back into the US Midwest later this week, although Jon Davis is predicating drier-than-normal conditions continuing into early August which may impact on crop development. August soybean futures were higher on support from the recent string of U.S sales, the most recent of which came yesterday reporting 225,000 tonnes of soy-meal and 20,000 tonnes of soy-oil to unknown destinations. Chicago Corn futures hit new contract lows, (slumping 30% since the end of April) prior to the close yesterday as the crop continues to flourish due to a continuation of a mix of sunshine, rain and moderate temperature, the perfect recipe for a record harvest this fall and it is early days yet but one analyst is expecting the crop to yield 250 bushels per acre of corn, up from a typical yield of 195-200 bushel. On the other side, grain future prices are so low and have fallen past technical points, indicating to speculators that prices may be on the turn as the market is “oversold” making them attractive to buy. In addition, over the last two weeks there was a flurry of grain export sales to China and to other destinations amounting to 2 million tonnes and some market analysts feel that this level of buying activity may be the starting point where we will see corn prices rebounding from four year lows. U.S wheat futures fell for a third straight session yesterday due to technical selling in the grain markets as funds sold 2,000 wheat contracts and 5,000 corn contracts. Wheat remains under pressure as the bears remain in the driving seat. The U.S winter wheat harvest is 75% complete, matching it five year for the time of the year. Furthermore, “Crop scouts” are reporting from their annual wheat crop tour that spring crop wheat yields look promising and are forecasting Southern eastern wheat regions to yield 64.6 bushels per acre, compared to 48 bushels per acres in the same area 12 months ago. Matif wheat rebounded as recent rains have impacted on the milling quality of the harvested crop. Sterling has dropped a bit this morning, after the BOE vote showed a 9-0 result in favour of no rate rise.

US Soybeans have continued to ease this week, being led down by the deferred positions that shed 12-14 cents per bu, whilst the August position was reluctantly weaker (down 1 cent). The move came during a trading session that saw the USDA announce a “flash sale” (over 100,000 tonnes)for the fifth day in a row after the Chinese stepped in to buy 120,000t of 13/14 crop beans, whilst a further 135,000t of soymeal was sold to Unknown destinations. Looking to the new-crop, last night saw the release of the latest NASS crop condition report, that saw the Good/Excellent rating for soybeans increase from 72% to 73%. At this stage, roughly 24% of the crop is reported to be blooming against the 5-year average of 21%. However, it is the weather through August that shall ultimately determine the crop’s eventual yield. Like soya, CBOT corn futures were weaker yesterday, falling nearly 2% through the session to make fresh contract lows on both the September and December contracts, whilst the continuous chart was hovering near a four year low on pressure from virtually ideal growing conditions for what is expected to be the second straight record US harvest. At this stage, the crop condition for corn is unchanged from last week at 76% good to excellent, with 56% of the crop silking against a 55% average. At this stage, we are expecting around 82% of the crop to be pollinated by the end of July, eliminating the majority of the risk factors to the crop. As such, most yield models are currently predicting roughly 168-172 bu per acre (well above the USDA). Wheat markets on both sides of the Atlantic fell yesterday on technical trading coupled with pressure from the expanding winter wheat harvest in the northern hemisphere. Through the session, European wheat futures fell to a fresh four year low (176), with the benchmark However, it must be noted that the premium for higher-quality wheat jumped significantly higher as heavy rainfall in France added to fears that this year’s harvest could be spoiled by poor quality. On the currency front, Sterling investors are beginning to show a glimmer of concern over the risks a surprise from Scotland’s September independence vote may pose to the markets. At this stage, investors who had been appearing rather complacent have started to buy options that ought to allow them to hedge against the possibility of a Scottish “Yes” vote.

The recent surge in wheat prices on the back of the airline tragedy was short lived as futures on the CBOT fell more than 3% on Friday, giving back recent gains posted on Thursday’s close. On Friday, Vladimir Putin called for a ceasefire in Eastern Ukraine easing concerns that it could affect grain shipments out of the black sea. This saw funds stepping in and selling 10,000 CBOT contracts. The U.S harvest is progressing northwards and wheat yields have increased significantly, yielding 40 -50 BPA. The USDA may have originally underestimated the crop’s potential – factoring in a yield of 17 BPA for Oklahoma, 28 BPA for Kansas and 40 BPA for Nebraska. After a slow start to the European harvest and with only 5% of the crop harvested in France to date, this week we may see the situation changing as dry weather is forecasted which will stimulate progress.
Perfect growing conditions in the U.S continue to weigh on the U.S corn markets as futures fell by 2% in the weekend close, falling to their lowest levels in four years, shedding 1.5% for the week in the fourth consecutive weekly decline. Large global reserves are also weighing on the market as China’s state corn sales dipped by 7.4% this week to 2,056,654 tonnes (45.49% of the total on offer) as Beijing continued to offer some of the stocks it imported in 2011 and 2012. On Soya, futures were mixed as front month contracts rose due to some late short covering. Spec funds are 8 million tonnes short of beans and 16 million tonnes short for all 4 commodities combined which is a position they rarely go over suggesting the selling period is over until the record short positions are squared. For the week, front month contract soybean contracts fell 9.1%, its third straight week of declines. Finally, the USDA reported the sale of 464,000 tonne of soybeans to an unknown destination for 2014/15.

Corn fell to the lowest level in four years as prospects for increasing supplies outweighed concern that turmoil in Eastern Europe may disrupt shipments from the Black Sea. Wheat traded near the lowest since 2010.

Commodity markets bounced yesterday and wheat futures made significant gains after news broke that a Malaysian passenger plane crashed in Eastern Ukraine near the Russian border killing 295 people. Wheat futures rallied into the close and the September contract rose by 2%, making the biggest weekly gain in three months as the catastrophe news sparked fears that rising tensions between Ukraine and Russia could inhibit grain shipments from the two major wheat producing countries. Investors reacted to the news by covering short wheat positions and funds also stepped in and bought 6,000 CBOT contract adding further to prices. European markets followed Chicago and rose to a two week high on concerns that the crash will deepen geopolitical tensions just at a time when Paris wheat futures had fallen to a four year low earlier in the week.
U.S corn futures were narrowly higher yesterday as exporters sold 1.068 million tonnes of corn of both old and new crop topping market expectations whilst the surge in the Wheat market also lent support to corn futures. The bears are still in the background as the corn crop is on track to yield 170 bushels/ acre and the yield may continue rising as the fantastic growing conditions prevail. Despite some bullish stories, U.S soya futures still ended the day on a weaker note. The USDA reported a sale of 708,000 mts tonnes of beans for 14/15 to China in the morning and the market reacted to the news at the time but it had little impact on the close. In addition weekly exports sales of old crop beans were on track at 37,700 tonnes whilst new crop sales of 561,000 tonnes were at the lower end of expectations. The strike at Rosario continued yesterday for the second day ceasing all exports but this was already factored into the market. In other news, Brazil’s largest public soybean grower SLC Agricola S.A is planning to cut back on double crop cultivation areas due to falling commodity prices and is considering scrapping a plan announced in 2011 to expand to the double cropping area to 700,000 hectares by 2020 from 344,000 hectares. Sterling continues to hover around the 1.71 mark, with little data due out in the UK today. There are a couple of financial releases later on in the U.S but most markets will be concentrating on geo-political issues today I would have thought.

Soya beans closed mixed but mainly lower again. Benign weather in the US and a wide expectation that USDA domestic and world ending stocks will be announced at record levels tomorrow are keeping Corn Wheat and Soyamarkets on the defensive.

Corn dropped to the lowest level in almost four years on expectations that a record harvest in the U.S., the biggest exporter, will boost global supplies. Soybeans headed for the longest run of losses since 2009.

Exports revive as buyers returned to the markets.July soybeans posted their highest close in two weeks after USDA reported 11.7 million bushels of export sales for last week, much more than expected. Corn and wheat also closed higher with rain in Kansas adding to harvest delays for the HRW wheat crop.

July soybeans ended lower on the day in spite of dramatic gains in the final minutes of trading in July soymeal, likely related to Friday’s expiration of July meal options. Beans down 2c 8c Old crop up2.6 cents to 4.4 cents forward.July meal up $10.80 but only $3.9 forward.

Corn futures are lower at Noon(6 a.m. CST); soybeans lower; wheat lower.

Fund money seems to be flowing out of the grains sector in favour of perceived better returns from equities.

US & European marketsare a little firmer this morning after yeserdays relatively large falls caused by acceleraring plantings in the US.

Latest prices updated at thise site. Soya firmer on nearby positions this week other commodities broadly unchanged. All heading lower since Weekend.

July soybeans posted their highest close in three weeks, supported by solid commercial buying and an obvious lack of soybeans and sellers.

Got some good offers nationwide on Spot Sugarbeet if you can use it. Give us a call 0118 984 1800 or E mail sales@straightsdirect.co.uk

Yesterday was a strange session on the CBOT with contracts posting wide and wild trading ranges. Soybeans reversed their action from Monday while corn was under pressure throughout and wheat finally threw in the towel.

U.S soybean futures rose 1.3 percent yesterday and shadowed rising soy-meal futures due to strong export demand. Prices up £5 on nearby UK positions.

Large falls across the board on the CBOT yesterday but this morning Wheat rose in Chicago for the first time in eight days on speculation that recent declines were exaggerated as dry weather persists in the U.S. Great Plains.

European Grain Markets are lower today Rapeseed slightly firmer.
US overnight markets are trading $7.70 down on May14 but only $2 down for remaining old crop positions. New crop down a mere $1.20 ish. This after a turnaround Tuesday 13th that saw Soyameal rise by $8.20 May14 $6.30 July 14 $3.70 Aug14 and took New crops positions up by about $1. Prices in the UK also effected by Sterling falling away from a giddy $1.69 pluslast week to a little beneath $1.68 this week.

Mon May 12, 2014 01:50 PM CDT
Corn and soybeans closed lower Monday with rain over the weekend and increased expectations for more supplies in 2014 from Friday’s USDA estimates. Wheat also closed lower after central and eastern Kansas received moderate to heavy rain Sunday, but stayed relatively dry to the west.

The Buenos Aires Grain Exchange now forecasts Argentina’s 2014 soybean production at 55.5 mln t, up from the previous forecast of 54.5 mln t. Last year, 48.5 mln t had been produced. The corn production estimate still stands a t24.0 (24.0; 27.0) mln t.(Reuters, May 8, 2014)

The Brazilian government’s national crop supply agency (CONAB) revised up its forecast for Brazil’s 2014 soybean production to 86.6 mln t from the previous figure of 86.1 mln t.

Soybeans closed lower Wednesday with a third consecutive day of commercial selling raising concerns that there may be another net cancellation in Thursday morning’s export sales report. Corn finished lower with favorable planting weather and news that Russia claimed to have pulled troops back from Ukraine’s border contributed to lower closes for both corn and wheat.

Informa raised their estimates for South American crop production from 86.7 to 87.4MMT.

Bargain loads of Wheatfeed available a demand drops while mills produve over the Bank holiday. Summer Wheatfeed S.E circa £126.00 delivered.

ADM Erith has reduced its Old Crop Rape meal price by £7.00 per tonne today. Following a purchase of cheaper Rapseed on the continent. Bookings at the mill remain tight but they have noticed a drop in demand.

Forecasts after inspections predict an average yield of 34.7 bu/acre, which is down significantly from the 43.8 bu/acre projected a year ago. This is also the lowest forecast for this region since 2001

Wheat was poised to snap a six-day rally as signs of ample global supply outweighed concern that deteriorating crops in the U.S. will curb output in the world’s biggest exporter. Corn and soybeans declined.

USDA weekly crop condition, 33 percent of the crop is in the good to excellent category, compared to 34 percent last week.

1. US Southern Plains: The HRW belt received only very limited and spotty rains since Friday and the forecast for the next ten days does not show any improvement in the southern and western areas, while northern Kansas and Nebraska should receive some beneficial rains. Especially in the southern and western region winter wheat plants urgently need more moisture because they are in the decisive stage of crop development.

2. EU: Rains over the past days improved soil moisture conditions in the far western part of Germany which had been too dry beforehand. In France, where rain is needed as well, showers have been lighter. From today until Wednesday, lighter rains are expected in southern France, before some stronger rains of 10-15mm should fall in the central and northern region. Overall, it is important that these rains materialize because early development of spring crops, especially spring barley, is already hampered and winter crops also can be affected soon if conditions remain dry.

So far since my return from my Easter Break most markets have felt easier. Rapseed in Paris was down E 6.75 nearbu to down E3.75 in distant August 2016. Also there is an improvement in the local wheatfeed supply. Often indicative of reduced compunder activity, which is to be expected after the Easter rush and as we move further into Spring.

U.S soybean futures rose to their highest level since July 2013 on Wednesday due to ongoing tightness of U.S supply.

Sterling turned on Tuesday gaining almost 1% to its highest level in a month against the dollar after data showed UK industrial output rose much faster than forecasted.

May ’14 478.1 3.8
Jul ’14 468.1 3.4
Aug ’14 438.2 2.1
Sep ’14 408.2 1.2
Oct ’14 382.9 1.0