29/09/14 -- Soycomplex: Beans closed higher on month/quarter-end short covering. There may also have been some book squaring going on ahead of tomorrow's quarterly stocks report. That's expected to show Sep 1 US soybean inventories at around 126-131 million bushels. Weekly export inspections came in at a robust 687,191 MT. At an edible oils conference in India over the weekend Dorab Mistry apparently said that world soybean prices could hit new lows in January due to the large South American crop. Chicago soybean prices frequently post seasonal lows around the beginning of the year. "The fundamentals of the soybean complex say that prices should continue lower especially if record South American harvest is realized," said Benson Quinn Commodities. IMEA said on Friday that Mato Grosso's 2014 soybean planting is 1.7% complete versus 0.3% a week ago and 0.7% a year ago. They estimated Mato Grosso;s total soybean area at 8.8 million ha. Lanworth tweaked higher its forecast for the 2014 US soybean yield to 47.1 bu/acre from 47.0 bu/acre previously, and estimated production at 3.880 billion bushels, up from 3.873 billion previously. After the close the USDA said that this year's US harvest was now 10% complete versus the 5-year average of 17%. They said that 69% of the crop is dropping leaves compared to 71% on average. They raised good to excellent crop conditions 1 point from a week ago to 72% versus only 53% a year ago. Nov 14 Soybeans closed at $9.23 1/2, up 13 1/4 cents; Jan 15 Soybeans closed at $9.32 1/4, up 13 1/2 cents; Oct 14 Soybean Meal closed at $308.10, up $0.90; Oct 14 Soybean Oil closed at 32.79, up 87 points.
Corn: The corn market was a couple of cents firmer on what also looks like position squaring ahead of tomorrow's quarterly grain stocks report. Trade estimates for that are around 1.020-1.294 billion bushels. Weekly export inspections were 601,825 MT. Big crops get bigger is the old adage, and Lanworth agreed, raising its estimate for 2014 US corn yields to 174.9 bu/acre from 174.5 bu/acre previously. The firm now put 2014 US corn production at 14.596 billion bushels, up from its previous forecast of 14.564 billion, and a record high. "Good yields and favourable weather remain the key components offering resistance to this market," said Benson Quinn Commodities. The corn market often posts its seasonal lows in October. The USDA reported after the close that this year's US corn harvest is only 12% complete versus 23% for the 5-year average. That's considerably less progress than some had been forecasting, with around 20% done being mentioned in some quarters. It is in fact an increase of only 5 points on a week ago. Fortunately the 6-10 day forecast is reasonably warm and dry. The USDA left good to excellent crop conditions unchanged on a week ago at 74%. They said that 60% of the crop is mature versus 70% for the 5-year average and that the crop is 96% dented, which is one point behind the norm at this time. Ukraine said that they'd harvested 5 MMT of corn so far, with the Russian harvest standing at 4.3 MMT to date. The UAE bought 120,000 MT of soft wheat, 15,000 MT of hard wheat, 40,000 MT of corn and 30,000 MT of feed barley for Feb-May shipment over the weekend. Dec 14 Corn closed at $3.25 3/4, up 2 3/4 cents; Mar 15 Corn closed at $3.38 1/2, up 2 3/4 cents.
Wheat: The wheat market closed higher on all three exchanges. "Pre-report trading in US wheat futures saw a round of profit-taking overnight and a nice recovery from lower trade early in the session," said Benson Quinn. Trade estimates for tomorrow's Sept 1 US all wheat stocks are around 2.004 to 2.075 billion bushels. The USDA will also report on US wheat production. Trade estimates for all wheat are averaging 2.037 billion bushels. The range of estimates are 2.004-2.075 billion versus the USDA's August estimate of 2.030 billion and the 2013 all wheat crop of 2.130 billion. Weekly export inspections came in at a fair 537,647 MT. Taiwan seeks 80,000 MT of US milling wheat for Nov-Dec shipment and Oman are tendering for 60,000 MT of what is expected to be German or Russian wheat for Jan shipment. Russian wheat prices are said to be in decline, catching up with cheaper offers out of Europe and the US. SovEcon pegged FOB prices for Russian wheat with 12.5 percent protein in the deep-water ports on the Black Sea at $237/tonne, down $8.50 on the week, according to Reuters. ABARES estimated Australia’s 2014/15 wheat crop at 24.234 MMT versus 27 MMT a year ago. After the close the USDA said that this year's US spring wheat harvest is winding down at 94% done, up from 86% a week ago, but 2 points behind the 5-year average. Winter wheat planting is 43% done versus 25% a week ago and 36% on average at this time. The crop is 14% emerged, which is 2 points ahead of the average. Dec 14 CBOT Wheat closed at $4.81 1/4, up 7 cents; Dec 14 KCBT Wheat closed at $5.66 1/2, up 2 3/4 cents; Dec 14 MGEX Wheat closed at $5.40, up 6 3/4 cents.
29/09/14 -- EU grains closed mostly higher in what looks like month-end and quarter-end consolidation and profit-taking.
The day ended with Nov 14 London wheat up GBP1.05/tonne to GBP108.70/tonne, Nov 14 Paris wheat closed EUR1.75/tonne higher at EUR153.75/tonne, Nov 14 Paris corn was up EUR1.25/tonne to EUR138.50/tonne, whilst Nov 14 Paris rapeseed was EUR2.00/tonne firmer at EUR317.0/tonne.
Fresh news was relatively scarce. The Russian 2014 grain harvest is closing in on the 100 MMT mark at 96.1 MMT off 81.4% of the planned area. Wheat accounts for 57.8 MMT of that total off 83.2% of the anticipated harvest area. Barley adds a further 20.3 MMT off almost 90% of plan, with corn adding an additional 4.3 MMT off almost 32% of plan.
Russia Ag Ministry said that the country had exported 3.0 MMT of grain between Sept 1st – Sept 24th. That takes Russia's exports so far this season to 10.7 MMT, up 26.6% from a year ago.
SovEcon estimated Russia’s September grain exports at 3.5-3.7 MMT.
The Kazakh harvest meanwhile will total 17 MMT, with 2014/15 exports at 7 MMT, according to their Ag Ministry. Yields are lower, but quality is better than last year, they added.
Ukraine's 2014 harvest is now 75% done at 41.1 MMT, said the Ag Ministry there. The wheat and barley harvests are finished at 24.4 MMT and 9.3 MMT respectively. They've also cut 5 MMT of corn so far.
Only 56% of the 2014 Ukraine wheat harvest is suitable for milling, the Ministry added. That's down from 69% a year ago.
Winter wheat planting in Ukraine is almost at the halfway point at 3 million ha of the intended 6.2 million ha (up slightly from 6.1 million ha a year ago), they said.
The IGC said late last week that the world will harvest the largest wheat area since 1998 next year at 224 million ha, up from 222.7 million in 2014.
Oman are tendering for 60,000 MT of German or Russian wheat for Jan shipment.
26/09/14 -- Soycomplex: Beans closed lower, setting contract lows and ending at the worst level for a front month since Feb 2010. The US harvest is expected to have made decent progress this week and over the weekend. The USDA will update us on just how much progress on Monday night. After that it will give us their Sept 1 US stocks numbers on Tuesday, and following that their October WASDE report two weeks today on Oct 10. Old crop soybean ending stocks (2013/14) are forecast anywhere from as low as 100 million bushels to up to 150 million versus 141 million a year ago and their 130 million estimate last month. It's 2014/15 carryout that the trade is now more interested in though. We won't get those figures until the WASDE comes out however, but these are expected to be huge - estimated at 475 million bushels in August. A report on Reuters said that China "has suspended the import approval process for a genetically modified soybean variety, citing low public acceptance of GMO food." The variety in question hasn't been named. That really could set the cat amongst the pigeons, given that their unwillingness to approve MIR 162 corn has seen US exports of the grain to China dry up. China also celebrate "Golden Week" next week, which would usually mean a slowdown in their activity. Abiove estimated Brazil’s 2014/15 soybean crop at a record 91.0 MMT, up 5.4% from the previous year. They see exports at 48 MMT, up 6.7% compared to 2013/14. They estimated Brazil’s 2014/15 soybean ending stocks at 5.78 MMT versus 3.8 MMT in 2013/14. The weekly commitment of traders report shows fund money adding to their net short position in beans. Nov 14 Soybeans closed at $9.10 1/4, down 12 1/2 cents; Jan 15 Soybeans closed at $9.18 3/4, down 12 3/4 cents; Oct 14 Soybean Meal closed at $307.20, down $5.20; Oct 14 Soybean Oil closed at 31.92, down 70 points. For the week that puts front month beans down 46 3/4 cents, with meal down $16.90 and oil shedding 54 points.
Corn: The corn market closed lower on the day, and lower for the week. Corn has now closed lower for 7 out of the last 8 trading sessions. "At $2.93 per bushel, the national average cash corn price has not been this low since the week of September 21, 2009," according to Brugler Marketing. The USDA is expected to report around 20% of the 2014 US corn harvest is now complete on Monday night, up from 7% done a week ago, although that figure may be a little high I feel. The trade is running out of superlatives to describe yields this year. Few think that anything but a rise, and probably a significant one, is still on the cards compared to the USDA's 171.7 bu/acre August yield forecast. We will have to wait until Oct 10 for that. Before that, the trade is expecting a Sept 1 US corn stocks figure of an average 1.185 billion bushels on Tuesday. The range of estimates is 1.020-1.350 billion versus the Sept 1 2013 figure of 821 million. Ukraine corn prices are reported to have dropped $10/tonne in a week, basis FOB the Black Sea. ADM Germany estimated the EU-28 2014 corn crop at a record 70.46 MMT versus 64.48 MMT a year ago. "The significantly larger feed grain supply in Europe continues to put pressure on the maize price," they said. The French corn harvest is stuttering into life, at 1% complete versus zero a year ago, according to FranceAgriMer. The Buenos Aires Grain Exchange said that corn planting there for the 2014/15 harvest was 6.4% complete, around 2 points behind last year. Mexico bought 107,188 MT of US corn, split 59,309 MT for this season and 47,879 MT for 2015/16. Taiwan’s MFIG bought 60,000 MT of Brazilian corn in a tender. Based on a Reuters survey South Africa’s 2014 corn crop is estimated at 14.39 MMT. The weekly commitment of traders report shows fund money continuing to reduce their net corn long by around 5,500 contracts for the week through to Tuesday night. Dec 14 Corn closed at $3.23, down 3 cents; Mar 15 Corn closed at $3.35 3/4, down 3 1/4 cents. That puts Dec 14 down 8 1/2 cents on the week.
Wheat: The wheat market closed narrowly mixed. "A lower overnight trade and a push to new lows early in the day session developed into orderly, low volume wheat trade," said Benson Quinn Commodities. A Reuters poll estimated the Australian 2014 wheat crop at 24 MMT versus 27 MMT last year and the current USDA forecast of 25.5 MMT. The range of estimates was 23.2 MMT to 24.5 MMT, so the USDA are currently 1 MMT above the top end of trade guesses. “This, in itself, is hardly likely to be enough for the wheat price to make any sort of noticeable recovery, for the plentiful crops in the northern hemisphere, where harvesting is almost complete, have caused supply to grow considerably,” Commerzbank said. The Buenos Aires Grain Exchange left their forecast for 2014 Argentine wheat plantings unchanged at 4.1 million hectares, a more than 13% increase on 3.62 million a year ago. For Tuesday's Sept 1 quarterly stocks report the average trade estimate for wheat is 1.880 billion bushels. The range of estimates are 1.707-1.980 billion and Sept 1 2013 wheat stocks were 1.870 billion. The USDA will also report on US wheat production next week. For all wheat the average trade estimate 2.037 billion bushels. The range of estimates are 2.004-2.075 billion and US 2013 all wheat production was 2.130 billion. Russia said that they'd now harvested 94 MMT of grains off 78.7% of the planned area. Wheat accounts for 56.5 MMT of the total, with almost 80% of the harvest now in. Average yields are 2.8 MT/ha this year, versus 2.44 MT/ha a year ago at this time, the Ag Ministry said. The weekly commitment of traders report shows fund money adding a net 11,662 contracts to their short position in CBOT wheat, making them now net short of a record 78,928 contracts. That leaves the market vulnerable to a corrective bounce. Dec 14 CBOT Wheat closed at $4.74 1/4, up 1/4 cent; Dec 14 KCBT Wheat closed at $5.63 3/4, down 1/2 cent; Dec 14 MGEX Wheat closed at $5.33 1/4, down 3 cents. For the week that puts Chicago wheat little changed, down 1/4 of a cent. Kansas wheat is up 3 1/2 versus last Friday, and Minneapolis is down 2 1/4 cents.
26/09/14 -- EU grains closed mixed, with London wheat slumping to fresh more than 4-year lows on the abundant supply of feed wheat in Europe, combined with the arrival of the impending record large EU and world corn crop.
The day ended with Nov 14 London wheat down GBP1.40/tonne to GBP107.65/tonne, Nov 14 Paris wheat closed EUR1.25/tonne higher at EUR152.00/tonne, Nov 14 Paris corn was up EUR1.25/tonne to EUR137.25/tonne, whilst Nov 14 Paris rapeseed was EUR1.50/tonne easier at EUR315.50/tonne.
For the week that puts London wheat down GBP3.90/tonne, with Paris wheat falling a more modest EUR1.50/tonne. Corn was actually 25 euro cents higher and rapeseed fell EUR1.75/tonne.
A weaker euro this week also weighed on London wheat and supported the Paris grains a little.
Strong demand for milling wheat is evidenced by the fact that Brussels have so far this season issued soft wheat export licences for 6.4 MMT versus 6.2 MMT a year ago. Recall that the USDA currently expects EU wheat exports to fall more than 18% this year versus 2013/14. Note also that Europe has managed to achieve these sales in the face of very strong early season competition from the Black Sea, especially Russia. Their aggressiveness is expected to wane somewhat as the season progresses.
Russian wheat prices have fallen this week, in reaction to missing out on both of Egypt's tenders, with 12.5% milling wheat offers from the deep water Black Sea ports down to around $234/tonne, which is down $10/tonne versus a week ago.
The 2014 Russian grain harvest now stands at 94 MMT, off almost 79% of the planned area. Wheat accounts for 56.5 MMT of that total (off 80%) and barley a further 20.1 MMT (88%), according to the Ag Ministry. They also say that Russian growers have already seeded 10.6 million ha of land with winter crops for next year's harvest. That's 64% of the planned area, and a sharp rise on 7.4 million this time a year ago.
FranceAgriMer said that the French corn harvest is now underway, albeit at only 1% complete as of Monday. They left crop conditions unchanged (in a manner of speaking) at 86% good to very good, which is 30 points ahead of last season. The finer detail shows a shift of two points out of good into very good.
Corn crops all over Europe, including those here in the UK, continue to look splendid and hugely better than they did a year ago. ADM Germany, formerly Toepfer, estimated the EU-28 corn for grain crop at a record 70.46 MMT, a 9.3% rise on last year's 64.48 MMT. Some feel that it's the impending size of this crop that could prove to be the final nail in the coffin for feed wheat prices.
Ukraine corn prices are now said to be down to $160/tonne FOB the Black Sea (around GBP98.50/tonne), which is $10/tonne lower than a week ago. French corn values are said to be around EUR132/tonne FOB Bordeaux (around GBP103/tonne).
A duty free barley export quota which still has around 230,000 MT open on it, granted to Ukraine, which is scheduled to expire on Oct 31 will be extended until the end of the year, Brussels has said. Ukraine's duty free wheat and corn export quota to EU destinations has already been filled. There's talk that a new preferential quota could be granted to Ukraine for corn exports beginning Jan 1.
At home, the HGCA reported preliminary results for the quality of the 2014 UK milling wheat harvest at 11.3% protein, 77.3 kg/hl bushel weight and 311 hagberg. The average nitrogen content of barley is the lowest since records began in 1977 at 1.53%, they added.
Corn: The corn market closed lower. Weekly export sales came in at 1.1 MMT, at the top end of expectations. MDA CropCast were unchanged with their forecast for this year's US corn crop at 14.426 billion bushels. The IGC raised their forecast for this year's corn crop by 1 MMT to 974 MMT, which would be 9 MMT below last season's record. Huge US corn yields are what is hanging over the market. "Unless something changes, the yield reports will continue to offer resistance. So far, 'off the charts' is the best description. While reports of yields tend to be 200+, 250+ etc, the trade never hears of yields that would drag the average down. I don’t believe news of this nature will go stale until we are deeper into harvest," said Benson Quinn Commodities. The Brazilian Ag Ministry said that they are to buy 1-1.5 MMT of domestic corn for public stocks. UkrAgroConsult estimated Ukraine’s 2014 corn crop at 25.9 MMT versus a previous estimate of 27.0 MMT. Dec 14 Corn closed at $3.26, down 3 1/2 cents; Mar 15 Corn closed at $3.39, down 3 1/4 cents.
Wheat: The wheat market closed mostly lower. The IGC raised their global wheat production forecast by 4 MMT from last month to an all time high 717 MMT. "The world carryover is placed at a five-year high and, with gains in the EU, US and the Black Sea region, major exporters’ stocks are expected to increase for a second successive season," they said. "Seeding of the 2015/16 northern hemisphere winter crop is underway. Total world area is tentatively projected to increase slightly year on year," they added. Weekly export sales came in at a relatively modest 396,300 MT. Qatar bought 40,000 MT of Russian origin wheat for Nov-Dec shipment. A Greek importer bought 3,000 MT of Ukrainian milling wheat for October shipment. The Max Rubner Institute said that Germany’s 2014 wheat protein content is 13.1%, unchanged from a year ago. UkrAgroConsult estimated Ukraine’s 2014 grain crop at 57.4 MMT versus a previous estimate of 58.5 MMT. Dec 14 CBOT Wheat closed at $4.74, down 6 1/4 cents; Dec 14 KCBT Wheat closed at $5.64 1/4, unchanged; Dec 14 MGEX Wheat closed at $5.36 1/4, down 1 3/4 cents.
25/09/14 -- EU grains closed mixed, with London wheat falling to fresh lows.
The day ended with Nov 14 London wheat down GBP0.45/tonne at GBP109.05/tonne, and Nov 14 Paris wheat closing down EUR2.00/tonne to EUR150.75/tonne. Nov 14 Paris corn was up EUR1.50/tonne to EUR136.00/tonne and Nov 14 Paris rapeseed rose EUR2.25/tonne to EUR317.00/tonne.
The International Grains Council again raised their forecast for by world grain production by 8 MMT to 1,983 MMT, now only 10 MMT lower than last year’s record. Wheat production is now seen at an all-time high 717 MMT, up 4 MMT from last month and last year.
"World total grains consumption is projected to grow by 2% year-on-year, with much of the increase for animal feed, particularly corn. However, strong competition is expected from heavy supplies of alternative feeds, including weather-damaged wheat," they said.
UkrAgroConsult said that they were "preparing to lower by 1.1 MMT to 57.4 MMT its forecast for the Ukraine grains harvest," according to Agrimoney.com. The reduction is due to lower corn production, now pegged at 25.9 MMT, although that's still the second highest on record.
"In our opinion, some 25% of corn plantings in Donetsk region and some 30% in Luhansk region have been damaged by the warfare and are unsuitable for harvesting," they said.
Looking ahead to winter plantings in the region. MDA CropCast said that "rains increased across central and eastern Ukraine, Belarus, southwestern Central Region, and western North Caucasus this past week, which significantly improved moisture for winter wheat establishment. Additional improvements are expected in Volga Valley and south central North Caucasus this week. However, some dryness will likely linger in far northern North Caucasus and northwestern Ukraine."
Russia said that it had now harvested 93 MMT of grains off 77.4% of the planned area. The wheat harvest is now up to 56 MMT in bunker weight, and the barley crop stands at 19.9 MMT. Corn production is 3.9 MMT off 29% of the planned area.
Winter grain planting is now complete on 10.5 million ha, or 63.5% of plan, they added.
Ukraine said that it had now harvested over 40 MT of grains off 73% of the planned area. The corn harvest is 19% complete at nearly 4 MMT, they said.
Brussels confirmed that they'd issued 613 TMT worth of soft wheat export licences this past week, taking the marketing year to date total to 6.4 MMT versus 6.2 MMT a year ago.
EU corn import licences now stand at 2.3 MMT versus 959 TMT a year ago.
24/09/14 -- Soycomplex: Beans closed with small gains. There's some supportive chatter that US soybean plantings may have been lower this year than the current USDA estimate suggests. "In its acreage update released last Friday, Informa cut harvested soybean acres by 1.2 million to 82.9 million vs. USDA’s estimate of 84.1 million," noted Benson Quinn Commodities. Still, very impressive early soybean yields continue to keep being reported, so it's possible that some, if not all, of any planted shortfall could be compensated for by this. The USDA's next chance to adjust their numbers is with next month's WASDE report due Oct 10. Before that we get the Sept 1 quarterly grain stocks report due next Tuesday, Sep 30. Trade estimates for that are for soybean stocks of 126 million bushels, according to a Reuters survey. A Bloomberg survey puts the figure at 131 million. Trade estimates for tomorrow's weekly export sales report are as high as 4 MMT+ on soybeans, largely due to the inclusion of much of last week's "showcase" deal with China to import 4.8 MMT of US beans. US weather forecasts remain non-threatening. Nov 14 Soybeans closed at $9.36 3/4, up 1/2 cent; Jan 15 Soybeans closed at $9.45 1/4, up 1 1/2 cents; Oct 14 Soybean Meal closed at $316.40, down $0.70; Oct 14 Soybean Oil closed at 32.62, up 39 points.
Corn: The corn market essentially reversed yesterday's losses, ending the day 4 cents higher. As with soybeans, there's widespread talk of lower US corn plantings this year than the current USDA estimate. Also, as with beans, reports keep filtering through of exceptional US corn yields this year, so one may compensate for the other. US weather forecasts remain conducive to good harvest progress to be made and the firm US dollar is an inhibiting factor. The corn harvest is underway in Russia and Ukraine. Prices are now below GBP100/tonne FOB sterling equivalent in the latter. Romania said that it is expecting a second bumper corn crop in a row, with production seen at close to last season's record 11.5 MMT. Exports are also thought likely to be similar to last season's 3.4 MMT. FranceAgriMer confirmed that a much larger proportion than normal (45%) of this year's French wheat crop is only feed grade, which will be offered onto the market in direct competition to corn. France is also expecting a record corn crop this year. A Bloomberg survey shows analysts expecting Sept 1 corn stocks to be 1.191 billion bushels next week. A Reuters survey says 1.185 billion. Taiwan Sugar Corp bought 23,000 MT of US corn Nov–Dec shipment. Trade estimates for tomorrow's weekly export sales report for corn are 500 TMT to 1 MMT. Dec 14 Corn closed at $3.29 1/2, up 4 cents; Mar 15 Corn closed at $3.42 1/4, up 4 cents.
Wheat: The wheat market managed modest gains. "Russian harvest progress continues to point to wheat production in a range of 61 to 63 MMT," noted Benson Quinn Commodities. The USDA are currently "only" at 59 MMT. The Russian's say they have harvested 55.5 MMT in bunker weight so far off 77.2% of the intended area. Russian grain exports are showing signs of slowing. Rusagrotrans said that the country will export 3.0 MMT of grains in October, down from 3.8 MMT in September and the record 4.7 MMT shipped out in August. The October total is still ahead of last year's 2.48 MMT however. Market talk suggests that Nigeria has bought 40,000 MT of US soft red winter wheat. Ethiopia are tendering for 200,000 MT of optional origin milling wheat for Jan shipment. Japan are tendering to import 93,000 MT feed barley. Qatar are in the market for 40,000 MT of optional-origin milling wheat. Reuters reported that heavy rain in Brazil is disrupting what is forecast to be a record wheat harvest this year. The harvest has already begun in Parana state. A Bloomberg survey shows the average trade estimate for Sept 1 US wheat stocks is 1.910 billion bushels. A Reuters survey says 1.880 billion. Trade estimates for tomorrow's weekly export sales report are 350-600 TMT. Dec 14 CBOT Wheat closed at $4.80 1/4, up 4 1/4 cents; Dec 14 KCBT Wheat closed at $5.64 1/4, up 2 1/4 cents; Dec 14 MGEX Wheat closed at $5.38, up 3 1/2 cents.