Nearby Chicago Soy/Corn Values Fall Around 10 Percent On The Week
26/07/13 -- Soycomplex: The market closed mixed, with front months lower but new crop higher. After three days of pretty dramatic action today was a relatively calm affair, maybe that suggests that the old crop/new crop realignment has been done? The USDA reported that China had bought 220 TMT of new crop US soybeans. There's talk that China’s Sinograin bought four Brazilian bean cargoes earlier in the week for April/May shipment. Considering that China need to buy 4-5 cargoes/day to hit the USDA target for 2013/14 then this business can hardly be considered anything but a routine event. The latest Commitment of Traders report shows managed money decreasing their net long position by 14,790 contracts for the week through to Tuesday night. Next week's data will be interesting given the heavy selling also witnessed on Wednesday and Thursday this week. Yesterday's weekly export sales report means that the US now have 102% of the USDA's soymeal sales target on the books for 2012/13, so despite what the futures market might be saying, meal availability will stay tight for a month or two yet. Aug 13 Soybeans closed at USD13.49 3/4, down 5 1/2 cents; Nov 13 Soybeans closed at USD12.28 1/2, up 4 1/2 cents; Aug 13 Soybean Meal closed at USD430.30, down USD17.50; Aug 13 Soybean Oil closed at 43.58, down 23 points. For the week Aug 13 beans nose-dived to the tune of USD1.41 (9.5%), with new crop Nov 13 down 45 1/2 cents (3.6%), Aug 13 meal fell USD52.10 (10.8%) and Aug 13 oil shed 192 points (4.2%).
Corn: Corn was down across the board, Sep 13 has closed lower every day this week, and now trades below USD5/bu for the first time for a front month on CBOT corn since October 2010. After a week like that you'd have maybe expected a bit of consolidation moving into a weekend with the crop in the middle of pollinating, but not today. The US weather outlook remains non threatening. Many Asian buyers are booking Black Sea feed wheat and/or corn in preference to US origin material. South Korea's MFG bought 60 TMT of optional origin feed wheat for Nov shipment today. South Korea's NOFI bought 65 TMT of optional origin (possibly from the Black Sea) corn for Jan shipment. The Philippines bought 100 TMT of optional origin (again possibly Black Sea) feed wheat for Sep/Oct shipment. Malaysia meanwhile is tendering for 120 TMT of optional origin corn for Oct/Dec shipment. US exporters did however announce the sale of 211,328 MT of US corn to unknown, split 8,128 MT old crop and 203,200 MT new crop. Yesterday's weekly export sales were below trade expectations, although cumulative sales do currently stand at 25% of the USDA forecast for the 2013/2014 marketing year versus a 5 year average of 17%. The weekly Commitment of Traders report shows managed money increasing their net short position by 46,099 contracts for the week through to Tuesday night, bringing their total net short position to 83,361 contracts. They're thought to have been further net sellers since. The Buenos Aires Grain Exchange estimated that 93.2% of the Argentine corn crop has now been harvested. Sep 13 Corn closed at USD4.92, down 4 cents; Dec 13 Corn closed at USD4.76, down 2 3/4 cents. For the week that puts Sep 13 corn 52 cents lower (down 9.6%), with new crop Dec 13 down 24 3/4 cents (4.9%).
Wheat: The wheat market was narrowly mixed. Although the market looks like it would like to go higher corn weakness weighs. Yesterday's weekly export sales were better than trade expectations at 661,400 MT for the current marketing year, and included 177,900 MT to China. This is new non traditional business, and the US is well placed geographically to service this new demand, and they have the quality that China wants. Cumulative US sales stand at 42% of the USDA forecast for 2013/2014 marketing year, versus a 5 year average of 30% at this time. Egypt are also tentatively back in the market, albeit booking cheap Black Sea wheat, but at least they are taking it off the market. The ongoing Black Sea harvest looks likely to weigh on prices for the next few months at least however. The Ukraine winter wheat harvest is nearing completion at 86% done, and they only grow a very small volume of spring wheat. The Russian harvest however will rumble on for a good while yet at only 25% complete. The French soft wheat harvest is 14% complete. The German wheat harvest is just getting going. The weekly Commitment of Traders report shows managed money increasing their net short position in CBOT wheat by 14,401 contracts in the week through to Tuesday night. That brings their total net short position to 48,662 contracts. Any further losses in Chicago values in the weeks ahead may trigger some short-covering. Sep 13 CBOT Wheat closed at USD6.50 1/4, up 1 cent; Sep 13 KCBT Wheat closed at USD6.91 1/2, down 3/4 cent; Sep 13 MGEX Wheat closed at USD7.36 1/2, down 1 1/4 cents. For the week that means Chicago wheat lost 14 1/4 cents (2.1%), with Kansas down 13 1/2 cents (1.9%) and Minneapolis down 13 3/4 cents (1.8%).