Chicago Beans Lower, Corn And Wheat Higher On Unwinding Of Spreads

19/09/13 -- US Crop Weather: "Midwest rainfall is expected to be heavy over the next few days due to an influx of tropical moisture from Mexico in an already unstable humid atmosphere. The morning satellite imagery reveals the source of heavy rainfall as Hurricane Manuel in western Mexico. This is a Pacific hurricane that hit the west Mexican coast last night. A bolus of tropical moisture has already been swept up by the jet stream and carried into western Texas. At the same time, a trough of low pressure in the central United States is creating instability and scattered showers. Thunderstorms are developing in Colorado, Nebraska, South Dakota, Wisconsin, Michigan, Indiana and Ohio on the morning radar. The atmosphere is ripe for rainfall, heavily laden with moisture. A heavy soaking rain is predicted over much of the drought-stressed Midwest the next 2-3 days from a slow-moving trough of low pressure. Also expecting very generous rain are Texas, Kansas and the Mid South. Hurricane Manuel's influence is a big factor infusing heavy moisture into the atmosphere which is then carried by the jet stream into the United States," said Martell Crop Projections.

Soycomplex: Beans were lower on ideas that these late rains, which would have been ideal had they fallen in August, will still do some good for maybe a quarter of the developmentally retarded US soybean crop. Fund money was said to be squaring up positions, selling bean longs and buying in corn and wheat shorts, putting further pressure on beans. Weekly soybean export sales were above trade expectations of 450-800 TMT at 923,300 MT though, with unknown destinations (530,500 MT) and China (129,000 MT) the main buyers. Actual shipments have slowed to a trickle at just 74,200 MT, pending the arrival of new crop beans. This week's sales take net soybean commitments for 2013/14 to around 60% of the USDA target for the season already - well ahead of normal. We already know that next week's sales will be above 2 MMT due to yesterday's confirmed sales to China and unknown, taking 2013/14 commitments even higher. Separately the USDA also announced the sale of 120 TMT of new crop US beans to unknown under the daily reporting system. MDA CropCast raised their forecast for US soybean production this year by 5 million bushels from last week to 2.972 million, even so that's still one of the lowest forecasts in the ring. Dryness in Brazil and Argentina wants watching, although it's not a major problem at the moment. You could in fact currently make out a case for it only leading to a larger potential switch into soybeans from corn (and also sunflower in Argentina) than the market currently has factored in. It could also be a problem for soybeans though if it lasts into mid-October. China did not hold a weekly soybean auction this week due to holiday. Funds were estimated as being net sellers of around 4,000 soybean contracts on the day. Nov 13 Soybeans closed at USD13.39 1/2, down 8 1/4 cents; Jan 14 Soybeans closed at USD13.41 1/2, down 8 3/4 cents; Oct 13 Soybean Meal closed at USD421.60, down USD5.40; Oct 13 Soybean Oil closed at 42.71, up 24 points.

Corn: The corn market finished modestly higher on profit-taking and unwinding of spreads with beans. The Fed's surprise announcement that the era of cheap money isn't over just yet prompted short-covering. The subsequently sharply weaker dollar also helped push prices higher. Weekly export sales came in at 437,400 MT, in line with the expected 350-600 TMT. China was in there taking 64,500 MT. Shipments of 518,800 MT were primarily to Mexico (196,400 MT), Japan (104,300 MT), Venezuela (67,000 MT) and China (60,000 MT). MDA CropCast cut their 2013 US corn production forecast by 19 million bushels from last week, citing dryness earlier in the season. The forecast Midwest rains are too late to improve corn yields now, but at least there's no damaging frost in the forecast through October 5. If anything these rains will stall the harvest. Better than expected yields keep being reported from what has been cut so far though. Rain is also hampering harvest progress in Ukraine and Russia where less than 10% of the 2013 corn harvest is in. Heavy rain remains in the forecast there. Ag Canada estimated Canada’s 2013/14 corn crop at 13.193 MMT versus a previous estimate of 13.15 MMT and slightly up on last year. The Argentine Ag Ministry estimated their 2013/14 corn area at 5.7 million hectares, down 6.6% from 2012/13. Current dry conditions could possibly lead to a larger cut further down the line. Brazilian farmers are also seen cutting their corn acreage in a switch to beans. The record 2012/13 Brazilian corn crop - at 81 MMT production there has sky-rocketed by more than 40% from only two seasons previously - is weighing on domestic prices, which are below the cost of production in the interior. Funds were estimated as being net buyers of around 4-5,000 corn contracts on the day. Dec 13 Corn closed at USD4.59 1/2, up 3 1/4 cents; Mar 14 Corn closed at USD4.72, up 3 1/4 cents.

Wheat: The wheat market jumped as funds decided to bank profits, cover shorts, and unwind some positions following the news from the Fed. One US economist said that the Fed had "created a self-licking ice cream cone" - which is a great way of putting it. QE on this scale has never been done before, and neither has removing it. Weekly export sales were very respectable at 704,400, versus trade expectations of 400-800 TMT. For once Brazil were not the biggest buyer, that honour went to Nigeria (159,200 MT). Brazil were relegated to second place taking 120,400 MT, including 40,000 MT switched from unknown destinations. Actual shipments of 1,204,400 MT were a marketing-year high, up 32 percent from the previous week. The primary destinations were China (406,700 MT) and Brazil (186,400 MT). Whilst the trade is more than happy to take this "new" business it is also wondering how long this particular party is going to last. There are rumours in the market of Brazil buying wheat from Poland and Canada this week. China is also said to be actively shopping for Australian wheat. Production prospects Down Under appear to have improved dramatically in the past month or so and harvesting there is less than a month away. They're mid-harvest in Canada, and Ag Canada today estimated their all wheat crop at 30.7 MMT this year versus a previous estimate of 29.2 MMT and nearly 13% higher than the 2012/13 crop of 27.2 MMT. MDA CropCast increased their Canadian wheat forecast by 1.1 MMT to 31.2 MMT, an 18% hike on last year "due to improved yield expectations from favourable weather." Argentina's Ag Ministry sharply cut their estimate for the 2013/14 wheat area 3.4 million hectares from a previous estimate of 3.9 million due to dry conditions. The heavy rains forecast for the Southern Plains should improve conditions for winter wheat. Dec 13 CBOT Wheat closed at USD6.57, up 10 1/2 cents Dec 13 KCBT Wheat closed at USD7.02, up 9 ½ cents; Dec 13 MGEX Wheat closed at USD7.08 1/2, up 8 1/4 cents.