Chicago Closing Comments - Friday Night

04/10/13 -- General Comment: The market continues to seem relatively relaxed about the ongoing partial US government "shutdown" and the lack of data forthcoming from the usual agencies. Today we should have had U non-farm payrolls along with the regular Friday CFTC numbers that reveal fund long or short-holdings in commodities. We didn't get them. Yesterday we missed out on the regular weekly grain export sales figures and on Monday we are due, but don't expect, the latest crop condition ratings and harvest progress stats. Nobody currently seems to know whether to expect next Friday's October WASDE report or not. We are also missing out on any daily announcements concerning large export sales, with private exporters obliged to report anything over 100 TMT to the USDA on a daily basis. There's now a danger of a data overload as and when the USDA finally do return to "business as usual" with potentially a myriad of export sales, missed production estimates and harvest figures to sift through. Surely these won't be released whilst the markets are actually open too will they? Imagine the intra-day volatility that would cause! Meanwhile, we are now in the dark as to the size of the fund position in the grains, with no official data to go on since the close of play a week last Tuesday night (Sep 24). For the time being at least, the shutters on the window of transparency remain closed.

Soycomplex: Beans closed around 6 to 8 cents higher on the day, but with losses of around 25 cents for the week. Informa Economics cut their forecast for 2013 US soybean yields to 41.7 bu/acre versus a previous estimate of 42.4 bu/acre, that added support although that's still higher than the USDA's September estimate of 41.2 bu/acre. They dropped production to 3.176 billion bushels versus a previous estimate of 3.224 billion, although again still higher than the USDA's September estimate of 3.149 billion. Rains this weekend in the Midwest are expected to slow the US harvest, but the outlook for next week is drier. Weather watchers are keeping their eye on South America where it's dry in Argentina and central Brazil. The Department of Rural Economy for Parana state in southern Brazil estimated the state's 2013/14 soybean area at 5.8 million ha, unchanged from a year ago and said that 10% of the crop has been planted versus 2% a week ago. FCStone estimated Brazil’s 2013/14 soybean crop at a record 87.9 MMT versus a previous estimate of 87.47 MMT and 82.0 MMT a year ago. They forecast Brazil’s 2013/14 soybean exports at a record 43.3 MMT versus 41.0 MMT a year previously as they are seen shipping more beans than they crush, a new trend that only began this season. World demand for meal remains strong. There's talk that the US has sold 500 TMT of soymeal to the EU in the past 2 weeks. Asia have also been a featured buyer this past fortnight. Based on the most recent export sales data available cumulative US soybean sales were 69% of the USDA export forecast versus the 5 year average of 47%. Cumulative meal sales were 27.4% versus the 5 year average of 18.8%. Nov 13 Soybeans closed at USD12.95, up 6 3/4 cents; Jan 14 Soybeans closed at USD12.95, up 6 cents; Oct 13 Soybean Meal closed at USD431.30, up USD3.50 Oct 13 Soybean Oil closed at 39.99, down 2 points. Nov 13 beans were down 24 3/4 cents versus last Friday, with meal up USD11.40 and oil down 152 points.

Corn: The corn market was around 4 cents higher on the day, but some 10 cents or so lower on the week. Informa estimated US 2013 corn yields at 158.8 bu/acre versus a previous estimate of 157.6 bu/acre and the USDA's September estimate of 155.3 bu/acre. They put production at a rcord 14.010 billion bushels versus a previous estimate of 13.889 billion and the USDA's September estimate of 13.843 billion. They estimated US corn abandonment at 7.7 million acres versus the USDA estimate of 8.2 million. They forecast the total Brazilian corn crop in 2013/14 at 71.1 MMT, down 550 TMT from previously and down 10.2 MMT from a year ago. They see the Ukraine corn crop at 27.5 MMT, unchanged from their previous estimate (but 1.5 MMT below the USDA) - yet still up 6.6 MMT from a year ago. The Russian corn crop is estimated at 9.3 MMT this year, down 400 TMT from their previous but up 300 TMT on the USDA and 1.1 MMT higher than a year ago. The Buenos Aires Grains Exchange said that corn planting in Argentina is only 8% complete versus 17% a year ago due to dryness. They estimated Argentina’s 2013/14 corn planted area at 3.46 million ha, previous estimate of 3.56 million and down 6% from the 2012/13 area. South Korea cancelled a tender for 140 TMT of optional origin corn for March shipment, saying that they expect prices to fall further. Coceral estimated the 2013/14 EU-28 corn crop at 65.39 MMT versus previous estimate of 66.2 MMT, but up 14% on last year's 57.37 MMT. Huge production increases are seen coming from discount sellers like Romania (up 79%), Hungary (up 46%) and Bulgaria (up 39%). The Ukraine Ag Ministry estimated the 2013 corn crop at a record 29.0 MMT, up 39% versus 2012. They also said that plantings for 2014 would rise further, to 5.5-5.7 million ha versus 4.8 million this year due to winter wheat plating problems. Dec 13 Corn closed at USD4.43 1/4, up 4 cents; Mar 14 Corn closed at USD4.56, up 4 cents. Dec 13 was down 10 3/4 cents on the week, with Mar 14 down 10 1/2 cents.

Wheat: Unlike the other two markets, wheat was lower on the day but higher for the week. Stats Canada forecast a record wheat crop there of 33 MMT, up 22% on last year. In Alberta, Canada’s second biggest wheat producing province, the outlook is exceptionally good. The most recent crop report was full of superlatives note Martell Crop Projections: “Reported yields are exceptional with the quantities being the highest ever reported for virtually all crops in all regions. 2013 yields are anticipated to be 20–25% above the average of the last 5 years. The cooperating dry weather is also providing above average quality with 93% of the spring wheat, 94% of the barley, 90% of the oats and 98% of the canola falling in the top two grades." In Saskatchewan, Canada's largest wheat province, very good yields are also being indicated this harvest, despite a very dry finish to the growing season. This appears to be due to "the tank was full in June and July" offsetting August dryness which also kept pest and disease losses to a minimum, they add. Coceral estimated the EU-28 all wheat crop at 143.3 MMT, up 7% versus last year's 133.9 MMT. The Buenos Aires Grains Exchange said that 26% of Argentina's wheat crop is in fair/poor condition, up 2 points on a week ago. In southern Argentina winter wheat areas received beneficial rainfall this week and the weather is finally turning warmer. Northern Argentina is still dry. Informa cut their Argentine wheat crop estimate to 11.0 MMT, down 2.7 MMT from their previous forecast, although still up 1.5 MMT from a year ago. On the export front there's talk that Brazil has bought 200 TMT of US hard wheat for Nov/Dec shipment this week, taking their total purchases of US wheat so far this year to 3 MMT. There's lots of talk that widespread rains in Russia and Ukraine will cut winter wheat plantings for the 2014 harvest quite sharply. However, the Russian and Ukrainian weather forecast is trending warmer and drier in the next 5-7 days. Informa estimated the 2013 Russian wheat crop at 54.5 MMT, up 1 MMT from their previous estimate and up 16.8 MMT from a year ago. Dec 13 CBOT Wheat closed at USD6.87, down 2 1/4 cents; Dec 13 KCBT Wheat closed at USD7.50 1/4, down 5 1/4 cents; Dec 13 MGEX Wheat closed at USD7.46 1/4, down 4 cents. Chicago wheat was up 4 cents on the week, with Kansas rising 18 1/2 cents and Minneapolis up 14 3/4 cents.