Chicago Market MIxed, But Wheat Jumps To 4-Month Highs

18/10/13 -- General Comment: The USDA are back at work, and some data is starting to filter through. Any sales in excess of 100 TMT reported under the daily reporting system will now be relayed to the trade as normal. Missing weekly export sales reports will be released starting today, with the report for sales for the week ended Sep 26. We will get sales for the week ended Oct 3 next Thursday, and then sales for the weeks ending Oct 10 and Oct 17 the following Thursday, which means we should be up to date with export sales by the end of the month. The regular weekly crop progress reports will be out again on Monday night. The next WASDE report will be released on Nov 8. There' no commitment of traders report today, but that is expected to resume again next Friday. The weekly ethanol production report from the Energy Dept. missing from this Wednesday will come out on Monday.

Soycomplex: The USDA announced 222 TMT of US beans sold to China and 140 TMT sold to unknown for 2013/14 shipment under the daily reporting system. Soybean export sales for the week ended Sep 26 came in at 860,700 MT, with China taking almost half (408,100 MT) of that total. That takes sales for the marketing year to that date to 71% of the USDA's forecast for the season versus 64% a year ago at that time. The Argentine government forecast 2012/13 soybean production at 49.30 MMT off 20.0 million hectares. They said that plantings for 2013/14 will rise 3.25% to 20.65 million hectares. They didn't offer a production forecast yet. Note that Argentine corn plantings are only 12% done versus 28% a year ago. It's possible that a larger shift into soybeans from corn than the current forecast might be on the cards. Sunflower plantings are expected to drop 18% to 1.36 million hectares, as of Oct 10 only 16% of the Argentine crop is sown versus 36% a year previously. The trade is expecting the US soybean harvest to be past halfway through at around 55-60% done when the USDA report on that on Monday night. Looking into 2014, current price line-ups favour an increase in soybean plantings in the US next spring. Informa forecast the 2014 US soybean area at a record 83.9 million acres versus the 83.6 million that they forecast previously and up 6.7 million, or 8.7%, on the USDA's 2013 acres estimate of 77.2 million. That's a big increase, especially considering what is supposed to be coming from South America in the early part of 2014. Let's hope that the much touted Chinese "insatiable" appetite for soybeans doesn't disappear in the meantime! Nov 13 Soybeans closed at $12.91 1/4, down 2 cents; Jan 14 Soybeans closed at $12.89 3/4, up 1/4 cent; Dec 13 Soybean Meal closed at $410.10, down $2.90; Dec 13 Soybean Oil closed at 41.68, up 56 points. For the week beans were 24 1/2 cents higher, with meal up $6.70 and oil up 140 points.

Corn: It was another quiet session for corn. The USDA announced weekly export sales of 775,200 MT for the week ending Sep 26. That included 115,200 MT to China. Israel bought 80 TMT of Black Sea origin corn for Dec/Feb shipment. Malaysia seeks 60 TMT of corn for Jan shipment. Better than expected corn and bean yields are still being reported in the US. The trade is expecting the US corn crop to be around 35% harvested in Monday night's report. "The coldest weather of the season is coming to the Midwest. Hard freezes area predicted in the Upper Midwest on 3 successive nights Sunday-Tuesday bringing the growing season to a definitive end. Northern corn and soybeans have greatly benefited from prolonged warmth this fall, permitting late-planted crops to safely mature," said Martell Crop Projections. No significant damage is expected by the upcoming freeze. The Argentine government pegged the 2012/14 corn crop at 32.1 MMT off 6.1 million hectares, which is far higher than anybody else thinks. The USDA went 26.5 MMT last month for example. Reports out of Argentina suggest that domestic corn availability is tight, which would suggest that the Argentine government's estimate is indeed way too high. They forecast plantings in 2013/14 falling to 5.7 million hectares, a 6.6% drop, without issuing a production estimate. They said that plantings were 12% done as of Oct 10 versus 28% complete as at the same point a year previously. The Buenos Aires Grains Exchange said that corn plantings were 18.5% complete versus 13.6% a week ago and 31.8% a year ago. Informa said that they expect US farmers to plant 91.7 million acres of corn in 2014, down 1 million from their previous forecast and down almost 6% from the USDA's 2013 acreage estimate of 97.4 million. Dec 13 Corn closed at $4.41 1/2, down 1 1/2 cents; Mar 14 Corn closed at $4.54, down 1 1/2 cents. For the week Dec 13 corn was up 10 3/4 cents.

Wheat: Dec 13 Chicago wheat finally broke through the USD7/bushel mark and held, closing at the best levels for a front month since June. The Argentine government's first wheat production forecast of the season came in at a surprisingly low 8.8 MMT, well under the USDA's 12 MMT (which was already regarded as "old" and too high), but also below trade estimates from the likes of the Buenos Aires Grains Exchange, MDA CropCast, ODA and Agritel which are all in the 10.1-10.9 MMT range. With old crop ending stocks extremely tight, and domestic consumption estimated at 6.3 MMT, that doesn't leave a lot left over for export from a country that was once one of the top six wheat exporting nations in the world. Indeed, as recently as 2011/12 Argentine exported over 11 MMT of wheat. This potentially turns a short-term window of opportunity for American wheat into a full blown "leave the patio doors open all summer" moment as far as demand from Brazil is concerned. Whether this estimate is accurate or not, it certainly seems to imply that the USDA's September WASDE estimate that Argentina will export 6 MMT of wheat in 2013/14 is way too high, 4 MMT too high if we believe the Argentine government. Much of that surplus would have gone to Brazil, and they will now need to look elsewhere. Although they have bought Canadian and European wheat in the recent past, US origin is easily their favourite. Weekly export sales for the week ended Sept 26 were pegged at 837,800 MT, which was on the high end of the range of analyst's estimates and well above the 340,200 MT required to hit the USDA target for the season. Without a commitment of traders report to go on it's unclear what size of short position funds are left sitting on in CBOT wheat. Today's price action probably generated some more to head for the exits. Dec 13 CBOT Wheat closed at $7.05 3/4, up 19 3/4 cents; Dec 13 KCBT Wheat closed at $7.68 3/4, up 19 3/4 cents; Dec 13 MGEX Wheat closed at $7.60 1/4, up 15 1/4 cents. For the week Chicago wheat was up 13 1/2 cents, Kansas up 8 1/2 cents and Minneapolis 5 1/2 cents firmer.