Chicago Soybeans And Corn Extend The Rout, Wheat Swimming Against The Tide

01/10/13 -- General Comment: As if attempting to forecast which way grain prices might be going wasn't hard enough, we've now got the not insignificant outside market factor of the US budget impasse. Hitherto the market has been relatively relaxed about the fact that the US government has "maxed out" the credit card at it's USD16.7 trillion limit, it'll just go and another one or raise the ceiling surely? Eleventh hour deals have been done before, which is why it came as a surprise that we didn't get one on Monday night. If they don't get hold of some more rope to hang themselves with by the middle of the month what happens then? Global markets could go into a 2008 style tailspin, with everything from equities to commodities going down the pan, according to the BBC's News at Ten last night. Meanwhile both the USDA's global Foreign Agricultural Service (FAS) and the domestic National Agricultural Statistics Service (NASS) websites are now down "due to the lapse in federal government funding." This is where reports such as the regular weekly export sales, crop progress and monthly world supply and demand estimates are released. Monday's stocks report sent soybean prices to a 19-month low, with corn slumping to its lowest in 3 years, who knows when the next set of data will come out, and what state the market will be in when it does.

Soycomplex: Beans extended yesterday's losses after the USDA's Monday night crop progress report revealed a 3 point rise in good/excellent crop ratings to 53%. Fund selling, brisk harvest activity and growing reports of better than expected yields added to the bearish tone. After the close FCStone raised their US 2013 soybean yield forecast to 41.4 bu/acre from 41.2 bu/acre, increasing production to 3.163 billion from 3.146 nillion and versus the USDA estimate of 3.149 billion. Dr Michael Cordonnier left his US 2013 bean yield estimate unchanged at 40.5 bu/acre, but said that there was now potential to raise this estimate. He left his Brazilian 2013/14 soybean crop estimate unchanged at a record 88.0 MMT. He also left his Argetine 2013/14 production estimate unaltered at a record 55 MMT. The Brazilian Trade Ministry forecast September soybean exports at 3.47 MMT versus 5.38 MMT in August, although up versus 1.68 MMT in September 2012. Private exporters reported the sale of 113,000 MT of soybeans to China under the daily reporting system. Fund selling was estimated at around 8,000 lots on the day in beans. Nov 13 Soybeans closed at USD12.68, down 14 3/4 cents; Jan 14 Soybeans closed at USD12.70, down 15 cents; Oct 13 Soybean Meal closed at USD408.50, down USD1.40; Oct 13 Soybean Oil closed at 40.01, down 82 points.

Corn: The corn market closed slightly lower, in modest follow-through trade from yesterday's losses. Funds were said to have been net sellers of around 4,000 contracts on the day, seemingly happy to further extending their record short position. FCStone raised their 2013 US corn yield estimate to 157.8 bu/acre from 156.3 bu/acre previously. They increase production to 14.15 billion bushels versus 13.942 billion previously and the USDA estimate of 13.843 billion. Dr Michael Cordonnier left his US 2013 corn yield estimate unchanged at 152.0 bu/acre, but said he may raise this in future reports. He also left his Brazilian 2013/14 corn crop estimate unchanged at 72.0 MMT, along with Argentina's at 25.0 MMT. The Argentine corn crop is said to be around 5% planted. The Brazilian Trade Ministry said that they exported 3.45 MMT of corn in September versus 3.05 MMT in August and 3.15 MMT in Sept 2012. The Russian corn harvest is only 14% done, delayed by rain. Harvesting in Ukraine is also well behind schedule (11% done) for the beginning of October. This could affect many European buyers with Ukraine corn bought for October and November arrival. Quality could also be a problem. Dec 13 Corn closed at USD4.39, down 2 1/2 cents; Mar 14 Corn closed at USD4.51 3/4, down 2 3/4 cents.

Wheat: The wheat market managed to buck the trend and close higher on all three exchanges. The strong demand witnessed for US wheat on the international stage since the start of the 2013/14 season should continue to be boosted by a dollar under pressure from the US debt ceiling problems. The trade is also focusing on Monday's Sept 1 US wheat stocks number, which was below expectations at 1.855 billion bushels, suggesting that more wheat feeding went on in the Jun/Aug quarter than the market anticipated. It is also possible though that a slow start to the spring wheat harvest this year may mean that more wheat than anticipated was still out in the field. The Ukraine Ag Minister said that the nation's winter grains planted area may fall around 20% to 6.2-6.3 million hectares. Only around 2 million ha has been planted so far. Russia's winter grains planting is also delayed - said to be at the lowest level in 13 years. Russian exports are also slowing already, with SovEcon estimating September exports at 2.6-2.8 MMT versus 3.53 MMT in August. US winter wheat planting advanced from 23% done to 39% complete as of Sunday night, slightly behind the 5-year average of 40%. Dec 13 CBOT Wheat closed at USD6.81 1/4, up 2 3/4 cents Dec 13 KCBT Wheat closed at USD7.45, up 5 1/2 cents; Dec 13 MGEX Wheat closed at USD7.36 3/4, up 8 cents.