Chicago Close - Trade Prepares For Friday's Reports

07/05/14 -- Soycomplex: Beans closed weaker on talk that the US will import around 500 TMT per month of Brazilian soybeans in each of May, Jun and Jul. There were 176 overnight deliveries against the May 14 contract, the first deliveries of the month, suggesting that supplies are easing following the recent first arrivals from Brazil. It may also suggest that end user demand isn't there at these levels. Funds were estimated to have trimmed their net soybean length by around 5,000 contracts on the day, heading into Friday's USDA report. Whilst that is expected to show tight US 2013/14 carryout of around 135 million bushels, ending stocks for 2014/15 are expected to more than double that to around 300 million. Global production is expected to snowball in 2014/15, with record crops from the US, Brazil and probably Argentina as well. That might take ending stocks next season to a record 80 MMT, which is almost 10 MMT above the previous all-time high. Reports that China will soon start auctioning off 3 MMT of domestic soybean reserves also leans bearish. So too do reports that Dr Cordonnier thinks that the overall US spring planting area could be being understated at the moment. He also says that it's too early to right off yield potential, which he still sees at 44-45 bu/acre for beans. The Brazilian Ag Minister said that the country could harvest 89-90 MMT of soybeans this year due to sharply higher second/winter crop production. Trade estimates for tomorrow's weekly export sales report for beans are zero on old crop and maybe 100-200 TMT on new crop. May 14 Soybeans closed at $14.51, down 13 cents; Jul 14 Soybeans closed at $14.46 1/4, down 13 1/4 cents; May 14 Soybean Meal closed at $481.30, down $5.30; May 14 Soybean Oil closed at 40.67, down 24 points.

Corn: The corn market closed around 2-3 cents weaker, having traded both sides. This might have been down to light consolidation heading into Friday's USDA report. The trade is thinking that the USDA will report old crop corn carryout of around 1.3 million bushels, and 2014 production close to 14 billion. US 2014/15 corn ending stocks could rise to around 1.7 billion bushels, although some trade estimates are well over 2 billion. Dr Cordonnier held firm on his estimate that US corn yields still have the potential to hit 163-165 bu/acre this year. His comments concerning an overall larger planted area also apply to corn. There's talk that an improved week weather-wise this week could see the USDA report that more than 50% of the US corn crop has been planted on Monday. The US Energy Dept reported weekly ethanol production averaging 894k barrels/day, down slightly from 898k bpd the previous week. That's around 50k bpd below the rate needed to hit the USDA target for corn demand from the ethanol sector this season. Conab are out tomorrow with their May crop production estimates for Brazil. Last month they had the 2013/14 corn crop at 75.46 MMT. The Ukraine authorities continue to say the the current unrest has not caused any problems at the ports, despite the fact that fighting has now spread to Odessa city. The Ukraine Ministry said that corn planting had already been completed on 3.9 million hectares of the planned 5.1 million. Plantings last year were just over 4.8 million ha. A Reuters survey suggested that Ukraine corn plantings will only reach 4.7 million ha, with production at 25 MMT. Russia said that it's 2014 corn crop was 58.5% planted at 1.5 million ha. Dow Jones reported that Indian corn is $10-15/tonne cheaper than South American origin grain into SE Asia, and that they might export 600 TMT into the region in the next 2-3 months. Tomorrow's weekly export sales report is expected to come in at around 500-800 TMT of old crop and 100-300 TMT of new crop. May 14 Corn closed at $5.10 1/4, down 2 3/4 cents; Jul 14 Corn closed at $5.14, down 3 1/2 cents.

Wheat: The wheat market closed mixed across the three exchanges - 6 cents lower to 3 cents higher. There were 144 overnight deliveries against the May CBOT contract. Since the contract went into the delivery the net total so far is 831 lots. The US winter wheat crop looks sick, but this is old news. Wheat clops elsewhere around the world are looking pretty good, not least here in Europe. India's 2014 wheat crop is expected to be a record 104 MMT, Informa Economics said earlier in the week. Spring grain planting is going well in Russia, with 10.2 million hectares sown so far, that's 1.1 million more than this time a year ago and 31.8% of the intended area. Spring wheat has been sown on 1.6 million ha, up versus 1 million a year ago, and 11.8% of plan. Spring barley has been sown on 4.8 million ha, versus 4.1 million this time last year and 55.2% of plan. UkrAgroConsult estimated the Russian wheat crop at 54.5 MMT versus 52.1 MMT last year. They see 2014/15 exports rising from 17.9 MMT to 19.7 MMT. Ukraine's wheat crop will however fall from 21 MMT to 19.6 MMT, with 2014/15 exports down from 9 MMT to 8.6 MMT, they said. Wheat production in Kazakhstan is expected at 16.3 MMT this year versus 13.9 MMT in 2013, according to Informa. Increases in output from the latter and Russia are therefore expected to more than compensate from production declines in Ukraine. Trade estimates for Friday's upcoming USDA report are that the 2014 US winter wheat crop will come in at 1.47 billion bushels, down from 1.53 billion a year ago. All wheat output will drop from 2.13 billion in 2013 to around 2.05 billion this year, according to the average trade estimate. The range of estimates is a fairly wide 1.9-2.2 billion. For 2013/14 all wheat ending stocks the average trade estimate is 588 million bushels versus the 583 million forecast last month. World 2013/14 carryout is also seen little changed at 186.8 MMT versus 186.7 MMT last time. Tomorrow's weekly export sales are expected to be around 300-500 TMT for both crop years. May 14 CBOT Wheat closed at $7.29 3/4, down 2 cents; May 14 KCBT Wheat closed at $8.36 1/2, down 6 1/2 cents; May 14 MGEX Wheat closed at $7.95 1/2, up 3 1/2 cents.