03/10/14 -- Soycomplex: Beans closed around 12-15 cents lower on rising production estimates and the outlook for some decent harvest progress to be made over the weekend and into the early part of next week. Benson Quinn said that they expect the US harvest to be 22-27% complete when the USDA release their crop progress report on Monday night. Harvesting was 10% done a week ago. Informa raised their US yield estimate by 2 bu/acre to 48.5 bu/acre, upping production from 3.875 billion bushels to 4.017 billion. Rabobank estimated yields at 48 bu/acre, with production at 4.021 billion. The USDA were 46.6 bu/acre and 3.913 billion in September. They revise their estimates next Friday. Rabobank forecast 2014/15 soybean production in Brazil at 92 MMT, with output in Argentina at 55 MMT, a combined increase of 5% or 7 MMT on last year. Informa raised their Brazilian soybean crop forecast by 1.7 MMT to 92.5 MMT. Safras e Mercado estimated Brazil’s 2014/15 crop even higher at 95.9 MMT. They said that Brazilian farmers had only sold 12% of their new crop versus 32% a year ago at this time. Stats Canada estimate the 2014 Canadian canola crop at 14.08 MMT, up sightly from 13.908 MMT previously, but below the average trade estimate of 14.6 MMT. Rabobank forecast US soybean prices at $8.90 in Q4 of this year and not much better - $9.00 - in Q3 of 2015. "A big crop is getting bigger. USDA monthly production report is a week from today. Seasonally, the market tends to score its harvest low in the first or second week of October. Harvest delays this week may hold that off for next week. But if South American crops are as big as anticipated..further lows look to be in the future," said Benson Quinn. Nov 14 Soybeans closed at $9.12 1/4, down 12 1/4 cents; Jan 15 Soybeans closed at $9.20 1/2, down 12 1/2 cents; Oct 14 Soybean Meal closed at $308.00, down $0.70; Oct 14 Soybean Oil closed at 32.29, down 38 points. For the week that puts beans 2 cents higher on the front month, with meal up 80 cents and oil 37 points higher.
Corn: The corn market closed with little change on the day, or for the week. Informa raised their 2014 US corn yield estimate from 171.8 bu/acre to 176.4 bu/acre, with production up from 14.024 billion bushels to 14.395 billion. Despite a much higher yield estimate than the USDA's existing 171.7 bu/acre, the production number only matches that from Washington due to a lower harvested area. "The trade is focused on big yields and really hasn’t embraced the potential effects of the significant acreage reductions Informa cites," noted Benson Quinn. Rabobank said that they are currently factoring in a 2014 US corn yield of 175 bu/acre, but that could eventually climb to 178-180 bu/acre by the December report. "Expectations of increasing yields from an already record-level crop will likely continue to drive prices down," they said. They forecast a Q4 2014 average corn price of $3.15, rising to $3.50 in Q2 of 2015. Stats Canada forecast the Canadian 2014 corn crop at 11.397 MMT, down from 11.43 MMT a month ago and below the 11.8 MMT that the trade was expecting. The French corn harvest was 3% done as of Monday, said FranceAgriMer. The Russian corn harvest is 46.5% complete at 5.7 MMT, said their Ag Ministry. The Ukraine corn harvest is 31% complete at 6.7 MMT, said their Ag Ministry. That implies a finished crop of 21.6 MMT rather than the Ministry's official forecast of 30 MMT and production of 30.9 MMT last year. Dollar strength continues to weigh on US prices. Yesterday's weekly export sales total was ho-hum at 638 TMT. Benson Quinn said that they expect the 2014 US corn harvest to be around 25-30% complete when the USDA report on that on Monday night. A week ago it was 12% done. Dec 14 Corn closed at $3.23 1/4, up 1/2 cent; Mar 15 Corn closed at $3.36 1/4, up 1/2 cent. For the week that puts Dec 14 1/4 of a cent higher, with Mar 15 up 3/4 of a cent.
Wheat: The wheat market closed higher on the day, and for the week, across the three exchanges. Stats Canada pegged the 2014 Canadian all wheat crop at 27.48 MMT versus the average trade estimate of 28.0 MMT and their August estimate of 27.705 MMT. "While 26% below last year’s monster crop, this is still a very good wheat crop," opined Benson Quinn. Rabobank lowered their forecast for Q4 2014 Chicago wheat prices to $4.50, rising to $4.75 in Q1 of 2015, before tailing off again to $4.60 in Q2 and Q3 of next year. "The hunt for quality is disrupting normal trade flows as global quantity is adequate yet quality is unevenly spread between major exporters, providing some price support," they said. However "rallies will be difficult to sustain without adverse weather. In addition, plummeting corn prices have been a key reason behind recent price losses in wheat," they added. Russia said that their 2014 wheat harvest had now reached 58.9 MMT off 89% of the intended area. They've now harvested close to 100 MMT of grain this year, with the Ag Minister today raising his estimate for final production to 110 MMT in bunker weight and 104 MMT after cleaning and screening, a near 14% increase on a year ago. Despite the strong US dollar yesterday's robust weekly export sales total of 741 TMT was supportive. As Rabobank point out the global demand for quality wheat is there, and should support that market as availability of such tightens up in the second half of the season. The destiny of feed wheat prices is however a different kettle of fish, with plentiful supply already looking likely to mean that a larger than normal proportion of this year's crop is carried over into 2015/16 in the hope that higher prices will eventually return. Dec 14 CBOT Wheat closed at $4.85 3/4, up 3 cents; Dec 14 KCBT Wheat closed at $5.68, up 6 1/2 cents; Dec 14 MGEX Wheat closed at $5.43 1/2, up 8 cents. For the week that puts Chicago wheat up 11 1/2 cents, with Kansas 4 1/4 cents firmer and the Minneapolis market 10 1/4 cents firmer.
03/10/14 -- EU grains closed mixed to end the week, but with decent gains versus last Friday.
The pound slumped under 1.60, to its worst level against the US dollar since November, falling below even the pre Scottish Referendum jitters low. That supported London wheat a little even if there is no shortage of global feed grain availability.
The day ended with Nov 14 London wheat up GBP0.50/tonne at GBP111.50/tonne, Nov 14 Paris wheat was up EUR0.50/tonne at EUR158.50/tonne, Nov 14 Paris corn was down EUR0.75/tonne at EUR141.50/tonne and Nov 14 Paris rapeseed rose EUR4.25/tonne to EUR325.00/tonne.
For the week that puts London wheat up GBP3.85/tonne, with Paris wheat EUR6.50/tonne firmer, corn up EUR4.25/tonne and rapeseed EUR9.50/tonne higher.
The Russian Ag Minister raised his forecast for their 2014 grain crop to 110 MMT in bunker weight, and 104 MMT in clean, or net weight. That's the second largest output of the post Soviet era (2008 being the largest with a crop of 108 MMT in net weight).
It also comfortably beats last season's final output of 91.3 MMT by almost 14% if correct.
The Russian Ministry said that the 2014 grain harvest is now 88% complete at 99.7 MMT. The wheat harvest is 89% done at 58.9 MMT, barley output is 95% complete at 20.6 MMT and 46.5% of this year's corn crop has now been cut producing 5.7 MMT so far.
Russian winter grain plantings for the 2015 harvest are already well advanced at 76.5% complete on 12.6 million ha to date. Rain is now needed there to help the crop get established before winter bites.
Kazakhstan said that they'd harvested almost 14 MMT of grains off 78% of the planned area.
Ukraine said that they'd now harvested 43 MMT of grains off 77% of plan. That includes 6.7 MMT of corn off 31% of the anticipated area. The bare bones of the latter numbers appears to confirm most analysts ideas that the Ag Ministry's official forecast for a 2014 corn crop of 30 MMT is pie in the sky.
Ukraine also said that they'd planted 4.258 million ha of winter grains, which is 57% of plan. Most of that area, 3.979 million ha, is wheat. They also said that winter OSR has now been sown on 803 million ha, or 94% of the intended area.
FranceAgriMer said that the French corn harvest was 3% complete as of Monday, up from 1% done a week ago, and compared to zero a year ago. Corn rated in good to very good condition was unchanged from a week ago at 86%, although there was a one point switch from good to very good, far higher than 57% a year ago.
They reported that French winter wheat for the 2015 harvest was 9% planted versus 7% a year ago at this time. Winter barley is 15% sown, up two points compared to this time last year.
02/10/14 -- Soycomplex: Beans closed with relatively small gains. Weekly export sales were in line with expectations at 869.1 TMT for 2014/15 shipment and 21.5 TMT for 2015/16. A wetter weather outlook for the Midwest next week is seen slowing harvest activity in a market keen to secure front end supplies. There was also some talk of a freeze risk for some northern states over the weekend. Linn Group joined the throng of analysts predicting much larger crop numbers than the USDA said last month. They are projecting a 48.6 bu/acre US soybean yield this year and a 4.091 billion bushel crop Those figures are slightly above FCStone's 48.4 bu/acre and 4.066 billion bushels of yesterday. Informa are due to release their latest estimates tomorrow, with the USDA themselves not out until Friday week. Last month they lined up at 46.6 bu/acre and production of "only" 3.913 billion bushels - even if that was a record in its own right. Lanworth forecast the 2014/15 Argentine soybean crop at a new record 58.7 MMT. Brazil are also expected to chip in with an all time high crop of around 95 MMT or more next year. Stats Canada are out tomorrow with their Canadian crop production estimates. Trade ideas for canola production this year are around 14.5-14.6 MMT versus their previous forecast of 13.9 MMT. Nov 14 Soybeans closed at $9.24 1/2, up 7 3/4 cents; Jan 15 Soybeans closed at $9.33, up 8 cents; Oct 14 Soybean Meal closed at $308.70, up $3.40; Oct 14 Soybean Oil closed at 32.67, up 1 point.
Corn: The corn market posted small gains. MDA CropCast raised their estimate for the US 2014 corn crop by 79 million bushels to 14.505 billion, joining a group of forecasters around the 14.5-15.0 billion bushel mark. The USDA were 14.395 billion back in September with yields at 171.7 bu/acre. Linn Group today pegged the crop at 14.881 billion bushels, up from 14.671 billion in September. They raised their yield estimate to 176.9 bu/acre from 174.65 bu/acre last month. FCStone were at 14.958 billion and 178.4 bu/acre yesterday. Weekly US export sales came in at the low end of trade guesses of 650-900 TMT at 638 TMT for 2014/15 shipment, plus a further near 48 TMT for the 2015/16 marketing year. That's the lowest weekly total so far this season. Separately the USDA announced 174,000 MT of US corn sold to unknown for 2014/15 shipment under the daily reporting system. Russia said that they'd harvested 5.5 MMT of corn so far, with Ukraine saying that they'd cut 6.7 MMT to date. The Ukraine Ag Ministry insist that production will reach 30 MMT or more this year, although most private analysts think that this is optimistic and are lining up in the 25-27 MMT region. Production last year was a record 30.9 MMT. Nevertheless, a report on Reuters said that Ukraine corn prices could quickly fall to around $140/tonne FOB the Black Sea, around $20/tonne lower than where they are currently, and some $60/tonne below where they were 12 months ago. Dec 14 Corn closed at $3.22 3/4, up 1 1/2 cents; Mar 15 Corn closed at $3.35 3/4, up 1 3/4 cents.
Wheat: The wheat market closed around 3 to 4 cents higher across the three exchanges. Weekly export sales were supportive at 741 TMT versus expectations of only 400-600 TMT. Iran is said to have bought 400 TMT of EU origin wheat in the last week or so, as EU exports continue to virtually match last season's pace despite USDA expectations for a near 6 MMT decline year-on-year. It is interesting to note that this has been achieved in the face of very strong early season competition from Russia and Ukraine, something that is expected to wane as the season wears on. Taiwan bought 80,000 MT of US wheat for Nov–Dec shipment in a tender. South Korea's CJ bought 36,500 MT of Australian milling wheat for Feb-March shipment. The wheat harvest in South Australia state is said to be underway 2-3 weeks earlier than normal. Stats Canada are out tomorrow with their latest crop production estimates. A Reuters survey has the 2014 total Canadian wheat crop average estimate at 28.0 MMT versus Stats Canada's August estimate of 27.705 MMT. The 2014 Canadian barley crop average estimate is 7.3 MMT versus Stats Canada's August estimate of 7.164 MMT. Russia said that they'd now harvested 99 MMT of grains off 87.4% of the planned area, including 58.6 MMT of wheat. Winter wheat planting for the 2015 harvest in Russia is already approaching 75% done, and is running well ahead of year ago levels. Egypt's Supplies Minister said that state (GASC) wheat imports to fall to 4-4.5 MMT next year. Dec 14 CBOT Wheat closed at $4.82 3/4, up 3 3/4 cents; Dec 14 KCBT Wheat closed at $5.61 1/2, up 4 cents; Dec 14 MGEX Wheat closed at $5.35 1/2, up 3 3/4 cents.
02/10/14 -- EU grains rose for a second day, with the ECB's decision to leave Eurozone interest rates on hold taking some of the recent acute weakness out of the euro.
The day ended with Nov 14 London wheat up GBP2.50/tonne to GBP111.00/tonne, Nov 14 Paris wheat closed EUR3.25/tonne higher at EUR158.00/tonne, Nov 14 Paris corn was up EUR1.50/tonne to EUR142.25/tonne, whilst Nov 14 Paris rapeseed was EUR0.50/tonne firmer at EUR320.75/tonne.
Is that it? Is the rout finally over? It's lasted 4-months, or at least the most recent round of it has. We probably won't know the answer to that question until we get next Friday's WASDE report from the USDA.
That is expected to confirm new all time high, unprecedented US corn and soybean yields. Certainly as far as corn is concerned, these are said to be off the scale of anything that's ever been seen before. FCStone yesterday estimated US national yields at 178.4 bu/acre versus a previous estimate of 174.1 bu/acre and 4% higher than the USDA's current estimate of 171.7 bu/acre.
In Illinois they put the average yield at 221 bu/acre, up 20 bu/acre from their previous estimate and a massive 14%, or 27 bu/acre, above the USDA's September estimate.
How can the USDA be so far out on yields? The answer seems to be that this summer's mild and wet Midwest conditions mean that the length of your average US corn cob this year is much longer than normal, and therefore contains more grain kernels.
The USDA have hitherto based their yield estimates on historical averages for the number of kernels per cob, I understand. They should however now have enough real 2014 harvest data at their disposal to come up with a more accurate reflection of this year's exceptional crop.
The disparity between US corn and wheat prices is still pretty high, so one more kick in the guts for corn from the USDA next week could potentially see wheat prices fall to yet new lows. Only time will tell.
Before that we've got Stats Canada and Informa Economics out with their latest crop production forecasts tomorrow.
Russia said that their 2014 grain harvest had now reached the 99 MMT mark, off 39.5 million ha, or 87.4% of the intended area. Wheat accounts for 58.6 MMT off 21.7 million ha (88.3%), with barley adding a further 20.5 MMT off 8.6 million ha (94.6%) and corn an additional 5.5 MMT off 1.2 million ha, or 44.8% of plan.
Russian farmers have already sown an area of 12.3 million ha of winter grains for the 2015 harvest, the Ministry added. That's up sharply from only 8.2 million ha this time a year ago and constitutes almost 75% of the anticipated area.
EU soft wheat export licences continue to run neck and neck with last year's pace, which is a supportive factor given that full season exports are expected to show a significant year on year decline. Brussels issued 417 TMT worth of soft wheat export licences this past week, taking the season to date total to 6.8 MMT versus 6.9 MMT a year ago. Lack of availability of quality wheat could be a hindrance to exports later in the season though.
Ukraine said that they'd exported 45% more grain in the first three months of the 2014/15 marketing campaign than a year ago. Exports stand at 8.6 MMT in Jul/Sep, according to the Ag Ministry. These include 4.9 MMT of wheat, 2.9 MMT of barley and 640 TMT of corn, they say.
Russian 12.5% milling wheat FOB the Black Sea is offered in the market at around $233/tonne versus Ukraine 11.5% milling wheat at $225/tonne and the winning French offers in yesterday's GASC tender were $223.70/tonne. French new crop corn offers FOB Bordeaux are at EUR137/tonne.
01/10/14 -- Soycomplex: Beans put in a new contract low before rebounding to finish the day with modest gains. FCStone raised its US 2014 soybean yield estimate to 48.4 bu/acre, up from 47.6 bu/acre previously and the USDA's current 46.6 bu/acre forecast. Given that the USDA said yesterday that last year's yield was 44 bu/acre, then a figure of 48+ this year is plausible given the improved weather scenario. FCStone now have production at 4.066 billion bushels versus the USDA's September estimate of 3.913 billion. "Today’s price action seemed to be another breather pause in an otherwise bearish market. Harvest has just begun and based on yield reports the producer if very undersold," said Benson Quinn Commodities. They noted that Goldman Sachs pegged the 3-6 month US soybean price at $8/bushel. Goldman also see US 2014/15 soybean ending stocks rising to a bountiful 456 million bushels versus the record tight 92 million at the end of 2013/14 that the USDA presented us with yesterday. Thailand are tendering for up to 430,000 MT of optional origin soymeal for Jan-June shipment. Trade estimates for tomorrow's weekly export sales report for beans are around 700 TMT to 1 MMT. Nov 14 Soybeans closed at $9.16 3/4, up 3 1/2 cents; Jan 15 Soybeans closed at $9.25, up 3 3/4 cents; Oct 14 Soybean Meal closed at $305.30, up $0.70; Oct 14 Soybean Oil closed at 32.66, up 39 points.
Corn: The corn market closed with nominal gains. FCStone estimated the 2014 US corn crop at a huge 14.958 billion bushels based on an average yield of 178.4 bu/acre. Their previous production estimate was 14.595 billion and the USDA's September figure was 14.395 billion. Their previous yield estimate was 174.1 bu/acre and the USDA's September figure was 171.7 bu/acre. Goldman Sachs said that corn prices would hit $3.00/bushel in the 3-6 month time frame. They have 2014/15 US corn ending stocks estimated at 2.278 billion bushels versus the USDA's 2013/14 ending stocks estimate of 1.236 billion. "Today’s pause from the downtrend seems a little premature to be called a consolidation for a variety of reasons. One being that only 12% of the crop had been harvested as of Sunday night and reports of extraordinary yields have not stopped being reported," said Benson Quinn Commodities. All eyes are now firmly fixed on next Friday's WASDE report from the USDA. The Energy Dept reported US weekly ethanol production was down 8k barrels/day versus the week previously. Trade estimates for the USDA weekly export sales report tomorrow are 650-900 TMT. Dec 14 Corn closed at $3.21 1/4, up 1/2 cent; Mar 15 Corn closed at $3.34, up 1/2 cent.
Wheat: The wheat market closed narrowly mixed. Egypt's GASC bought two cargoes of French wheat in their tender, with the price reportedly paid beating Russian offers by around $10/tonne. US SRW wheat, which was successful in the last tender, wasn't offered this time round. Morocco bought 9,000 MT of US soft wheat for Dec shipment. Goldman Sachs reportedly pegged US wheat prices at $4.50/bushel in the 3 to 6 month time frame. The USDA attaché in Brazil estimated the country's 2014/15 wheat crop at 7.5 MMT, up 30% versus 2013/14. Brazil were a featured buyer of US wheat last season due to the shortfall in their own, and neighbouring Argentina's, wheat crop. Ukraine's Ag Minister estimated the 2014 grain crop there at a record 64.4 MMT, up from a previous estimate of 60.0 MMT and compared to 63 MMT last year. How they will achieve that, given the loss of Crimea and that some crops in the Lugansk and Donetsk region are expected to go unharvested due to the fighting there remains to be seen. UkrAgroConsult estimated the Ukraine grain crop at a more realistic looking 57.4 MMT earlier in the week. Trade estimates for tomorrow's weekly export sales report for wheat are in the region of 400-600 TMT. Dec 14 CBOT Wheat closed at $4.79, up 1 1/4 cents; Dec 14 KCBT Wheat closed at $5.57 1/2, down 1/2 cent; Dec 14 MGEX Wheat closed at $5.31 3/4, down 1 3/4 cents.
01/10/14 -- EU grains closed higher to start the new month, with the Paris market garnering support from an ever weakening euro.
The day ended with Nov 14 London wheat up GBP0.80/tonne to GBP108.50/tonne, Nov 14 Paris wheat closing EUR2.00/tonne higher at EUR154.75/tonne, Nov 14 Paris corn was up EUR2.75/tonne to EUR140.75/tonne, whilst Nov 14 Paris rapeseed was EUR1.50/tonne firmer at EUR320.25/tonne.
The pound rose to a fresh 2-year high against the euro, nervous ahead of tomorrow's ECB meeting.
Another supportive factor for the Paris wheat market was Egypt's GASC booking two cargoes of French wheat for Nov 1-10 shipment, with Russian wheat comfortably out-priced.
It seems like Russia have crammed the bulk of their activity into the first quarter of the new season. ProZerno said that the country had exported around 3.6-3.7 MMT of grains in September, that's down from the record 4.7 MMT shipped out in August, but still the highest for that particular month in the last three seasons.
That takes Q1 (Jul/Sep) 2014/15 exports to an all time high 11.7 MMT, they said.
Ukraine's exports are also going well, with 8.347 MMT shipped out in Q1 of the new season. That total includes 4.764 MMT of wheat, 2.871 MMT of barley and 599 TMT of corn. The Ukraine Ag Minister raised his estimate for grain production there this year to an optimistic looking 64.4 MMT, which would beat last season's record 63 MMT if achieved.
Back to Russia, the Ag Ministry there said that the 2014 grain harvest had now reached 97.6 MMT off 86% of the planned area. The country has harvested 21.5 million ha of wheat (87.4% of plan), producing a crop of 58.3 MMT in bunker weight so far. They've also harvested 20.5 MMT of barley and 4.6 MMT of corn.
In addition, Russian winter grains have already been planted on an area of 11.4 million ha, 69% of plan, and up sharply from only 7.9 million ha this time a year ago.
On day two of the Russian Ministry's intervention purchase program they only managed to procure 6,885 MT of grain, down from 19,555 MT yesterday.
Domestic demand in Russia is strong due to increased livestock production due to tit-for-tat sanctions issued against Europe and the US. SovEcon estimate Russian grain demand at 71 MMT this season, up 4 MMT from a year previously.
Closer to home, FranceAgriMer reported that France had exported 784 TMT of barley in July, a 36% rise on a year ago. New customer China took 247 TMT of that total. FranceAgriMer estimate 2014/15 French barley exports at 5.625 MMT, up 11% from last season.
Here in the UK, feed wheat prices are now below GBP100/tonne in southern and central regions, according to a report on Agrimoney today. They say that Strategie Grains peg UK wheat carryover stocks at the end of the year at an unusually large 3.6 MMT, which they say is "more than the country has seen since the days of Intervention stores," as UK growers continue to baulk at selling at these levels.
30/09/14 -- Soycomplex: Beans closed lower, despite the USDA cutting Sep 1 stocks to just 92 million bushels, down 38 million from their previous estimate and the tightest in over 40 years. That came even with a 0.7 bu/acre increase in yields in 2013, and a corresponding 69.2 million bushel rise in production last year to 3.358 billion bushels. "This surprise offered the producer some opportunities during the session to sell beans higher if they were paying close attention because at the end of the day big yield reports and an expanding (2014/15) balance sheet had the market closing in the red," said Benson Quinn Commodities. Dollar strength was also a negative influence again today, they added. AgroConsult estimated Brazil’s 2014/15 bean crop at a record 94.8 MMT, although down slightly on their previous forecast of 95.1 MMT. AgRural said Brazil’s 2014/15 bean crop was 2% planted as of Friday versus 1% a year ago. Good early progress has been made in Parana where soil moisture is said to be abundant. Dr Cordonnier has the 2014/15 Brazilian bean crop estimated at 95.0 MMT, unchanged from his previous forecast. He has the Argentina bean crop estimated at 55.0 MMT, also unchanged from previously. The market appears to be far more interested in the looming record large US and South American soybean crops than looking back at how tight things were in 2013/14. A test of $9.00/bushel looks like it might be on the cards, we haven't been down there since 2009. Nov 14 Soybeans closed at $9.13 1/4, down 10 1/4 cents; Jan 15 Soybeans closed at $9.21 1/4, down 11 cents; Oct 14 Soybean Meal closed at $304.60, down $3.50; Oct 14 Soybean Oil closed at 32.27, down 52 points.
Corn: The corn market closed lower, with 2013/14 US ending stocks coming in 45 million bushels larger than the trade had been expecting at 1.236 billion bushels. Corn now trades at new contract lows and looking to test $3.00/bushel to the downside, that would be the lowest level on a front month since 2009. Reports of huge corn yields continue to hit the market. The USDA may reflect at least some of that in next week's WASDE report. Dr Cordonnier has the Brazilian total corn crop estimated at 75.0 MMT, with Argentina's at 22 MMT, both unchanged from his previous estimates. South Africa's CEC estimated the 2014 corn crop there at 14.307 MMT, unchanged from previously. The Ukraine corn harvest is said to be around 40% complete, with progress in Russia a little bit less than that. Ukraine new crop corn offers FOB the Black Sea are said to be around $162/tonne. Fund selling in corn was estimated at a net 5,000 contracts on the day today. "Technicals remain weak with new contract lows expected to trigger additional selling. Perhaps, there was more emphasis on the sell side due to quarter end, but there isn’t much of a case to be made on the long side," said Benson Quinn Commodities. As with beans, dollar strength was also a negative today. So too is the fact that the EU 2014 corn harvest is now underway, with a record crop expected there too. French corn growers group AGPM recently estimated the 2014 corn crop there at a record high 17.25 MMT, up 17% from last year. Some other estimates are now as high as 18 MMT. Dec 14 Corn closed at $3.20 3/4, down 5 cents; Mar 15 Corn closed at $3.33 1/2, down 5 cents.
Wheat: The wheat market closed mostly lower, pressured by corn sliding to contract lows. The USDA put 2014 US all wheat production at 2.035 billion bushels, which was almost exactly in line with the average trade estimate of 2.037 billion. Sept 1 all wheat stocks came in at 1.914 billion bushels, which was a little below the average trade guess. Egypt's GASC tendered for wheat for Nov 1-10 delivery late in the day, with the results expected tomorrow. It will be interesting to see if US wheat remains competitive versus French, Russian and Romanian offers - especially given the strength of the dollar. GASC are currently said to have only bought 355,000 MT of wheat for October delivery so far, not much more than half the 650,000 MT that they bought in October of 2013. It's unclear whether they've simply read the market well or are short of cash. The fact that they are now in the market for November suggests that it might be the latter. Russia kicked off it's 2014/15 intervention program buying 19,555 MT of a mixture of wheat and barley. Their aim is to buy 5 MMT over the coming months to replenish state-owned stocks. "Late price action (in corn) and Chicago wheat eventually gaining on corn hints at the need for a correction in that market. I expect there is a considerable position long corn/short Chicago wheat. A better correction in Chicago wheat could force liquidation of these spreads," said Benson Quinn Commodities. Dec 14 CBOT Wheat closed at $4.77 3/4, down 3 1/2 cents; Dec 14 KCBT Wheat closed at $5.58, down 8 1/2 cents; Dec 14 MGEX Wheat closed at $5.33 1/2, down 5 3/4 cents.
30/09/14 -- EU grains closed narrowly mixed to end the month and quarter, with the London market remaining under pressure from the burgeoning supply of global feed wheat and the looming record large world and EU corn crops.
The day ended with Nov 14 London wheat down GBP1.00/tonne at GBP107.70/tonne, and with Nov 14 Paris wheat closing down EUR1.00/tonne to EUR152.75/tonne. Nov 14 Paris corn was EUR0.50/tonne lower to EUR138.00/tonne and Nov 14 Paris rapeseed rose EUR1.25/tonne to EUR318.75/tonne.
However bad your average UK or EU arable grower thinks things are, spare a thought for your counterpart in Ukraine, particularly in the rebel held Lugansk and Donetsk regions. Agritel report that ex farm milling wheat in Lugansk is only fetching $157/tonne, which is around GBP97/tonne sterling equivalent. Corn prices are even worse, at $92/tonne - that's around GBP57/tonne! For comparison purposes they say that milling wheat in the Poltava region, which is a similar distance away from Odessa port as Lugansk, are $186/tonne (around GBP115/tonne), with corn at $122/tonne (GBP75/tonne).
Ukragroconsult forecast Ukraine's 2014 wheat harvest at 21.62 MMT in clean weight, up from 21.0 MMT previously. They also increased their estimate for 2014/15 wheat exports from 9.5 MMT to 10 MMT. They said that Ukraine had exported 4.4 MMT of wheat in the first quarter (Jul/Sep) of the new marketing year.
Russia began its intervention purchase program today, buying 19,555 MT of grain split 54% wheat and 46% barley.
FranceAgriMer said that French wheat stocks as at Sep 1 were up 3% on year ago levels, and that barley stocks were 13% higher. That's roughly in line with production increases this year which sees the French wheat crop up 2% at 37.4 MMT and barley output 11% higher at 11.5 MMT.
ADM Germany (formerly Toepfer) forecast the UK wheat crop at 16.58 MMT, a 39% rise versus last year.
They also estimated Germany’s 2014 corn crop at 4.8 MMT versus 4.0 MMT a year ago, with Romania's up to 10.8 MMT from 10.4 MMT in 2013.
Turkey released a tender for 200 TMT of optional origin milling wheat for Oct/Nov shipment. Russian wheat may be the favourite to win that business.
Egypt tendered for wheat late in the day, with the results expected tomorrow afternoon. US wheat won their last tender.
29/09/14 -- Soycomplex: Beans closed higher on month/quarter-end short covering. There may also have been some book squaring going on ahead of tomorrow's quarterly stocks report. That's expected to show Sep 1 US soybean inventories at around 126-131 million bushels. Weekly export inspections came in at a robust 687,191 MT. At an edible oils conference in India over the weekend Dorab Mistry apparently said that world soybean prices could hit new lows in January due to the large South American crop. Chicago soybean prices frequently post seasonal lows around the beginning of the year. "The fundamentals of the soybean complex say that prices should continue lower especially if record South American harvest is realized," said Benson Quinn Commodities. IMEA said on Friday that Mato Grosso's 2014 soybean planting is 1.7% complete versus 0.3% a week ago and 0.7% a year ago. They estimated Mato Grosso;s total soybean area at 8.8 million ha. Lanworth tweaked higher its forecast for the 2014 US soybean yield to 47.1 bu/acre from 47.0 bu/acre previously, and estimated production at 3.880 billion bushels, up from 3.873 billion previously. After the close the USDA said that this year's US harvest was now 10% complete versus the 5-year average of 17%. They said that 69% of the crop is dropping leaves compared to 71% on average. They raised good to excellent crop conditions 1 point from a week ago to 72% versus only 53% a year ago. Nov 14 Soybeans closed at $9.23 1/2, up 13 1/4 cents; Jan 15 Soybeans closed at $9.32 1/4, up 13 1/2 cents; Oct 14 Soybean Meal closed at $308.10, up $0.90; Oct 14 Soybean Oil closed at 32.79, up 87 points.
Corn: The corn market was a couple of cents firmer on what also looks like position squaring ahead of tomorrow's quarterly grain stocks report. Trade estimates for that are around 1.020-1.294 billion bushels. Weekly export inspections were 601,825 MT. Big crops get bigger is the old adage, and Lanworth agreed, raising its estimate for 2014 US corn yields to 174.9 bu/acre from 174.5 bu/acre previously. The firm now put 2014 US corn production at 14.596 billion bushels, up from its previous forecast of 14.564 billion, and a record high. "Good yields and favourable weather remain the key components offering resistance to this market," said Benson Quinn Commodities. The corn market often posts its seasonal lows in October. The USDA reported after the close that this year's US corn harvest is only 12% complete versus 23% for the 5-year average. That's considerably less progress than some had been forecasting, with around 20% done being mentioned in some quarters. It is in fact an increase of only 5 points on a week ago. Fortunately the 6-10 day forecast is reasonably warm and dry. The USDA left good to excellent crop conditions unchanged on a week ago at 74%. They said that 60% of the crop is mature versus 70% for the 5-year average and that the crop is 96% dented, which is one point behind the norm at this time. Ukraine said that they'd harvested 5 MMT of corn so far, with the Russian harvest standing at 4.3 MMT to date. The UAE bought 120,000 MT of soft wheat, 15,000 MT of hard wheat, 40,000 MT of corn and 30,000 MT of feed barley for Feb-May shipment over the weekend. Dec 14 Corn closed at $3.25 3/4, up 2 3/4 cents; Mar 15 Corn closed at $3.38 1/2, up 2 3/4 cents.
Wheat: The wheat market closed higher on all three exchanges. "Pre-report trading in US wheat futures saw a round of profit-taking overnight and a nice recovery from lower trade early in the session," said Benson Quinn. Trade estimates for tomorrow's Sept 1 US all wheat stocks are around 2.004 to 2.075 billion bushels. The USDA will also report on US wheat production. Trade estimates for all wheat are averaging 2.037 billion bushels. The range of estimates are 2.004-2.075 billion versus the USDA's August estimate of 2.030 billion and the 2013 all wheat crop of 2.130 billion. Weekly export inspections came in at a fair 537,647 MT. Taiwan seeks 80,000 MT of US milling wheat for Nov-Dec shipment and Oman are tendering for 60,000 MT of what is expected to be German or Russian wheat for Jan shipment. Russian wheat prices are said to be in decline, catching up with cheaper offers out of Europe and the US. SovEcon pegged FOB prices for Russian wheat with 12.5 percent protein in the deep-water ports on the Black Sea at $237/tonne, down $8.50 on the week, according to Reuters. ABARES estimated Australia’s 2014/15 wheat crop at 24.234 MMT versus 27 MMT a year ago. After the close the USDA said that this year's US spring wheat harvest is winding down at 94% done, up from 86% a week ago, but 2 points behind the 5-year average. Winter wheat planting is 43% done versus 25% a week ago and 36% on average at this time. The crop is 14% emerged, which is 2 points ahead of the average. Dec 14 CBOT Wheat closed at $4.81 1/4, up 7 cents; Dec 14 KCBT Wheat closed at $5.66 1/2, up 2 3/4 cents; Dec 14 MGEX Wheat closed at $5.40, up 6 3/4 cents.
29/09/14 -- EU grains closed mostly higher in what looks like month-end and quarter-end consolidation and profit-taking.
The day ended with Nov 14 London wheat up GBP1.05/tonne to GBP108.70/tonne, Nov 14 Paris wheat closed EUR1.75/tonne higher at EUR153.75/tonne, Nov 14 Paris corn was up EUR1.25/tonne to EUR138.50/tonne, whilst Nov 14 Paris rapeseed was EUR2.00/tonne firmer at EUR317.0/tonne.
Fresh news was relatively scarce. The Russian 2014 grain harvest is closing in on the 100 MMT mark at 96.1 MMT off 81.4% of the planned area. Wheat accounts for 57.8 MMT of that total off 83.2% of the anticipated harvest area. Barley adds a further 20.3 MMT off almost 90% of plan, with corn adding an additional 4.3 MMT off almost 32% of plan.
Russia Ag Ministry said that the country had exported 3.0 MMT of grain between Sept 1st – Sept 24th. That takes Russia's exports so far this season to 10.7 MMT, up 26.6% from a year ago.
SovEcon estimated Russia’s September grain exports at 3.5-3.7 MMT.
The Kazakh harvest meanwhile will total 17 MMT, with 2014/15 exports at 7 MMT, according to their Ag Ministry. Yields are lower, but quality is better than last year, they added.
Ukraine's 2014 harvest is now 75% done at 41.1 MMT, said the Ag Ministry there. The wheat and barley harvests are finished at 24.4 MMT and 9.3 MMT respectively. They've also cut 5 MMT of corn so far.
Only 56% of the 2014 Ukraine wheat harvest is suitable for milling, the Ministry added. That's down from 69% a year ago.
Winter wheat planting in Ukraine is almost at the halfway point at 3 million ha of the intended 6.2 million ha (up slightly from 6.1 million ha a year ago), they said.
The IGC said late last week that the world will harvest the largest wheat area since 1998 next year at 224 million ha, up from 222.7 million in 2014.
Oman are tendering for 60,000 MT of German or Russian wheat for Jan shipment.
26/09/14 -- Soycomplex: Beans closed lower, setting contract lows and ending at the worst level for a front month since Feb 2010. The US harvest is expected to have made decent progress this week and over the weekend. The USDA will update us on just how much progress on Monday night. After that it will give us their Sept 1 US stocks numbers on Tuesday, and following that their October WASDE report two weeks today on Oct 10. Old crop soybean ending stocks (2013/14) are forecast anywhere from as low as 100 million bushels to up to 150 million versus 141 million a year ago and their 130 million estimate last month. It's 2014/15 carryout that the trade is now more interested in though. We won't get those figures until the WASDE comes out however, but these are expected to be huge - estimated at 475 million bushels in August. A report on Reuters said that China "has suspended the import approval process for a genetically modified soybean variety, citing low public acceptance of GMO food." The variety in question hasn't been named. That really could set the cat amongst the pigeons, given that their unwillingness to approve MIR 162 corn has seen US exports of the grain to China dry up. China also celebrate "Golden Week" next week, which would usually mean a slowdown in their activity. Abiove estimated Brazil’s 2014/15 soybean crop at a record 91.0 MMT, up 5.4% from the previous year. They see exports at 48 MMT, up 6.7% compared to 2013/14. They estimated Brazil’s 2014/15 soybean ending stocks at 5.78 MMT versus 3.8 MMT in 2013/14. The weekly commitment of traders report shows fund money adding to their net short position in beans. Nov 14 Soybeans closed at $9.10 1/4, down 12 1/2 cents; Jan 15 Soybeans closed at $9.18 3/4, down 12 3/4 cents; Oct 14 Soybean Meal closed at $307.20, down $5.20; Oct 14 Soybean Oil closed at 31.92, down 70 points. For the week that puts front month beans down 46 3/4 cents, with meal down $16.90 and oil shedding 54 points.
Corn: The corn market closed lower on the day, and lower for the week. Corn has now closed lower for 7 out of the last 8 trading sessions. "At $2.93 per bushel, the national average cash corn price has not been this low since the week of September 21, 2009," according to Brugler Marketing. The USDA is expected to report around 20% of the 2014 US corn harvest is now complete on Monday night, up from 7% done a week ago, although that figure may be a little high I feel. The trade is running out of superlatives to describe yields this year. Few think that anything but a rise, and probably a significant one, is still on the cards compared to the USDA's 171.7 bu/acre August yield forecast. We will have to wait until Oct 10 for that. Before that, the trade is expecting a Sept 1 US corn stocks figure of an average 1.185 billion bushels on Tuesday. The range of estimates is 1.020-1.350 billion versus the Sept 1 2013 figure of 821 million. Ukraine corn prices are reported to have dropped $10/tonne in a week, basis FOB the Black Sea. ADM Germany estimated the EU-28 2014 corn crop at a record 70.46 MMT versus 64.48 MMT a year ago. "The significantly larger feed grain supply in Europe continues to put pressure on the maize price," they said. The French corn harvest is stuttering into life, at 1% complete versus zero a year ago, according to FranceAgriMer. The Buenos Aires Grain Exchange said that corn planting there for the 2014/15 harvest was 6.4% complete, around 2 points behind last year. Mexico bought 107,188 MT of US corn, split 59,309 MT for this season and 47,879 MT for 2015/16. Taiwan’s MFIG bought 60,000 MT of Brazilian corn in a tender. Based on a Reuters survey South Africa’s 2014 corn crop is estimated at 14.39 MMT. The weekly commitment of traders report shows fund money continuing to reduce their net corn long by around 5,500 contracts for the week through to Tuesday night. Dec 14 Corn closed at $3.23, down 3 cents; Mar 15 Corn closed at $3.35 3/4, down 3 1/4 cents. That puts Dec 14 down 8 1/2 cents on the week.
Wheat: The wheat market closed narrowly mixed. "A lower overnight trade and a push to new lows early in the day session developed into orderly, low volume wheat trade," said Benson Quinn Commodities. A Reuters poll estimated the Australian 2014 wheat crop at 24 MMT versus 27 MMT last year and the current USDA forecast of 25.5 MMT. The range of estimates was 23.2 MMT to 24.5 MMT, so the USDA are currently 1 MMT above the top end of trade guesses. “This, in itself, is hardly likely to be enough for the wheat price to make any sort of noticeable recovery, for the plentiful crops in the northern hemisphere, where harvesting is almost complete, have caused supply to grow considerably,” Commerzbank said. The Buenos Aires Grain Exchange left their forecast for 2014 Argentine wheat plantings unchanged at 4.1 million hectares, a more than 13% increase on 3.62 million a year ago. For Tuesday's Sept 1 quarterly stocks report the average trade estimate for wheat is 1.880 billion bushels. The range of estimates are 1.707-1.980 billion and Sept 1 2013 wheat stocks were 1.870 billion. The USDA will also report on US wheat production next week. For all wheat the average trade estimate 2.037 billion bushels. The range of estimates are 2.004-2.075 billion and US 2013 all wheat production was 2.130 billion. Russia said that they'd now harvested 94 MMT of grains off 78.7% of the planned area. Wheat accounts for 56.5 MMT of the total, with almost 80% of the harvest now in. Average yields are 2.8 MT/ha this year, versus 2.44 MT/ha a year ago at this time, the Ag Ministry said. The weekly commitment of traders report shows fund money adding a net 11,662 contracts to their short position in CBOT wheat, making them now net short of a record 78,928 contracts. That leaves the market vulnerable to a corrective bounce. Dec 14 CBOT Wheat closed at $4.74 1/4, up 1/4 cent; Dec 14 KCBT Wheat closed at $5.63 3/4, down 1/2 cent; Dec 14 MGEX Wheat closed at $5.33 1/4, down 3 cents. For the week that puts Chicago wheat little changed, down 1/4 of a cent. Kansas wheat is up 3 1/2 versus last Friday, and Minneapolis is down 2 1/4 cents.