Chicago Closing Report: Corn Holds Steady As Beans Crash

12/01/15 -- Soycomplex: Beans closed with heavy losses following the release of what Benson Quinn amusingly called "the long awaited, highly anticipated, much discussed and over hyped" January WASDE and quarterly stocks reports from the USDA. In that, they raised US 2014 soybean yields by 0.3 bu/acre to 47.8 bu/acre. Planted and harvested acres were cut, but not by as much as expected. US exports were raised, reflecting the very strong pace witnessed so far this season, but only by 10 million bushels. The bottom line in all that, as if by magic, is that US 2014/15 ending stocks are exactly the same as they were in the December report at 410 million bushels, which is around 4.5 times what they were at the end of last season. Elsewhere, they raised their outlook on Brazil's 2014/15 soybean crop from 94 MMT to 95.5 MMT. Argentina was left unchanged at 55 MMT. China's import needs were also unaltered at 74 MMT. The bottom line on a global level is that world ending stocks were raised to a record 90.8 MMT, which is almost 1 MMT higher than a month ago and 37% up versus 2013/14. Separately, the USDA also reported weekly US export inspections of a robust 1.839 MMT. Jan 15 Soybeans closed at $10.13 1/2, down 38 cents; Mar 15 Soybeans closed at $10.16, down 36 1/4 cents; Jan 15 Soybean Meal closed at $356.50, down $7.30; Jan 15 Soybean Oil closed at 32.45, down 109 points.

Corn: The corn market closed with small gains, resisting the negative pull of crashing soybeans and lower trade in the wheat pit. The USDA were expected to reduce 2014 US corn yields from last month's 173.4 bu/acre, and they did. However, 171 bu/acre was a bigger cut than the market was anticipating. Harvested acres were left unchanged. The bottom line was a 14.216 billion bushel crop, some 133 million bushels below trade expectations and down from 14.407 in December, although still a record. US 2014/15 corn ending stocks were reduced to 1.877 billion bushels, some 6% lower than the December estimate of 1.944 billion. Global production numbers were unchanged in Brazil, Argentina, China etc. India's crop was raised 1 MMT to 22 MMT. Europe's 2014/15 corn crop was nudged a little higher to close on 74 MMT. World ending stocks came in around 3 MMT below last month's estimate to 189.15 MMT. Chinese corn consumption was left unchanged at 216 MMT. Worth noting was a 1 MMT hike in US sorghum exports to 6.8 MMT. China's sorghum imports were raised from 5 MMT to 6.2 MMT, which is more than 2 MMT up on a year ago. Weekly export inspections of just over 500 TMT weren't too impressive, and came in towards the lower end of trade expectations. The strong US dollar appears to be continuing to harm US exports, even though the USDA left these unchanged at 44.5 MMT in 2014/15. Mar 15 Corn closed at $4.02, up 1 3/4 cents; May 15 Corn closed at $4.10, up 1 3/4 cents.

Wheat: The wheat market closed around 8-10 cents lower across the three exchanges. "The report offered a few negative old crop features and a couple of mildly support new crop features. The negative aspects of the report are immediate, while the potential supportive aspects towards new crop will need some time to develop, if they develop at all," noted Benson Quinn. Amongst the negative old crop features were December 1 wheat stocks of 1.525 billion bushels, up from pre-report estimates of 1.499 billion. They put 2014/15 US ending stocks at 687 million bushels, up from 654 million previously. Friendlier news for US wheat further down the line came from total US all winter wheat acres of 40.452 million, which was more than 2 million below trade expectations of 42.564 million and down nearly 2 million from 42.399 million the previous year. Russia's 2014/15 wheat exports were cut 2 MMT to 20 MMT, of which more than 80% had been shipped by the end of 2014, they said. The reduction in exports is due to the introduction of the Feb 1 export duty. "The global impact on trade is expected to be minimal because other exporter supplies are abundant," though, they said. Europe, Ukraine and Kazakhstan are expected to pick up 1.9 MMT of extra wheat export business between them, the USDA estimated. World wheat ending stocks were raised more than 1 MMT to 196 MMT, which is more than 10 MMT up on last season. Weekly US export inspections of only 238,153 MT were very poor once again. Mar 15 CBOT Wheat closed at $5.55 1/2, down 8 1/4 cents; Mar 15 KCBT Wheat closed at $5.90 1/2, down 10 cents; Mar 15 MGEX Wheat closed at $5.95 1/4, down 8 cents.