Chicago Grains Slump Following Bearish USDA Report

10/11/15 -- Soycomplex: Beans closed sharply lower as the USDA surprised the market by raising final US yields this year by 1.1 bu/acre to a new record 48.3 bu/acre. Production was also pegged at an all-time high 3.981 billion bu. The average trade estimate was for production of around 3.914 billion bushels with yields at 47.5 bu/acre. Increases of 40 million bu for exports and 10 million bu for the domestic crush still couldn't prevent projected 2015/16 ending stocks rising 40 million bu to 465 million which would be the highest since 2006/07. Brazil's and Argentina's crop were both left unchanged at 100 MMT and 57 MMT respectively. Both had their exports raised, with Brazil up from 56.45 MMT to 57 MMT and Argentina up from 9.75 MMT to 10.75 MMT. India's crop was dropped 1.5 MMT to 9.5 MMT. China's imports were raised to a new record 80.25 MMT from 79.5 MMT previously. World ending stocks were projected smaller than last month's 85.1 MMT at 82.9 MMT, but the market seems to be looking at the fact that these are seen increasing in the US in favour of lower inventories in South America. In other news Brazil's CONAB estimated their 2015/16 soybean crop at 101.2-102.8 MMT versus a previous estimate of 100.1-101.9 MMT. They estimated soybean exports at 55.0 MMT versus a previous estimate of 53.0 MMT and 52.6 MMT a year previously. Safras e Mercado said Brazil's soybean planting is 42.3% complete versus 46% a year ago and 57.2% on average at this time. Nov 15 Soybeans settled at $8.64 1/2, down 9 cents; Jan 16 Soybeans settled at $8.55 1/2, down 10 3/4 cents; Dec 15 Soybean Meal settled at $292.20, down $2.80; Dec 15 Soybean Oil settled at 27.27, down 50 points.

Corn: The corn market settled around 7-8 cents lower following a bearish USDA report. That pegged US 2015 corn production at 13.654 billion bu, the third largest production ever with a yield of 169.3 bu/acre - the second largest on record. The average trade guess for US corn production was 13.564 billion bu (the USDA were 13.555 billion last month) and a yield of 168.2 bu/acre (the USDA were 168.0 bu/acre in October). US corn exports for 2015/16 were lowered 50 million bu, reflecting the slow start that these have got off to this season. US ending stocks for 2015/16 were forecast at 1.760 billion bushels. The average trade estimate for those was only 1.597 billion bu, from within a range of estimates of 1.461-1.702 billion and the USDA's October estimate was 1.561 billion. World corn ending stocks came in well above the high end of trade expectations at nearly 212 MMT, up around 24 MMT from a month ago. The average trade estimate for those was only 188.43 MMT. Argentina's crop was raised from 24.0 MMT to 25.6 MMT, and Brazil's was increased from 80.0 MMT to 81.5 MMT. Ukraine's was cut from 25 MMT to a more realistic 23 MMT. CONAB estimated Brazil's total corn crop at 81.1-82.7 MMT versus a previous estimate of 82.6-83.6 MMT. They estimated corn exports at 28.0 MMT versus 29.7 MMT a year ago. An article on Reuters said that Argentine grains output could be at least 30% higher by 2019 if presidential front runner Macri wins this month’s election run-off on November 22nd and keeps his promises to cut export taxes and state controls that have weighed on production there in recent years. Russia said that their 2015 corn harvest was 83.1% done at 11.7 MMT. Ukraine said that they'd exported just over 3 MMT of corn so far this marketing year. Dec 15 Corn settled at $3.59, down 7 3/4 cents; Mar 16 Corn settled at $3.68, down 8 cents.

Wheat: The market closed lower, in line with falling beans and corn. Today's USDA report was always going to be more about the latter two than wheat, but the USDA didn't do wheat any favours either. US exports for 2015/16 were lowered 50 million bu to 800 million and ending stocks were raised correspondingly to 911 million bu. World ending stocks were lowered a bit more than 1 MMT to a still very ample 227.3 MMT. Europe's 2015 crop was raised to a new all-time high 157.3 MMT. Europe's exports were raised by 0.5 MMT to 33.5 MMT, on the expectation that these will pick up in the second half of the season. Canada's were increased 1 MMT and Australia's were lowered 1 MMT. There were no changes to exports for Russia, Ukraine or Kazakhstan. Egypt passed on French wheat booking a cargo each of Russian and Ukraine origin material for December shipment. They are said to be back in the market again tonight for more. Japan are tendering for 119,415 MT of food wheat for February shipment split between US, Canadian and Australian origin. Analysts in Australia said heavy rains in the country's east coast are not expected to cause large-scale quality downgrades to wheat. Their 2015/16 harvest is said to be around 15% complete. UkrAgroConsult estimated Russia’s 2015/16 wheat exports at 21.5 MMT versus the 2014/15 total of 22.3 MMT. They said that 34% of Russia’s winter crops are in good condition versus 56% a year ago. In Ukraine they said that only 29% of winter grain crops are in good condition versus 41% a year ago. They said 31% of Ukraine’s winter grain crops are in poor condition versus 17% a year ago. Agritel said that in the south of Ukraine germination in some winter grains in less than 50%. Dec 15 CBOT Wheat settled at $4.90 3/4, down 11 cents; Dec 15 KCBT Wheat settled at $4.60 3/4, down 13 1/4 cents; Dec 15 MGEX Wheat settled at $4.97 1/2, down 6 3/4 cents.