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.
USDA Numbers Pressure EU Grains Lower
10/11/15 -- It was another bad day for the EU wheat market, led down by falling US prices.
At the close, Nov 15 London wheat was down GBP1.45/tonne at GBP113.30/tonne, Dec 15 Paris wheat was down EUR3.00/tonne at EUR180.75/tonne, Jan 16 Paris corn was EUR1.75/tonne weaker at EUR167.25/tonne, whilst Feb 16 Paris rapeseed fell EUR0.75/tonne to EUR374.75/tonne.
Egypt's GASC bought one cargo each of Russian and Ukraine wheat for Dec 11-20 shipment in their tender this afternoon. The average price paid was reported at $210.41/tonne C&F.
Russia said that their 2015 wheat harvest was 99.8% done at 63.9 MMT, along with a barley harvest that was 99.9% complete at 18.3 MMT (both in bunker weight). They've also reportedly brought in 83.1% of this year's corn harvest for a crop if 11.7 MMT to date.
The Russian Ag Ministry indicated that winter plantings for the 2016 harvest are still ongoing, now 95% complete on 16.2 million ha versus 16.5 million ha a year ago at this time.
Worries remain over the state of these newly planted winter crops going into the ground so late. The situation in Ukraine is possibly even more concerning. Agritel report that less than 50% of many winter planted crops in the south of the country have yet to germinate.
Late in the afternoon the USDA raised their estimate for the EU-28 2015 wheat crop by 2 MMT to a new record 157.3 MMT, and increased export potential to 33.5 MMT from 33.0 MMT previously, and down only 5.4% on last season's record.
The latter comes despite the fact that exports so far this season lag a year ago by 31%. The export pace is expected to pick up in the second half of the year, they said.
Russia's 2015 wheat crop was lowered from 61.0 MMT to 60.5 MMT. Their exports, along with those from Ukraine and Kazakhstan were left unchanged.
The Ukraine Ag Ministry said that the country had exported 14.55 MMT of grains so far this seasn, including 7.96 MMT of wheat, 3.47 MMT of barley and 3.06 MMT of corn.
Chicago Grains End Lower Ahead Of Key USDA Data
09/11/15 -- Soycomplex: Beans closed mixed but mostly around a cent or two lower. The USDA announced the sale of 126,000 MT of US soybeans to unknown destinations for 2015/16 delivery, along with another 256,740 MT being switched from unknown destinations to China. Customs data from the latter shows that they imported 5.53 MMT of beans in October, up 35% from a year previously. Their calendar year imports (Jan/Oct) are now 65.18 MMT, a 15% rise compared to the same period in 2014. Weekly export inspections came in at a very respectable total just in excess of 2 MMT, underlying the strong demand at these levels theme. The USDA's FAS in Brazil cut their forecast for production there in 2015/16 to a still record 98.5 MMT citing planting delays. Plantings in the leading state of Mato Grosso are the slowest in the last 5 years, and the east of the state is only 15% done versus 40-50% normally, they said. Ukraine said that their 2015 soybean harvest was 96% complete at just over 3 MMT. After the close the USDA said that the US 2015 harvest was now 95% complete, up 3 points from a week ago, 6 points ahead of last year and 2 points more than the 5-year average. The trade is looking for increased US soybean yields and production in tomorrow's USDA WASDE report. The average trade estimate for production is around 3.914 billion bushels with yields at 47.5 bu/acre versus the USDA’s October numbers of 3.888 billion and 47.2 bu/acre. This day a year ago the USDA raised soybean yields by 0.4 bu/acre from their October estimate. Nov 15 Soybeans settled at $8.73 1/2, up 2 1/4 cents; Jan 16 Soybeans settled at $8.66 1/4, down 1 cent; Dec 15 Soybean Meal settled at $295.00, down $0.70; Dec 15 Soybean Oil settled at 27.77, down 27 points.
Corn: The corn market closed with losses of around 6 cents. Weekly export inspections of only 295,701 MT were down 38% from the previous week and provided little support. The current cumulative pace is 25% behind this time last year. The USDA reported the 2015 US corn harvest at 93% complete versus 85% a week ago, 88% on average and only 78% done this time last year. Bloomberg reported that Japan imported 9.7 MMT of corn in the first 8 months of 2015, with 8.37 MMT, or 86%, of that coming from the US. Imports from Brazil by contrast were only 878 TMT (9%) and from Ukraine 336 TMT (3.5%). They are now expected to pick up their imports from the latter two suppliers, at the expense of US origin material, in the final quarter of 2015 due to price considerations. Both Brazilian and Ukraine corn are said to offer savings of around $10/tonne over US corn. Ukraine said that it's 2015 corn harvest was now 86% complete at 19.3 MMT. That implies final production of 22.44 MMT, not the 25 MMT that the USDA currently predict. They will of course have an opportunity to revisit that number in tomorrow's WASDE report. In that, the average trade guess for US corn production is 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). A year ago the USDA surprised the trade by lopping 0.8 bu/acre off final US corn yields in their November report. Spanish analysts AgroInfoMarket estimated corn production there in 2016 at 10.92 MMT versus 10.40 MMT this year. They see 2016/17 Spanish corn imports at 6.1 MMT versus 6.25 MMT this season, and ending stocks at 764 TMT compared to 738 TMT in 2015/16. Dr Cordonnier reports that the Brazilian states, Mato Grosso, Goias, and Tocantins are contemplating placing a 12% export tax on corn, soybeans and other grains. Dec 15 Corn settled at $3.66 3/4, down 6 1/4 cents; Mar 16 Corn settled at $3.76, down 5 3/4 cents.
Wheat: The wheat market closed sharply lower across the three exchanges. Weekly export inspections of 282.6 TMT were better than a week ago, but hardly stellar. Year to date inspections are 18% down versus 12 months previously, they may need to revise those already low expectations even lower tomorrow. Wheat exports from Ukraine seaports were 463.3 TMT last week, report APK Inform. From Russian seaports they were 507.4 TMT. Russian customs data shows that they have exported 16.38 TMT of wheat since the new 2015/16 season began on Jul 1. US wheat exports to Oct 29 are only around half of that at 8.7 MMT. "A disappointing winter wheat crop has been gathered in the United States this season continuing a trend of smaller wheat harvests. A succession of smaller harvests are having a negative impact on wheat exports, as well. The 1.44 billion bushels of (winter) wheat gathered in the 2015 harvest is down from 1.51 billion bushels, the previous 5-year average. Winter wheat production has been declined – not due to poor yields but rather shrinking acreage. Most of the blame goes to Kansas, the leading US wheat state. The trend in shrinking wheat acres began several years ago. Producers in Kansas have chosen to diversify their crops, planting less wheat in favour of corn, soybeans and sorghum," said Martell Crop Projections. Winter wheat crop worries in Ukraine and Russia remain about the only supportive factor around at the moment. Ukraine say that their winter wheat crop is only 90% planted on 5.57 million ha. UkrAgroConsult say that only 29% of the crop is in good condition versus 41% this time last year. The USDA reported US winter wheat plantings for the 2016 harvest at 92% complete after the close, up 4 points on a week ago but 2 points behind the 5-year average. Emergence is in line with average at 80%. Good to excellent conditions improved 2 points to 51%. Dec 15 CBOT Wheat settled at $5.01 3/4, down 21 1/2 cents; Dec 15 KCBT Wheat settled at $4.74, down 16 1/4 cents; Dec 15 MGEX Wheat settled at $5.04 1/4, down 14 1/2 cents.
EU Grains Follow US Lead In Afternoon Trade
09/11/15 -- EU grains were mixed, but mostly a bit lower in morning trade, although a weaker tone to US markets once they opened - led by wheat - filtered through into afternoon dealings and everything closed on the red.
Breaking outside of the recent range-bound region that we had been stuck in since the last day of September (EUR175-181/tonne) seems to have tired Paris wheat out, at least for the time being.
At the close, Nov 15 London wheat was down GBP0.25/tonne at GBP114.75/tonne. In Paris, Dec 15 wheat was EUR2.00/tonne lower at EUR183.75/tonne, Jan 16 corn was EUR3.00/tonne easier at EUR169.00/tonne and Feb 16 rapeseed crashed EUR6.25/tonne to EUR375.50/tonne.
After hitting close to 1.42 against the euro last week, the pound seems to have stabilised for now around the 1.40 mark versus the single currency. Whether sterling can hold at or around that level will now be interesting The fact that the UK interest rate outlook has become much more unclear than it seemed a week ago could mean that there's a bit more downside for the GBP/EUR yet due to the overbought nature of sterling.
That could provide some abeit modest support for London wheat, although a bit of sterling weakness is unlikely to unlock any huge floodgates in terms of export activity. Paris wheat may have nudged north of it's recent trading range, but Nov 15 London wheat still hasn't finished outside GBP112.50-117/tonne since September 22.
Demand from the livestock sector is tepid, and last week's numbers on UK Human and Industrial wheat usage hardly paint a rosy picture either as far as the demand side of the equation goes.
Despite all the talk of possible problems with Russian and Ukraine winter grains, these are issues that we are many, many months away from knowing the full implications of. Both are still exporting grains nearby with gay abandon, and that is what the EU is dealing with head-to-head right now, with our own soft wheat shipments now 31% below what they were a year ago, despite a record crop to shift.
APK Inform report that Ukraine seaports shipped out 715.2 TMT of grains last week, including 463,3 TMT of wheat (or 65% of the total volume), 191 TMT of corn and 60.9 TMT of barley.
Russian seaports meanwhile exported 638.1 TMT of grains, of which 507.4 TMT (60%) was wheat, 33.8 TMT was corn and 93.7 TMT was barley.
Russian customs data shows that the country's calendar year grain exports to date are 29.03 MMT. Wheat accounts for 60%, or 17.42 MMT, or that total. Season-to-date exports (from Jul 1) are 16.38 MMT, of which 72%, or 11.75 MMT, is wheat.
Ukraine said that their 2015 grain harvest is now 96% complete at 57.1 MMT. This year's corn harvest is 86% done at 19.3 MMT, implying final production of around 22.4 MMT. The Ukraine soybean harvest is 96% complete at 3.6 MMT, and the sunflower harvest is 99% done at 10.8 MMT.
Spanish analysts AgroInfoMarket estimate the 2016/17 soft wheat crop there at 5.67 MMT, up 8.6% on this year, although winter/spring rains, or the lack of, could easily change all that between now and next harvest. They see the nation's imports at 3.75 MMT, down a little on 3.88 MMT this season.
The 2016/17 Spanish barley harvest is forecast 10.3% higher at 7.47 MMT, with imports dropping 27.6% to 0.55 MMT. The Spanish corn crop is seen at 10.92 MMT next year, up 4.8%, with imports falling 2.4% to 6.1 MMT.
The market needs some direction. Maybe tomorrow's USDA WASDE report will provide it? I wouldn't want to put too much money on it though....
Chicago Soymeal Ends At Near 4-Year Lows
06/11/15 -- Soycomplex: Beans closed with small gains on the day, but lower for the week. Meal finished at the lowest on a front month in almost 4 years. There was maybe a bit of light pre-weekend short-covering and position-squaring today ahead of Tuesday's upcoming WASDE report from the USDA. The average trade estimate for US 2015 soybean production now seems to be around 3.914 billion bushels with yields at 47.5 bu/acre versus the USDA’s October numbers of 3.888 billion and 47.2 bu/acre, according to a Bloomberg survey. Not much change is expected in the level of US or world ending stocks. A survey by Reuters shows that the trade expects 2015/16 US ending stocks at 435 million bushels versus the USDA's October estimate of 425 million. The same survey shows world ending stocks at 85.32 MMT versus the USDA's October estimate of 85.14 MMT. FCStone were reported to have decreased their Brazilian soybean production estimate by 0.65 MMT to 100.45 MMT, although that's still slightly higher than the USDA's 100 MMT estimate. Plantings in Brazil are still a bit slow in northern and central areas. "AgRural reported that farmers in Mato Grosso had plated 38% of their anticipated soybeans as of late last week, which is approximately 20 percent behind the average planting pace," said Dr Cordonnier. Nov 15 Soybeans settled at $8.71 1/4, up 3 1/2 cents; Jan 16 Soybeans settled at $8.67 1/4, up 3 1/4 cents; Dec 15 Soybean Meal settled at $295.70, down $0.70; Dec 15 Soybean Oil settled at 28.04, up 21 points. For the week Nov 15 beans were 12 1/2 cents lower, Dec 15 meal fell $8.70 and Dec 15 oil was 16 points lower. Meal remains particularly weak, this was the lowest close on a front month since late 2011, although beans aren't too far above multi-year lows either.
Corn: The corn market closed slightly lower on the day, and with losses of the best part of 10 cents for the week. For Tuesday's WASDE report the average trade guess is for production at 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). A Reuters survey shows that the average trade estimate for 2015/16 world ending stocks is 188.43 MMT versus the USDA's October figure of 187.83 MMT. US ending stocks are estimated at an average 1.597 billion bushels versus the USDA's October forecast of 1.561 billion. The Reuters survey also predicts higher US production (13.579 billion bushels) and yields (168.4 bu/acre) than the Bloomberg one. Ukraine's 2015 corn harvest meanwhile is now said to be 85% complete on 3.5 million ha for a crop of 18.8 MMT so far. That implies final production of around 22.1 MMT versus the current USDA estimate of 25 MMT. The Russian 2015 corn harvest was reported at 80.1% complete on 2.2 million ha for a crop of 11.2 MMT so far. Yields are said to be averaging 5.15 MT/ha versus 4.53 MT/ha a year ago and the current USDA prediction of 5.00 MT/ha. The 2015 French corn harvest was said to be 86% done as of Monday, up 11 points on the week and 12 points ahead of a year ago. The Ukraine Ag Ministry say that total corn exports so far this season total 3.0 MMT. The EU reported that they'd approved 442 TMT of corn import licences this week - more than the combined total for wheat and barley exports for the second week running. The US dollar did corn no favours today, rallying sharply following a strong US jobs report. US corn exports are already pretty sluggish. Dec 15 Corn settled at $3.73, down 1 1/2 cents; Mar 16 Corn settled at $3.81 3/4, down 1 cent. For the week that puts Dec 15 corn 9 1/4 cents lower, with Mar 16 down 9 3/4 cents.
Wheat: The wheat market closed mixed on the day and for the week. Chicago wheat has been supported all week relative to the Kansas market, so today was perhaps a mini correction of that trend. Next week's WASDE report isn't expected to throw up any big surprises in wheat, essentially re-enforcing the record global supply and ending stocks situation. A Reuters survey of trade analysts shows 2015/16 world ending stocks estimated at 227.82 MMT, little changed from the USDA's October estimate of 228.49 MMT. The same survey predicts US ending stocks at 861 million bushels, completely unchanged from a month ago. The EU reports that soft wheat export licences there are now running 31% behind year ago levels, despite euro weakness. At the end of July cumulative soft wheat export licences were up 23% compared to 2014, by the end of August they were down 17%, at the end of September they were 23.5% lower and now things are 31% behind a year ago with a record crop to dispose of.Yet the USDA currently predicts EU wheat exports to only fall by less than 7% year-on-year this season. Concerns over winter wheat conditions in Ukraine and Russia seem to be enough to keep wheat shorts a bit nervous for now, which may be enough to underpin downside, even if US and EU exports are very sluggish. There were rumours circulating today that the Ukraine government might be about to introduce an "informal" cap on wheat exports, such is their concern over the state of the newly planted winter crop. APK Inform said that Ukraine growers might only sow only around 5.5 million ha of winter wheat this year, some 19% less than a year ago, and that production in 2016 could fall by a third to 16.7 MMT. Dec 15 CBOT Wheat settled at $5.23 1/4, down 3 cents; Dec 15 KCBT Wheat settled at $4.90 1/4, up 4 1/4 cents; Dec 15 MGEX Wheat settled at $5.18 3/4, up 2 1/2 cents. For the week that leaves Chicago wheat up 1 1/4 cents, with the Kansas market down 3 1/2 cents and Minneapolis down 1 3/4 cents.
EU Grains Mixed, Wheat Exports Slow, FSU Concerns Offer Best Hope For The Bulls
06/11/15 -- EU grains closed mixed on the day but mostly higher for the week.
At the finish, Nov 15 London wheat was up GBP0.20/tonne at GBP115.00/tonne. In Paris, Dec 15 wheat was EUR2.00/tonne higher at EUR185.75/tonne, Jan 16 corn was unchanged at EUR172.00/tonne and Feb 16 rapeseed was up EUR1.75/tonne to EUR381.75/tonne.
On a front month basis, London wheat was 5 pence higher on the week, Paris wheat was up 5 euros, corn was up 7 euros and rapeseed advanced EUR3.25/tonne.
Euro weakness has helped the French markets this week, with tonight's Paris wheat close being the highest since Jul 24. Rapeseed closed the week just below Wednesday's EUR382.50/tonne highest for a front month since Aug 11.
London wheat however remains range-bound. This week's "wobble" by sterling following the news from the BoE's MPC meeting seemingly pushing an interest rate rise here further down the road, has essentially been matched by the euro.
GBP/EUR ends the week where it began it at 1.40, having peaked close to 1.42 in early trade on Thursday before the BoE press releases. Against the US dollar meanwhile sterling has slumped from an early week high close to 1.55 to finish the week around 1.5050 - it's lowest close since April.
The weakness of the euro, and the prospect of more to come, in theory augurs well for EU wheat exports - at least those priced in euros at any extent.
This theory however hasn't yet been transformed in practice though. Brussels only released 293 TMT worth of soft wheat export licences this week, down from 371 TMT worth the previous week. Season to date licences are now 7.1 MMT, some 31% below where they were this time last year.
The trend is worrying. At the end of July cumulative soft wheat export licences were up 23% compared to 2014, by the end of August they were down 17%, at the end of September they were 23.5% lower and now things are 31% behind a year ago.
The USDA currently predicts EU wheat exports to fall by less than 7% year-on-year this season, so there needs to be a massive improvement in sales in the second half of the campaign. For sure, some improvement could be expected, as supplies from certain cheaper origins dry up, but to end the season only 6.8% lower on exports now looks like a very big ask.
Another worrying trend is the fact that with EU barley export licences only totalling 100 TMT this week, after a stellar start to the season led by large sales to China, Brussels issued more EU corn import licences (442 TMT) this week than they did for wheat and barley exports combined.
If Europe doesn't export or utilise more wheat domestically, which it won't do with feed demand so slack and all this corn coming in, then 2015/16 ending stocks can only rise.
Progress with newly sown crops in Russia and Ukraine will be closely monitored and debated across the winter, and the condition of these still appears to offer the best chance of some upside in the market for the time being.
There were rumours circulating today that Ukraine might be about to introduce another of their "informal" caps on wheat exports this season, with the Ag Ministry there presumably concerned enough about winter crops to consider such a move and preserve some carryover "insurance" into 2016/17.
APK Inform said that Ukraine growers might only sow only around 5.5 million ha of winter wheat this year, some 19% less than a year ago, and that production in 2016 could fall by a third to 16.7 MMT, and that came with the caveat of "assuming normal over-wintering". Domestic wheat consumption this season is estimated at 12.7 MMT by the USDA, which if replicated next year, wouldn't leave a lot left over to export in 2016/17.
For winter rapeseed APK Inform see a best case scenario of a crop of 1.1 MMT in 2016, down 35% on this year's 1.7 MMT and the lowest since 2007.
Ukraine's 2015 corn harvest meanwhile is now said to be 85% complete on 3.5 million ha for a crop of 18.8 MMT so far. That implies final production of around 22.1 MMT versus the current USDA estimate of 25 MMT.
The Ukraine Ag Ministry say that total grain exports so far this season total 14.4 MMT, including 7.9 MMT of wheat, 3.5 MMT of barley and 3.0 MMT of corn.
In Russia meanwhile, winter grains are said to have been planted on 15.8 million ha, some 600,000 ha below this time a year ago. The Russian Ag Minister said earlier in the week that 25% of what had been sown was in poor condition.
Back to the here and now, and Europe, though. The HGCA report that UK "millers, starch and ethanol producers consumed just over 1.6 MMT of wheat in the three months to September. This is 5% down on the same period last year, but the sharpest drop was seen in the September data, which was 8% lower year-on-year." So it looks like we're not really exporting it, or using it domestically either.
Across the Channel, FranceAgriMer report that the French winter wheat crop was 90% sown as of Monday, up from 76% done a week ago and 4 points ahead of this time last year. Winter barley at 97% sown was up 2 points versus 12 months previously. The 2015 French corn harvest was 86% done, up 11 points on the week and 12 points ahead of a year ago.
Chicago Grains: Beans End Just 5-Cents Off Multi-Year Lows
05/11/15 -- Soycomplex: Beans closed sharply lower, and within 5 cents of matching the recent multi-year low for a front month set on Sep 22. Weekly export sales shocked, coming in at only 655,600 MT for 2015/16 - a marketing-year low - being down 69 percent from the previous week and 61 percent below the prior 4-week average. Trade expectations were for sales of 1.4-1.8 MMT. Exports of nearly 2.2 MMT, with over 1.7 MMT of that going to China, were pretty good though, being up 17 percent from the prior 4-week average. There may have been a "risk off" element to today's trade ahead of next Tuesday's WASDE report from the USDA. Brazilian ports are said be be getting caught up in logistics due to heavy demand, and rain delays. Some ports are said to have loading delays of twice this time last year. Not a good time then for Brazilian truck workers to announce an indefinite strike starting Monday. MDA CropCast were unchanged on their forecast for the global (308.3 MMT) and US soybean crops (3.863 billion bu) from a week ago. The FAO raised their forecast for the world soybean crop by 1 MMT to 319 MMT, but lowered ending stocks by 1 MMT to 51 MMT. "In Brazil, conditions are generally favourable as planting progresses, though there is limited concern due to irregular rainfall, which is expected to increase in coming weeks and there is some concern in Rio Grande do Sul due to excess rainfall," they said. A Bloomberg survey into trader/analyst sentiment in beans returned - Bullish: 4; Bearish: 10; Neutral: 14. Nov 15 Soybeans settled at $8.67 3/4, down 14 1/4 cents; Jan 16 Soybeans settled at $8.64, down 20 cents; Dec 15 Soybean Meal settled at $296.40, down $5.40; Dec 15 Soybean Oil settled at 27.83, down 67 points.
Corn: The corn market settled around 5-6 cents lower. Weekly export sales of 556,000 MT for 2015/16 were down 22 percent from the previous week, but up 7 percent from the prior 4-week average. Trade expectations were for sales of 450-650,000 MT. Celeres estimated the Brazilian 2015/16 corn crop at 86.41 MMT, down 1.49 MMT from their previous forecast. MDA CropCast increased their global corn production estimate by 1.21 MMT to 948.3 MMT, largely due to an extra 1.23 MMT for Ukraine where they now have production at 22.6 MMT (although the USDA are at 25 MMT until next week at least). MDA went unchanged on US production at 13.695 billion bushels. The FAO lowered world corn production in 2015/16 by 3 MMT from a month ago to 1004 MMT, and cut ending stocks by a similar amount to 220 MMT. Consider that the USDA are currently 31 MMT lower on the size of the global corn crop than that, and 32 MMT below them on 2015/16 carryout. "In the US, harvest is almost complete and yields are good. In the EU, conditions are largely unfavourable due to the earlier summer heatwave and lack of rain. In Ukraine, yields are expected to be down due to earlier dry and hot weather," they said. China's 2015/16 corn crop may be smaller than originally expected. "Corn production in China, the world’s second largest corn producer, is expected to shrink by 5.8% this year due to drought and wind damage, Bloomberg News reported yesterday. New data on China corn potential comes from a SGS SA, a researcher hired by Bloomberg, who conducted an extensive survey among corn farmers. Heilongjiang, the leading corn province, would see a 12% reduction in corn output, based on survey results, due to drought and insect damage the report said. This is China’s leading corn province accounting for 15% of the harvest," said Martell Crop Projections. A Bloomberg survey into trader/analyst sentiment in corn returned - Bullish: 5; Bearish: 8; Neutral: 15. Dec 15 Corn settled at $3.74 1/2, down 6 cents; Mar 16 Corn settled at $3.82 3/4, down 5 1/2 cents.
Wheat: The market closed flat to 8 cents lower. Weekly export sales of just 84,600 MT for delivery in marketing year 2015/16 were down 85 percent from the previous week and 80 percent from the prior 4-week average. That was frankly an atrotious weekly total that could easily have had the market posting double digit losses. Exports of only 176,900 MT weren't much help either, being down 45 percent from the previous week and 52 percent below the prior 4-week average. Kansas wheat lost again relative to the Chicago market on anticipation of rain relief for US winter wheat. Soft wheat mills continue to search for quality in the east, providing support to Chicago but adding more to the discrepancy with Kansas City, said Arlan Suderman of Water Street Solutions. MDA CropCast were unchanged on their global wheat production estimate at 723.4 MMT, as well as that for the US crop at 2.218 billion bushels. The FAO added 1 MMT to their global wheat production and ending stocks estimates, taking them up to 736 MMT and 207 MMT respectively. "In the northern hemisphere the spring wheat season is complete and planting of winter wheat is ongoing under mostly favourable conditions with the exception of the Russian Federation and Ukraine where there is concern over dry conditions. In the southern hemisphere, conditions remain mixed. In Australia, conditions deteriorated due to lack of rains. In Argentina, conditions are generally favourable and in Brazil, mixed weather during all the season is expected to negatively impact yields. In South Africa, conditions are poor," they said. The Buenos Aires Grain Exchange said that Argentine wheat harvest progress is being delayed due to rains. Concerns remain over dryness in Russian and Ukraine winter wheat areas where planting is delayed, emergence is also retarded and "poor" crop ratings are far higher than a year ago. A Bloomberg survey into trader/analyst sentiment in wheat returned - Bullish: 7; Bearish: 6; Neutral: 15. Dec 15 CBOT Wheat settled at $5.26 1/4, unchanged; Dec 15 KCBT Wheat settled at $4.86, down 6 3/4 cents; Dec 15 MGEX Wheat settled at $5.16 1/4, down 8 cents.
EU Grains Mostly Lower, London Wheat Helped By Faltering Pound
05/11/15 -- There were few fireworks to get traders excited today, with EU grains mostly consolidating and giving up some of yesterday's gains. The exception was London wheat which derived a small boost from a weaker sterling following the Bank of England's regular monthly MPC meeting.
At the close, Nov 15 London wheat was up GBP0.55/tonne at GBP114.80/tonne, Dec 15 Paris wheat was down EUR0.75/tonne at EUR18375/tonne, Nov 15 Paris corn was EUR1.25/tonne weaker at EUR161.00/tonne, whilst Feb 16 Paris rapeseed fell EUR2.50/tonne to EUR380.00/tonne.
Once again fresh news was thin on the ground. The FAO raised their view on this year's global wheat crop by 1 MMT to 736 MMT, some 3 MMT higher than the current USDA estimate. World ending stocks were also increase 1 MMT, but at 207 MMT these are 21 MMT less than the USDA predicted a month ago.
"A higher (production) estimate for the EU more than offset lower forecasts for Australia and the US," they said.
World corn production was lowered by 3 MMT from a month ago to 1004 MMT, and ending stocks cut a similar amount to 220 MMT. If you think that the disparity with the USDA's wheat numbers are noteworthy then consider that Washington are currently 31 MMT lower on the size of the global corn crop than the FAO, and 32 MMT below them on 2015/16 carryout.
Winter wheat plantings in the northern hemisphere are ongoing under mostly favourable conditions with the exception of Russia and Ukraine, the FAO noted.
"In the EU, planting continues for all regions under favourable conditions except for Poland where dry and cold weather have hampered germination," they said.
For corn, the "EU, harvest has begun, though areas in south-east faced abundant rain, which is slowing harvest. Conditions are largely unfavourable and production is expected to be below the 5 year average due to the heat wave and lack of rainfall in central and eastern Europe.
"In Ukraine, harvest is ongoing and yields are expected to be down due to the persistent dryness and high temperatures in central and western regions in previous months," they added.
The Bank of England voted 8-1 again to leave UK interest rates on hold at 0.5% it was revealed at lunchtime. For the third month running, Ian McCafferty was the only member of the MPC to vote for a rise.
The pound was weaker on the news, as whilst no rate increase was expected, one or two thought that a 7-2 vote might have been on the cards, backing the notion that UK rates might be set to increase early in the New Year.
Other negatives for sterling today were the downgrading of the Bank's economic growth forecast from 2.8% to 2.7%, as well as a warning that inflation risks were skewed to the downside over the next two years.
The pound was overbought, so all this news will have encouraged some profit-taking. The day ending with the GBP/EUR rate back below 1.40 and GBP/USD around 1.52.
