Review of the week: huge losses across the board
Soybeans
Ouch, what a week. Aug CBOT beans lost a total of 145 1/2 cents this week closing with heavy losses every day bar Wednesday. To highlight how bad a week beans have had, out of the four out of five sessions this week where beans have lost, their best day was Monday when they finished down "just" 33 1/2 cents!
"The sharp downturn in crude oil pulled soybean futures down hard," said Doane Agricultural Services. "Adding to the losses were forecasts for favourable weather in the Midwest."
The USDA reported weekly old-crop soybean export sales at just 2.3 million bushels, which was off almost 60% from the seasonal average, and only one-third to one-half of general trade expectations. The export outlook for U.S. soybeans also darkened further after the Argentine Senate voted to reject the controversial export tax on soybeans.
Corn
Sep corn didn't fare much better losing 81 1/2 cents on the week, with Weds also the only plus day.
A bushel of U.S. corn was worth 12% less by the end of the week, concluding a complete collapse which has seen the market value of that key feed grain fall by more than $1.50 per bushel from record levels reached in late June.
"The recent highs did ration some demand, as traders are now realizing," said Benson Quinn Commodities analyst Kevin Kjorsvik. "The slow pace of shipments have some analysts concerned that the USDA will cut U.S. corn exports, thus raising this year's carryout."
The falling price of crude has done little to enhance ethanol demand, and thereby corn a trader added.
Wheat
Sep CBOT wheat turned in a better performance than corn & beans losing "just" 26 3/4 cents on the week.
The futures market is doing better than the cash market midway through the winter wheat harvest. The cash value of U.S. wheat waned on the week, diving about 3-4%, to 1 1/2-month lows for winter-grown varieties, and eight-month lows for hard red spring wheat.
"Large new-crop wheat supplies may continue to weigh on wheat prices, with total U.S. wheat production now expected to be up more than 19% from a year ago," noted Brock Associates. The USDA currently forecasts total domestic wheat production of 2.46 billion bushels, far in excess of the previous five-year average of 2.12 billion.
"Strength in the dollar was bearish for wheat," added Doane. "Expectations for a record world wheat crop will make the export market particularly competitive, making wheat prices very sensitive to the value of the dollar."
Crude Oil
Sep NYMEX crude lost $16.19 on the week, it's largest weekly drop of all-time in dollar terms.
US stocks came in substantially higher than expected and the general market malaise seems to have finally spilled over into the "Golden Child" that is crude.
European Markets
Nov LIFFE feed wheat lost £4.50/tonne on the week, Nov Paris milling wheat lost EUR7.70, Nov Paris rapeseed lost EUR24.75 and Nov Paris corn EUR8.25.
The French are reportedly all but finished on the barley harvest and around halfway through the rapeseed harvest. Depending on the they expect to be "well into" the wheat harvest across the weekend. Rain has delayed progress here in the UK and in Germany but better weather forecast for next week should enable some progress to be made.
Egypt bought wheat on the export market this week but there wasn't even a clause in the contract including French origin. Ukraine and Russia are where its at at the moment as they are "wall-to-wall wheat" as one broker put it.
Australian Wheat
ASX Jan wheat lost A$15 on the week with beneficial rains falling, particularly in Western Australia, and with more forecast across the weekend.
Ouch, what a week. Aug CBOT beans lost a total of 145 1/2 cents this week closing with heavy losses every day bar Wednesday. To highlight how bad a week beans have had, out of the four out of five sessions this week where beans have lost, their best day was Monday when they finished down "just" 33 1/2 cents!
"The sharp downturn in crude oil pulled soybean futures down hard," said Doane Agricultural Services. "Adding to the losses were forecasts for favourable weather in the Midwest."
The USDA reported weekly old-crop soybean export sales at just 2.3 million bushels, which was off almost 60% from the seasonal average, and only one-third to one-half of general trade expectations. The export outlook for U.S. soybeans also darkened further after the Argentine Senate voted to reject the controversial export tax on soybeans.
Corn
Sep corn didn't fare much better losing 81 1/2 cents on the week, with Weds also the only plus day.
A bushel of U.S. corn was worth 12% less by the end of the week, concluding a complete collapse which has seen the market value of that key feed grain fall by more than $1.50 per bushel from record levels reached in late June.
"The recent highs did ration some demand, as traders are now realizing," said Benson Quinn Commodities analyst Kevin Kjorsvik. "The slow pace of shipments have some analysts concerned that the USDA will cut U.S. corn exports, thus raising this year's carryout."
The falling price of crude has done little to enhance ethanol demand, and thereby corn a trader added.
Wheat
Sep CBOT wheat turned in a better performance than corn & beans losing "just" 26 3/4 cents on the week.
The futures market is doing better than the cash market midway through the winter wheat harvest. The cash value of U.S. wheat waned on the week, diving about 3-4%, to 1 1/2-month lows for winter-grown varieties, and eight-month lows for hard red spring wheat.
"Large new-crop wheat supplies may continue to weigh on wheat prices, with total U.S. wheat production now expected to be up more than 19% from a year ago," noted Brock Associates. The USDA currently forecasts total domestic wheat production of 2.46 billion bushels, far in excess of the previous five-year average of 2.12 billion.
"Strength in the dollar was bearish for wheat," added Doane. "Expectations for a record world wheat crop will make the export market particularly competitive, making wheat prices very sensitive to the value of the dollar."
Crude Oil
Sep NYMEX crude lost $16.19 on the week, it's largest weekly drop of all-time in dollar terms.
US stocks came in substantially higher than expected and the general market malaise seems to have finally spilled over into the "Golden Child" that is crude.
European Markets
Nov LIFFE feed wheat lost £4.50/tonne on the week, Nov Paris milling wheat lost EUR7.70, Nov Paris rapeseed lost EUR24.75 and Nov Paris corn EUR8.25.
The French are reportedly all but finished on the barley harvest and around halfway through the rapeseed harvest. Depending on the they expect to be "well into" the wheat harvest across the weekend. Rain has delayed progress here in the UK and in Germany but better weather forecast for next week should enable some progress to be made.
Egypt bought wheat on the export market this week but there wasn't even a clause in the contract including French origin. Ukraine and Russia are where its at at the moment as they are "wall-to-wall wheat" as one broker put it.
Australian Wheat
ASX Jan wheat lost A$15 on the week with beneficial rains falling, particularly in Western Australia, and with more forecast across the weekend.
