Chicago Soybeans Crash On Profit-Taking, But Corn And Wheat Rise
12/03/13 -- Soycomplex: Front month beans crashed back below USD15/bu, a level which has become very difficult to hold above, in spectacular style on profit-taking and a lack of bullish news. It should be noted that Mar 13 goes off the board on Thursday. For all the talk of China switching interest away from Brazil to the US there's now talk of vessels being hard to come by in the PNW, presumably they are all sat waiting to load off the west coast of South America? Oil World estimated the 2013 US soybean planted area at 78-79 million acres, up 2.5-3.8% on 76.1 million a year ago. China’s soybean crush for the first week of March was said to be 1.121 MMT, down 14.25% from the previous week due to lower soybean imports in February. Rumours still circulate that China will release 1.1 MMT of beans from state-owned reserves by the end of the month. AgRural said 50% of Brazil's soybean crop has been harvested, including 75% of the crop in Mato Grosso. They estimated Brazil’s 2012/13 crop at above 80.0 MMT, a rise of at least 20% on last year. Fund selling in beans was estimated at 3-4,000 contracts on the day. Mar 13 Soybeans closed at USD14.89 3/4, down 25 cents; May 13 Soybeans closed at USD14.68 3/4, down 10 3/4 cents; Mar 13 Soybean Meal closed at USD436.40, down USD1.70; Mar 13 Soybean Oil closed at 49.83, down 41 points.
Corn: In contrast to beans, corn closed higher for a fourth session in a row. Nearby longs seem to want ownership of corn, or at least are prepared to say to the shorts "deliver against it then" which it looks like they may struggle to do. A report on Reuters suggests that private Chinese feed mills have bought 600 TMT of new crop US corn since February. Sinograin, the manager of China’s state reserves, are currently said to be rebuilding their domestic stocks. Reports still circulate of US ethanol manufacturers looking to substitute some corn in the grist with wheat and now sorghum. There are reports of Argentina sorghum being imported to the east coast of the US to facilitate this new demand. Corn planting is underway in southern US states, with Texas 29% complete, up sharply from 15% a week ago and ahead of the 5-year average of 22%. Louisiana is 20% complete versus 6% on average. Tomorrow brings the weekly ethanol production data, with most expecting an increase on last week's 805,000 barrels/day. Funds were estimated as being net buyers of around 5-6,000 corn contracts on the day. Mar 13 Corn closed at USD7.41, up 6 1/2 cents; May 13 Corn closed at USD7.14 1/4, up 3 cents.
Wheat: The wheat market remains a follower of corn. With Chicago wheat currently running at around a 40 cent discount to corn there should be increased feed usage of wheat. There are reports of some US feed companies with Argentine corn on the books looking to switch to cheaper domestic SRW wheat. India’s March 1st wheat stocks were said to be 27.1 MMT - well above government target levels. However the price that the government have paid for these stocks means that if they sell at USD300/tonne or less then they will be making a loss. Harvesting there normally starts at the end of March. So, with India seemingly unwilling to accept bids around the USD295-300/tonne mark on various tenders to export wheat, US wheat is indeed the cheapest around. Last week's export sales were bumper at a combined 828,100 MT, the trade will be looking for that kind of form to be continued again this week. Japan are tendering for 130,533 MT of milling wheat for April/June shipment, including 65,000 MT of US origin. Bangladesh seeks 50 TMT of optional origin wheat for April shipment. Funds were said to have been net buyers in Chicago wheat of around 1,500 contracts on the day, but still remain heavily short. Mar 13 CBOT Wheat closed at USD7.00 1/2, up 6 1/2 cents; Mar 13 KCBT Wheat closed at USD7.35, down 3 1/4 cents; Mar 13 MGEX Wheat closed at USD8.00 3/4, down 10 1/4 cents.
