Chicago Wheat Ends At Lowest Since June 2012
06/03/13 -- Soycomplex: Nearby beans closed lower with deferred months higher in positioning and book squaring ahead of Friday's USDA report. That is expected to show old crop US soybean ending stocks tightening further from last month's 125 million bushels on continued strong demand from China and shipping delays in Brazil. These are now said to be at around 50 days in Paranagua port. The USDA attaché to Brazil cut his soybean production estimate there to 82.5 MMT, half a million down from previously and 1 MMT below the February USDA forecast. Exports were left unchanged at 39 MMT. Lanworth trimmed their Brazilian estimate slightly also, from 81.0 MMT to 80.8 MMT. They reduced prospects in Argentina a little too, from 49.6 MMT to 49.4 MMT. CONAB come out tomorrow with their Brazilian crop estimates. Rumour circulates that China will release 1.1 MMT of beans from state-owned reserves by the end of March. Lanworth estimated the 2013/14 US soybean crop at 3.45 billion bushels, unchanged from their previous estimate and 14% more than last year. Friday could bring fireworks. Note that despite tightening US ending stocks to 125 million bushels last month, on the day the trade responded in a "buy the rumour, sell the fact" manner as heavy fund selling drove soybean prices to close around 35 cents lower. Estimates for tomorrow's weekly export sales report for beans are a hefty 700 TMT - 1.1 MMT. Fund selling in beans was estimated at around 1-2,000 contracts on the day. Mar 13 Soybeans closed at USD14.84 1/2, down 12 cents; May 13 Soybeans closed at USD14.66 down 1/2 cent; Mar 13 Soybean Meal closed at USD434.20, down USD0.70; Mar 13 Soybean Oil closed at 50.06, up 14 points.
Corn: Heavy fund selling, estimated at as much as 20,000 lots on the day pushed corn prices sharply lower. Weekly ethanol production came in at 805k barrels/day, down 7k from last week and below the level required to meet USDA projections for corn usage for the eighth week in a row. Lanworth increased their Brazilian corn crop estimate to 76.9 MMT from a previous estimate of 75.8 MMT, and well above the USDA's 72.5 MMT forecast. CONAB release their forecast tomorrow, last month they estimated Brazil's crop at 76.0 MMT. Output in Argentina was estimated by Lanworth at 24.9 MMT versus a previous estimate of 25.0 MMT and the USDA's 27.0 MMT. They also pegged the US corn crop for 2013/14 at 13.7 billion bushels, unchanged from their previous estimate and 27% more than the 10.78 billion bushels produced in 2012. South Korea's largest feed group NOFI bought 69 TMT of South American corn for July shipment. Israel are in for 70 TMT of optional origin corn for Apr/Jun shipment. The Black Sea might be the favourite for that business. Japan bought 80,130 MT of feed wheat and 100,500 MT of feed barley for July shipment. They are also looking for a further 120 TMT of feed wheat and 200 TMT of feed barley for June shipment as they continue to replace corn in the feed ration. The USDA is seen raising US corn ending stocks in Friday's report given the lacklustre performance on the export front so far this marketing year. The average trade estimate is 649 million bushels versus 632 million last month. Trade estimates for tomorrow's weekly export sales report are 500-700 TMT. On the day Mar 13 Corn closed at USD7.08, down 24 cents; May 13 Corn closed at USD6.88 1/2, down 20 1/2 cents.
Wheat: It was a bad day at the office for wheat, with prices falling to their lowest levels since last June. A much improved outlook for US wheat on the Plains following recent major storm precipitation has had the market under pressure for a few weeks now. Comments from a leading USDA official that world wheat production could hit record highs this year didn't help. Lanworth increased their forecast for US wheat production for 2013/14 from 1.91 billion bushels to 2.026 billion. They have the Russian wheat crop estimated at 49.8 MMT, up 32% on last year. In Ukraine they predict a crop of 23.3 MMT, up nearly 48% on last year. Beneficial moisture is forecast for Russia and Ukraine in the coming week. Lebanon bought 50 TMT of European origin wheat for March/April shipment. Jordan bought 50 TMT of optional origin wheat for April/May shipment in a tender for 100 TMT. Bids for Indian wheat in an assortment of tenders floating around are starting to slip below the USD300/tonne mark, a level which they have so far refused to take. They are however said to be looking to shift 5 MMT more of their surplus stocks over the next couple of months to make room for new crop, so this may not be the time to get picky over a few dollars a tonne. Trade estimates for tomorrow's weekly export sales report are 300-600 TMT. Fund selling was estimated at around 3-5,000 Chicago contracts on the day. Mar 13 CBOT Wheat closed at USD6.76 1/4, down 20 cents; May 13 KCBT Wheat closed at USD7.24 1/2, down 20 1/2; May 13 MGEX Wheat closed at USD7.83 1/2, down 12 1/4 cents.
