Chicago Market Mixed Prior To USDA Plantings Report
20/05/13 -- Soycomplex: The same old theme of very tight old crop stocks supported the nears, whilst suggestions of potentially record US soybean production in 2013 weighed on the deferred positions. Vietnam bought 120 TMT of US soymeal for Sept/Nov shipment. Weekly export inspections of 3.328 million bushels, were subdued compared to 13.079 million a year ago, although in line with last week's effort. Even so 2012/13 exports are so well advanced already that hitting the USDA target for the season looks to be a formality at this stage. Although old crop US export sales have slowed up markedly of late, any sign of a switch back to the US due to South American logistical problems is a threat to already razor thin US ending stocks, especially with an anticipated delayed start to the 2013 harvest. Brazilian dockers were on strike last week, workers in the Argentine port of Rosario went on strike today. The availability picture later on in the year though still looks a whole lot rosier. The US Soybean Export Council forecast the 2013 US soybean area at 80.0 million acres, almost 3 million higher than the USDA's estimate of 77.1 million. The Council also said that soybean prices could fall below USD10/bu by July due to an acreage switch from corn to beans. After the close the USDA said that 24% of the 2013 US soybean crop was in the ground, up from 6% a week ago, but well behind the 5 year average of 42% - the market was expecting plantings at 25-35% complete. The percentage of the crop emerged was 3% versus 32% a year ago and 14% for the 5 year average. The Argentine Ag Ministry said that 85% of the soybean crop there has been harvested versus 83% a year ago. Farmer sales to exporters are said to be well behind normal levels as growers continue to sit on their stocks due to spiralling inflation and an ever weakening Argentine peso. Jul 13 Soybeans closed at USD14.64 1/2, up 16 cents; Nov 13 Soybeans closed at USD12.25, down 3 1/4 cents; Jul 13 Soybean Meal closed at USD435.30, up USD10.20; Jul 13 Soybean Oil closed at 49.20, down 32 points.
Corn: Unlike soybeans, today we had new crop corn gaining on old crop. Maybe this was in anticipation that the USDA would report corn plantings at the low end of the 50-75% range of trade estimates. They came out with a figure of 71% after the close, meaning that US farmers equalled their busiest corn planting week on record (set in 1992), sowing 43% of the crop in a week. Planting still lags the 5 year average of 79%, but not alarmingly so. It remains to be seen how well this crop develops from here though as much of it has been sown under far from ideal conditions. The USDA said that 19% of the crop is emerged versus 5% a week ago and 46% for the 5 year average. A senior Agriculture Economist at Kansas State University said if planting delays continue through to the end of May the 2-4 million acres of corn could be switched to beans. That appears to be consistent with the US Soybean Export Council ideas. Weekly corn export inspections of 14.557 million bushels were up from 12.7 million a week previously and better than the 7-12 million that the trade was expecting. Weekly inspections will need to average 15.6 million bushels to meet the USDA's export target for the season. The USDA also reported the sale of 120 TMT of new crop corn to "unknown" destinations. China’s Ministry of Agriculture said as of 16 May 96.7% of the 2013 corn crop had been planted in the northeast of the country. Japan's corn usage, and purchases from the US, keep ebbing away. Japan’s Ag Ministry said that the use of corn in animal feed in March was 42.2% versus 44.3% a year ago. They also said that Japan imported 1.31 MMT of corn in March, down 9.2% from a year ago, with only 40.5% of March imports coming from the US as opposed to 87.8% a year ago. The Argentine Ag Ministry said 61% of their corn crop has been harvested versus 58% a year ago. Jul 13 Corn closed at USD6.49 1/2, down 3 1/4 cents; Dec 13 Corn closed at USD5.20 1/4, up 3/4 cent.
Wheat: The USDA reported spring wheat plantings at 67% complete versus 43% a week ago and 76% for the 5 year average. They have spring wheat emergence at 22% versus 10% a week ago and 49% for the 5 year average. Worryingly, winter wheat conditions continue to deteriorate. The USDA raise the proportion of the crop rated poor/very poor by 2 points from last week to 41% compared to only 14% a year ago. Good/excellent conditions fell one point versus last week to 31% and versus 58% a year ago. Winter wheat headed was 43% versus 29% a week ago and 62% for the 5 year average. Reports suggest that severe storms over the weekend may have further damaged some winter wheat in Oklahoma and Kansas. Weekly export inspections of 21.149 million bushels were decent, the trade was expecting somewhere between 15-23 million. Russia’s Ag Ministry said that as of May 17th spring grain planting is 51.9% complete versus 63.4% a year ago. IKAR estimated the 2013 Russian wheat crop at 53.8 MMT versus a previous estimate of 52.5 MMT and up almost 43% on last year. Welcome rain is expected in both Ukraine and southern Russia this week. Ukraine's Trade Ministry estimated Ukraine’s May-June grain exports at 2.97 MMT, taking full season 2012/13 grain exports up to 24.5 MMT. Effective tomorrow, after the close, the CME Group will raise margins on wheat. On the side lines of an international grains conference in Bali an executive from Australia’s largest co-op said that Indonesia may become the world’s largest wheat importer within 5 years due to its large population, strong GDP growth and changing diets. The USDA currently has Indonesia down to import 6.6 MMT of wheat in 2012/13, rising to 7.0 MMT in 2013/14. Chicago wheat continues to lose ground to Minneapolis wheat. Jul 13 CBOT Wheat closed at USD6.85 1/4, up 2 cents; Jul 13 KCBT Wheat closed at USD7.45, up 7 3/4 cents; Jul 13 MGEX Wheat closed at USD8.11 1/4, up 7 1/2 cents.
