Chicago Market Rallies Heading Into USDA Report

09/05/13 -- Soycomplex: Weekly export sales of 193,800 MT of old crop and 391,700 MT of new crop were in line with trade estimates for combined sales of 4-700 TMT. The US now has 99.3% of the USDA's target for exports of 36.74 MMT this season already on the books, and the vast majority of it (93.5%) has already been shipped. In addition China bought 110 TMT of new crop soybeans. There are now reports of Brazilian, and possibly Paraguayan, beans being lined up to be shipped to the US. Conab cut their Brazilian soybean crop forecast from 81.9 MMT to 81.5 MMT which is 2 MMT lower than the USDA said last month, although still a record. They forecast Brazilian soybean exports at 36.78 MMT (also a record), and up 13% versus 32.47 MMT a year previously. MDA CropCast forecast the US 2013 soybean crop at 84.22 MMT, up almost 11% on last year. In tomorrow's USDA WASDE report the trade is expecting little change to last month's 2012/13 US soybean ending stocks estimate of 125 million bushels. The USDA have hitherto appeared unwilling to dip into their comfort zone below this level. Next season's carryout is seen rising to 239 million bushels, from within a fairly wide range of estimates of 147–347 million. Once the USDA report is out of the way we will undoubtedly remain stuck firmly in a classic weather market, with traders scrutinising every fresh forecast for clues for what to do next. It could be a long weekend. Fund buying in beans was estimated at around 4-5,000 contracts on the day. May 13 Soybeans closed at USD14.95, up 16 cents; Jul 13 Soybeans closed at USD14.07, up 16 1/4 cents; Nov 13 Soybeans closed at USD12.16 1/2, up 5 1/2 cents; May 13 Soybean Meal closed at USD433.40, up USD8.10; May 13 Soybean Oil closed at 49.19, up 53 points.

Corn: The corn market closed sharply higher despite disappointing weekly export sales of 115,800 MT of old crop and 169,900 MT of new crop falling short of trade expectations for sales of a combined 4-800 TMT. Old crop commitments are only 77% of the USDA target for the season. The ongoing delays to US corn planting provided the support, with some talk that this week won't see the big jump in progress that some had been expecting, with many farmers holding out for better field conditions. The hopes of many may be thwarted though as "the chance of rainfall today is near 100% in east Iowa, Wisconsin and Illinois, extending deeper into the Mid South. Slow eastward movement of this storm would bring heavy rain Friday to Michigan, Indiana, Ohio, south through Kentucky into Tennessee. From 0.75 to 1.5 inches of rainfall is expected from this storm, but locally more in Illinois and western Indiana," say Martell Crop Projections. One Chinese analyst said that China’s corn planting is delayed by 15-20 days due to cold and wet weather, and that this may cause some switching into soybean plantings instead. They estimated production in Heilongjiang (China’s top corn producing state) at 23.0 MMT versus 27.0 MMT in 2012. IMEA estimated Brazil’s second corn crop at 40.6 MMT versus the 2012 second crop of 39.0 MMT. Conab estimated Brazil's total corn crop at 78.0 MMT versus a previous estimate of 77.45 MMT. MDA CropCast estimated the 2013 US corn crop at 337.9 MMT, up 30% on last year. A Bloomberg survey said almost 359 MMT. The trade is expecting the USDA to slightly lower US 2012/13 ending stocks from 757 million bushels to around 754 million tomorrow. New crop carryout is seen rising sharply to around 2 billion bushels. Fund buying in corn was estimated at 8-12,000 lots on the day. May 13 Corn closed at USD6.90 1/2, up 15 1/2 cents; Jul 13 Corn closed at USD6.45 1/4, up 12 1/4 cents.

Wheat: There may have been some short-covering in Chicago wheat today ahead of tomorrow's USDA report. Weekly export sales of 239,200 MT of old crop and 226,300 MT of new crop were in line with trade forecasts for combined sales of 3-800 TMT. Old crop commitments are now 94% of the USDA target for the season with only four weeks left to go. Conab estimated the 2013 Brazilian wheat crop at 5.4 MMT versus the 2012 estimate of 4.3 MMT. Brazil's wheat import needs in 2013/14 were estimated at 6.8 MMT versus 7.2 MMT in 2012/13 as production returns to more normal levels. India’s Ag Minister estimated India’s 2013 wheat crop at 93.62 MMT, with domestic demand at 76.0 MMT. Lanworth estimated the 2013/14 Australian wheat crop at 24.3 MMT versus a previous estimate of 25.0 MMT and the USDA's 2012/13 figure of 22.0 MMT. They pegged the Ukrainian wheat crop at 21.9 MMT this year versus a previous estimate of 23.3 MMT and 15.76 MMT from the USDA last year. The FAO said that world wheat production will rise 5.4% this year to 695 MMT, just below the 2011 record crop. They also said that corn production would reach a record 960 MMT, which is 10% up on last year led by a sharp rebound in output in the US. Trade estimates for tomorrow's USDA report have US all wheat production at just over the 2 billion bushel mark versus 2.27 billion in 2012. US 2012/13 ending stocks are seen unchanged from last month at 731 million bushels, from within a range of estimates of 681-747 million. Carryout for next season is seen at an average of 627 million bushels, from within a range of estimates of 486–726 million. World 2012/13 ending stocks are forecast falling to 181.5 MMT versus the USDA's April estimate of 182.26 MMT. Fund buying in CBOT wheat was estimated at around 4,000 contracts on the day. May 13 CBOT Wheat closed at USD7.13 3/4, up 17 cents; May 13 KCBT Wheat closed at USD7.81 1/2, up 9 3/4 cents; May 13 MGEX Wheat closed at USD8.57 3/4, unchanged.