Chicago Market Mixed, Old Crop/New Crop Spreads Widen
05/06/13 -- Soycomplex: The soybean market closed mixed with old crop a little firmer and new crop down sharply. Lanworth trimmed their estimate for US soybean production this year from 3.43 billion bushels to 3.4 billion bushels, down slightly but still a record crop. Speculation that 3-4 million acres of intended corn acres will go unplanted this spring (there were 8.75 million unsown as of Sunday night) suggests that maybe the 2013 US soybean area might be 2 million acres or so higher than the current USDA forecast of 77.1 million. Even if yields are lower than the USDA's current 44.5 bu/acre then we could still easily end up with a record US soybean crop this autumn. Old crop remains supported by tight soybean availability and high crushing levels due to strong demand for meal. A report on Reuters suggests that Argentine farmers strategy of planting GM soy on GM soy, with little in the way of crop rotation in an attempt to maximise yields is resulting in lower protein levels in beans, and thus in Argentine meal. The theory is that this is keeping demand for US meal high. Lanworth pegged the world soybean crop in 2013/14 at 286 MMT, unchanged from their previous estimate and a record high. Trade estimates for tomorrow's weekly export sales report for beans are 300-700 TMT. Jul 13 Soybeans closed at USD15.32, up 3 1/4 cents; Nov 13 Soybeans closed at USD13.00, down 16 cents; Jul 13 Soybean Meal closed at USD455.90, up USD3.40; Jul 13 Soybean Oil closed at 48.30, down 29 points.
Corn: The corn market also saw a widening of the differential between old and new crop. Lanworth also cut their forecast for 2013 US corn production, but again only slightly, from 13.9 billion bushels to 13.8 billion. This would still comfortably be a record output. They cut their world 2013/14 production forecast by 4 MMT to 961 MMT, but also still easily a record and 12% up on last year. Weekly ethanol production data was supportive for old crop at 882,000 barrels/day, the largest daily corn use since June 2012 and up 19,000 bpd on last week's 863,000 bpd. Ethanol imports were zero. Informa estimated the Argentine corn crop at 25.5 MMT, which is 1 MMT below the USDA. They estimated the Brazilian corn crop at 78.5 MMT, which is 2.5 MMT more than the current USDA forecast. Iran bought 60,000 MT of Black Sea origin corn for June shipment. APK Inform said that Ukraine farmers had planted a record grain area for 2013, including an all time high corn area of 4.7 million hectares. Cool and wet weather continues to dog US corn planting. "Maximum temperatures last week were 4-5 F below normal in Minnesota and the northern Midwest at large. Slight warming is predicted on the weekend maximum temperatures recovering to low 70s F. There also would be a renewed risk of showers in Minnesota, South Dakota, Wisconsin and Nebraska with expected rainfall from 0.25 – 1 inch expected," said Martell Crop Projections. Trade estimates for tomorrow's weekly export sales report are 500-800 TMT. Jul 13 Corn closed at USD6.60 3/4, up 1/4 cent; Dec 13 Corn closed at USD5.42 1/4, down 10 3/4 cents.
Wheat: Informa reduced their US winter wheat production estimate from 1.529 billion bushels to 1.494 billion, but still a little higher than the USDA predicted last month. They predicted a HRW wheat crop of 778 million bushels (the USDA go 768 million), SRW wheat at 505 million (USDA: 501 million) and soft white wheat at 211 million. Lanworth left their 2013/14 world wheat production forecast unchanged at 694 MMT, just 3 MMT shy of the 2011/12 record output. They raised their Australian production estimate to 24.8 MMT (versus 24.5 MMT from the USDA) but cut their Canadian forecast to 27.9 MMT (vs. 29.0 MMT from the USDA). South Korea said that they'd found no traces of GMO wheat in any shipments from the US, but millers there said that they won't be resuming US wheat imports just yet until an explanation as to how GMO wheat was found growing in Oregon 8 years after tests on the strain were suspended. US wheat shipments that have already arrived in South Korea are facing delays of up to 3 days to begin to unload whilst the appropriate tests are carried out. South Korea bought 60 TMT of optional origin, possibly from the Black Sea, feed wheat for October shipment from Toepfer. Algeria bought 425 TMT of possibly French wheat for November shipment. Winter wheat harvesting is underway in Texas and Oklahoma, reports suggest that yields are down and protein levels are up on heat during heading. Trade estimates for tomorrow's weekly export sales report are 300-600 TMT. Jul 13 CBOT Wheat closed at USD7.01 1/2, down 7 1/2 cents; Jul 13 KCBT Wheat closed at USD7.43 1/4, down 7 1/2 cents; Jul 13 MGEX Wheat closed at USD8.16, down 5 cents.
