Chicago Mixed, But Mostly Lower, Heading Into Weekend
14/06/13 -- Soycomplex: Beans closed mixed with old crop higher and new crop lower. Old crop remains supported by the tight supply line and strong crusher demand. Talk of an upcoming Argentine dock workers strike is also supportive. The spectre of potentially record US production in 2013 still hangs over new crop however. The Buenos Aires Grains Exchange estimated Argentina's soybean harvest at 99% complete, forecasting production at 48.5 MMT, well below the USDA's 54.5 MMT. Argentina's Ag Ministry estimate their 2012/13 soybean crop at 50-51 MMT. Argentine farmers start a well timed 5-day strike on Saturday. The local markets there will also be closed on Thursday and Friday for a holiday. Various investment banks are lining up to predict sharply lower soybean prices by the end of the year. Goldman Sachs said that prices could drop to US11/bu inside the next three months, and that even USD10/bu was possible by the end of the year if the USDA's predicted record 2013 US soybean crop comes to fruition. Deutsche Bank said soybeans face "significant downside" and that November beans may fall below USD11/bu. CNGOIC estimated China’s 2013 soybean crop at 12.3 MMT, down 3.9% from 2012. Private industry analysts estimated China’s June soybean imports at 6.9 MMT versus 5.1 MMT in May. The USDA will issue their latest planting progress report on Monday night. The trade is looking for soybean plantings at 85-90% done versus 71% a week ago. Jul 13 Soybeans closed at USD15.16 1/2, up 6 1/4 cents; Nov 13 Soybeans closed at USD12.99 1/4, down 2 1/4 cents; Jul 13 Soybean Meal closed at USD450.70, down USD1.90; Jul 13 Soybean Oil closed at 48.48, up 64 points. For the week that puts Jul 13 beans down 11 3/4 cents, with Jul 13 meal USD1.80 weaker and Jul 13 oil down 5 points.
Corn: The corn market also saw old crop gains and new crop declines for similar reasons to those for soybeans. The Buenos Aires Grains Exchange estimated Argentina's corn crop this year at 66.3% harvested versus 61.3% a week ago and 67.6% a year ago. They estimated production at 24.8 MMT, unchanged from their previous estimate and significantly lower than the USDA's 27 MMT. The Argentina Ag Ministry estimated the corn crop at 26-27 MMT. CNGOIC estimated China’s 2013 corn crop at 214.0 MMT, unchanged from their previous estimate. They forecast 2013/14 corn imports at 5 MMT versus 7 MMT from the USDA. As with soybeans, the sharks are circling new crop corn. Goldman Sachs forecast corn prices down to USD4.75/bushel from a previous forecast of USD5.25/bushel, adding that a further downgrade to USD4.25/bushel was possible if the US got a corn crop of 13.6 billion bushels this year. The USDA forecast production at 14 billion on Wednesday. Goldman recommended to customers "a short new crop corn and bean basket trade" according to reports. The Deutsche Bank meanwhile are even more bearish, saying that new crop prices could fall as low as USD3.60/bushel. The USDA will report on US corn planting progress on Monday night. Last week's report suggested that 95% of the 2013 US corn crop was in the ground. That might be up to the 97% mark on Monday, which would mean 3 million acres of the USDA's forecast 97.3 million would still be unplanted. Jul 13 Corn closed at USD6.55, up 11 1/2 cents; Dec 13 Corn closed at USD5.33, down 2 1/4 cents. For the week Jul 13 was down 11 1/4 cents and Dec 13 fell 25 1/2 cents.
Wheat: Wheat was down on all three exchanges with news that the Black Sea barley harvest was underway and that early yields were up sharply on year ago levels. The wheat harvest in the region will not be far behind. The US winter wheat harvest is in full swing in Texas and Oklahoma and is now into Kansas. Reports so far suggest good quality and a wide range of test weights. Protein levels are said to be high, which may suggest lower yields. CNGOIC estimated China’s 2013 wheat crop at 120.63 MMT, down from a previous estimate of 121.9 MMT due to excessive rains. Ukraine's State Stats Office said June 1st grain stocks there were 6.3 MMT, down 42% from a year ago, including 2.5 MMT of wheat, 2.6 MMT of corn and 700 TMT of barley. The barley harvest there has begun in the Crimea and Odessa regions. Iran are said to have bought at least 800 TMT of wheat in the past two weeks ahead of this weekend's upcoming elections. Germany and the Baltic are the most likely origins it is thought. In Canada's Saskatchewan, spring crop plantings are said to be 96% complete versus the 5 year average of 89%. Argentine wheat plantings are said to be 30% complete and optimism is high for a strong rebound in production this year on increased plantings and better yields. The same can also be said for Australia. US harvest pressure and the threat of increased competition from a sharp rebound in production from the other major wheat exporting nations in 2013 sees the market grind lower. Jul 13 CBOT Wheat closed at USD6.80 3/4, down 4 3/4 cents; Jul 13 KCBT Wheat closed at USD7.11 1/2, down 7 cents; Jul 13 MGEX Wheat closed at USD8.04, down 8 cents. For the week that puts Chicago wheat 15 1/2 cents lower, with Kansas down 23 1/2 cents and Minneapolis 15 3/4 cents easier.
