Chicago Market Sharply Higher On Weather, Short-Covering
09/07/13 -- Soycomplex: For a change it was new crop beans that led the charge today, even if soon to expire old crop Jul 13 did set another lifetime contract closing high. The US weather is warming up, and the late planted soybean crop is consequently lagging in development with only 10% of the crop at the flowering stage versus 24% normally at this time. CONAB estimated the Brazilian 2012/13 soybean crop at 81.5 MMT versus a previous estimate of 81.3 MMT. They forecast 2012/13 soybean exports at 37.8 MMT versus a previous estimate of 36.78 MMT and compared to 32.5 MMT a year previously. Dock workers in Brazil's port of Santos are said to be staging a 24 hour strike tomorrow, causing further disruptions to shipping in the region. For the USDA report on Thursday the trade is looking for 2012/13 ending stocks to come in at 121 million bushels, down from 125 million in June. The 2013/14 carryout is expected to come in near 263 million bushels, down from 265 million in June. Michael Cordonnier estimated 2013 US soybean yields at 42.0 bu/acre, unchanged from his previous forecast. Jul 13 Soybeans closed at USD16.13 1/4, up 4 cents; Nov 13 Soybeans closed at USD12.76 1/4, up 24 cents; Jul 13 Soybean Meal closed at USD520.80, up USD9.70; Jul 13 Soybean Oil closed at 47.08, up 7 points.
Corn: Corn closed with decent gains. As with soybeans new crop months made the largest advances on what may have been short-covering ahead of Thursday's upcoming USDA report after the Dec 13 contract fell to it's lowest level since late 2010 recently. Friday's Commitment of Traders report showed managed money holding a net short in CBOT corn for the first time since April 2010. A warmer and drier outlook for the Midwest is no doubt making the shorts nervous, mindful of what happened last year and conscious that heat damage during pollination can really knock yield potential. CONAB estimated the Brazilian 2012/13 corn crop at 79.1 MMT versus a previous estimate of 78.1 MMT. Second crop corn will account for 44.24 MMT of that. They see 2012/13 corn exports at only 15.0 MMT, unchanged from their previous estimate but well down on 22.3 MMT in 2011/12. Taiwan bought 60 TMT of Brazilian corn for September shipment. Michael Cordonnier left his 2013 US corn yield forecast of 153 bu/acre unchanged from previously. For the USDA report on Thursday, the trade is looking for 2012/13 ending stocks to come in at 725 million bushels, down from 769 million in June. The 2013/14 carryout is expected to come in near 1.895 million bushels, down from 1.949 in June. Jul 13 Corn closed at USD7.04, up 12 1/4 cents; Dec 13 Corn closed at USD5.21 3/4, up 21 1/4 cents.
Wheat: Wheat closed sharply higher on all three exchanges. Following the recent surge in Chinese buying, the trade is wondering if, and by how much, the USDA may raise their forecast for China's 2013/14 wheat imports from the existing estimate of 3.5 MMT. Estimates for Russia's 2013 grain and wheat harvest are also in decline. The Russian PM hinted at a lower 2013 grain harvest than the current official forecast of 95 MMT. "In June and in early July, the European part of our country saw abnormally hot weather and 13 regions were hit," he said. That isn't the case everywhere in the Black Sea and Eastern Europe though, the Ukrainian Agrarian Confederation said that they expect a grain harvest there of 55-58 MMT, with export potential at a record 27-29 MMT. CONAB forecast the Brazilian 2013/14 wheat crop at 5.61 MMT versus a previous estimate of 5.56 MMT. In Thursday's USDA report the trade is looking for US 2013/14 wheat ending stocks of 632 million bushels (versus 659 million in June). World 2012/13 wheat carryout is estimated at 179.344 MMT (versus 179.87 MMT in June). World 2013/14 wheat ending stocks are seen at 180.293 MMT (versus 181.25 MMT last month). Jul 13 CBOT Wheat closed at USD6.75 1/2, up 15 1/2 cents; Jul 13 KCBT Wheat closed at USD7.06 3/4, up 15 1/2 cents; Jul 13 MGEX Wheat closed at USD7.98, up 25 cents.
