Chicago Markets Mostly Lower On Improved Weather Outlook

18/07/13 -- Soycomplex: Weekly soybean export sales of 702,300 MT were at the top end of expectations of 350-700 TMT, even so the market closed lower on an improved outlook for rain and cooler temperatures across much of the Midwest. Soybean oil remains friendless, tonight's close was a new multi-year low with Aug 13 settling at the lowest for a front month since October 2010. Meal is therefore having to "balance the books" when it comes to crush margins. Oil World estimated 2013/14 global palm oil output at a record high 58.2 MMT, up 4.4% from 2012/13. Argentina's Ag Ministry estimated their 2012/13 soybean crop at 49.0 MMT, down 1.2 MMT from a previous estimate of 50.2 MMT. Ag Canada estimated the 2013/14 canola crop there at 14.6 MMT versus previous estimate of 14.1 MMT and up almost 10% compared to the 2012/13 crop of 13.31 MMT. The trade feels that the current USDA soybean acreage estimate is too high, and notes that around 10% of this year's area is supposed to come from double cropped wheat acres. Wheat harvesting in some states, most notably Ohio, is running well behind schedule. Demand from China remains robust, but the USDA's forecast for them to import 69 MMT in 2013/14 still looks a very tall order. That means that they need to by 4-5 soybean cargoes every single working day of the year to hit that target. Sinograin today forecast China's 2013/14 imports at 64 MMT. Aug 13 Soybeans closed at USD14.69 1/4, down 8 1/4 cents; Nov 13 Soybeans closed at USD12.65 3/4, down 17 3/4 cents; Aug 13 Soybean Meal closed at USD470.40, up USD1.30; Aug 13 Soybean Oil closed at 45.52, down 27 points.

Corn: Weekly export sales of 152,900 MT of old crop and 1,590,800 MT of new crop were supportive. Trade estimates were for 1-200 TMT of old crop and 1.0-1.4 MMT of new crop. China took over 1.2 MMT of the new crop. The trade also feels that the USDA corn acreage estimate is too high, and will need to be revised lower in due course. For now though a largely benign weather forecast is non threatening. "The 12z run of the GFS model is wetter than previously indicated. This is the latest forecast available from the National Weather Service valid 7 am CDT this morning. Midwest cumulative rainfall for the 5 consecutive days Friday-Tuesday, July 18-22, would be mostly 0.75-1 inch in the driest growing areas - Iowa, southern Minnesota, South Dakota, Nebraska, Missouri, western Illinois and western Wisconsin," said Martell Crop Projections. MDA CropCast cut their world corn production forecast by 0.4 MMT to 918.2 MMT, although that's still almost 100 MMT up on last year. "Rains this week in the north central and eastern Midwest will improve moisture there for corn, although some dryness will persist in southwestern areas. Rains in central and southern North China Plain this week will ease dryness there. Widespread rains in Mexico this past week further improved moisture for corn and sorghum," they said. Ag Canada estimated corn production there at 13.15 MMT versus a previous estimate of 13.8 MMT and compared to the 2012/13 crop of 13.06 MMT. South Korea bought 55 TMT of optional origin corn for arrival by Nov 1st. They are also in the market for 70 TMT of optional origin corn for August shipment. Sep 13 Corn closed at USD5.41, up 2 1/2 cents; Dec 13 Corn closed at USD5.00 3/4, down 1 1/4 cents.

Wheat: Weekly export sales of 996,600 MT were actually at the low end of trade expectations, given that a large sale to China had already previously been reported. Brazil was the other main buyer, they are having to turn their attention to US wheat after Argentina put the blocks on further exports as old crop supplies there run low. Egypt's GASC bought 300 TMT of wheat for August shipment, their largest purchase so far this year. The total included 120 TMT each from Russia and Romania, along with a further 60 TMT from Ukraine. Strategie Grains estimated the EU-28 2013/14 soft wheat crop at 133.4 MMT versus previous estimate of 131.5 MMT and up 6% on last year. They also placed EU-28 soft wheat exports at a record 22.3 MMT, up a rather large 4.6 MMT from their previous forecast. "This sharp increase can be attributed to high global demand in 2013/14 and the current very competitive position of EU wheat on the market against the other origins," they said. Romania is part of Europe I suppose. Strategie Grains estimated Egypt’s 2013/14 wheat imports at 8.0 MMT versus a previous estimate of 7.0 MMT. Ag Canada estimated the all wheat crop there at 29.2 MMT versus a previous estimate of 29.4 MMT and compared to the 2012/13 crop of 27.2 MMT. All wheat exports were pegged at 18.7 MMT versus a previous forecast of 18.9 MMT and 18.6 MMT in 2012/13. MDA CropCast cut their world wheat production forecast by 0.3 MMT from last week. Reductions for the US and Kazakhstan outweighed increased for the EU and Australia. South Korea's NOFI seek 60 TMT of optional origin feed wheat for November shipment. South Korea also bought 35 TMT of Australian wheat for October shipment. Sep 13 CBOT Wheat closed at USD6.60 1/2, down 4 1/2 cents; Sep 13 KCBT Wheat closed at USD7.02 1/4, down 1/2 cent; Sep 13 MGEX Wheat closed at USD7.50 1/4, down 5 cents.