Chicago Gives Up Some Of Monday Night's Gains

Corn: Corn gave up around half of yesterday's 20 cent or so gains, also on a wetter outlook for the Midwest. The Pro Farmer crop tour found potential SD average corn yields of 161.75 bu/acre, hugely better than only 74.26 bu/acre a year ago and the 3 year average of 119.65 bu/acre. In OH they came up with corn yields of 171.6 bu/acre versus 110.5 bu/acre a year ago and the 3 year average of 144.1 bu/acre. For prices, this all hinges on where final yields will end up. Maquaire Bank forecast US corn yields at 155.9 bu/acre, 1.5 bu/acre more than the USDA's current estimate. The USDA's current corn yield estimate was produced based on the number of ears and ear weights. Their survey found 27,500 corn ears per acre, not far short of the 2009 record of 27,750 ears/acre. Ear weights were estimated at 0.32 pounds versus 0.27 pounds last year and 0.345 pounds in 2009. US analysts AgriVisor yesterday noted that because the US crop was unusually immature when the USDA conducted their Aug 1st survey, to help determine this year's yields they used the 5-year average weight instead. Because the 5-year average included last year's disastrous corn yield of only 123.4 bu/acre, the estimate given may therefore have been skewed to the low side, and therefore they expect that yields will ultimately end up higher than last week's 154.4 bu/acre. Incidentally though, and unlike soybeans, the USDA were calling final corn yields correctly at 123.4 bu/acre as of last August. A late planted, slow developing crop will almost certainly mean a late harvested one too. That is the biggest risk for corn right now. "Delayed development in corn is a serious worry, increasing the risk of freeze damage in the fall. United States corn 'denting' was only 11% under way August 18, among the slowest on record. Slow progress in corn is due to a very cool spring that delayed planting in the Upper Midwest. The slowest developing corn is in Iowa, the top US corn state, Minnesota the 4th biggest producer, and Wisconsin and North Dakota, affecting 30% of United States corn," said Martell Crop Projections. The same Kansas State University economist mentioned above said that US corn prices could have a half dollar downside to where we are now. Last night's crop condition report came in 3 points lower in the good/excellent category at 61%, still above the 10-year average of 58% at this time. The biggest losers were MO down 10%, CO down 7% and WI down 5%. The Argentine Ag Secretary estimated 2012/13 corn exports at 22-24 MMT. The USDA's current forecast is 23.5 MMT. Sep 13 Corn closed at USD4.83 3/4, down 9 1/2 cents; Dec 13 Corn closed at USD4.75 1/2, down 10 cents.
Wheat: Wheat, the follower. Corn was lower, so it was lower. That's about all there is to it. Volume was light and fresh news was lacking. Unlike corn and beans, at the end of the day CBOT wheat gave up 75% of last night's gains, with KCBT and MGEX wheat both losing more than they put on yesterday. Syria cancelled a tender to import 200 TMT of wheat "because the offers presented were not in accordance with our specifications," said Reuters. Jordan bought 100 TMT of optional origin wheat in their tender. Ukraine are forecasting a record grain crop and record exports. Stats Canada are due out tomorrow with their latest production estimates, with the trade expecting an all wheat crop of 30.4 MMT, the highest output since 1991 and 12% up on last year. The USDA are currently almost a million tonnes below that. The Manitoba weekly crop report said that the winter wheat harvest is displaying good yields and quality with similar from the early spring wheat, oats, and barley harvest that has only just begun. The Russian harvest is ongoing, producing 35.8 MMT of wheat so far off less than half of the planned area. Yields don't seem to be dropping as expected, in fact on the face of the numbers presented by the Ministry they are getting larger in terms of percentage comparison versus last year. The latest figures place the average Russian wheat yield up 41% versus 2012 at 2.96 MT/ha. A week ago yields were seen up 36% compared with last year. Quality does seem to be a potential problem though this year though, with Agritel reporting that the feed/milling wheat spread has doubled in the past 6-7 weeks. Kazakhstan's Ag Ministry said as of Aug 20th the country has harvested 1.368 MMT of grains off 863,300 hectares with an average yield of 1.58 Mt/ha, up 72% versus less than a tonne/ha a year ago. The August USDA WASDE report showed total new crop US wheat supplies remain abundant at 23% on a stocks to use basis in the face of strong overseas competition in the world market. US wheat is expensive relative to European and Black Sea origin material in all but to "traditional" homes, and will shortly have to compete with the very large Canadian crop that is looming menacingly on the horizon. Wheat production in Western Australia in 2013/14 could be hit by drought for a second year, and maybe only total around 6.2 MMT, according to the state's Minister for Agriculture and Food. Sep 13 CBOT Wheat closed at USD6.34 1/4, down 7 1/4 cents; Sep 13 KCBT Wheat closed at USD6.96 3/4, down 6 1/2 cents; Sep 13 MGEX Wheat closed at USD7.35, down 10 1/4 cents.