Chicago Market Finds Some Traction

15/08/13 -- Soycomplex: Concerns about a drier weather forecast for the Midwest and very strong export sales appeared to trigger some short-covering. "August rainfall is the main factor affecting soybean yields, the heavier the better. Rainfall boosts pod filling, enlarging the seed size. Iowa is the largest US corn and soybean state and also the driest. Only half of normal rainfall has occurred in the recent 6 weeks. The weather pattern could undergo a major change next week, becoming much warmer. Mid to upper 80's F are predicted by Tuesday, compared to low-mid 70's F yesterday. This is a mixed blessing. Retarded crops need heat to spur development, but moisture stress would intensify if heavy rains are not received," said Martell Crop Projections. Weekly export sales for soybeans came in negative to the tune of 10,500 MT for old crop, but a much larger than anticipated near 1.9 MMT for new crop (versus expectations of around 900 TMT - 1.1 MMT). China took the lion's share of that with over 1.3 MMT along with a further 417 TMT going to unknown destinations. Also adding support was news that the USDA's Farm Service Administration said that an intended 1.6 million acres of US soybeans never got planted this year. The numbers included 203,760 acres of soybeans in Minnesota, 418,046 in North Dakota, 113,007 in Illinois and 106,350 in Iowa. AIR Worldwide (a Boston based agricultural consultant) estimated US 2013 soybean yields at 44.3 bu/acre versus Monday's USDA estimate of 42.6 bu/acre. China sold 199 TMT (40%) of the 500 TMT of soybeans offered up at auction today, a far better result than last week's 18%. MDA CropCast increased their US soybean production estimate by 23 million bushels from last week to 3.238 billion bushels citing improved yield potential. The USDA said 3.255 billion on Monday. Sep 13 Soybeans closed at USD12.88 1/4, up 18 3/4 cents; Nov Soybean closed at USD12.65 1/2, up 26 1/2 cents; Sep 13 Soybean Meal closed at USD409.80, up USD1.90; Sep 13 Soybean Oil closed at 43.12, up 78 points.

Corn: Corn finished with impressive gains, continuing with the recent yo-yo theme, also on strong export sales and weather worries. Again, short covering was a feature with fund money now holding an unusually large short position in CBOT corn. Weekly export sales came in at net reductions of 59,100 MT for old crop and sales off 836,100 MT for new crop. The latter easily beat trade forecasts for sales of 250-450 TMT. "Prolonged coolness has slowed down crop development in the Northern Midwest. This is concerning, because northern corn was planted on a delayed timetable in a cool wet spring. Corn development is retarded in northern Iowa, Minnesota, Wisconsin, South Dakota and North Dakota. An early fall frost would be very damaging," said Martell Crop Projections. The FSA said that an intended 3.4 million acres of US corn didn't get planted this year, including 613,257 acres in the top producing state of Iowa, along with 201,763 in Illinois, 616,671 in Minnesota and 498,837 in North Dakota. AIR Worldwide estimated US 2013 corn yields at 157.6 bu/acre, more than 3 bu/acre higher than the USDA's Monday estimate of 154.4 bu/acre. MDA CropCast added 46 million bushels to their US 2013 corn production forecast from last week to increase that to 13.871 billion bushels, citing favourable yield prospects. The USDA said 13.763 billion bushels on Monday. They also increased their estimate for Ukraine by 2.2 MMT from last week to 27.6 MMT. Ag Canada predicted a Canadian corn crop of 13.15 MMT, up marginally on the 13.06 MMT produced last year. Strategie Grains cut their EU-28 corn production forecast slightly, from 65.9 MMT to 65.7 MMT, although that's still 15% up on year ago levels. The Buenos Aires Grains Exchange said that Argentina's corn harvest is 98.8% done. They said that the average corn yield is 7.27 MT/ha versus 6.74 MT/ha last year. They estimated Argentina’s 2013 corn crop at 24.8 MMT, unchanged from their previous estimate. Sep 13 Corn closed at USD4.81 1/2, up 16 3/4 cents; Dec 13 Corn closed at USD4.72 1/4, up 17 cents.

Wheat: Wheat closed modestly higher on all three exchanges, helped by a firmer corn market. "The wheat market remains a reluctant follower with corn outperforming wheat by a large margin," said Benson Quinn Commodities, and I couldn't have put it better myself. Weekly export inspections of 490,100 MT for delivery in the 2013/14 marketing year weren't great - down 33 percent from the previous week and 34 percent from the prior 4-week average. Brazil was the top customer for the second week running taking 140,700 MT. A report on Reuters today said that as much as a third of the Brazilian state of Parana's wheat crop could have been lost to the recent frosts. Parana normally produces around 50% of Brazil's wheat crop. A further freeze is possible tonight according to some forecasts. Ag Canada estimated all wheat production there at 29.2 MMT, up 2 MMT versus last year. They see 2013/14 wheat exports little changed at 18.8 MMT, with 2013/14 ending stocks rising to 5.7 MMT versus 4.75 MMT in 2012/13. Stats Canada release their estimates next week. MDA CropCast upped their 2013/14 world wheat production forecast by 12.2 MMT from last week. They increased their US wheat production forecast by 37 million bushels from last week to 2.111 billion bushels, which is now very close to the USDA's 2.114 billion estimate. Increased acreage and improved spring wheat yields were the reason given. Production in the FSU-12 was raised 4 MMT and India's output hiked by 3.7 MMT from a week ago. The FAS said that 1.7 million acres of intended US wheat never got planted this season. Taiwan’s TFMA group bought 101,500 MT of US Wheat for Sep/Oct shipment. Jordan are tendering for 100,000 MT of optional origin wheat. Sep 13 CBOT Wheat closed at USD6.37 1/2, up 7 cents; Sep 13 KCBT Wheat closed at USD7.03, up 4 1/4 cents; Sep 13 MGEX Wheat closed at USD7.39 1/2, up 3 1/2 cents.