Chicago Slumps On Rain

22/08/13 -- Soycomplex: Beans finished lower on overnight rains, although opinion is divided on how much good they might do. "Strong thunderstorms erupted in Nebraska and northern Iowa this morning. Growing conditions have been extremely dry the past 3-4 weeks. While heavy rain is welcome, it is arriving too late in the growing season for maximum benefits," said Martell Crop Projections. This system also affects parts of southern MN, stretching east with lighter showers for northern IL and IN. Reuters, reporting from an international grains conference in Australia, said some analysts there forecast that the US soybean crop could be 92.5 MMT, or even above 95 MMT, well ahead of the USDA's current forecast of 88.6 MMT. Others aren't so optimistic, MDA CropCast cut their estimate by 650 TMT to 87.48 MMT citing dryness in western areas. Even so that would still be a 15% increase on production last year. Day 3 of the Pro Farmer crop tour found an east central Iowa average soybean pod count of only 661 pods per 3 foot square plot versus 1,079 pods a year ago and 1,189 pods for the 3 year average. In southern Minnesota they found an average soybean pod count of 975 pods versus 900-920 pods a year ago and 1,050-1,100 pods for the 3 year average. In Illinois they found an average bean pod count of 1,115.97 pods versus 944.05 pods a year ago and the 3 year average of 1,149.47 pods. Weekly export sales for soybeans came in at 20,900 MT for old crop and 926,000 MT for new crop, which were primarily for China (681,000 MT) and unknown destinations (159,500 MT). That fell below trade expectations of 1.3-1.7 MMT. Brazil will plant 3-5% more soybeans for the 2013/14 season, say Rabobank. Although production costs are rising, beans offer better potential returns than corn. Brazilian farmers will also benefit from the value of the real which has fallen by around 20% versus the US dollar since May. China sold 187 TMT of the 500 TMT of soybeans, or 37.3%, that was offered at today’s government auction. Sep 13 Soybeans closed at USD13.22, down 11 cents; Nov 13 Soybeans closed at USD12.86 3/4, down 17 1/4 cents; Sep 13 Soybean Meal closed at USD413.30, down USD8.20; Sep 13 Soybean Oil closed at 42.43, down 39 points.

Corn: Better than expected overnight rains saw corn move lower, sharply lower in the case of new crop. Weekly export sales of 58,200 MT of new crop and 434,400 MT for 2013/14 fell well below trade expectations of 700 TMT to 1 MMT. Yesterday's weekly ethanol usage data was uninspiring also, suggesting that the USDA is overstating ethanol demand in 2012/13 by as much as 20-25 million bushels. The Pro Farmer crop tour is generally finding decent yield potential for US corn this year. In east central Iowa they came up with average corn yield at 170 bu/acre versus 140 bu/acre a year ago and the 3 year average of 161 bu/acre. In southern Minnesota they found an average corn yield of 177.3 bu/acre versus 146-158 bu/acre a year ago and around 167-174 bu/acre for the 3 year average. In Illinois they found an average corn yield at 170.48 bu/acre versus 121.60 bu/acre a year ago and a 3 year average of 148.04 bu/acre. In western Iowa they found an average corn yield at 168.6 bu/acre versus the 3 year average of 160.74 bu/acre. Their final estimates will be released tomorrow. The US Grains Council estimated China’s 2013/14 corn imports at 10.0 MMT, versus 3 MMT in 2012/13 and the USDA's current estimate of 7 MMT. They said that US corn undercuts domestic Chinese supplies by USD145/tonne! That would make China the second largest corn buyer in the world after Japan. MDA CropCast cut their forecast for US corn production this year by 1 MMT to 351.4 MMT, still a hefty 35% increase on output in 2012. We are still in the vagaries of a weather market. "The new 5-day forecast calls for below-average rainfall in the Midwest. A ridge of high pressure in the heartland would block showers from the central United States. Less than one-quarter inch of moisture is expected. Modest showers 0.25 - 0.50 inch would occur in northern Illinois, northern Indiana and Ohio. The normal Midwest 5-day rainfall is 0.66 inch in late August. The forecast is hotter in the North-Central states this weekend, where the jet stream builds up a stable ridge of high pressure. Maximum temperatures would be 6-10 F above normal Sunday-Wednesday in Iowa, Nebraska, South Dakota, North Dakota, Wisconsin and northern Illinois. Less extreme heat is predicted in the eastern Midwest, 3-6 F above normal," said Martell Crop Projections. Sep 13 Corn closed at USD4.87 1/2, down 10 1/2 cents; Dec 13 Corn closed at USD4.64 1/2, down 18 3/4 cents.

Wheat: Wheat followed corn easier. Weekly export sales of 494,000 MT were so-so, although in line with expectations of 450-550 TMT. Brazil was the largest buyer again taking 188,800 MT, with China also in there for 52,300 MT. The early strong pace of EU wheat exports in 2013/14 is highlighted by the fact that Brussels have now issued 3.2 MMT of soft wheat export licences this season versus only 1.44 MMT this time a year ago. French and Black Sea wheat is very competitive into North Africa and the Middle East compared to US origin grain. MDA CropCast cut their forecast for Russia's wheat production this year by 600 TMT to 52.5 MMT, that's still a 39% increase on last year though. They raised production in Morocco by 300 TMT from last week to 6.7 MMT an 81% increase on 2012. They cut Australia's barley crop by 200 TMT to 7.2 MMT versus 6.8 MMT in 2012/13. Jordan bought 100 TMT of optional origin feed barley for April shipment. Japan bought 153 TMT of US/Canadian milling wheat for Sept-Nov shipment in a routine tender. The Argentine Ag Ministry estimated Argentina’s 2013/14 wheat area at 3.9 million ha versus a previous estimate of 4.0 million. The German Farmers Association, DBV, estimated German’s 2013 winter wheat crop at 23.9 MMT versus the 2012 crop of 22.38 MMT. They said that German’s winter barley harvest is complete and they harvested 8.2 MMT versus 7.0 MMT a year ago. Various analysts are lining up to point out that Ukraine will suffer logistical problems with its potentially record 2013 grain harvest and its attempts to export 34-39 MMT of grains, oilseeds and by-products in 2013/14. They will remain aggressive sellers throughout much of the new campaign, but may start letting some buyers down later in the season, especially once winter starts to bite. Yesterday's Stats Canada spring wheat production estimate of 21.83 MMT was up almost 17% versus 18.72 MMT a year ago. This sent bearish vibes into the Minneapolis wheat market yesterday and today, and the premium the market held against the KCBT and Chicago markets eroded as a result. Minneapolis wheat was thus the weakest leg of the three wheat exchanges for the second day running tonight. Sep 13 CBOT Wheat closed at USD6.30 1/2, down 8 1/4 cents; Sep 13 KCBT Wheat closed at USD6.94 1/4, down 5 1/4 cents; Sep 13 MGEX Wheat closed at USD7.19 1/4, down 9 1/2 cents.