Choppy Trade In Chicago As Traders Grapple With Acreage Numbers
17/09/13 -- Soycomplex: It was a choppy session for beans, with front month Nov 13 trading 18 cents higher at one stage as traders grappled with the latest data from the USDA's Farm Service Administration (FSA) which reported a US soybean planted area of 74.659 million acres versus the USDA's current estimate of 77.2 million. The FSA data includes the vast majority, but not all, of US growers - only those enrolled in subsidy programs for 2013. Last September the FSA had planted acres around 2% lower than the USDA's final figure, which is about average in recent years. Add that to today's estimate and we get a possible 2013 US soybean area of around 76.15 million acres, some million or so less than the current USDA number. The FSA also said that there were 1.687 million acres of "prevent plant" soybeans, so it looks like the final harvested area this year could be significantly lower than the USDA's current estimate of 76.378 million acres if we take these figures at face value. The trade didn't seem to see it that way once the dust had settled however, and the market ultimately closed on the defensive, with funds estimated as net sellers of around 4,000 soybean contracts, and 1,000 each of meal and oil on the day. Oil World estimated the total 2013/14 South American soybean production at a record high 155.91 MMT. They have Brazilian output at a record 86.5 MMT, up 6% from 2012/13. Mato Grosso farmers are waiting for rain to begin planting soybeans. Oil World pegged the 2013/14 Argentine crop at 53.0 MMT, up 9.3% from 2012/13. Dr Michael Cordonnier left his 2013 US soybean yield estimate unchanged at 40.5 bu/acre. Nov 13 Soybeans closed at USD13.42 1/2, down 5 3/4 cents; Jan 14 Soybeans closed at USD13.43, down 5 1/4 cents; Oct 13 Soybean Meal closed at USD428.80, down USD2.40; Oct 13 Soybean Oil closed at 42.00, down 13 points.
Corn: The corn market also put in a two-sided day, with front month Dec 13 trading 12 cents higher at one stage. As with beans it was traders struggling to analyse the FSA data that had the market trading both sides. The FSA pegged the US corn planted and prevent plant area at 91.428 million acres. Last September the FSA had the corn area at 93.75 million, the final figure from the USDA proved to be 97.15 million, so the final area was 3.6% higher than the FSA's September 2012 area. Again this seems to be around a "normal" differential in recent years, although this is far from an exact science. That suggests a 2013 US corn area of 94.7 million acres versus the USDA's current estimate of 97.4 million. The FSA said that there were 3.573 million acres of "prevent plant" corn, suggesting that the final harvested area might come in around 91 million acres. The current USDA estimate is 89.135 million, potentially increasing US corn production this year from last week's USDA estimate of 13.843 billion bushels. Dr Michael Cordonnier left his 2013 US corn yield estimate unchanged at 152 bu/acre though, which is 3.3 bu/acre less than the USDA. Either way, the global corn supply side of the equation still looks weighty for the season ahead. Brazil has harvested a sizeable winter corn crop, and much of this will end up going to traditional overseas US customers. The Ukraine has just begun harvesting what is expected to be a record corn crop and will also be an active seller. The US market still seems to be adjusting from the tight supply/demand scenario of 2012/13 to a much more comfortable new crop balance sheet. Funds continue to appear comfortable to build on their short position in corn, ending up as net sellers of an estimated 3-5,000 contracts on the day. Tomorrow brings the weekly ethanol production data. Last week's output was up sharply to 848,000 barrels/day, presumably a result of more new crop corn coming onto the market, so that trend might continue. Dec 13 Corn closed at USD4.54, down 2 1/2 cents; Mar 14 Corn closed at USD4.66 1/2, down 2 1/2 cents.
Wheat: Wheat closed mixed, also experiencing a choppy session. "The support experienced late in the overnight session stemmed from acreage data compiled by FSA that at face value appeared supportive the grain room. However, the process of extrapolating data released by FSA requires plenty of assumptions to be made," said Benson Quinn Commodities. I know what they mean. The bare bones of it are that the FSA put all wheat planted acres at 53.149 million. Using similar deviances from normal as above that suggests a total planted area of around 54.6 million acres versus the USDA's current 56.53 million. The FSA also increased their all wheat prevent plant acres to 1.977 million from an August estimate of 1.743 million. Japan are tendering for 108,901 MT of milling wheat for Oct-Dec shipment split between US, Canadian and Australian origin. Brazil has bought 2.35 MMT of US HRW wheat since February as they are forced to ramp up their purchases from outside the Mercosur trade bloc. Conab say that they've imported 4.653 MMT of wheat so far this calendar year (to the end of Aug), of which 1.463 MMT has come from the US. They've been the leading buyer of US wheat in the weekly export sales report for 4 of the last 5 weeks, which is helping to keep current US sales for 2013/14 robust versus USDA expectations for the full season. China has also been a featured buyer of US wheat, but may well switch it's attention to newly harvested Canadian wheat, and soon to be harvested Australian origin for its future requirements. Brazil will begin harvesting its own wheat crop next month, and Argentina will step up to the plate in November. That could see the pace of US foreign wheat sales tail off in the second half of the season, in the face also of strong competition from Europe. Talk of quality issues with Russian and Kazakh wheat might help a little going forward though. Feed grain supplies in 2013/14 should be abundant if an unusually high proportion of the Black Sea crop is feed grade, along with record world corn production and a large hike in global barley output. Dec 13 CBOT Wheat closed at USD6.43, up 1 3/4 cents; Dec 13 KCBT Wheat closed at USD6.90, up 1/2 cents; Dec 13 MGEX Wheat closed at USD6.99 1/2, down 2 1/4 cents.
