Chicago Close - Wednesday
16/10/13 -- Soycomplex: Beans gained back what they lost on Tuesday as US Lawmakers closed in on a deal on the US borrowing limit. A solution would mean a resumption of the regular USDA drip-feed of data concerning export sales and the like, although it is currently unclear whether we will ever see the October WASDE report. The USDA will apparently decide by the end of the week whether to release this report or hang fire until November. Nevertheless, the trade is expecting to discover substantial bean (and possibly meal sales too) to China during the government shutdown. Some analysts are saying that China bought up to 3 MMT of US beans and 800 TMT of US meal over the last few weeks. Sales of both for 2013/14 were already well ahead of the schedule needed to hit the USDA's forecasts for the season. Lanworth estimated the 2013/14 global soybean crop at 286.0 MMT, unchanged from previous estimate, but above the USDA's September WASDE forecast of 281.7 MMT. Brazil is finally turning wetter in central areas as monsoon rains begin. Lingering dryness in parts of Argentina may mean less corn and more soybean acres. Soyoil appears to finally be gaining traction after hitting a more than 3 year low earlier in the month, supported by yesterday's NOPA crush figures. No weekly export sales report is expected tomorrow. Nov 13 Soybeans closed at USD12.76 1/2, up 9 1/2 cents; Jan 14 Soybeans closed at USD12.74 3/4, up 8 3/4 cents; Dec 13 Soybean Meal closed at USD403.80, up USD1.40; Dec 13 Soybean Oil closed at 41.37, up 71 points.
Corn: Corn was slightly lower, despite a widely rumoured sale of 300 TMT of US corn to China. That's not a huge deal in the overall scheme of things, especially with some suggesting that this year's US corn yields could ultimately average close to (or even above) 160 bu/acre. Some are saying that China has bought 1.2 MMT US corn for Feb onwards shipment during the past couple of weeks. Lanworth cut their world corn production estimate by 1 MMT to 952 MMT, and versus the USDA's 956.7 MMT forecast last month. Brazil's crop was downgraded from 74.1 MMT to 73.8 MMT, although that's still above the USDA's estimate of 72 MMT. UkrAgroConsult estimated Ukraine's corn crop up 36% at 25.5 MMT, which is a record although below most other trade forecasts (the USDA went for 29 MMT last month). Based on harvest progress so far, 11.36 MMT off 41% of the planned area, the Ukraine analysts are probably closer to the truth than the USDA. The Russian corn harvest if 31% complete at around 4 MMT. Dry weather is forecast for Ukraine and Russia for the next week, which should enable good progress to be made with the corn harvest there. The German Stats Office said that their corn crop will fall from last year's record 5.5 MMT to 4.07 MMT on a combination of late plantings and unfavourable yields. Israel seeks 80 TMT of optional origin corn for Dec/Feb shipment. Black Sea origin would be the likely favourite for that. It would seem that the US Energy Dept has also run out of funding, as there was no weekly ethanol production data from them today. Dec 13 Corn closed at USD4.42 3/4, down 3/4 cent; Mar 14 Corn closed at USD4.55 1/4, down 1/2 cent.
Wheat: Wheat closed lower on all three exchanges. Some commentators are describing US winter wheat conditions as "exceptional" and "the best in years" on the back of good rains in the Southern Plains. Newswires reported that China's COFCO this morning estimated their 2013/14 wheat imports at "only" 3-5 MMT, even though they are already said to have contracted to take around 6.0 MMT (mostly from the US and Australia) and trade forecasts of a requirement closer to 10 MMT this season. The market believes that the Argentine wheat crop will probably come in closer to 10 MMT than the USDA's September estimate of 12 MMT. Agritel forecast output there at 10.1 MMT, The Buenos Aires Grain Exchange say 10.36 MMT and ODA 10.5 MMT. With old crop stocks non-existent, and domestic consumption generally at around 7 MMT, they are likely to limit exports in 2013/14. That should mean continued Brazilian buying of US wheat. UkrAgroConsult forecast the wheat crop in Ukraine at 21.0 MMT, up 48% versus last year. Barley output there is seen at 7.2 MMT, a rise of nearly 11% on last year. Russia's wheat harvest stands at 51.5 MMT off 91% of plan, dry weather there across the next week should enable that to pretty much be wrapped up. It will also aid winter plantings in both Russia and Ukraine, which are finally catching up a little. Russia bought 29,970 MT of intervention grains today, taking the weekly total purchased to 58,050 MT. They are expected to buy 2-3 MMT on the local market by the end of the year, although the prices that the government are looking to pay aren't overly attractive now that the market has moved up a little. Dec 13 CBOT Wheat closed at USD6.81 1/2, down 4 1/4 cents; Dec 13 KCBT Wheat closed at USD7.44 3/4, down 11 1/2 cents; Dec 13 MGEX Wheat closed at USD7.42 1/2, down 7 3/4 cents.
