Chicago Soybeans Extend Rally As Wheat And Corn Decline
13/11/13 -- Soycomplex: Beans managed a sixth successive higher close, although only just on about to expire Nov 13. Strong demand for nearby beans is what is supporting the market, and the USDA underlined this once again by announcing the sale of 123,000 MT of US beans to China (who else?) for 2013/14 delivery under the daily reporting system. Robust demand for meal, and healthy crush margins, are also keeping domestic demand for new crop beans in the US high. It's looking like the US soybean export effort will be concentrated on the first half of the season, this week's export inspections of close to 80 million bushels for a third week in a row far outstripped the required 22.4 million needed each week to reach the USDA projection for the year. If not exactly looming, then record South American production is on the distant horizon, but with that will come the inevitable logistical problems and early season shipping delays. This is all starting to sound strangely familiar isn't it? Meanwhile the dogs are already barking that given the current corn:soybean pricing structure we can expect a substantial increase in soybean acres in the US next spring. As ever it's soybean jam tomorrow it would seem. The Chinese Ministry of Commerce estimated their November bean imports at 5.95 MMT versus their October estimate of 4.119 MMT. Various other industry analysts see China's November soybean imports at around 6.5 MMT, peaking at around 7.0-7.2 MMT in December, before falling off to 5.8 MMT in January and 4.0 MMT in February. Lanworth tweaked slightly lower their forecast for the 2013 US soybean crop from 3.293 billion bushels to 3.287 billion. The Philippines typhoon is seen as being supportive for world vegoil prices as it will likely cut coconut oil production. Indian coconut prices are said to have jumped to record levels. Nov 13 Soybeans closed at $13.19 3/4, up 1/2 cent; Jan 14 Soybeans closed at $13.15, up 1/2 cent; Dec 13 Soybean Meal closed at $423.30, down $4.40; Dec 13 Soybean Oil closed at 40.96, up 21 points.
Corn: Corn futures drifted 2-4 cents lower on harvest pressure and continued talk that a lowering of the ethanol mandate for 2014 is in the wind from the EPA. A drop in demand for US corn to coincide with a record circa 14 billion bushel crop is obviously not good news. Lanworth tweaked slightly higher their forecast for the US 2013 corn crop, from 13.938 billion bushels to 13.944 billion. The USDA's Canadian attaché estimated the 2013/14 corn crop there at 13.1 MMT, unchanged from a year ago. Ending stocks are seen rising to 2.5 MMT from 1.6 MMT a year ago. The Russian corn harvest is now 63.5% complete at 8.2 MMT, the USDA raised their forecast for output there this year from 9.0 MMT to 11.5 MMT on Friday. Russia are said to be stepping up their corn export activity. So too are Ukraine, where this year's record corn harvest is now also well advanced. Both countries are expected to increase corn plantings in 2014 further, pushing production there up to new record levels in what is becoming a rapidly expanding crop in the FSU. For South American farmers meanwhile, corn is losing it's lustre and reduced production from Brazil and Argentina is on the cards for early next year, although output will still be substantial. Brazilian corn is now approved for export to China, where the US already faces stiff competition from Argentina and Ukraine. The weekly ethanol production data from the Energy Dept comes out tomorrow. The usual weekly export sales are out on Friday. Both are a day later than normal due to Monday's Veteran's Day holiday. "Ukraine corn offers are undercutting France into the rest of the EU. The corn market may be trying to tell us that it isn’t going anywhere fast without a story," said Benson Quinn Commodities. Dec 13 Corn closed at $4.29 3/4, down 2 1/2 cents; Mar 14 Corn closed at $4.40 1/4, down 3 3/4 cents.
Wheat: Wheat was narrowly mixed, and looks like it will struggle to go higher whilst corn remains mired in the low $4's area. CNCOIC estimated China's wheat imports at 8 MMT, up from 7.5 MMT previously and the most since 1995, although below the USDA's 8.5 MMT forecast. Lanworth forecast the Chinese 2014 wheat crop at a record 124 MMT, up 2% versus this year. Wheat planting in India is underway, they expect to sown around 29 million hectares this year, and the government have increased the price it will pay local growers from INR1,390 per 100 kg to INR1,400 per 100 kg (around $221/tonne) to ensure good plantings. Indian trading firms have announced that they are to defer slightly the deadline for bids on efforts to sell 340 TMT of government wheat stocks for December shipment due to a holiday. The bidding deadline is now November 18th instead of the 15th. It will be very interesting to see what happens there, as they are supposed to now be prepared to accept more realistic bids compared to their previous minimum of $300/tonne. Russia bought 21,330 MT of grain for it's intervention fund, that takes the total purchased so far to 282,420 MT. They have a declared intent to buy 2-3 MMT by the end of the year, so they are going to have to get their skates on to hit that target. The USDA's Canadian attaché estimated the 2013/14 all wheat crop at a record 33.2 MMT, up 22% versus 27.2 MMT a year ago. The attaché estimated Canadian 2013/14 all wheat ending stocks at 8.2 MMT versus 5.1 MMT a year ago. Australia's CBH Group estimated the wheat crop there at 26.0 MMT, versus 25.9 MMT previously and up 17.6% on a year ago (and versus 25.5 MMT from the USDA last Friday). They estimated Australian wheat exports in 2013/14 at 17.0 MMT. The harvest there is said to be around 25% done and new crop shipments have already begun to leave the ports WA and SA. Dec 13 CBOT Wheat closed at $6.45 1/2, up 1/4 cent; Dec 13 KCBT Wheat closed at $7.02, down 1 1/4 cents; Dec 13 MGEX Wheat closed at $6.99 1/2, down 1 3/4 cents.
