Chicago Soy Up, Corn And Wheat Down (Again)
16/12/13 -- Soycomplex: Beans traded lower in the overnight Globex session, but reversed that direction once the open outcry daytime trade began. Strong demand underpins the market, with the US having around 38.7 MMT (or over 96%) of the USDA's projected 40.1 MMT target for the 2013/14 either already shipped or sold and waiting to go (in roughly a 50:50 split). In addition forward sales for 2014/15 have also been unusually active too. Trade rhetoric suggests that much of the unshipped US soybean sales will end up getting cancelled or switched to South America. Today's trade gossip though has China supposedly actively seeking US beans for Feb shipment. The USDA also gave us another strong week of export inspections, with beans coming in at over 60.5 million bushels, versus trade expectations of 50-60 million. Cumulative inspections are now past halfway USDA expectations and we are less than a third of the way through the season. Domestic demand in the US is also strong, with the November NOPA crush coming in at 160.3 million bushels versus last year's 157.3 million. Brazil is said to be around 98% planted on beans, in line with normal. There's a little bit of talk of the weather turning hotter and drier in Brazil and Argentina. Jan 14 beans closed 10 1/4 cents higher at $13.37 3/4; Jan 14 meal was up $6.40 at $439.00 and Jan 14 soybean oil closed 8 points lower at 39.75.
Corn: The corn market closed a couple of cents lower, extending the recent slide. Export inspections of only 25 million bushels weren't great, and fell short of trade expectations/hopes that they might at least match last week's 40 million. Despite the ongoing problems with China clearing US corn through customs, almost 9 million bushels of this week's total is heading that way. There are reports that some of these rejected US corn shipments to China are being shipped to South Korea at discounted prices. There's also talk of at least one cargo of US DDGS being quarantined due the same issue, and that the problem is unlikely to be resolved until well into the New Year. Speculation suggests that Beijing is using the dispute as a way to curb cheap corn imports and support the domestic market. They appear to have plenty of corn of their own, with a record crop of 217.7 MMT being forecast last week by CNGOIC, up from their previous estimate of 215 MMT and 6% higher than last year. Coceral estimated the EU-28 corn crop at 64.8 MMT, up almost 13% on last year. Ukraine revealed that it had exported more corn (7.45 MMT) than wheat (6.33 MMT) so far this season, a trend that is set to continue and a gap that's likely to get much wider by the end of 2013/14. News wires report that Mexico is to restore import taxes of 20% on white corn that were suspended in 2008. Yellow corn imports remain tax free. New front month Mar 14 corn closed down 2 1/4 cents at $4.23 1/4, within touching distance of the recent lifetime contract closing low of $4.21. May 14 closed down 2 cents at $4.31 3/4.
Wheat: The wheat market slid to new lows, closing around 6-7 cents lower across the 3 exchanges. Demand for US wheat is what the market wants to see, and weekly export inspections of 17.5 million bushels were at the low end of trade expectations. Iraq's wheat tender, which closed over the weekend, picked up a best offer of just under $340 Ciffo for Australian origin material versus US wheat at a best price of almost $359 Ciffo. India continues to offer wheat in an attempt to make a bit of room ahead of another bumper, and maybe even record, harvest early in 2014. They reportedly picked up a best bid of $281.50 FOB in a 70,000 MT offering. Egypt's GASC is reported to have issued a late tender for wheat for Jan 21-31 shipment. France and Romania got the nod last week, although there's a feeling that offers out of the latter are about to dry up. Depressed corn prices offer little in the way of support to US wheat, and neither does Canada's record crop this year. Logistics appear to be their main hurdle to overcome. US winter wheat went into dormancy in pretty good shape, and so too has wheat across most of Europe - particularly in the western half of the continent where the bulk of the crop is grown. Mar 14 CBOT wheat closed down 7 cents at $6.21 3/4, a lifetime contract closing low. Mar 14 KCBT also ended 7 cents lower at $6.65 1/2 and Mar 14 MGEX wheat fell 6 1/4 cents to $6.54 1/4.
