Chicago Falls As USDA Predict Record Crops For 2013/14

10/05/13 -- Soycomplex: The USDA report proved to be fairly predictable, keeping the old crop outlook tight, but projecting the usual jam tomorrow. They stood by their minimum "line in the sand" for US old crop ending stocks of 125 million bushels. New crop ending stocks however came in above expectations at 265 million bushels versus the average trade guess of 239 million. That came courtesy of a projected 44.5 bushel/acre yield in the US this year, up more than 12%, or almost 5 bu/acre on last year. That is seen producing a US soybean crop of 3.39 billion bushels in 2013, also more than 12% up on year ago levels. They also pegged global soybean production for 2013/14 at a record 286 MT, up 6% compared 269 MT in 2012/13. Brazil's crop next year is seen rising from this year's record 83.5 MMT to a new record 85.0 MMT, with Argentina's coming in at a record equalling 54.5 MMT versus 51.0 MMT this year (the latter being revised down today from 51.5 MMT last month). These production numbers take world ending stocks for 2013/14 to a record large 75 MMT. That's not as outrageous as it might sound, as the USDA have also pencilled in Chinese imports at a record 69 MMT in 2013/14, a hefty 10 MMT more than they are expected to ship in 2012/13. In other news, the Buenos Aires Grains Exchange said that Argentina's soybean harvest is 79.3% complete, up from 66.2% a week ago and versus 73.4% a year ago. They estimated Argentina’s soybean crop at 48.5 MMT, unchanged from their previous estimate. The CFTC commitment of traders report shows spec money continuing to exit soybean longs. Funds were estimated to have been further net sellers of around 5,000 soybean contracts on the day. May 13 Soybeans closed at USD14.88 1/4, down 3 cents; Jul 13 Soybeans closed at USD13.99, down 9 3/4 cents; Nov 13 Soybeans closed at USD12.05 1/2, down 10 cents; May 13 Soybean Meal closed at USD444.30, up USD4.20; May 13 Soybean Oil closed at 49.17, up 10 points. For the week May 13 beans were up 33 1/4 cents, whilst Nov 13 beans were down 15 3/4 cents. May 13 meal was up USD26.50 and May 13 oil up 1 point.

Corn: Similar to soybeans, corn got a bit of support nearby from tight old crop US supplies, but the outlook was more bearish going forward into new crop. The USDA pegged US corn yields at 158 bu/acre this year, 28% up on last year, with production projected at 14.1 billion bushels, up more than 30% to a record 14.1 billion bushels. Old crop carryout was increased slightly to 759 million bushels versus the 754 million that the trade was expecting. US ending stocks for 2013/14 however are seen rebounding sharply to in excess of 2 billion bushels. Demand from the ethanol sector in 2012/13 was increased slightly to 4.6 billion bushels, although that was offset by a reduction in exports to 750 million bushels. Brazil's corn crop this year was raised 2 MMT to 74 MMT, whilst Argentina's was left unchanged at 26.5 MMT. The trade was expecting 75.2 MMT and 25.4 MMT respectively. World corn production in 2013/14 was pegged at a record 966 MMT, up 12.7% on 2012/13. New crop global ending stocks were forecast at 154.63 MMT versus an average trade estimate of 150.9 MMT. China is seen importing 7 MMT of corn next season, versus 3 MMT this year, despite their domestic production rising to a record 212 MMT. In other news, the Buenos Aires Grains Exchange said that Argentine corn harvest is 40.5% complete, up from 38.5% a week ago and versus 49.2% a year ago. They estimated the crop at 24.8 MMT, unchanged from their previous estimate. Now that this USDA report is out of the way we go back to trading the weather. The trade is expecting US corn planting to be somewhere between 25-35% complete in Monday night's crop progress report. it may come in at the low end of that scale as farmers wait for fields to dry out a little and soil temperatures to improve rather than risk planting in soggy, wet conditions. The CFTC commitment of traders report shows spec money increasing their net long heading into this report. Today funds were judged to have ended up as net sellers of around 10,000 contracts. May 13 Corn closed at USD6.87 3/4, down 6 3/4 cents; Jul 13 Corn closed at USD6.36 1/4, down 12 1/2 cents. May 13 corn was down 11 3/4 cents for the week whilst Jul 13 shed 25 cents.

Wheat: The USDA left US 2012/13 ending stocks unchanged at 731 million bushels, in line with expectations. They pegged 2013 US all wheat production at just over 2 billion bushels, which was also in line with trade forecasts. Production in the top US wheat state of Kansas was forecast down from 382.2 million bushels last year to 299.7 million, although this was now a severe a drop as many expected, and still beats output of 276.5 million in 2011. They did however paint a picture of plentiful wheat availability around the world for 2013/14, with a record global crop of 701 MMT, up 7% from output versus 2012. Whilst US output is seen down 8% this year, there are increases for Russia, Ukraine and Kazakhstan, which are all broadly in line with the estimates given by the FAO yesterday. Russia's wheat crop is seen up 48% to 56 MMT, with Ukraine's rebounding 40% to 22 MMT and Kazakhstan's forecast to increase 52% to 15 MMT. There are also increases for the EU (up 5% to 139 MMT), Canada (up 7% to 29 MMT), Australia (up 11% to 24.5 MMT) and Argentina (up 18% to 13 MMT). In other news, the Buenos Aires Grains Exchange estimated the 2013/14 Argentine wheat area at 3.9 million hectares, up 8.3% from a year ago. There are still a few question marks around for global wheat before the USDA's record 701 MMT crop is assured however. "New South Wales wheat producers are complaining bitterly about drought. The soil moisture deficit in northern and central NSW has worsened to 150-300 mm since August 1, 2012. The southwest wheat growing area requires 75-150 mm of rainfall to fully re-charge soil profiles based on official data from the Bureau of Meteorology," say Martell Crop Projections. Meanwhile "Drought has worsened in the past month in European Russia, threatening winter grains and slowing spring grain planting in Ukraine, southern Russia and southeastern Europe. Unusually warm temperatures are making drought worse, enhancing evaporation and speeding soil drying," they add. May 13 CBOT Wheat closed at USD6.96 3/4, down 19 1/2 cents; May 13 KCBT Wheat closed at USD7.71 1/2, down 20 1/2 cents; May 13 MGEX Wheat closed at USD8.57 3/4, unchanged. On the week CBOT wheat was down 14 1/2 cents, Kansas fell 18 1/2 cents and Minneapolis was down 3/4 of a cent.

EU Grains Drift Lower Heading Into USDA Report

10/05/13 -- EU grains were mixed, but mostly lower, in quiet and nervous trade heading into another major Friday night USDA report. May 13 Paris wheat, which has seen choppy trade this week, went off the board making new crop Nov 13 the new front month.

London wheat closed the day with front month May 13 up GBP0.25/tonne to GBP191.25/tonne, all other months apart from those of the 2014/15 crop year were lower, with new crop Nov 13 ending GBP1.50/tonne easier at GBP181.50/tonne. May 13 Paris wheat expired officially EUR1.75/tonne higher at EUR247.00/tonne, everything else was lower including Nov 13 which closed GBP2.25/tonne easier at GBP208.75/tonne.

UK growers continue to fret over their crops and generally think that sharply lower wheat production here this year means that prices must go higher. It is worth noting however that Nov 13 Paris milling wheat closed tonight at the equivalent in sterling of GBP177.00/tonne, whilst Nov 13 Paris corn closed at the equivalent of GBP158.50/tonne.

The market has been drifting slightly lower heading into this report, with May 13 London wheat down GBP0.50/tonne versus last Friday. New crop Nov 13 London wheat was down GBP3.05/tonne on the week, whilst May 13 Paris wheat fell EUR1.75/tonne.

Pretty decent and widespread rains across much of the UK and northern France today/tomorrow should perk both winter and spring crops up a bit, although more would be helpful. There's no weekly crop condition report from the French today due to holiday interruptions this week, that is now due to be released on Monday.

Rouen's weekly grain export total jumped from 158 TMT last week to 208 TMT this week, including 150 TMT of soft wheat. Not too bad a performance for a holiday week. Algeria was the top destination for the soft wheat, although the UK also featured as a buyer of 20,630 MT along with 3,300 MT of feed barley and 3,150 MT of French corn.

FranceAgriMer reported March soft wheat exports of 1.83 MMT, up 12% on last year with Morocco (296 TMT) and Algeria (330 TMT) the top destinations. That takes Jul/Mar exports to 13.18 MMT versus a full season estimate of 16.92 MMT, meaning that exports need to average 1.25 MMT/month for the last three months of the season to reach that total.

Algeria were said to have bought 175 TMT of optional origin durum wheat for July shipment in a tender.

Western Australia got decent rains this week, with the Geraldton area picking up 40-60mm totals, which will be a boon ahead of wheat planting. Production in the state, normally Australia's largest wheat producer and exporter, fell to 6.9 MMT last year. It is thought that output may rebound to around 10 MMT there this year if weather conditions aren't too unkind.

Southern and eastern Ukraine (not normally the most productive parts of the country) and southern Russia (the main winter wheat area) are dry and expecting little in the way of moisture relief in the week ahead. Temperatures here are expected to hit 90F by the end of next week.

As London and Paris markets were closing the USDA released their May WASDE report, which included a first glimpse into production prospects around the globe for the season ahead. They were always likely to be optimistic with these projections at this early stage, and so it proved, although generally the numbers weren't outlandish. There were already plenty of other trade estimates in the same ballpark.

They gave us a world wheat crop in 2013 of a record 701 MMT, up 7% versus 2012, although not that far above yesterday's 695 MMT estimate from the FAO. For corn output they also forecast a record global crop of 966 MMT, a rise of 12.7% on 2012. Again that is "only" 6 MMT more than the FAO forecast yesterday.

Closer to home they gave us an EU-27 (no mention of Croatia who are set to join the club this summer) wheat crop of 138.77 MMT, up 5% on last year and almost identical to 138 MMT from the FAO yesterday. They also forecast the EU-27 barley crop up 1.7% to 55.3 MMT (versus 54.2 MMT from Strategie Grains) and the corn crop here 12.6% higher at 63.8 MMT, which is actually a little lower than the 65 MMT that the FAO estimated yesterday. The EU-27 rapeseed crop was forecast almost 5% higher at 20 MMT (Oil World said 19.8 MMT earlier in the week).

For the UK they estimate the wheat crop down 13% at 11.55 MMT, the barley crop up 18% at 6.5 MMT and the rapeseed crop down 22% to 2.0 MMT. Apart from the latter, the rest of the numbers don't look too outrageous.

USDA See Records All Round

10/05/13 -- The USDA also today had a first peek into crop production around the world for the 2013/14 season. They were predictably bullish on prospects for bumper crops, seeing more records than a HMV fire sale.

For wheat they are predicting a record world crop of 701 MMT, up 7% from output versus 2012.

For corn they are also predicting record world production of 966 MMT, a rise of 12.7% on 2012.

They have global soybean production at a record 286 MT, up 6% compared 269 MT in 2012.

US corn yields this season are seen rising 28% to 158 bu/acre, with production projected at 14.1 billion bushels, up more than 30% to a record 14.1 billion bushels.

US soybean yields are seen at 44.5 bu/acre with production at 3.39 billion bushels, up 12% on 2012, which would also be a record.

Now the excitement is over it's back to trading the weather....

The USDA Numbers

10/05/13 -- The USDA's eagerly awaited raft of important numbers are out, here's some of them:




USDA 2012/13 Ending Stocks Estimates (million bushels):
Product
USDA
Avg Est
Range
USDA 2012/13
Wheat
731
731
681-747
731
Corn
759
754
684-802
757
Beans
125
124
107-130
125

USDA 2013/14 Ending Stocks Estimates (million bushels):

Product
USDA
Avg Est
Range
Wheat
670
627
486-726
Corn
2004
1973
1387-2427
Beans
265
239
147-347

USDA 2012/13 World Ending Stocks Estimates (MMT):

Product
USDA
Avg Est
Range
USDA Apr
Wheat
180.2
181.5
178.3-183.2
182.26
Corn
125.4
125.8
123.8-132.1
125.29
Beans
62.5
62.3
61.1-63.0
62.63

South American 2012/13 Crop Production:

Product
USDA
Avg Est
Range
USDA Apr
Brazil Soybeans
83.5
82.8
82.0-83.5
83.5
Brazil Corn
76.0
75.2
73.5-77.5
74.0
Argentina Soybeans
51.0
50.9
48.5-53.0
51.5
Argentina Corn
26.5
25.4
25.0-26.0
26.5

USDA 2013/14 World Ending Stocks Estimates (MMT):

Product
USDA
 
Avg Est
Range
Wheat
186.4
 
186.4
178.1-195.8
Corn
154.6
 
151.63
135.4-165.6
Beans
75.0
 
70.5
65.0-83.0

USDA 2013/14 US Wheat Production (million bushels):

Product
USDA
Avg Est
Range
USDA 2012/13
US All Wheat
2057
2059
1832-2165
2269
All Winter Wheat
1486
1477
1359-1555
1645
HRW Wheat
768
765
676-834
1004
SRW Wheat
501
496
473-524
420
White Winter Wheat
205
217
204-226
222

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EU Rapemeal Prices

10/05/13 -- Rapemeal prices on the continent are mixed, with old crop lower and new crop firmer today after the markets were closed yesterday for a holiday. There may be a bit of protection being built in to the new crop levels ahead of tonight's USDA report

MDA CropCast yesterday forecast the EU 2013 rapeseed crop up 3% on last year, with Canadian output is seen rising 11.4%.

Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:

May13
305.00
unch
Jun13
300.00
-1.00
Jul13
295.00
-4.00
Aug/Oct13
225.00
+3.00
Nov13/Jan14
224.00
+4.00
Feb/Apr14
224.00
+4.00
May/Jul14
222.00
+4.00

Chicago Market Rallies Heading Into USDA Report

09/05/13 -- Soycomplex: Weekly export sales of 193,800 MT of old crop and 391,700 MT of new crop were in line with trade estimates for combined sales of 4-700 TMT. The US now has 99.3% of the USDA's target for exports of 36.74 MMT this season already on the books, and the vast majority of it (93.5%) has already been shipped. In addition China bought 110 TMT of new crop soybeans. There are now reports of Brazilian, and possibly Paraguayan, beans being lined up to be shipped to the US. Conab cut their Brazilian soybean crop forecast from 81.9 MMT to 81.5 MMT which is 2 MMT lower than the USDA said last month, although still a record. They forecast Brazilian soybean exports at 36.78 MMT (also a record), and up 13% versus 32.47 MMT a year previously. MDA CropCast forecast the US 2013 soybean crop at 84.22 MMT, up almost 11% on last year. In tomorrow's USDA WASDE report the trade is expecting little change to last month's 2012/13 US soybean ending stocks estimate of 125 million bushels. The USDA have hitherto appeared unwilling to dip into their comfort zone below this level. Next season's carryout is seen rising to 239 million bushels, from within a fairly wide range of estimates of 147–347 million. Once the USDA report is out of the way we will undoubtedly remain stuck firmly in a classic weather market, with traders scrutinising every fresh forecast for clues for what to do next. It could be a long weekend. Fund buying in beans was estimated at around 4-5,000 contracts on the day. May 13 Soybeans closed at USD14.95, up 16 cents; Jul 13 Soybeans closed at USD14.07, up 16 1/4 cents; Nov 13 Soybeans closed at USD12.16 1/2, up 5 1/2 cents; May 13 Soybean Meal closed at USD433.40, up USD8.10; May 13 Soybean Oil closed at 49.19, up 53 points.

Corn: The corn market closed sharply higher despite disappointing weekly export sales of 115,800 MT of old crop and 169,900 MT of new crop falling short of trade expectations for sales of a combined 4-800 TMT. Old crop commitments are only 77% of the USDA target for the season. The ongoing delays to US corn planting provided the support, with some talk that this week won't see the big jump in progress that some had been expecting, with many farmers holding out for better field conditions. The hopes of many may be thwarted though as "the chance of rainfall today is near 100% in east Iowa, Wisconsin and Illinois, extending deeper into the Mid South. Slow eastward movement of this storm would bring heavy rain Friday to Michigan, Indiana, Ohio, south through Kentucky into Tennessee. From 0.75 to 1.5 inches of rainfall is expected from this storm, but locally more in Illinois and western Indiana," say Martell Crop Projections. One Chinese analyst said that China’s corn planting is delayed by 15-20 days due to cold and wet weather, and that this may cause some switching into soybean plantings instead. They estimated production in Heilongjiang (China’s top corn producing state) at 23.0 MMT versus 27.0 MMT in 2012. IMEA estimated Brazil’s second corn crop at 40.6 MMT versus the 2012 second crop of 39.0 MMT. Conab estimated Brazil's total corn crop at 78.0 MMT versus a previous estimate of 77.45 MMT. MDA CropCast estimated the 2013 US corn crop at 337.9 MMT, up 30% on last year. A Bloomberg survey said almost 359 MMT. The trade is expecting the USDA to slightly lower US 2012/13 ending stocks from 757 million bushels to around 754 million tomorrow. New crop carryout is seen rising sharply to around 2 billion bushels. Fund buying in corn was estimated at 8-12,000 lots on the day. May 13 Corn closed at USD6.90 1/2, up 15 1/2 cents; Jul 13 Corn closed at USD6.45 1/4, up 12 1/4 cents.

Wheat: There may have been some short-covering in Chicago wheat today ahead of tomorrow's USDA report. Weekly export sales of 239,200 MT of old crop and 226,300 MT of new crop were in line with trade forecasts for combined sales of 3-800 TMT. Old crop commitments are now 94% of the USDA target for the season with only four weeks left to go. Conab estimated the 2013 Brazilian wheat crop at 5.4 MMT versus the 2012 estimate of 4.3 MMT. Brazil's wheat import needs in 2013/14 were estimated at 6.8 MMT versus 7.2 MMT in 2012/13 as production returns to more normal levels. India’s Ag Minister estimated India’s 2013 wheat crop at 93.62 MMT, with domestic demand at 76.0 MMT. Lanworth estimated the 2013/14 Australian wheat crop at 24.3 MMT versus a previous estimate of 25.0 MMT and the USDA's 2012/13 figure of 22.0 MMT. They pegged the Ukrainian wheat crop at 21.9 MMT this year versus a previous estimate of 23.3 MMT and 15.76 MMT from the USDA last year. The FAO said that world wheat production will rise 5.4% this year to 695 MMT, just below the 2011 record crop. They also said that corn production would reach a record 960 MMT, which is 10% up on last year led by a sharp rebound in output in the US. Trade estimates for tomorrow's USDA report have US all wheat production at just over the 2 billion bushel mark versus 2.27 billion in 2012. US 2012/13 ending stocks are seen unchanged from last month at 731 million bushels, from within a range of estimates of 681-747 million. Carryout for next season is seen at an average of 627 million bushels, from within a range of estimates of 486–726 million. World 2012/13 ending stocks are forecast falling to 181.5 MMT versus the USDA's April estimate of 182.26 MMT. Fund buying in CBOT wheat was estimated at around 4,000 contracts on the day. May 13 CBOT Wheat closed at USD7.13 3/4, up 17 cents; May 13 KCBT Wheat closed at USD7.81 1/2, up 9 3/4 cents; May 13 MGEX Wheat closed at USD8.57 3/4, unchanged.

EU Wheat Dragged Higher By US Pre-USDA Short-Covering

09/05/13 - EU grains were mixed in quiet trade for most of the day with many traders absent due to a public holiday in some European countries. A slightly wetter look to the latest US 6-10 day forecast sent CBOT grains higher in afternoon trade, dragging European prices up with it. There was undoubtedly some book squaring and short-covering in CBOT wheat running into tomorrow's USDA WASDE report.

London wheat closed with front month May 13 up EUR0.50/tonne at GBP191.00/tonne and new crop Nov 13 GBP1.35/tonne firmer to GBP183.00/tonne. Paris wheat closed with front month May 13 EUR3.00/tonne higher at EUR245.25/tonne and new crop Nov 13 EUR2.75/tonne better to EUR211.00/tonne.

Everybody is waiting on tomorrow's report, although unfortunately it isn't scheduled for release until  EU markets are getting ready to close, leaving very little time to trade it until Monday morning.

There was no shortage of data prior to that though, with the FAO releasing their latest 2013 cereal production estimates today. They estimated the world wheat crop at 695 MMT this year, some 5.4% up on last year and only slightly less than the record crop of 2011.

Of the leading protagonists only America will a significant drop in production this year, with their crop seen down 9.4% to 56 MMT, with the FAO noting potentially high abandonment rates due to drought and also freeze losses.

Elsewhere though they forecast the EU crop up 5.1% on last year at 138 MMT, although they did note that "the 2013 spring growing period has got off to a slow start in northern and central parts where temperatures have been below the long-term average, with consequent delays in winter crop development and spring planting."

Potentially more importantly, as far as determining prices later in the year is concerned, they see a sharp recovery in Black Sea wheat production this year. The Russian harvest is forecast up 45.9% to 55 MMT, with Kazakhstan's rising 38.8% to 14.3 MMT and Ukraine's seen 25.3% higher at 19.8 MMT.

The FAO also said that the world will produced a record 960 MMT of corn in 2013, led by a sharp recovery in output in the US to 340 MMT. European corn production will rise 18% this year to 65 MMT, they said. From a cereal demand perspective "despite the expected production increases, world cereal utilization is expected to stagnate in 2012/13, constrained by rising grain prices and faltering ethanol demand," they added.

Elsewhere a Bloomberg survey pegged this year's US corn crop even higher, at 359 MMT, which would represent an increase of 31% on last year.

UkrAgroConsult estimated wheat production in Ukraine at 20.2 MMT, up 42% on last year. The barley crop will come in at 7.7 MMT (up 18.5%) and the corn crop at 21.8 MMT (up 16%), they added.

The Commonwealth Bank of Australia said that it was premature to be too alarmed over wheat production prospects Down Under in 2013/14, estimating the crop at 24.9 MMT (the FAO said 24.0 MMT). The USDA currently have 2012/13 production at 22.0 MMT.

Closer to home, Defra said that on farm wheat stocks in England and Wales were 3.5 MMT at the end of February, around 10% down on the same time a year previously. Wheat stocks held in store by ports, merchants and co-ops were 1.2 MMT, roughly the same as in Feb 2012. As a percentage of production the on farm stocks was the equivalent of 28%, up slightly on 27% in 2012.

Late in the day, Brussels said that it had issued 267 TMT of soft wheat export licenses in the past week, bringing the marketing year to date total to 17.14 MMT.

USDA Weekly Export Sales

09/05/13 -- The USDA's weekly export sales report showed soybean and wheat sales in line with trade expectations and corn sales below market forecasts.

Soybean sales of 193,800 MT of old crop and 391,700 MT of new crop were in line with trade estimates for combined sales of 4-700 TMT. Old crop shipments now stand at 93.5% of the USDA target for the season, add on outstanding sales and we're now at 99.3%. Will the USDA raise that bar tomorrow?

Corn sales of 115,800 MT of old crop and 169,900 MT of new crop fell short of trade expectations for sales of a combined 4-800 TMT. Old crop commitments are 77% of the USDA target for the season. Will they lower that bar tomorrow?

Wheat sales came in at 239,200 MT of old crop and 226,300 MT of new crop versus trade forecasts of 3-800 TMT. Old crop commitments are now 94% of the USDA target for the season. With outstanding unshipped sales of almost 3 MMT though it seems likely that some of this will get rolled over into 2013/14 with only 4 weeks of the wheat marketing year left to go. That bar might also be a bit too high, but it's probably unlikely to be lowered tomorrow.

UK Rapeseed

09/05/13 -- There are no EU rapemeal prices from the continent available today as the buggers over there are on another day off.

So, to keep you entertained, I've got this little picture for you instead, gleaned via the modern day marvel that is Twitter. This pic was taken by a Bayer crop scout flying around North Yorkshire in a helicopter this very morning.

Rapeseed near Tadcaster: Makes MrsN#1 look like Angelina Jolie

I might send that to Oil World and ask them if they'd like to revisit this week's revised downwards UK production estimate of 1.8-1.9 MMT.

The Morning Rant

09/05/13 -- The overnight market is mixed with corn 3-4 cents easier, wheat generally down 1-2 cents and soybeans around 1-2 cents firmer.

Interesting point, last night's close on Aug 13 Paris rapeseed, down EUR5.25/tonne to EUR424.00/tonne was the lowest close for a front month in almost 18 months. You have to go all the way back to December 2011 to find a lower finish than that.

Meanwhile May 13 London wheat closing at GBP190.50/tonne was the lowest close for a front month since the early days of last August (when optimism was still quite high that we'd end up with a decent crop). Back across the Channel again, Jun 13 Paris corn closed at EUR214.75/tonne last night, a close at EUR214.00/tonne would have been the lowest for a front month since last June.

Does that tell us that these prices are cheap, or that the market is working lower? In the case of corn and wheat at least, my money would be on the latter.

Lanworth yesterday upped it's forecast for Brazilian corn production to 78 MMT, which is 4 MMT above where the USDA currently stand. Beneficial April rains have boosted the chances for a bumper second corn crop it would seem. The USDA could follow suit on Friday.

Whatever your view on corn production potential in the US this year it's a nailed on certainty that the USDA are going to be pencilling in a large leap in output versus 2012 on Friday too (like up 30% large).

They're also giving us their first official estimates for production around the world in the season that lies ahead, and the USDA are generally bullish about crop prospects until a disaster hits them in the face, and it's too early for that just yet.

Unless you fancy predicting that it isn't going to rain in Russia or Ukraine between now and harvest time, or that we are in for either the wettest, dullest summer on record in the US, or that instead the weather will do a complete U-turn and we will have a repeat of the 2012 drought then things look like they're going lower to me.

Who was it said "I don't do predictions Brian, but this game's got nil-nil written all over it," or something like that?

Friday's USDA report has a much greater chance of being bearish than bullish in my humble opinion.

Chicago Closing Comments - Wednesday

08/05/13 -- Soycomplex: Beans closed mixed with the nears firmer, supported by very tight old crop supplies. The USDA announced the sale of 115 TMT of new crop soybeans to China. Chinese customs data has their soybean imports in April down 18.4% versus April 2012 at 3.98 MMT, taking the 2013 calendar year to date imports to 15.47 MMT, which is down 14.8% on a year ago. Bird flu in China has now affected 129 people with 31 dead. Reports say that poultry sales in the east of the country are down 80%. Soybean shipments out of the US have declined recently, but are already at 93% of the USDA target for the season. Shipments plus outstanding sales stand at 98.5% of the USDA's 36.74 MMT target for the season. Trade estimates for tomorrow's weekly export sales report for soybeans are 400-700 TMT. Last week's sales showed net cancellations of 109,800 MT for old cop along with new crop sales of 1.34 MMT - a 2013/14 marketing year high. Soymeal sales of just under 150 TMT last week took old crop commitments to 102% of USDA projections. The market is looking for 2012/13 ending stocks to come in near 123 million bushels in Friday’s USDA report, down slightly from 125 million last month. The average 2013/14 ending stocks estimate is 235 million bushels, versus 250 million at the USDA Outlook Forum in February. Funds were estimated to have bought 2-4,000 soybean contracts on the day. May 13 Soybeans closed at USD14.79, up 15 1/2 cents; Jul 13 Soybeans closed at USD13.90 3/4, up 8 1/2 cents; Nov 13 Soybeans closed at USD12.14 1/4, down 1 1/2 cents; May 13 Soybean Meal closed at USD425.30, up USD9.00; May 13 Soybean Oil closed at 48.66, down 43 points.

Corn: As with soybeans nearby months were supported by the tight cash market. Weekly ethanol production came in at 843,000 barrels per day, down 14,000 bpd from last week. That may have been a function of lack of available corn supplies as much as anything else. Production needs to come in at around 868,000 bpd to meet the USDA's target for the season. The trade is expecting significant Midwest planting progress to have been made this week, versus only 12% as of Sunday night. "Rainfall has tapered off significantly in the past 2 weeks, but the past 30 days have been extremely wet with two to three times the normal rainfall. Soggy field conditions have continued, prohibiting planting in the low-lying areas especially. The wise producer would wait to plant until soils have drained sufficiently. Otherwise, corn would develop a shallow root system, increasing vulnerability to drought stress later on," say Martell Crop Projections. Two South Korean buyers bought 130,000 MT of South American corn for Jul/Aug shipment. The market is looking for 2012/13 US ending stocks to come in at 750 million bushels in Friday's USDA report, down from 757 million in April. The USDA will also release their first 2013/14 estimate with ending stocks projected to come in at 1.99 billion bushels, versus the USDA Outlook Forum estimate of 2.177 billion. Trade estimates for tomorrow's weekly export sales report for corn are 400-800,000 MT. Last week's sales were 329,300 MT of old crop and 656,000 MT of new crop. Funds were estimated to have been net sellers of around 6-7,000 corn contracts on the day. May 13 Corn closed at USD6.75, down 1 1/2 cents; Jul 13 Corn closed at USD6.33, down 7 cents.

Wheat: Wheat was lower early on but posted a mini recovery late in the session on what was probably a bit of short-covering ahead of Friday's USDA report. Planting delays continue to be supportive for spring wheat in Minneapolis. The trade is estimating 2013/14 US all wheat production to come in at 2.060 billion bushels on Friday versus 2.269 in 2012/13 and a little under the USDA Outlook Forum estimate of 2.100 billion. US ending stocks for 2013/14 are estimated at 656 million bushels versus the forum estimate of 639 million. Jordan bought 50 TMT of optional origin wheat in a tender for 150 TMT. Libya are tendering for 50 TMT each of both hard and soft wheat. Japan are tendering for 120 TMT of feed wheat and 200 TMT of feed barley for shipment by the end of August. Australia got some heavy rain in the west, the same front will push onto South Australia by the weekend and on into the east of the country early next week. That should improve planting conditions there. Ukraine and Russia are a bit dry. Canada, the Northern Plains and Upper Midwest are warming up this week, but there's still a chance of a frost Sunday/Monday morning, according to Martell Crop Projections. Winter wheat in Kansas has had potentially yield boosting 1-2 inch rains in the past 24 hours. Trade estimates for tomorrow's weekly export sales report are 3-800 TMT. Last week's sales came in at 219,200 MT of old crop and 497,300 MT of new crop. With only 4 weeks of the 2012/13 wheat marketing year left to run shipments plus outstanding sales are at 93% of the USDA's target for exports of 28.5 MMT this season. Funds were estimated to have sold 2,000 contracts of Chicago wheat on the day. May 13 CBOT Wheat closed at USD6.96 3/4, down 2 3/4 cents; May 13 KCBT Wheat closed at USD7.71 3/4, up 2 cents; May 13 MGEX Wheat closed at USD8.57 3/4, unchanged.

EU Wheat Declines Following US Lead

08/05/13 -- EU grains closed mixed but mostly lower, failing to hold onto early gains as US markets nudged into the red in afternoon trade. The market is nervous ahead of Friday's upcoming USDA report which will include their first glimpse into production prospects for 2013/14.

May 13 London wheat finished GBP0.75/tonne lower at GBP190.50/tonne and with new crop Nov 13 GBP1.10/tonne easier to GBP181.65/tonne. May 13 Paris wheat settled EUR3.50/tonne lower at EUR242.25/tonne.

May 13 Paris wheat expires on Friday, which may have led to some technical weakness today. Open interest in that was over 3,500 lots as of last night, as opposed to only 8 in the case of May 13 London wheat. Trade was thin with many French participants away on holiday despite the MATIF market being open.

Western Australia got it's forecast significant rain event as "many places saw their heaviest rain in almost a decade" according to Weatherzone.com.au. Perth got 54 mm in 24 hours. This same weather system is seen bringing rain to South Australia at the weekend, and more precipitation for NWS and Victoria early next week.

Parts of Ukraine and Russia are still dry, but morning weather maps showed an improved chance for showers in the driest regions of southern Russia in the next 7-10 days. UkrAgroConsult said that dry and windy conditions mean that there are water shortages in some areas of Ukraine, but noted that these are mainly in the south east where spring planting is more or less complete. The Ukraine Ag Ministry forecast the corn area this year at 4.7 million hectares, of which 3.8 million is already sown. Plantings last year were 4.37 million ha.

The Ukraine Ministry also said that grain exports in the 2012/13 marketing year to date now stand at 21 MMT, up 14.3% on year ago levels. Corn exports are currently 12 MMT and wheat exports 6.56 MMT.

UkrAgroConsult forecast the local 2013 OSR crop at 2.01 MMT, up by more than two thirds on last year. This year's sunflower crop will rise from 8.57 MMT to 9.86 MMT, they add. Wheat production is now seen at 20.16 MMT, down slightly from their previous forecast, although well up on last year's 15.76 MMT.

Oil World meanwhile say that Russian oilseed plantings are well ahead of year ago levels, which could equate into production rivalling the record levels of 2011. Sunflower plantings are 37% complete at 2.4 million ha, with OSR sowings 24% done at 273,000 ha the Ministry said yesterday.

Lanworth Inc today estimated the Ukraine wheat crop at 23.3 MMT, down 1.4 MMT on last month but almost 48% up on last year. They place Russian wheat output at 50.8 MMT, a near 35% rise on 2012.

Russian old crop stocks are running dry, customs data out today shows that they exported only 424,700 MT of wheat in the Q1 of 2013 versus 3.196 MMT a year ago.

India said that May 1 wheat stocks in government stores jumped by more than three quarters versus Apr 1 to 42.7 MMT, putting them under pressure to revise down their price ideas to shift some stock in their ongoing wheat tenders.

Weather conditions in France and Germany remain mostly favourable, although crop maturity is lagging.

Friday's USDA WASDE report is seen pegging world 2013/13 wheat ending stocks at 181.5 MMT versus the 2011/12 ending stocks of 199.4 MMT. For 2013/14 these are seen rising to 186.4 MMT from within a range of estimates of 178.1-195.8 MMT.

EU Rapemeal Prices

08/05/13 -- Rapemeal prices on the continent are a bit firmer today, after posting a sharp correction yesterday, reflecting last night's rise in soymeal values in Chicago.

Oil World yesterday downgraded their view on EU-28 rapeseed production from 20.2 MMT last week to 19.8 MMT, a drop of 3% on last year.

Latest guide prices for EU rapemeal today, basis FOB Lower Rhine in euros/metric tonne, with change from previous trading session:

May13
305.00
+1.00
Jun13
301.00
+1.00
Jul13
299.00
+3.00
Aug/Oct13
222.00
+3.00
Nov13/Jan14
220.00
+2.00
Feb/Apr14
220.00
+2.00
May/Jul14
218.00
+2.00

The Morning Buzz

08/05/13 -- Twitter is alight with the breaking news that Sir Alex Ferguson is to retire at the end of the season, and my own beloved (which is what David means incidentally) David Moyes "odds on" to succeed him, according to a report on the Beeb this morning. In actual fact when the news broke it was looking like a very close two horse race between Moysey and The Chosen One, Jose Mourinho, according to the bookies - with the latter generally the slight favourite with most of them around evens and with Moyes at 6/4 ish, although it now looks like Moyes is indeed set to make the short journey down the M62. Here's a link to view the latest fluctuating odds if you're interested ManUre Manager. Sky are apparently reporting that the identity of the new manager will be confirmed within the next 48 hours.

It's nice to see the peoples favourite 'Arry Redknapp get a look in, with a quote of 66/1, although I'm sure that wild horses couldn't drag him away from the glamour of away games at Barnsley and Doncaster next season. "I'd like to stay and help at QPR, you know I would, but me daughter lives in Wilmslow and I am a big family man, you can't blame me for that. What time's the next train?"

Back to the boring business stuff. A stimulating Twitter debate was generated by Oil World's assertion last week that the UK OSR crop would come in at 2.3 MMT this year. They must have got wind that this was about as likely as Stuart Hall getting a knighthood with a swift downgrade to 1.8-1.9 MMT yesterday. Even so, this still looks a tall order judged by the area of winter rape that never made it. Judged by the emails and tweets I've received in the past 24 hours 1.25-1.70 MMT is the range that those who should be in the know are expecting this year.

Across the pond, I'm still not entirely convinced that the US wheat crop is done for just yet. The late development of the crop may yet turn out to be it's saviour, preventing too much freeze damage and holding out for rain, should it finally come. Note that last week's Kansas wheat tour threw up better potential yields than the market was expecting. This morning I hear from Martell Crop Projections that a life giving rain event is indeed on the way for the Great Plains.

"A new weather disturbance is getting organized in the Great Plains today promising generous rainfall for hard red winter wheat. Strong thunderstorms may spawn tornadoes. The disturbance in the central Great Plains is a slow-mover (nice), promising to produce very generous rainfall in hard red winter wheat (lovely).

"Kansas is expecting at least one inch of rainfall, but up to 2 inches in scattered strong thunderstorms. Oklahoma also has a very wet forecast in a stalled trough of low pressure. Rains would be highly beneficial for wheat jointing and moving into the grain filling stage," they say. Great, smashing, super!

Meanwhile "Northern spring wheat areas would receive little if any rainfall in the week ahead. Strong sunshine would encourage field drying and warming," they add. A nice little bonus at the end there.

In other news this morning Chinese customs data has soybean imports in April down 18.4% versus April 2012 at 3.98 MMT. Cumulative Jan/Apr 13 imports are down 14.8% at 15.47 MMT.

In other, other news disappearing honeybees are also causing a buzz in the US too according to this report from the Wall Street Journal Bzzzzzzz

Bloomberg are carrying an interesting story for all you chartists out there this morning, suggesting that new crop Nov 13 Paris wheat could fall to fresh one year lows if the price falls below resistance around the EUR205/tonne level. Link here.

Before we even think about Friday's USDA report (nice to see we are back to having to wait all weekend to react to it again) we have all sorts of data to sift through tomorrow:

The Bank of England's MPC meeting concludes; Conab release their Brazilian May supply & demand estimates; The FAO release their May supply & demand estimates; Defra are due to give us the latest UK cereals usage data: We also have the usual USDA weekly export sales report.

Informa are also said to be due out today or tomorrow with their 2013 US acreage estimates. Last month they gave us a corn acreage estimate of 97.753 million acres versus the USDA estimate of 97.3 million; A soybean acreage estimated of 78.457 million versus the USDA estimate of 77.1 million; A all wheat acreage estimate of 56.074 million versus a USDA estimate of 56.4 million.

Chicago Mixed, Friday's USDA Report Eyed

07/05/13 -- Soycomplex: It was a typical "Turnaround Tuesday" session. Nearby US soybean availability remains extremely tight, with most growers already sold out until new crop, a new crop that's going to be late. Yesterday's export inspections of 6.4 million bushels, whilst deemed "disappointing" and down from 8.9 million the week previously were still above the 5.3 million needed to reach the USDA estimate for the season. The cumulative shipment pace is 93% of the USDA export estimate compared with the 5 year average of 84.5%. News after last night's close that only 2% of the US soybean crop has been planted so far was supportive too. This week's anticipated "planting window" may see US farmers concentrate their efforts more on corn planting than trying to get some more soybeans in. As ever with soybeans it seems, the promise is always of jam tomorrow. AgroConsult estimated the 2013/14 Brazilian soybean planting area at 29.1 million hectares, up 1.2 million from this season. At this early stage they said that the 2013/14 Brazilian crop could reach a record 86.0 MMT next season. The trade is expecting the USDA to peg US soybean production in 2013 at around 3.4-3.5 billion bushels in it's first look into output for 2013/14 on Friday. That would be up around 14% on last year. Fund buying in soybeans was estimated at a net 3,000 contracts on the day. May 13 Soybeans closed at USD14.63 1/2, up 19 cents; Jul 13 Soybeans closed at USD13.82 1/4, up 13 cents; Nov 13 Soybeans closed at USD12.14 1/2, up 8 3/4 cents; May 13 Soybean Meal closed at USD416.30, up USD3.20; May 13 Soybean Oil closed at 49.09, up 40 points.

Corn: The corn market was mixed, with the trade anticipating good planting progress to be made in the US this week. Yesterday's weekly export inspections of only 6.5 million bushels were well below the 19.3 million needed to hit the USDA estimate for the season. The cumulative shipment pace is now 59% of the USDA export estimate for the season versus the 5 year average of 65%, suggesting that the USDA may possibly revise down their current estimate for exports of 800 million bushels in 2012/13. South Korea's Nofi bought 69 TMT of optional origin corn, most likely of South American origin for September shipment. Michael Cordonnier estimated the Brazilian corn crop at a record 75.0 MMT, unchanged from his previous estimate. He pegged the Argentine corn crop at 24.0 MMT, also unchanged from previously. The USDA's FAS said that Ukraine will produce 22 MMT of corn this year, up 5% on last year, with exports in 2013/14 rising 13% to 14 MMT. The Ukraine Ministry said that the country exported 1.19 MMT of grains in April, of which 960 TMT was corn. That takes the cumulative grain export total for the season so far to 20.6 MMT, of which 11.8 MMT is corn. The weekly US ethanol plant production report comes out tomorrow. Last week's grind of 857,000 barrels/day was the highest since last June. Most plants are said to be running at full capacity, so another strong week is expected. In Friday's upcoming USDA WASDE report the trade is expecting US 2012/13 corn ending stocks to be raised slightly from the current 757 million bushels to around 762 million. The average production estimate for 2013/14 comes at 14.120 billion bushels, up 31% on 10.78 billion bushels last year. Fund buying on the day was estimated at a net 4,000 contracts. May 13 Corn closed at USD6.76 1/2, down 2 1/4 cents; Jul 13 Corn closed at USD6.40, up 3 1/2 cents.

Wheat: Yesterday's weekly export inspections of 16.6 million bushels, were down sharply from 30.8 million the previous week and below the 24.7 million needed per week to reach the USDA export estimate for the season. The cumulative shipment pace is now sitting at 90% of the USDA estimate as compared with the 5-year average of 89% with only 4 weeks left in the marketing year. Turkey have tendered to sell 240 TMT of milling wheat for May-June shipment. The Iraq Trade Minister said that the country will lose 25-30% of their 2013 wheat crop due to floods in the south. Their annual wheat consumption is about 4.5 MMT and imports are normally around 3 MMT. Jordan bought 50 TMT of optional origin barley for August-September shipment, and tendered for 100 TMT of the same. Needed rain is said to be on the way for Western Australia. The east remains dry. Russia has sown 7% of it's spring wheat crop, rain is also wanted in the south of the country. The USDA's FAS estimated the Ukraine 2013 wheat crop at 22.6 MMT, up 43% on last year. They see exports rising 70% to 11 MMT. Wheat exports this season currently stand at 6.4 MMT. The USDA is likely to keep export demand unchanged in this Friday’s report it is thought, with no reason to change 2012/13 carryout either. They will also give their first estimate for 2013/14 production. The trade is estimating that at 2.060 billion bushels, down 9% from 2.269 in 2012/13. Funds were estimated as net buyers of around 2,000 CBOT wheat contracts on the day. May 13 CBOT Wheat closed at USD6.99 1/2, up 6 1/2 cents; May 13 KCBT Wheat closed at USD7.69 3/4, up 1 cent; May 13 MGEX Wheat closed at USD8.57 3/4, up 6 3/4 cents.

London Wheat Down, Playing Catch Up With Yesterday

07/05/13 -- EU grains were mixed, with the London market playing catch up after a day's closure, Paris wheat decided that it had done all it's falling yesterday.

London wheat closed with front month May 13 down GBP0.50/tonne to GBP191.25/tonne and with new crop Nov 13 GBP1.80/tonne easier at GBP182.75/tonne. May 13 Paris wheat was unchanged at  EUR245.75/tonne.

The jungle drums are saying that there's concern mounting over persistent dryness in the south of Russia and southern and eastern parts of Ukraine. In some of these areas it hasn't rained since 10th April, according to Agritel. A report on Reuters, quoting an un-named a senior weather forecaster, said that yields of spring barley and spring wheat in Ukraine could fall by "as much as 30%" if they don't get rain in the next two weeks.

"Ukraine topsoil moisture is less than 5 mm currently. Moisture in the deep layer is still favourable over most of the farm belt however, due to a heavy snowmelt. The worst dryness exists in Crimea, southern and eastern Ukraine, where the winter-spring precipitation has been extremely light. Hot temperatures have accelerated soil drying, topping 80 F several days last week. Drought and heat stress is linked to a persistent ridge of high pressure in northern Africa expanding across into Ukraine and southern Russia. The forecast remains hot and mostly dry in the week ahead," note Martell Crop Projections.

Last week, the USDA's FAS said that wheat production in Ukraine would jump 43% to 22.6 MMT in 2013/14, with exports rising 70% to 11 MMT. Local analysts are less bullish, with UkrAgroConsult now forecasting a wheat crop of 20.23 MMT this year, and ProAgro pegging the new wheat harvest at 19.89 MMT. Even so, both are still considerably higher than the USDA's 2012/13 estimate of 15.76 MMT.

Not everybody is convinced that this is a big issue for the time being however. Local agronomist Mike Lee says "On the ground no one is complaining of dry conditions just yet, apart from those in the East and South, but they all ways do so there's no news there." Indeed, the SE of Ukraine suffers habitually from drought.

Russia's spring grain planting meanwhile is advancing rapidly, aided by the dry weather, at 27.4% complete. To date 60% of the spring corn crop has been sown, along with 50% of spring barley and 7% of the spring wheat. Decent rains are in the forecast in the May 14-22 time frame, which will be extremely useful if they arrive.

Australia is another country getting flagged up as too dry, although "critical" rains are in the forecast for Western Australia state today/tomorrow, moving onto South Australia state 4-7 days from now. The GFS model has NSW, Victoria and Queensland remaining dry for the next two weeks, although the CMC model has better than average rains for all but the extreme east coast of these states between one to two weeks from now. CBH estimated the WA 2013/14 wheat crop at 8.08 MMT, up 17% from 6.9 MMT a year ago.

The Argentine government have floated a plan to reimburse farmers with some or all of the existing 23% export tax on wheat in a bid to encourage plantings, which typically take place May/Jul. The country has slipped out of the world's top six wheat exporting nations rankings table following repeated government taxes and strict export quotas on wheat in recent years. Having produced a crop of 17.2 MMT in 2010/11, output has slipped to below 10 MMT this season as growers have cut back sharply on plantings.

The Buenos Aires Grain Exchange say that they expect Argentine farmers to increase the wheat planted area 8.3% to 3.9 million hectares this year, although even if they do that would still be around 20% down on the average area sown over the last 10 years.

The French Ministry pegged the soft wheat planted area there at 4.98 million hectares on Friday, up 2.4% on last year. The corn area is seen roughly unchanged at 1.64 million ha, with the area given over to OSR down 8% to 1.48 million at the expense of sunflower sowings which are seen rising 7% to 0.73 million ha.

Oil World have had a rethink on last week's UK OSR production forecast of 2.3 MMT, which was widely greeted with scepticism (at best), revising that number down to 1.8-1.9 MMT, a drop of around 25-30% on last year. French output was held steady at 5.2 MMT, down 5% on last year with the Germans becoming Europe's leading producer with a crop of 5.45 MMT, up 13% on 2012, they say.

EU Rapemeal Prices

07/05/13 -- Rapemeal prices on the continent are sharply lower for once, on improving rapeseed production prospects on a global level and following declines in soymeal values in Chicago last night.

Guide prices, basis FOB Lower Rhine in euros/metric tonne, with change from previous session:


May13
304.00
-8.00
Jun13
300.00
-7.00
Jul13
296.00
-9.00
Aug/Oct13
219.00
-3.00
Nov13/Jan14
218.00
-4.00
Feb/Apr14
218.00
-4.00
May/Jul14
216.00
-4.00

Chicago Sharply Lower To Start The Week

06/05/13 -- Soycomplex: Weekly soybean export inspections were an uninspiring 6.422 million bushels versus 8.956 million last week and 13.141 million a year ago. News leaked out on Friday that Cargill are to close a crushing plant in Indiana until after the 2013 harvest due to poor margins and a shortage of beans was seen as bearish. China’s total April soybean crush was 4.68 MMT versus 4.97 MMT in March. Total crush volume for last week was just over 1 MMT, down 11.43% from a week previously. CNGOIC estimated China’s May bean imports at 5.6 MMT versus their April estimate of 4.2 MMT. Safras e Mercado said that 97% of the Brazilian soybean crop has been harvested, up from 94% a week ago and in line with progress this time last year. After the close the USDA said that 2% of the US 2013 soybean crop had been planted versus the 5-year average of 12% and 22% this time last year. That's a low number, but it wasn't a surprise. Fund selling in beans was estimated at around 4-5,000 contracts on the day. May 13 Soybeans closed at USD14.44 1/2, down 10 1/2 cents; Jul 13 Soybeans closed at USD13.69 1/4, down 18 cents; Nov 13 Soybeans closed at USD12.07 1/4, down 16 cents; May 13 Soybean Meal closed at USD413.10, down USD4.70; May 13 Soybean Oil closed at 48.69, down 47 points.

Corn: A drier weekend than anticipated and a decent forecast for much of the US corn belt in the week ahead should see planting progress improved markedly this week. That's what the market chose to concentrate on today, rather than the very tight old crop supply situation. After the close the USDA said that 12% of the national corn crop was planted, towards the bottom end of trade expectations, which may add a bit of support in the morning. The 5-year average is 47% and this time last year farmers had 69% of the crop in the ground. There's still time for a decent yield though, if summer weather conditions are benign. Weekly export inspections were only 6.506 million bushels versus the expected 11-13 million. CNGIOC said China’s 2012 total corn purchases for reserves totalled 24.70 MMT versus 10.0 MMT a year previously. Safras e Mercado estimated Brazil’s 2013 total corn crop at a record 78.4 MMT versus 72.7 MMT a year ago. Argentina’s Ag Ministry said that 39% of the Argentine corn crop has been harvested. South Korea's NOFI are in the market for 70 TMT of optional origin corn for September shipment, South American corn could be the favourite for that order. Fund selling in corn was estimated at a net 12-15,000 lots on the day, driving prices lower. May 13 Corn closed at USD6.78 3/4, down 20 3/4 cents; Jul 13 Corn closed at USD6.36 1/2, down 24 3/4 cents.

Wheat: Weekly export inspections for wheat came in at 16.639 million bushels, the trade was expecting 21-26 million. Spillover weakness from corn put wheat under pressure despite concerns for the 2013 US winter wheat crop. Those worries appeared to be justified when the USDA increased the percentage of the crop in poor/very poor condition up from 35% last week to 39% after the close. Maturity is lagging, which may ultimately prove to have helped keep damage from the recent series of freezes to a minimum however. Only 20% of the US winter wheat crop is headed versus 39% for the 5-year average. Spring wheat planting is only 23% complete versus 50% normally and 82% a year ago. Warmer weather is finally expected for the northern Plains and Canadian Prairies this week. The French Farm Ministry estimated the 2013 soft wheat planted area at 4.98 million hectares, up 2.4% from a year ago. Ukraine and Russia are dry, which is helping spring planting progress, but rain is needed soon to establish spring planted crops and advance winter wheat. Analysts are starting to get twitchy that the dryness in southern Russian in particular may soon start to hurt the crops there. Funds were estimated to have been net sellers of around 4,000 CBOT wheat contracts on the day. May 13 CBOT Wheat closed at USD6.93, down 18 1/4 cents; May 13 KCBT Wheat closed at USD7.68 3/4, down 21 1/4 cents; May 13 MGEX Wheat closed at USD8.51, down 7 1/2 cents.

EU Wheat Falls As US Weather Shows Signs Of Improvement

06/05/13 - It was London's turn to take a day off today, with the French having celebrated May Day last week.

Paris wheat closed with front month May 13 down EUR3.00/tonne at EUR245.75/tonne and new crop Nov 13 EUR3.75/tonne easier to EUR209.25/tonne.

The French market followed US grains lower, after weekend rainfall in the US was a little lighter than anticipated. A warmer and drier outlook for the week ahead should finally allow some significant progress to be made with corn planting in the US.

That isn't likely to show up in tonight's crop progress report from the USDA though, where corn plantings are only expected by the trade to have advanced to around 13-15% complete, up fairly modestly from 5% done a week ago. The slowest in recent history was 14% in the flood year of 1993. Normally US farmers would expect to have 45-50% of the crop planted by now.

The trade will also be looking to see if there's any further deteriorating in US winter wheat crop conditions when the report comes out after the close of Chicago this evening. Only 33% of the crop was rated as being in good/excellent condition last week.

There's only fairly limited interest around on the wheat export tender front. Egypt failed to show up as a buyer on Friday or over the weekend, which is contrary to what the trade was expecting. Egypt’s Prime Minister estimated the country's 2013 wheat imports at 4-5 MMT - around half of what they would normally buy. He said that the government had bought 284 TMT of local wheat for domestic stocks between April 1-May 2nd.

Libya are tendering for 50 TMT of milling wheat and a similar quantity of durum wheat, both of optional origin. Algeria seeks 50 TMT of optional origin durum wheat for June/July shipment.

Canada is forecast warmer this week. Stats Canada estimated all wheat stocks there as of Mar 31 at 13.5 MMT, down from 14.65 MMT a year previously. Canadian growers are expected to increase their wheat planted acreage this year if and when the weather improves.

Rain is in the forecast for western Australia but central and eastern areas are seen staying dry for the next 10 days.

India have issued a new tender to sell 110 TMT of wheat. They've had a very lacklustre response to their wheat tenders recently as the government's price aspirations have been too high to make Indian wheat feature into most destinations, apart from very near neighbours like Bangladesh.