Chicago Markets Mostly Lower In Positioning Ahead Of USDA Reports
09/01/14 -- Soycomplex: Beans closed mixed, around 4 cents lower to 4 cents higher in what looks like positioning ahead of tomorrow's USDA report. Bear in mind also that Jan 14 contracts go off the board on Tuesday. Weekly export sales of only 155,500 MT were a marketing-year low for beans, but with the USDA target for the season already matched what does it really matter? That total included sales to China of 387,900 MT, including 299,800 MT switched from unknown destinations. Weekly shipments of 1,675,300 MT were impressive once more and included 1,217,800 MT going to China. Separately the USDA also announced the sale of 110,000 MT of beans to China for 2014/15 delivery. CONAB tweaked their forecast for the Brazilian soybean crop a little higher, up from 90.03 MMT to 90.33 MMT, although it is reported that the Ag Minister said that production could easily top 95 MMT. It's highly likely to be a record crop which ever way you look at it, it's just a case of how big a record. There's still some talk of some Brazilian farmers possibly planting soybeans on soybeans this year, such is their dissatisfaction with the current loss-making domestic corn price in areas of the interior. FC Stone estimated the Brazilian bean crop at 90.2 MMT versus a previous estimate of 89.3 MMT. They also forecast 2013/14 Brazilian soybean exports at 46.2 MMT. Reports suggest that the Mato Grosso bean harvest is now around 2.5% complete. Argentina meanwhile has had some rain this week, and there's talk of a wet February in the longer range forecast. South Korea's KFA bought 30,000 MT of South American origin beans for May shipment. Now we sit and wait for tomorrow's USDA data. Jan 14 Soybeans closed at $12.96 1/4, down 4 1/2 cents; Mar 14 Soybeans closed at $12.73 3/4, up 4 1/2 cents; Jan 14 Soybean Meal closed at $433.00, up $2.40; Jan 14 Soybean Oil closed at 37.74, up 31 points.
Corn: The corn market closed around 5 cents lower. Weekly export sales came in at a pretty poor 155,300 MT, which was below expectations. That included some corn switched from China to Japan and South Korea as the MIR 162 dispute rumbles on. CONAB raised slightly their forecast for Brazilian corn production from 78.78 MMT to 78.97 MMT, which is far higher than the USDA's forecast of 70 MMT. That looks somewhat ambitious given that the state of Parana is said to have planted the smallest full season corn area on record (669k ha, down 24% on last year) and that Mato Grosso growers are expected to sow 12% fewer safrinha corn acres due to price considerations. FC Stone estimated the Brazilian total corn crop at 72.4 MMT versus previous estimate of 71.8 MMT, and down 10% from a year ago, which looks closer to the mark. Trade estimates for tomorrow's USDA reports see US corn production averaging 14.066 billion bushels versus the current USDA forecast of 13.989 billion. Yields are forecast at 161.2 bu/acre versus 160.4 bu/acre previously. US 2013/14 ending stocks are estimated at 1.861 billion bushels versus 1.792 billion last time. World 2013/14 carryout is seen at 163.2 MMT versus 162.46 MMT previously. The Argentine corn crop will probably be called around 1 MMT lower than last month's 26 MMT it is thought. UkrAgroConsult forecast a 5.6% increase in corn production in Ukraine in 2014. The USDA's FAS said that Spain's corn harvest this season was 4.8 MMT versus 4.2 MMT in 2012/13. Despite tumbling futures markets, nearby cash premiums in the US are firm as the recent severe winter weather has virtually brought the physical movement of grains to a halt. It will be interesting to see what the USDA say with regards to Chinese corn imports tomorrow, given the recent spate of rejections. JC Intelligence earlier in the week cut their forecast for Chinese corn imports to 4.4 MMT versus the USDA's current estimate of 7.0 MMT. Mar 14 Corn closed at $4.12, down 5 cents; May 14 Corn closed at $4.20 1/4, down 5 cents.
Wheat: The wheat market settled around 2 cents higher to 4 cents weaker across the 3 exchanges. Weekly export sales of only 110,800 MT - a marketing year low - didn't help and fell well below expectations of 350-550 TMT. The USDA's FAS estimated Spain's 2013 wheat crop at 6.7 MMT versus 4.7 MMT a year previously. CONAB forecast Brazil's wheat crop at 5.47 MMT versus a previous estimate of 5.36 MMT. There's talk of Brazil buying more US wheat this week. UkrAgroConsult estimated Ukraine's 2014 wheat crop at 21.64 MMT, up 3% versus 2013. They said that winter grain conditions are "one of the best in recent years" and said that 92% of crops are rated good/satisfactory. They also forecast the 2014 Ukraine barley harvest 18.3% higher at 8.55 MMT on a combination of better yields and increased plantings. Agritel said that the recent run of unusually mild conditions (daytime highs of 7 C in Kiev and 4 C in Moscow) would tail off next week as temperatures fall back below zero. No FSU crop damage is expected at this stage. The Buenos Aires Grain Exchange, who have resolutely stood by an Argentine wheat production estimate of 10.35 MMT for some time now, finally trimmed their outlook a little to 10.1 MMT today. For US Dec 1 wheat stocks the average trade estimate in tomorrow's USDA report is 1.4 billion bushels, from within a range of estimates of 1.305-1.768 billion. Sep 1, 2013 wheat stocks were 1.855 billion and Dec 1, 2012 wheat stocks were 1.671 billion. The USDA will also report on US winter wheat acres with the average trade guess coming in at 43.5 million, from within a range of 42.5-44.6 million and last year's 43.09 million. Mar 14 CBOT Wheat closed at $5.84 1/4, down 4 1/2 cents; Mar 14 KCBT Wheat closed at $6.39, up 2 cents; Mar 14 MGEX Wheat closed at $6.29 1/4, up 2 1/4 cents.
