Chicago Grains Crash Lower
27/02/14 -- Soycomplex: Beans raced to new highs in early trade, with the front month Mar 14 contract popping its head above the $14.50/bushel mark at one point, before collapsing for no apparent reason. The market is massively overbought, and fund length is at the highest level since at least September 2012, so these sort of capitulations are almost inevitable if everyone wants to cash in their chips all at the same time. The USDA announced that China had bought 112,000 MT of optional origin beans for 2013/14 shipment. They also reported weekly export sales of 327,700 MT of old crop beans (mostly to China), taking 2013/14 commitments now to 106% of the USDA's forecast for the season. The USDA also reported new crop export sales of 315,200 MT along with weekly shipments of an impressive near 1.8 MMT. There's not a lot of bearish news in amongst that lot, but still the market went lower. MDA CropCast cut their Brazilian soybean production estimate by 1.38 MMT to 88.53 MMT. Mar 14 Soybeans closed at $13.93 1/2, down 13 3/4 cents; May 14 Soybeans closed at $13.90, down 7 cents; Mar 14 Soybean Meal closed at $464.00, down $4.30; Mar 14 Soybean Oil closed at 40.90, down 30 points.
Corn: The corn market also crashed lower, with funds selling an estimated 12-15,000 contracts on the day. Weekly export sales of 840,800 MT for 2013/14 and a modest 1,500 MT for 2014/15 were towards the top end of trade expectations. Private exporters also reported sales of 284,480 MT of US corn for delivery to Mexico during the 2013/14 marketing year under the daily reporting system. However, for corn too, it was just one of those days when any bullish news was largely ignored in the face of heavy fund selling. MDA CropCast cut their forecast for the Brazilian corn crop by 180 TMT to 69.74 MMT, and down from 76 MMT a year ago. The IGC left their world 2013/14 corn production estimate unchanged at 959 MMT, but raised consumption by 4 MMT to 932 MMT. World corn production in 2014/15 was forecast to decline modestly. Another bout of very harsh weather conditions in the US is expected to keep feed demand high. Mar 14 Corn closed at $4.48, down 7 1/2 cents; May 14 Corn closed at $4.54 1/2, down 6 1/2 cents.
Wheat: The wheat market, by way of not wanting to be the odd one out, fell into line tumbling 14 to 17 cents lower on the day across the three exchanges. The USDA reported weekly export sales of 365,100 MT of old crop and 199,800 MT of new crop. Weekly shipments of 547,400 MT were respectable enough. The market was disappointed however to see US wheat priced out in Egypt's latest wheat tender, having won a share of GASC's business last time. Russian wheat dominated, wining the lion's share of the 295 TMT order, with one cargo going to Romania. This apparently confirmed the market's fear that US wheat prices have gone up too far, too fast, this month. China sold 406,105 MT of wheat at auction today out of an offered volume of 607,157 MT. MDA CropCast cut their forecast for the Indian wheat crop this year by 0.5 MMT to 96.9 MMT, although that's still a record. They also trimmed 0.8 MMT off their US all wheat production estimate. Mar 14 CBOT Wheat closed at $5.82 1/4, down 17 3/4 cents; Mar 14 KCBT Wheat closed at $6.62 1/4, down 16 3/4 cents; Mar 14 MGEX Wheat closed at $6.55 1/2, down 14 3/4 cents.
