Chicago Market Jumps

04/02/14 -- Soycomplex: Beans were sharply higher, and so too was meal, with front month Mar 14 meal setting a lifetime contract high. There's still no sign of the much touted Chinese cancellations, and with the Lunar New Year celebrations ongoing then they may not show up in Thursday's weekly export sales report either. As well as fretting over Argentine soybean production and adverse weather conditions, there's now talk of heat and dryness issues in southern Brazil. Agrimoney today report "up to 5 MMT of Brazilian soybean output is at risk from the heatwave which has already sent coffee prices soaring, influential crop scout Michael Cordonnier said." Dr Cordonnier said "the month of January will go into the record books as one of the hottest month ever recorded for many cities in southern Brazil including Sao Paulo, Rio de Janeiro, Curitiba (the capital of Parana), Florianopolis (the capital of Santa Catarina), and Porto Alegre (the capital of Rio Grande do Sul)." Nevertheless, he stuck by his forecast for a Brazilian soybean crop of a record 90 MMT this year, at least for now. Informa today raised their forecast for Brazilian soybean production from 88.7 MMT to 89.7 MMT, although they cut Argentina's prospects from 57.5 MMT to 57 MMT. As Argentine farmers continue to sit on beans from last year's crop, meal availability out of South America is very tight. Argentina are traditionally the world's largest soymeal exporter, you will recall. Brazil appear to be leaning towards concentrating their export efforts more on beans than meal these days. Hence a very buoyant US soymeal market (and why soyoil values are near, 3 1/2 year lows). Stats Canada estimated Canadian canola stocks as at Dec 31 at a record 12.6 MMT, versus the expected 12.3 MMT and up more than 55% on 8.1 MMT a year previously. Mar 14 Soybeans closed at $13.13 1/4, up 20 1/2 cents; May 14 Soybeans closed at $12.97 1/2, up 19 1/4 cents; Mar 14 Soybean Meal closed at $447.00, up $13.00; Mar 14 Soybean Oil closed at 37.71, up 26 points.

Corn: The corn market closed with gains of around 6 cents, and with the nearby Mar 14 contract settling at its best level since mid-November. With reference to the potential problems in Brazil, Dr Cordonnier said that "full-season corn has probably been the crop most impacted by the hot and dry conditions. The state of Minas Gerais has the most full-season corn acreage in Brazil and there have been numerous reports of significant moisture stress impacting the corn crop in the state. The full-season corn crops in Sao Paulo and northern Parana have also suffered under the adverse conditions." Again though he still pegged the Brazilian corn crop at 68.5 MMT, unchanged from his previous estimate. Likewise, Argentina's corn crop was estimated at 22.5 MMT, also unchanged from previously. Informa on the other hand cut their forecasts for both countries, coming in 2 MMT lower than Dr Cordonnier in Brazil, and broadly now agreeing with his Argentine forecast. They cut Brazil from 67.5 MMT to 66.5 MMT, and wiped 2.4 MMT off potential Argentine production, going from 25 MMT to 22.6 MMT. The USDA are currently at 70 MMT and 25 MMT respectively. In their first preliminary peek into 2014/15, the Ukraine Ministry estimated corn production there at 30.2 MMT, down 2.2% from last year. On the international tender front, South Korea's NOFI bought 65,000 MT of US corn for June shipment. US corn export sales continue to run well ahead of schedule, although actual shipments themselves are only in line with normal levels at 39.6% of the USDA forecast for the season as compared with 39.2% as the 5-year average for this time of the year. Analysts are expecting the USDA to raise US corn exports estimate by around 50 million bushels in next Monday's WASDE report. Stats Canada reported Dec 31 Canadian corn stocks of 11.5 MMT, a 10.6% rise on a year previously. The US Energy Dept will release their weekly ethanol production data tomorrow. Mar 14 Corn closed at $4.41 3/4, up 6 cents; May 14 Corn closed at $4.47 3/4, up 6 cents.

Wheat: The wheat market closed sharply higher, as a steep decline in US crop conditions sparked fund short-covering. News overnight that Kansas winter wheat was now only rated 35% good/excellent, versus 58% a month ago and 63% at the end of November took the trade by surprise. Kansas is the largest US winter wheat state, followed by Oklahoma in second. Oklahoma's crop has also seen a steep decline in crop conditions across the winter, now at 36% good/excellent from 63% just a month ago and 77% at the end of November. Stats Canada estimated Canadian all wheat stocks as at the end of December at 28.4 MMT, which was up sharply on 20.6 MMT a year previously, but was actually half a million less than the trade was expecting. The Ukraine Ag Ministry said that Ukraine had exported 2.79 MMT of grain in January, down 40% from December. How much of this decline is due to bad weather interrupting transport and dockside logistics, civil unrest and government turmoil, or simply stocks running low is unclear. There's persistent talk of frost damage to winter crops in Ukraine, although the Ministry are playing these rumours down. They said that 92% of winter crops are in good/satisfactory condition and issued a preliminary forecast for a 2014/15 Ukraine wheat crop of 21.2 MMT, down only 1% from last year. They estimate 2014/14 barley production at 8.3 MMT, up 10% from last year. Informa estimated Argentina's ‘13/14 wheat crop at 10.0 MMT versus a previous estimate of 9.8 MMT. They pegged India’s 2014/15 wheat crop at a record 99.0 MMT versus a previous estimate of 96.6 MMT. Russia's intervention grain purchases have dried right up, they only bought 4,590 MT today, taking the total bought to date to just 588 TMT out of declared original intention of 5-6 MMT. The sharp decline in value of the Russian rouble is suddenly re-opening the export door for Russian wheat. Mar 14 CBOT Wheat closed at $5.84 1/2, up 20 3/4 cents; Mar 14 KCBT Wheat closed at $6.46 1/2, up 22 1/4 cents; Mar 14 MGEX Wheat closed at $6.23 1/2, up 12 3/4 cents.