Chicago Market Mostly Higher As USDA Takes First Peek Into 2014 Plantings
13/02/14 -- Soycomplex: Beans closed sharply higher as the USDA released their baseline projections for US plantings this year, showing the soybean area at "only" 78 million acres, up a modest 2% versus 76.5 million last year. Trade talk had been for an increase of around 5-6%. They forecast 2014 soybean yields at 45.2 bu/acre, with output at 3.48 billion bushels, not much better than 3.3 million in 2013. Exports were pegged at 1.64 billion bushels, up 8.6% on this season, keeping ending stocks down to a fairly miserly 205 million bushels. Considering that the trade already thinks that carry-in from this season (the USDA's line in the sand of 150 million bushels) is likely being overstated, and that a 4.4% jump in yields is far from a foregone conclusion at this stage, there has to be the possibility that we are already stuck with US soybean stocks of 150 million bushels again all the way through the 2014/15 campaign. The USDA also estimated China’s 2014/15 soybean imports at a record 72.8 MMT versus 69.0 MMT this season. MDA CropCast cut their forecast for the Argentine soybean crop this year by 730 TMT from last week to 54.39 MMT "due to continued wetness and earlier heat". They held pat on Brazil at 89.91 MMT. The trade is already talking about logistical problems quickly developing in Brazil, particularly as Argentine growers continue to hoard beans. Weekly US export sales came in at 173,600 MT for old crop and 122,600 MT for new crop. That was below expectations, although some thought that old crop sales could be negative due to Chinese cancellations. In fact China was a net buyer of 320,700 MT of the old crop, matching decreases of 326,900 MT from unknown destinations. Old crop soybean commitments remain around 105% of the USDA's projections for the season. Mar 14 Soybeans closed at $13.44 1/4, up 21 1/4 cents; May 14 Soybeans closed at $13.30 1/2, up 20 3/4 cents; Mar 14 Soybean Meal closed at $452.80, up $9.30; Mar 14 Soybean Oil closed at 39.54, up 55 points.
Corn: The corn market ended little changed. Strong old crop weekly export sales of 1,269,800 MT were supportive. Along with net sales of 71,100 MT for 2014/15 that gave us combined sales of over 1.34 MMT versus trade expectations of 400 TMT to 1.1 MMT. Old crop commitments are now 85% of the USDA target for the season versus 77% this time last year and the 5 yr average of 67%. Note though that a significant volume remains unshipped, including sales to China that are on hold whilst the dispute over MIR 162 corn rages on. Less supportive was news from the USDA that they see US corn plantings this spring at 93.5 million acres, down a fairly modest 2% from 95.4 million last year. That you may recall was a 75-year high encouraged by prices between $7-8/bushel. The USDA pegged 2014 US corn yields at 165.6 bu/acre (which already looks a tall order), with production therefore coming in at 14.26 billion bushels and comfortably beating last year's record 13.925 billion. Ending stocks for 2014/15 were estimated at a very burdensome 2.607 billion bushels, up well over 200% on only a couple of season's previously. Even more alarming maybe was that they see carryout rising even further in 2015/16, to 2.877 billion bushels. MDA CropCast cut their 2013/14 Brazilian corn production estimate by 2.9 MMT from last week to 69.9 MMT based on "continued dryness". They were unchanged on Argentina at 23.7 MMT, but raised Ukraine by 1.1 MMT to a record 30.1 MMT. Strategie Grains estimated the 2014 EU-28 corn crop at 65.1 MMT, up 300 TMT from their previous forecast, and 1% above production in 2013. They said that the rise was due to increased plantings in Germany and Croatia and anticipated better yields in France and Poland. South Korea Kocopia are tendering for 55 TMT of optional origin corn for May shipment. Mar 14 Corn closed at $4.40 1/2, up 1/2 cent; May 14 Corn closed at $4.46 1/2, up 1/2 cent.
Wheat: The wheat market closed around 7 to 9 cents higher across the three exchanges. Weekly export sales came in at 597,000 MT of old crop and 29,600 MT of new crop versus trade expectations around the 500 TMT mark. Net old crop commitments are 86% of the USDA forecast for the season, which is bang on the 5-year average. The USDA's baseline projections pegged the 2014/15 US wheat planted area at 57 million acres, about what was expected and up 800k acres on last year. Average yields however were only forecast at 45.8 bu/acre versus 47.2 bu/acre in 2013/14. Production was seen at 2.22 billion bushels, not much better than 2.13 billion last year despite the area increase. US wheat exports in 2014/15 were pegged at 1.025 billion bushels, versus 1.175 billion this season, and ending stocks were estimated at 642 million bushels compared to 558 million in 2013/14. The USDA also said that the US wheat area would decline by 5 million acres over the next 10 years. Strategie Grains trimmed their forecast for the 2014/15 EU-28 soft wheat crop by 300 TMT to 137.5 MMT, although that's still up 2% on last year. Soft wheat exports next season were estimated to decline by more than 10% on this year's record 24.3 MMT to 21.7 MMT, although that's up 1.2 MMT on their previous figure. MDA CropCast cut their 2014/15 Canadian wheat production estimate by 1.2 MMT from last week to 29.6 MMT. The weather in the US is forecast to warm up into the weekend and next week, but the outlook for the Western Plains is still lacking in rainfall. This forecast looks to hold for the next 7-10 days at least. Persistent dryness on the Plains may ultimately prove to be more of an issue for winter wheat than freeze damage. Mar 14 CBOT Wheat closed at $5.95 1/2, up 8 1/2 cents; Mar 14 KCBT Wheat closed at $6.72 3/4, up 9 3/4 cents; Mar 14 MGEX Wheat closed at $6.62 1/4, up 7 1/2 cents.
