Chicago Mixed After USDA Data

21/02/14 -- Soycomplex: Beans closed around 12 to 18 cents higher, despite opening lower, as the trade grapples with the frenetic pace of US exports and heavy fund buying balanced against a very large, and imminent, South American crop and the outlook for a sharp rise in US plantings this spring. The USDA reported weekly export sales of a net 86,300 MT of old crop and 749,100 MT of new crop, versus expectations for combined sales of only 200-500 TMT. Although the old crop sales were a marketing year low, they still weren't negative as many have been expecting in recent weeks. There were however some cancellations in there for unknown destinations (268,500 MT) and China (145,600 MT). Actual shipments themselves of 1,339,500 MT were down 10 percent from the previous week, but still a decent total. The US have now shipped 34.4 MMT of soybeans so far in 2013/14, that's 84% of the USDA's target for the season. Outstanding sales of a further 8.9 MMT take total commitments to over 105% of the USDA's current estimate for the season. The latest Commitments of Traders report shows managed money adding to their soybean long in the week through to Tuesday. They now sit on a net long in excess of 195k contracts - their largest such position since September 2012. We know from yesterday that the USDA's Outlook Forum projected 2014 US soybean plantings at a record 79.5 million acres this year, versus 76.5 million a year ago. Today they said that 2014 yields would be a record 45.2 bu/acre, up 4.4% on last year (what are the chances of accurately forecasting that at this stage?). That takes production up to a record 3.55 billion bushels, a rise of nearly 8% versus 2013. This means that 2014/15 US ending stocks will jump from this season's "line in the sand" below which they refuse to cross of 150 million bushels, to a more comfortable 285 million. That's a stocks-to-use ratio of 8.3 percent - the highest of the past eight seasons. The Buenos Aires Grains Exchange estimated soybean plantings there at 20.3 million hectares, which is half a million lower than previously. The Argentine Ministry said that 85 percent of early-planted and 73 percent of late-planted soy crops are in good to very good condition. There's talk of shipping delays now starting to build in the Brazilian port of Santos. Mar 14 Soybeans closed at $13.70 3/4, up 12 1/2 cents; May 14 Soybeans closed at $13.60 1/4, up 12 1/2 cents; Mar 14 Soybean Meal closed at $455.80, up $4.90; Mar 14 Soybean Oil closed at 40.95, up 38 points. For the week that puts front month beans up 33 /14 cents, with meal gaining $5.80 and oil adding 180 points.

Corn: The corn market finished lower on the day, but higher for the week. Weekly export sales of 691,400 MT of old crop and zero for new crop were below trade expectations for sales of 800 TMT to 1.2 MMT. As the dispute with China over MIR 162 corn rumbles on there were no sales to that particular buyer. There were cancellations from unknown destinations (127,500 MT) and China (18,800 MT). Exports of 745,000 MT were down 22 percent from the previous week and 15 percent from the prior 4-week average. The US has now shipped 16.5 MMT of corn so far this season, or 40.6% of the USDA's forecast for 2013/14. There's a further 18.8 MMT of outstanding sales, taking total commitments so far to 87% of the USDA target. The latest Commitments of Traders report shows managed money adding to their newly established long in the week through to Tuesday. They now sit on a net long of a little over 45k contracts having been short on corn since early last summer. The USDA now say that US farmers will plant 92 million acres of corn this year, versus 95.4 million in 2013. They also project 2014 US corn yields at record levels of 165.3 bu/acre (see above), up 4% on 158.8 bu/acre last year. That takes production in 2014 to a new record 13.985 billion bushels versus 13.925 billion in 2013. Demand for corn from the US ethanol sector is seen holding steady at 5 billion bushels, with 2014/15 ending stocks rising to 2.111 billion bushels, up from 1.481 billion at the end of this season, and over 2.5 times more than at the end of 2012/13. Note that the USDA estimates US corn, soybean, wheat and cotton acres at a combined 238.5 million acres, exactly the same area as last year. Yet early season wetness in 2013 produced a total very significant "prevent plant" area being claimed for on insurance. Last year's Outlook Forum pegged 2013 corn plantings at 96.5 million acres, and by the 31 March planting intentions report that area had risen to 97.3 million versus the 95.4 million that the USDA now say finally did get planted. US soybean plantings were estimated at 77.5 million acres at last year's Outlook Forum and 77.1 million at the end of March, before finally falling to 76.5 million. So a combined area of 2.1 million acres in February, rising to 2.4 million in March seemingly never go planted. Where did it go? Not into wheat, which was estimated at 56 million in February and 56.4 million in March, before ultimately ending up at 56.2 million they now tell us. Where are those lost acres now? Chinese customs data shows that they imported 650,904 MT of corn in January, up 64% from a year ago. They also imported 575,462 MT of DDG's, up 600% from a year ago. The Buenos Aires Grains Exchange said that the Argentine corn harvest is underway at 1.2% complete versus 5% a year ago. They estimate production at 23.5 MMT, unchanged from previously, but down 13% from 27.0 MMT in 2012/13. Mar 14 Corn closed at $4.53, down 2 3/4 cents; May 14 Corn closed at $4.59, down 3 1/4 cents. For the week front month Mar 14 was up 7 3/4 cents.

Wheat: The wheat market took a bit of a thrashing to end, what had been up until now, a decent week. Options expiry, a bearish slant to the USDA's Outlook Forum data and pre-weekend profit-taking may all have been behind today's action. Weekly export sales were a bit disappointing at 424,500 MT of old crop and 67,000 MT of new crop versus trade expectations of 500-700 TMT. More disappointing though were actual shipments of only 277,300 MT – a marketing-year low – which were down 31 percent from the previous week and 29 percent from the prior 4-week average. The primary destinations were Brazil (60,000 MT), Japan (55,800 MT), South Korea (33,000 MT), Mexico (32,500 MT), and Nigeria (30,500 MT). The US has now shipped 21.8 MMT of wheat so far this season, or 68% of the USDA's forecast for the marketing year. There's an outstanding sales total of 5.9 MMT taking total net commitments to 86.5% of the USDA's target. The latest Commitments of Traders report shows managed money continuing to decrease their net short on CBOT wheat by almost 9,000 contracts in the week through to Tuesday. They now sit on a net short position of nearly 34.5k lots. That was over 100k lots at the end of 2013. In Kansas they are net long around 18.5k lots and long in the region of 7k lots in Minneapolis. The USDA's Outlook Forum pegged all wheat plantings for the 2014 US harvest at 55.5 million acres versus 56.2 million a year ago. Harvested acres however are seen at 47.2 million, which is 2 million more than a year ago due to lower abandonment rates. The 2014/15 wheat yield is seen averaging 45.8 bushels/acre, down from 47.2 bu/acre last year, possibly due to more marginal land making it through to harvest this year. All in, that gives us a 2014/15 US all wheat harvest of 2.16 billion bushels, up slightly on 2.13 billion in 2013/14. US wheat ending stocks are seen rising from 558 million bushels at the close of this season to 587 million next year. Chinese customs data shows that they imported 725,942 MT of wheat in January, up 304.75% from a year ago, with 256,935 MT of it coming from the US. Frigid weather is due to return to the Midwest next week, which may cause renewed winterkill concerns. Indeed the longer range forecast shows much colder than normal conditions largely remaining through to the second half of March. Meanwhile hard red winter wheat on the Southern Great Plains is in the throes of severe drought, say Martell Crop Projections. "The last important rain in West Texas was mid December. Oklahoma has received 1.25 inches of rain December-February, against 4.1 inches on average and 30% of normal. This is the United States second largest wheat state," they note. Russia says that 96% of it's winter grains are in good to satisfactory condition. Nevertheless, SovEcon say that a 2014/15 grain harvest of 86 MMT versus the government estimate of 95 MMT is likely to be nearer the mark, given the sharp reduction in higher yielding winter plantings. Mar 14 CBOT Wheat closed at $6.09 3/4, down 6 1/2 cents; Mar 14 KCBT Wheat closed at $6.82 3/4, down 9 cents; Mar 14 MGEX Wheat closed at $6.64 1/4, down 17 1/2 cents. For the week CBOT wheat still added 10 1/4 cents, with KCBT wheat up 8 1/4 cents and MGEX falling 2 1/4 cents after today's slump.