Chicago Closing Comments At The End Of A Very Choppy Week

Corn: The corn market ended little changed on the day, and with small gains for the week. The USDA announced 340,000 MT of US corn sold to Egypt for 2013/14 shipment under the daily reporting system. Chinese customs data showed that they imported around 480 TMT of corn in February, up nearly 22% on a year ago. Imports from the US however were down 48% at 206 TMT. Jan/Feb Chinese corn imports were 1.1 MMT, an increase of 43% on a year ago. Ag Canada forecast the corn crop there this year at 12.7 MMT versus a previous estimate of 13.1 MMT and down from 14.2 MMT in 2013. The USDA's Mexico attaché estimated the 2014 corn crop there at 22.5 MMT versus 21.9 MMT a year ago. They also estimated Mexico's 2014 corn imports at 10.4 MMT versus 11.5 MMT a year ago. Mexico are traditionally a large US corn customer. The latest Commitment of Traders report showed managed money adding a further 18k contracts to their net corn long for the week through to Tuesday. Are they getting tired? It was 50k last week and more than 70k the week before. Their total net corn long holding is now a heavy near 278k lots. The confirmed number of cases of the deadly PEDv virus in the US increased by 296 in the week ended March 15, bringing the total number to 4,757. There is no official count regarding the number of pigs that died from the disease, but some private estimates are around 4-5 million. Rabobank estimated the US 2014 corn planted area at 93 million acres, down a relatively modest 2.4 million on last year. Other trade estimates in the last week or so have been around 90-92 million. They said that they expected the price ratio between corn and soybeans to "restore some balance" to the market and essentially not cut US farmers' desire to plant corn quite as much as other analysts expect. They raised their forecast for US corn prices in the final quarter of the year by 20 cents to $4.60/bushel. UkrAgroConsult forecast a 2014 Ukraine corn crop of 23 MMT versus around 30 MMT last year. Some growers will plant spring barley instead of corn as it's cheaper to cultivate and matures earlier, allowing them to turn the crop into cash quicker, they said. APK Inform this week also suggested that some Ukraine corn growers will opt to plant soybeans over corn this year due to price considerations. The EU issued 350 TMMT of corn import licences this past week, taking the 2013/14 marketing year to date total to 9.6 MMT versus 8.6 MMT this time a year ago. May 14 Corn closed at $4.79, up 1/2 cent; Jul 14 Corn closed at $4.83 3/4, up 1/4 cent. For the week, May 14 corn was 6 3/4 cents higher.
Wheat: The wheat market posted losses of around 10-12 cents across the three exchanges, ending mixed for the week. Managed money added around 13.5k lots to their new Chicago wheat long for the week through to Tuesday night, according to the latest Commitment of Traders report. They now sit on a net long of 24k lots, which is only very modest relative to the size of the position that they hold in corn and soybeans. Does this give wheat more upside potential than the other two? Only time will tell. Chinese customs data shows that the country imported 579 TMT of wheat in February, a 160% increase on a year previously. Their Jan/Feb imports now stand at over 1.3 MMT, a hefty 225% increase versus the same period in 2013. The US supplied 506 TMT of the wheat that China imported in the first two months of the year, a hike of more than 775% of the volume that they sold them in the same period in 2013. A report in the China Daily said "The price of domestic wheat is now around 2,610 yuan ($425) a metric ton, while wheat of a similar quality from the US is priced at 2,200 yuan a metric ton in the Chinese market after customs clearance, data from China's Zhengzhou Commodity Exchange shows. Chinese mills therefore are willing to buy cheaper US wheat to reduce their flour costs and tackle the rising costs of labour, energy prices and logistics services, instead of buying the same products from the domestic market." Ag Canada estimated the all wheat crop there at 29.3 MMT, unchanged from previous estimate and down nearly 22% from the record 37.5 MMT harvested last year. This is partly due to a decrease in plantings, seen at 9.7 million hectares versus 10.4 million a year ago. Despite the drop in production though, a large hangover of carryover stocks from this season means that 2014/15 Canadian all wheat exports will rise to 22.1 MMT versus 21.6 MMT in 2013/14, they said. The Canadian barley crop was forecast at 8.3 MMT versus a previous estimate of 8.4 MMT and compared to 10.2 MMT a year ago. "As weather starts to dominate wheat discussions with winter wheat crops starting to come out of dormancy, weekend temps and rains are taking on more and more significance. Mid-day forecast turned wetter in rain event seen for TX, OK, KS, AR, and MO out into April 3-5 timeframe and the timing of the update hitting the wires seemed to coincide with another bout of sell pressure in the wheat," said Benson Quinn Commodities. Rabobank forecast Chicago wheat to fall to $5.60/bushel in the final quarter of the year. May 14 CBOT Wheat closed at $6.93 1/4, down 10 1/2 cents; May 14 KCBT Wheat closed at $7.71 1/4, down 10 3/4 cents; May 14 MGEX Wheat closed at $7.43 1/4, down 12 cents. For the week, CBOT wheat finished a choppy 5 days 3 cents higher, whilst Kansas wheat rose 19 3/4 cents and Minneapolis wheat fell 7 1/4 cents.