Chicago Grains Closing Comments - Friday Night

28/03/14 -- Soycomplex: Beans closed narrowly mixed on the day, but higher for the week. The trade is now sat tight waiting for Monday's USDA stocks and planting intentions reports. These are expected to show US March 1st soybean stocks at a tight 989 million bushels, and that US farmers plan to sow around 81 million acres (record) of soybeans this spring. The Buenos Aires Grains Exchange estimated the Argentine soybean crop at a record 54.5 MMT, unchanged from their previous estimate. The 2014 soybean harvest is 3.2% complete, up from 1.2% a week ago and versus 5% a year ago, they added. The Argentine Ag Ministry yesterday estimated the soybean crop there at 54.0 MMT, up 9.5% from 2012/13. That's the same figure that the IGC gave us yesterday, who also estimated the Brazilian soybean crop at a record 85.6 MMT. So, we have two record crops on the way from the leading South American producers, and record plantings in the offing in the US. In addition, there's already talk of Brazil's 2014/15 soybean crop usurping this season's record. Yet, strong demand from China (also at record levels) continues to see soybean prices defy gravity. The latest Commitment of Traders report shows managed money trimming their soybean long position for the week through to Tuesday night by over 13k contracts, although the still sit on a sizeable net long of over 185k lots. May 14 Soybeans closed at $14.36 1/2, unchanged; Jul 14 Soybeans closed at $14.07 3/4, up 3/4 cent; May 14 Soybean Meal closed at $468.40, down $2.10; May 14 Soybean Oil closed at 40.48, up 5 points. May 14 beans added 27 3/4 cents during the course of the week, and May 14 meal gained $12.50.

Corn: The corn market also ended the day with little change, but finished higher for the week. As with beans, there wasn't a lot of fresh news out there, and any position squaring that traders needed to do ahead of Monday's reports looked like it had already been done earlier in the week. For corn, Monday's reports are expected to show March 1st US stocks of around 7 billion bushels, with 2014 plantings falling from 95.4 million acres last year (a 75-year high) to around 92.7-92.9 million this time round. The Buenos Aires Grains Exchange estimated the Argentine corn crop at 24.0 MMT versus a previous estimate of 23.5 MMT and the 2012/13 crop of 27 MMT. The Argentine Ag Ministry yesterday forecast the corn crop there at 29.8 MMT in their first estimate of the season. The Buenos Aires Grains Exchange estimated the Argentine corn harvest is 10% complete versus 7% a week ago and 18% a year ago. The Ukraine Ag Ministry said that Ukraine had exported 2.5 MMT of grains (mostly corn) between March 1-27th. They said that takes this season's exports to 26.9 MMT so far. CEC estimated South Africa’s 2014 corn crop at 12.955 MMT versus a previous estimate of 12.403 MMT. The latest Commitment of Traders report shows fund money continuing to add to their net long position in corn. They are now sitting on a net long of nearly 240k contracts. That's a pretty large position, and one that could leave the market vulnerable to a serious downside slump should they all decide to scramble for the exit at the same time. May 14 Corn closed at $4.92 and Jul 14 Corn closed at $4.96 1/4, both unchanged. For the week May 14 corn added 13 cents.

Wheat: The wheat market took a dive to end the week in appropriately choppy fashion. Yet, for the week as a whole we are virtually unchanged. Monday's USDA reports are expected to show US March 1st wheat stocks of around one billion bushels. US all wheat plantings are expected to come in at around 56.3 million acres. Spring wheat plantings might have the capacity to spring a surprise (no pun intended) given the recent strength in wheat prices following Russia's annexation of Crimea. The 2013 "other" spring wheat (excluding durum) area was 11.6 million acres, this is expected to rise to around 12.3 million this year, although some estimates are as high as 13.5 million. MDA CropCast yesterday raised their forecast for the 2014 US all wheat crop by 1.6 MMT due to increased spring wheat plantings and improved yield expectations. Algeria bought 250,000-300,000 MT of optional origin (possibly French) milling wheat for May/June shipment. Tunisia bought 50,000 MT of soft milling wheat and 25,000 MT of barley for Apr/May shipment. The origin was also optional but thought most likely to be sourced from the Black Sea. The USDA attaché in Brazil estimated their 2014/15 wheat area at 2.0 million hectares, down 9% from a year ago. This is in direct conflict to other estimates which forecast wheat plantings in Brazil rising this year as the crop potentially offers much better returns than safrinha corn. For example, the Secretary of Agriculture for the state of Parana estimate that the wheat acreage in the state will increase by 20% in 2014. The Commitment of Traders report shows managed money adding almost 12.5k contracts to the new net long position in CBOT wheat, leaving them net long of around 36.5k lots. May 14 CBOT Wheat closed at $6.95 1/2, down 15 cents; May 14 KCBT Wheat closed at $7.63 1/2, down 20 1/4 cents; May 14 MGEX Wheat closed at $7.39 3/4, down 14 1/2 cents. CBOT wheat added 2 1/4 cents for the week, with KCBT down 7 3/4 cents and MGEX shedding 3 1/2 cents.