Chicago Market Jumps Higher On Fund Buying

18/03/14 -- Soycomplex: Beans closed sharply higher on active fund buying (said to be at around a net 5,000 contracts on the day). Argentine exports out of the port of Rosario have come to a standstill after a ship carrying 45 TMT of Paraguayan beans ran aground, completely halting traffic into and out of the port. There are said to be 7 ships loaded upriver waiting to leave the port and a further 54 vessels downstream waiting to enter. To add to Argentine woes, a port workers strike is also in the offing. Dr Cordonnier estimated the 2013/14 Argentine bean crop at 54.0 MMT, unchanged from his previous estimate and pegged Brazilian output at 86.0 MMT, down from his previous estimate of 87.0 MMT. Abiove estimated the Brazilian bean crop at 86.1 MMT versus a previous estimate of 88.6 MMT, and placed 2013/14 Brazilian bean exports at 44.0 MMT versus a previous estimate of 44.5 MMT. The USDA currently have the Brazilian crop at 88.5 MMT and exports at 45 MMT. Any sign of further supply tightening puts renewed pressure on US supplies, with exports already set to beat the USDA forecast for the season. The Brazilian harvest is 58% complete, according to Celeres. May 14 Soybeans closed at $14.18 1/4, up 26 1/2 cents; Jul 14 Soybeans closed at $13.95 3/4, up 20 1/2 cents; May 14 Soybean Meal closed at $455.80, up $9.20; May 14 Soybean Oil closed at 42.27, up 38 points.

Corn: The corn market closed around 7 cents firmer as fund money came in for an estimated net 7,000 contracts on the day. Dr Cordonnier estimated the 2013/14 Brazilian corn crop at 68.5 MMT, and the Argentine crop at 23 MMT, both unchanged from his previous estimates. The USDA are currently at 70 MMT and 24 MMT respectively. South Korea's NOFI bought 193,000 NT of US and South American corn for June/July shipment. There's talk of US corn plantings being late due to a combination of dryness in some areas and extreme cold in others. The Texas corn crop is only 15% planted versus the 5-year average of 31%. Note though that last year was one of the latest planted years on record, and the US still grew a record crop. Informa's US acreage estimates come out next week, and the USDA will release theirs at the end of the month. Tomorrow brings the usual weekly ethanol production report from the Energy Dept. Last week's ethanol production was 869,000 barrels/day, down from 894,000 bpd the week previously and well below the more than 930,000 bpd required to hit the USDA's target for the season. Early spring grain planting is underway in Ukraine, although corn planting wouldn't normally begin until the end of April. The trade is keeping a very close eye on developments there. Despite the USDA's protestations to the contrary, the lack of availability of credit could be a problem for some when it comes to purchasing seed and other inputs. May 14 Corn closed at $4.86 1/4, up 7 1/4 cents; Jul 14 Corn closed at $4.91, up 7 cents.

Wheat: The wheat market jumped higher, recovering all of Monday's losses and then some. Fund money was estimated as being a net buyer of around 4,000 Chicago wheat contracts on the day to add to their newly acquired long. Egypt bought a combination of Russian, US and Romanian wheat. Note that they didn't appear to have a problem buying from Russia. Even with the more expensive freight added on, the trade will have been pleased to see US wheat compete though. Russia has now largely managed to annex Crimea without too much turmoil and violence. There is speculation now that they may have ambitions to take over some of the other regions of eastern Ukraine. Talk persists that spring grain plantings in Ukraine will suffer this year, and so too will yields as farmers cut back on fertiliser and agrochemical applications, whether due to lack of cash or lack of availability. The plunging Ukraine hryvna makes the cost of importing these products pretty prohibitive. The same could also be said of the Russian rouble, so maybe we might see some reduced level of inputs there this year too? US winter wheat areas remain dry, and crop conditions are deteriorating on a weekly basis. Current weather models offer only light precipitation potential for much of the HRW belt in the coming week, but there are better prospects later in March/early April. May 14 CBOT Wheat closed at $6.92 1/2, up 18 cents; May 14 KCBT Wheat closed at $7.63 1/4, up 19 3/4 cents; May 14 MGEX Wheat closed at $7.41 1/2, up 17 1/4 cents.