Chicago Higher On Ukraine Developments
14/04/14 -- Soycomplex: Beans ended up recovering most of Friday's losses as fund money returned to the fray after weekend events in Ukraine took a turn for the worst. They were estimated as ending up as net buyers in beans of around 4-5,000 contracts on the day. Weekly US export inspections were reported at 267,939 MT, which is not much better than half of last week's 509,627 MT. Nevertheless, nor do they need to be, cumulative shipments for the marketing year to date now stand at almost 41 MMT, just 2 MMT shy of the USDA's target for the season. US exports are (finally) dropping off as the Brazilian harvest winds down. Safras e Mercado said as of Friday that was 86% complete versus 80% a week ago, 82% a year ago and 78% for the 5-year average. There's unconfirmed talk of more unwanted Chinese purchases of Brazilian beans being resold into the US. The NOPA March crush report comes out tomorrow, with the trade expecting a domestic demand number of around 146 million bushels. There are reports of bird flu outbreak in Japan. Goldman Sachs forecast US soybean prices at $10.50/bushel 12 months from now. May 14 Soybeans closed at $14.76 1/4, up 13 1/4 cents; Jul 14 Soybeans closed at $14.63 1/2, up 16 1/4 cents; May 14 Soybean Meal closed at $479.10, up $6.20; May 14 Soybean Oil closed at 42.26, up 16 points.
Corn: The market closed around 4-5 cents higher, with renewed tensions between Russia and the West/Ukraine supporting. Fund money was estimated as finishing the day as a net buyer of around 5-7,000 corn contracts. The rapid demise of the Ukraine currency, which is down by more than 50% in the past 3 months since their political problems escalated to new heights, is seen harming corn planting and inputs this year. Agritel estimated Ukraine’s 2014 corn crop at 23.3 MMT versus a previous estimate of 26.8 MMT, and down 18% from a year ago. Although for now, Ukraine's corn exports continue relatively uninterrupted, there's also the suggestion that farmers there may hold off selling whatever old crop they have left (and likely do the same on new crop) as a hedge against the weakening hrynia - at least until the situation stabilises. Agritel estimated Russia’s 2014 corn crop at 9.8 MMT versus a previous estimate of 10.2 MMT, and down 6% from 2013. Weekly US export inspections were strong at 1.45 MMT, and now total almost 25.2 MMT for the marketing year to date. Safras e Mercado said that as of Friday 74% of the Brazilian summer corn crop has been harvested versus 63% a year ago. They estimated Brazil’s 2nd "safrinha" corn crop at 40 MMT or more. Current conditions for that are favourable. The USDA released the first crop progress report of the year today, placing the US crop at 3% planted versus 2% this time a year ago and 6% on average. May 14 Corn closed at $5.03, up 4 1/2 cents; Jul 14 Corn closed at $5.09 1/4, up 4 3/4 cents.
Wheat: The market closed with good gains, although it also finished well off the intra-day highs as a bit of profit-taking kicked in later in the day. Fund money was estimated as being a net buyer of around 6-7,000 Chicago wheat contracts on the day, smelling blood (unfortunately, literally) on weekend developments in Ukraine. Agritel suggested that financial problems will cut Ukraine many farmers' ability to fund inputs for corn and wheat this year. There's also the issue of inadequate winter rains in not just Ukraine, but also Russia. Agritel estimated Ukraine’s 2014 wheat crop at 18.4 MMT versus a previous estimate of 20.0 MMT, and down 16.5% from a year ago. They now see Russia's crop at 48.1 MMT versus a previous estimate of 49.9 MMT, and down 8% from 2013. Taiwan bought 92,550 MT of US milling wheat for May June shipment, according to Reuters. South Korea's NOFI bought 65,000 MT of optional origin feed wheat for Sep/Oct shipment. Weekly US export inspections of 683,544 MT were better than trade expectations of 450-550,000 MT. The USDA reported US winter wheat at 34% good to excellent, down a point from a week ago and versus 36% a year ago. They rated 32% of the crop as poor to very poor, versus 29% a week ago and 31% a year ago. Headed was 5% versus 4% a year ago. Spring wheat plantings were 6% complete versus 5% a year ago. All in all then, the US wheat crop is in similar shape to 12 months ago. May 14 CBOT Wheat closed at $6.78 3/4, up 18 1/2 cents,; May 14 KCBT Wheat closed at $7.42, up 22 1/2 cents; May 14 MGEX Wheat closed at $7.17 1/4, up 15 1/2 cents.
