Chicago Mixed, Are They Really Getting A Weather Market Going In Corn Already?
23/04/14 -- Soycomplex: Beans closed lower on the old crop and higher on the new. The jungle drums concerning Chinese cancellations and switches into the US are deafening. Reuters apparently confirmed that Japan's Marubeni Corp had resold two cargoes of Brazilian beans to US buyers, naming the vessels, the volumes, the ports they've sailed from and their destinations (Mobile, Alabama and Wilmington, North Carolina). About the only thing they skipped was the prices paid. Is that just the tip of the iceberg? ADM denied that any of it's sales to China had been defaulted on, and Bunge and Cargill refused to comment, Reuters added. The Chinese government meanwhile is expected to restart its weekly soybean reserve auctions on May 6th, which may further curtail demand from the world's largest buyer. Venezuela are in the market for soymeal for July shipment, Argentina might be the most likely seller. The Rosario Grain Exchange estimated Argentina's 2013/14 soybean crop at a record 54.9 MMT, up from a previous forecast of 54.7 MMT. They said that better yields than expected in Cordoba are offsetting lower ones in other areas. Harvesting is 25% complete, 15 points behind last year, they added. The USDA attaché in Argentina estimated plantings for the 2014/15 soybean harvest rising to 20.6 million ha versus 19.1 million for the current harvest. The attaché sees next year's Argentine soybean crop at a new record 57.5 MMT. Early estimates also have Brazil producing a new record crop in 2014/15 of around 95-97 MMT, whilst US farmers are also expected to "go large" with soybeans plantings this year. That sounds like a lot of soya doesn't it, especially in the face of faltering demand from China. Tomorrow's weekly export sales from the USDA will be interesting in light of all the cancellation talk. Estimates for that are from zero to possibly negative 200 TMT on old crop, and 350-550 TMT positive on new crop. May 14 Soybeans closed at $14.69, down 10 3/4 cents; Jul 14 Soybeans closed at $14.65, down 5 3/4 cents; May 14 Soybean Meal closed at $478.80, down $1.00; May 14 Soybean Oil closed at 42.44, down 30 points.
Corn: The market ended around 7 to 8 cents higher on the day. Fund money ended up as an estimated net buyer of around 8-9,000 contracts on the day. Late planting of the 2014 US corn crop is getting spec money excited (already). There's talk that some are already prophecising (if that's not a real word then it should be) another summer weather disaster, and are looking to "get in early" on the long side. Others suggest that 2014 will be an El Nino year, and that would normally produce a beneficial growing environment for the US Midwest. Suffice to say that April is very early indeed to get into a US weather market. Anything like trendline yields this year could leave fund money looking spectacularly foolish come the autumn. Next week's weather forecast is not conducive to planting though, but could ultimately prove beneficial in the long run. "The GFS forecast is extremely wet in the Midwest, calling for 2-4 inches of rainfall with a slow moving storm. The rain potential is great. Some farms in Missouri, Illinois and Wisconsin could receive 4-6 inches of rain. This would be the equivalent to a month's worth of May rainfall. Ohio and Indiana would be “less wet” the new forecast calling for 1.5 – 2.5 inches of rain," said Martell Crop Projections. Elsewhere, the Rosario Grain Exchange increased their forecast for the 2013/14 Argentine corn crop from 22.7 MMT to 23 MMT, and said that harvesting is 23% complete. A Reuters survey put South Africa’s 2014 corn crop at 13.1 MMT. APK Inform reported that Ukraine's corn exports continue unhindered by political issues. They shipped out 1.1 MMT of corn in the April 1-22 period, and increase of 49% on a year ago. Marketing year to date corn exports are now 16.4 MMT, an increase of 56% versus the same period in 2012/13. Full season exports will total 19.3 MMT, APK Inform estimated. US ethanol production this past week fell to 910k barrels/day from 939k bpd the previous week. Tomorrow's weekly export sales are expected to be in the region of 500 TMT to 1 MMT. May 14 Corn closed at $5.03 3/4, up 7 1/2 cents; Jul 14 Corn closed at $5.09 1/2, up 7 1/2 cents.
Wheat: The market closed around 3 to 5 cents higher on the day. The trade continues to fret over US winter wheat crop conditions, slow spring wheat plantings and Ukraine. There is also some talk of Oklahoma confirming freeze damage to winter wheat from the recent sub-zero dip. The same major storm that is shaping up next week to further delay corn plantings in the Midwest, could however bring some drought relief to winter wheat on the southern Plains. "Both Oklahoma and central Kansas could receive up to 1 inch of rainfall from the slow moving storm," said Martell Crop Projections. China's weekly (or should that be weakly?) wheat auctions continue to be woefully under subscribed. Today's offering of 675,445 MT only received a 7.2% take-up rate. That's even worse than the 16-17% acceptance of the last two weeks. The USDA did however announce the sale 120 TMT of US sorghum to China for 2013/14 shipment. Japan bought 108,789 MT of food wheat for May-Sept shipment in their regular weekly tender. As usual the origins were split between the US, Canada and Australia. Iran bought 60,000 MT of Russian wheat. Kazakhstan said that it plans to export 1.2 MMT of wheat to Iran this year. Stats Canada are out with their planting intentions estimates tomorrow. The trade is expecting an all wheat area of 24.4 million acres versus 26.26 million in 2013. For barley the average estimate is 6.7 million versus 7.08 million last year. For oats it's 3.2 million versus 3.17 million in 2013. Morocco said that it only expects a cereal harvest of 6.7 MMT this year, down sharply from 9.7 MMT a year ago. Wheat will account for 3.7 MMT of that against 5.2 MMT in 2013 when good rains fell. Rains this year ave come a bit too late to boost yields the Ag Minister said. After a wet Easter, eastern Australia is seen mostly dry for the next few days, favouring field work, but more rain will soon be needed. The west remains dry. Fund money was estimated as buying around a net 2,000 Chicago wheat contracts on the day. Trade estimates for tomorrow's weekly export sales report are old crop 200–400 TMT, and new crop 250–500 TMT. May 14 CBOT Wheat closed at $6.76 1/2, up 3 1/2 cents; May 14 KCBT Wheat closed at $7.45 1/2, up 4 1/4 cents; May 14 MGEX Wheat closed at $7.25 1/4, up 5 cents.
