Chicago Ends Lower On Fund Selling, Generally Increased Production Estimates

05/06/14 -- Soycomplex: Beans ended sharply lower. Once again the front end took the worst losses, despite that being where the real tangible tightness is. That's probably due to the fact that this is also where the big spec longs are. We are also in the middle of funds rolling out of those Jul 14 longs. They, of course, have no interest in taking physical delivery of soybeans to the 27th floor of a Manhattan skyscraper. Fund selling was estimated at 5,000 lots in beans and 2,000 each in both meal and soyoil. Weekly export sales came in at 41,300 MT on old crop and 230,500 MT on new crop. Trade estimates had been for old crop sales of -100 TMT to zero, and new crop sales of 500 TMT to up to 1 MMT. Actual shipments this week were 213,388 MT, taking the marketing year total so far to 42.9 MMT. Add on outstanding sales of a further 2 MMT and we get total commitments of 44.9 MMT against a USDA forecast for the season of 43.5 MMT, or 103%. The FAO's Agricultural Market Information System (AMIS) raised their forecast for the world 2013/14 soybean crop by 2 MMT from last month to 283 MMT, and put ending stocks 1 MMT higher than last time at 31 MMT. "In the southern hemisphere prospects are favourable. In Argentina, overall conditions for both the first and second planted crops remain favourable. Harvest is in progress, though is delayed due to excess moisture conditions in some areas. In Brazil, the harvest is complete. Despite the climatic adversity this growing season, the total production increased due to the increase in area planted. In the US, planting is in progress, and conditions are generally favourable at this early stage," they said. The trade may be beginning to focus on new crop prospects in the northern hemisphere, now that the South American harvest is mostly concluded. Prospects for a record US 2014 soybean crop currently look very good. The spec element still seem to fancy owning soybeans, a stance that has proven to be generally profitable of late, and certainly more so than owning corn or wheat. That trend, should it continue, may add some support to even the new crop market, for now at least. Jul 14 Soybeans closed at $14.60 1/2, down 22 cents; Nov 14 Soybeans closed at $12.10 1/2, down 6 3/4 cents; Jul 14 Soybean Meal closed at $490.60, down $5.90; Jul 14 Soybean Oil closed at 38.69, down 56 points.

Corn: The corn market closed around 6-8 cents lower. Weekly export sales came in at 550,700 MT on old crop and only 19,600 MT on new crop. The old crop sales included net decreases for unknown destinations (230,400 MT) and China (92,000 MT). Sales to Japan, Columbia, Egypt and Vietnam all included switches from either unknown or China. Actual shipments of almost 1.2 MMT take the 2013/14 marketing year total to just shy of 33.8 MMT, with further unfulfilled sales of 12.4 MMT. That takes total commitments to 46.2 MMT versus a USDA forecast for the season of 48 MMT, which is 96% - similar to the 5-year average of 95% at this time. US weather looks non-threatening. Very heavy rains on the Plains are seen effectively curing the drought there, which whilst coming too late to help wheat will do wonders for corn. The FAO's AMIS raised their forecast for the world 2014/15 corn crop by 21 MMT from last month to 988 MMT. They increased carryout by 7 MMT to 169 MMT, which is also 7 MMT more than at the end of 2013/14. "In the southern hemisphere, the season is nearly complete. In Argentina, conditions are favourable though there is some concern over excess wetness, which is delaying harvest. In Brazil, an overall decrease in production is expected owing to reduced planted area and yield. In the northern hemisphere conditions are generally favourable and planting is nearly complete. There is minor concern over planting delays in the northern US Cornbelt," they said. "In China, overall conditions are favourable and the crop is between planting (northern regions) and flowering (southern regions) stages. In Russia, planting is complete and moisture conditions are sufficient at this early stage. In Ukraine, crop moisture conditions are favourable for the emergence and establishment of the newly planted crop," they added. The Russian Ministry said that corn planting there isn't quite finished off at 97.5% done on 2.5 million hectares. Ukraine said that they'd exported a record 19.74 MMT of corn this season, with a further 264 TMT at store in port waiting to load. Serbian corn was the lowest offer in a Turkish old crop tender. Ukraine new crop corn is said to be offered in the market at around $208/tonne FOB. Fund selling was estimated at around 7,000 lots in Chicago today. Jul 14 Corn closed at $4.49, down 7 1/4 cents; Sep 14 Corn closed at $4.44 1/4, down 8 cents.

Wheat: The wheat market ended mixed, with Chicago showing the most weakness. Weekly export sales for old crop came in at just 2,000 MT, whilst new crop sales were 341,400 MT. That was a bit disappointing compared to trade estimates for sales of around 350-600 TMT for both crop years. Exports were 492 TMT, taking the seasonal total to just short of 30 MMT to the period ending 29 May. That leaves just two days of the official 2013/14 marketing year remaining. The USDA's forecast for 2013/14 was for exports of 31.5 MMT, so obviously they are going to fall short of that. The FAO's AMIS raised their forecast for the world 2014/15 wheat crop by 1 MMT from last month to 703 MMT, which is 6 MMT more than the USDA currently predict. They raised ending stocks by 2 MMT to 182 MMT, which is 5 MMT more than this season. "Overall conditions are still mostly favourable in the northern hemisphere. However, significant concern continues in the US southern plains due to dry conditions. In Canada the cool weather continued and is causing some delays for spring wheat. In Turkey there is concern due to hot dry weather. In the southern hemisphere planting is progressing and conditions are generally favourable at this early stage of the season, with some concern over dry conditions in parts of South Africa and Australia," they said. "In Russia, winter wheat conditions are mostly good except in parts of the southern growing regions, where there is some concern over hot dry weather that developed towards the end of the month. Spring wheat planting is nearly complete and conditions are generally favourable at this early stage. In Ukraine, conditions are good and crop development is ahead of average. In the EU prospects are favourable, and similar to last year," they added. MDA CropCast don't agree that Russia's prospects are "mostly good" as they cut their forecast for this year's wheat crop by 6.1 MMT from just a week ago to 45.2 MMT. IKAR on the other hand estimated this year's Russian wheat output at 54.25 MMT, which is 2.5 MMT more than a year ago. They also see exports increasing in 2014/15, up by 1 MMT to 19.4 MMT. Turkey bought 165,000 MT of milling wheat Black Sea origin for July-Aug shipment, along with 105,000 MT of barley Black Sea origin for June-July shipment. Jordan bought 100,000 MT of optional origin wheat for Nov shipment. They are stepping up their buying due to the increased influx of Syrian refugees. Funds sold an estimated 2,000 CBOT wheat contracts on the day. Jul 14 CBOT Wheat closed at $6.05 1/4, down 9 1/4 cents; Jul 14 KCBT Wheat closed at $7.14, up 1/2 cent; Jul 14 MGEX Wheat closed at $6.91 1/2, up 2 cents.