Chicago Closing Comments: Monster US Corn Crop On The Way?

24/07/14 -- Soycomplex: Beans closed firmer following impressive weekly export sales. These came in at 226,700 MT for old crop and 2,451,100 MT for new crop. Pre-report estimates had been for sales of 150-250 TMT of old crop and 1.2-1.4 MMT of new crop. China (who else) bought 158,800 MT for 2013/14 and 1,283,500 MT for 2014/15. There were also net sales of 949,600 MT to unknown for 2014/15 shipment. Benson Quinn also note that "New crop meal sales remain extremely strong at 348,900 MT this week which takes accumulative sales to record pace and 3 times higher than last year’s accumulated sales for same period." The market is clearly thinking "why do we need to go lower, given this sort of demand at these levels, even with a record large US crop looming?" As far as the latter is concerned, Allendale estimated US 2014 soybean yields at 46.2 bu/acre, even if they did throw in the caveat of "we reserve the right to alter that" with the crucial yield-determining month of August still to come. Doane’s Midwest crop tour estimated Iowa soybean yields at 50+ bu/acre. Today was the last day of the western leg of the tour. The eastern leg starts on Sunday and ends Tuesday. Aug 14 Soybeans closed at $12.07 1/2, up 6 1/2 cents; Nov 14 Soybeans closed at $10.84 3/4, up 8 1/4 cents; Aug 14 Soybean Meal closed at $395.30, up $3.80; Aug 14 Soybean Oil closed at 36.24, up 4 points.

Corn: The corn market closed slightly lower. Weekly export sales came in at 291,500 MT of old crop and 1,143,400 MT of new crop. That was a bit better than trade expectations on the new crop which were in the 400-600 TMT region. Bearish news came from Allendale forecasting US 2014 corn yields at a bin-busting 174.1 bu/acre, the largest estimate I've seen yet. It's also miles above the USDA's 165.3 bu/acre. "Allendale said that its forecast implied a record US harvest of some 14.6bn bushels, well above the 13.86bn bushels that the USDA is factoring in," said That's a record crop by some considerable distance, and would also be the second in a row for the US. "The broker believes that futures will hit $3.30 a bushel in the autumn, when the weight of supplies from harvest typically depresses markets to seasonal lows," Agrimoney added. On the weather front "the GFS model is predicting temperatures 5-10 F below normal to close out the month. The 6-10 day forecast continues exceptionally cool," said Martell Crop Projections. The market continues to view this cool scenario as not being a problem - at least for now. However, it will "further retard Midwest crop development, increasing the risk of freeze damage in the fall," Martell noted. "China has officially asked the USDA to certify a 0% tolerance for the MIR 162 trait on shipments of DDGs for export to that country," reported Benson Quinn. That would seem to effectively close the door to US DDGs exports to China. It also hints that the country's stance on MIR 162 is unlikely to change any time soon, casting a cloud over US corn acceptance in China too. Sep 14 Corn closed at $3.61 1/2, down 1 cent; Dec 14 Corn closed at $3.69 1/2, down 1 1/4 cents.

Wheat: The wheat market closed around 1-4 cents lower. Weekly export sales of 443,200 MT were in line with expectations, if unspectacular. Separately, South Korean buyers bought 27,400 MT of US wheat for Dec shipment and 30,700 MT of US wheat for Dec-Jan shipment. Japan bought 94,586 MT of food wheat for September shipment comprising of their regular mix of US, Canadian and Australian origin. The Wheat Quality Council’s 3-day wheat tour estimated US 2014 spring wheat yields at 48.6 bu/acre (said to be the highest since 1992). That's up from 44.9 bu/acre a year ago and compares favourably with the five year average of 44.7 bu/acre. Reuters reported that the Indian government is to release 10 MMT of state-owned wheat stocks onto the open market. French wheat prices rose for a third day as traders remain jittery over possible large-scale quality downgrades there. Russia continues to report very impressive wheat yields, and suggests that the quality of this year's crop is good, with 83% of the Stavropol wheat harvest said to be of milling grade for example. They've harvested 29.2 MMT of wheat so far off 32% of the intended area, with yields averaging 3.6 MT/ha versus 3.06 MT/ha a year ago. Russian 12.5% milling wheat is said to be offered around $238-242 FOB the Black Sea. Although Egypt bought wheat off Russia, Romania and Ukraine yesterday, many buyers are shying away from the latter for the time being due to the political uncertainty and unrest in the country. Dryness is said to be potentially damaging wheat yields in Australia. Sep 14 CBOT Wheat closed at $5.28 3/4, down 2 cents; Sep 14 KCBT Wheat closed at $6.20 1/2, down 3 cents; Sep 14 MGEX Wheat closed at $6.19 3/4, down 1 1/4 cents.