Chicago Grains Mostly Lower, Large US Crops Loom
18/07/14 -- Soycomplex: Beans closed mixed but mostly lower, save for the front end. Strong Chinese buying has been rumoured this week, following the dip in prices to 2 1/2 year lows. The USDA appeared to confirm this by announcing 116,000 MT of optional origin soybeans sold to China for 2014/15 delivery, along with 464,000 MT to unknown under the daily reporting system. Thailand bought 150,000 MT of South American soymeal for Dec-Feb shipment. Argentina's Ag Ministry that farmers there have sold 45.53% of their 2013/14 soybean crop versus 52.43% a year ago. Negotiations in the labour dispute in Argentina's Rosario between dock workers and the government have been pushed back until Monday, although their strike rumbles on. Argentine truckers may also strike on Monday. SocGen forecast 2014/15 US soybean ending stocks at a weighty 464 million bushels versus the USDA's current forecast of 413 million and well over triple carryout at the end of 2013/14 of 140 million bushels. They estimated the average Q3 soybean average price at $10.85/bu and forecast the Q4 soybean average price rising to $11.17/bu. Oil World forecast the global rapeseed crop at 68.3 MMT, a 2% reduction on last year, led by a sharp decline for Canada - down from 17.96 MMT in 2013 to 14.8 MMT in 2014. They estimated global sunseed output at 40.5 MMT versus 42.1 MMT last year. Aug 14 Soybeans closed at $11.76, up 1 1/4 cents; Nov 14 Soybeans closed at $10.84 1/2, down 9 1/2 cents; Aug 14 Soybean Meal closed at $380.00, down $0.50; Aug 14 Soybean Oil closed at 36.47, up 10 points.
Corn: The corn market slumped to fresh 4-year lows on a continued non threatening US weather outlook. "Reduced rainfall and strong sunshine this week has favoured Midwest corn and soybeans, though crop development has been set back by sharply cooler temperatures. Drier weather in the Midwest this week is beneficial for corn following several weeks of relentless rainfall previously," said Martell Crop Projections. The outlook for bumper 2014 US corn production continues to weigh. SocGen forecast average 2014 US corn yields of 167 bu/acre versus 165.3 bu/acre currently from the USDA. The vast majority of the trade are now factoring in a number of 167-170 bu/acre it would seem. Some estimates, like yesterday's from the Commodity Weather Group (CWG), a US weather forecasting firm, are even higher. The USDA seem likely to revise their estimate upwards next month once we have passed the critical pollination period of middle to late July. Despite potentially higher production in 2014, SocGen however estimated 2014/15 US corn ending stocks at "only" 1.56 billion bushels versus the USDA's current 1.8 billion forecast and 1.246 billion in 2013/14. They aren't too bearish on prices either, forecasting an average Q3 US corn price of $4.44/bu and a Q4 average price of $4.38/bu. Argentina's Ag Ministry said that growers there have sold 49.15% of their 2013/14 corn crop versus 69.49% a year ago. Japan's corn usage in feed was 46.8% in May versus 42% in May 2013 as the discount to wheat returns to more "normal" levels, according to the Ag Ministry there. Sep 14 Corn closed at $3.70, down 9 1/2 cents; Dec 14 Corn closed at $3.77 1/2, down 9 3/4 cents.
Wheat: The wheat market closed anywhere from 6 to 18 cents lower on the day, reversing yesterday's "knee jerk" price reaction to the news of the Malaysian passenger jet being shot down over Ukraine. Despite US wheat prices falling to 4 year lows, they still aren't picking up a great deal of export business, aside from what you might call from "traditional" buyers. Yesterday's weekly export sales of 320,700 MT were far from spectacular. Iraq bought 100,000 MT of hard wheat from Russia and Canada for Oct-Nov shipment. Russia remains a very active and aggressive seller, with their 2014 wheat harvest now 22.7% done and average wheat yields said to be up 14% at 3.61 MT/ha. Average Russian grain yields, including barley, are up by even more. The Argentine Ag Ministry said that farmers there have only forward sold 61.76% of their 2013/14 wheat crop versus 96.10% a year ago. They said that Argentine farmers will plant 4.5 million hectares of wheat for the 2014/15 harvest, an increase of 23% versus last year. Plantings are so far 73% complete, a similar figure to 12 months ago, they added. The final planted area will be dependent upon some waterlogged and flooded areas returning to more normal levels, they said. The Buenos Aires Grains Exchange yesterday cur their Argentine planted area estimate to 4.2 million ha, saying that 80% of the crop was already in the ground. This large jump in plantings in Argentina this year will potentially impact upon demand for US wheat in the first half of 2015, as Brazil (who are also hoping for/expecting a large jump in production of their own this year) have been big "bonus" buyers of US wheat this year. Sep 14 CBOT Wheat closed at $5.32 1/2, down 18 1/4 cents; Sep 14 KCBT Wheat closed at $6.33, down 16 cents; Sep 14 MGEX Wheat closed at $6.30 1/4, down 6 3/4 cents.
