Chicago Markets Slump, Wheat And Corn At 4-Year Lows
07/07/14 -- Soycomplex: The entire complex closed lower as US traders came back to their desks in bearish mode after a long weekend break. Despite wetness concerns most seem to view current conditions in the Midwest as non-threatening. The USDA would seem to concur that the outlook is promising, leaving soybean good/excellent crop condition ratings unchanged from at week ago at 72%, which is 5 points ahead of this time last year. Crop emergence is now 98%, which is one point better than average, and 24% of the crop is blooming versus 10% a week ago and 21% normally. Weekly export inspections of 59,959 MT were unimpressive, but nor do they need to be. The trade however now seems firmly focussed on new crop prospects. The latest Commitment of Traders report shows fund money continuing to desert the grains sector, including now soybeans too. They were estimated to have sold a net 4,000 soybean contracts today. CONAB come out on Wednesday with their revised Brazilian crop estimate updates. Last month they had the 2013/14 Brazilian soybean crop estimated at 86.1 MMT. Jul 14 Soybeans closed at $13.63, down 24 3/4 cents; Nov 14 Soybeans closed at $11.25 1/2, down 8 cents; Jul 14 Soybean Meal closed at $443.70, down $3.30; Jul 14 Soybean Oil closed at 38.36, down 20 points.
Corn: The corn market closed sharply lower, slipping to levels not seen on a front month in almost 4 years. Sep 14 dipped below the psychologically important $4/bu mark, although it managed to eventually close just above that critical level. The USDA left corn good/excellent crop condition ratings unchanged from last week at 75% - with a minor shift if 1% extra going into the excellent category. They said that 15% of the crop is silking versus 18% normally, maybe a slight sign that the wet weather in some areas is retarding development a little. Nevertheless, optimism seems high for big yield potential this year. Weekly export inspections of just over 1 MMT were in line with expectations. Fund selling was estimated at a net 10,000 contracts on the day, as they continue to exit corn. The weekly Commitment of Traders report shows the non-commercial (fund/spec) trader reducing their net long to only a fraction over 26k lots as of last Tuesday night. China were reported to have only sold 1.56 MMT of the 5 MMT of corn on offer at last week's government auction. They will attempt to offload a further 5 MMT of surplus stocks this week. Conab are out on Wednesday with their latest 2013/14 Brazilian crop production estimates. Last month they had the Brazilian corn crop estimated at 77.9 MMT. Jul 14 Corn closed at $4.09 1/4, down 7 3/4 cents; Sep 14 Corn closed at $4.00 1/2, down 9 cents.
Wheat: The wheat market closed sharply lower across the three exchanges, and with Chicago wheat faring the worst of the bunch. Jul 14 Chicago wheat slumped past the January lows to reach the lowest level seen on a front month since July 2010. Weekly export sales of 417,063 MT were in line with expectations. That takes inspections for the new 2014/15 season to date to 2.3 MMT versus 3.1 MMT this time a year ago. Good harvest weather is finally in the forecast for the Central/Southern US Plains for the week ahead. The weather is also seen co-operating on the Canadian Prairies where it's forecast warmer and drier this week. Both the Russian and Ukraine harvests are running a little behind last year's pace, but yields are around 8-11% higher than in 2013. The USDA reported the 2014 US winter wheat harvest at 57% complete versus 60% normally at this time. They upped the proportion of the crop rated good/excellent by one point from last week to 31%, although that's still 3 points behind year ago levels. Spring wheat conditions were unchanged on a week ago at 70% good/excellent. Spring wheat at the headed stage was 47%, the same as the 5-year average. Conab will report on Brazilian wheat production prospects on Wednesday, last month they estimated the 2014 crop at 7.37 MMT. Jul 14 CBOT Wheat closed at $5.45, down 23 cents; Jul 14 KCBT Wheat closed at $6.78 1/2, down 18 1/2 cents; Jul 14 MPLS Wheat closed at $6.57, down 3 3/4 cents, although other months posted double digit losses.
