Chicago Grains Tumble On Bearish USDA Report

11/09/14 -- Soycomplex: Beans closed lower across the board as the USDA came out with a higher US 2014 yield and production estimate than the trade expected, along with larger US and world ending stocks for 2014/15. Yields this year were pegged at 46.6 bu/acre, up from 45.4 bu/acre in August and versus the average trade guess of 46.3 bu/acre. Production was forecast at 3.913 billion bushels compared to the average trade estimate of 3.883 billion. "The US season-average soybean price is projected at $9.00 to $11.00 per bushel, down 35 cents on both ends of the range. Soybean meal prices are projected at $330 to $370 per short ton, down $10.00 on both ends of the range," they said. They estimated 2014/15 soybean production in Brazil up 3 MMT from a month ago to a record 94 MMT, with Argentina's crop raised 1 MMT to 55 MMT. World soybean ending stocks in 2014/15 were raised from 85.6 MMT to 90.2 MMT, a record high and well above the 87.24 MMT that the trade was expecting. Chinese imports were increased 1 MMT to a new record 74 MMT. All this data overshadowed the weekly export sales numbers for the new 2014/15 marketing year, which began September 1, which came in at 984,300 MT, with China (658,200 MT) and unknown destinations (105,000 MT) the largest buyers. Sep 14 Soybeans closed at $10.61 1/2, down 9 1/2 cents; Nov 14 Soybeans closed at $9.81 1/2, down 12 1/4 cents; Sep 14 Soybean Meal closed at $426.70, down $16.10; Sep 14 Soybean Oil closed at 31.44, down 14 points.

Corn: The corn market slumped to new lows as the USDA raised their 2014 US yield estimate to a record 171.7 bu/acre. Whist this is not the highest estimate in the market, it was a bushel/acre higher than the trade expected. US production is now forecast at an all time high 14.395 billion bushels versus trade expectations of 14.288 billion. The market is now expecting even further yield and production increases could be in the pipeline next month. China's 2014/15 corn crop estimate was cut 5 MMT to 217 MMT, and Argentina's was trimmed 3 MMT to 23 MMT, whilst Brazil's was raised 1 MMT to 75 MMT. Even so, global ending stocks were still forecast up 2 MMT from their prior estimate to 189.9 MMT. Weekly export sales for the 2014/2015 marketing year, which began September 1, came in at 563,200 MT. "As long as the market continues to put in new lows for the move the technicals have little chance of offering much support. On the cusp of harvest expanding at a much quicker pace and with these numbers and the trade’s future expectations, it’s tough to make much of a bullish case," said Benson Quinn Commodities. The long term historic trend for US corn futures to put in their yearly lows in October is well known. Sep 14 Corn closed at $3.31 3/4, down 7 cents; Dec 14 Corn closed at $3.41, down 4 3/4 cents.

Wheat: The wheat market closed sharply lower as the USDA hiked global production to a record 720 MMT, driven mainly by larger crops in the EU and Ukraine. Lower US exports and increased ending stocks were a feature. US exports were lowered 0.5 MMT to 25 MMT "as competition intensifies with other major exporters". US ending stocks were raised 35 million bushes to 698 million versus 663 million a month ago and the average analysts guess of only a slight increase to 667 million. "Russia’s investment in deep water port capacity and improvements in logistics management are boosting its ability to ship larger quantities of grain. Modernization of grain loading equipment, storage, and rail transportation have eased bottlenecks that caused shipping delays in the past," they noted. "Investments in ports and logistics management have contributed to record shipments. In a typical year, nearly 40 percent of wheat exports are shipped during July-September, immediately following harvest. This year, exports in August were a record 4.2 million tons (20 percent of the total export forecast), up 40 percent from the same month last year. Russia’s wheat and barley exports are both projected at record levels." they added. Weekly export sales came in at a respectable 690,200 MT. Sep 14 CBOT Wheat closed at $5.03, down 15 3/4 cents; Sep 14 KCBT Wheat closed at $5.95 3/4, down 9 1/2 cents; Sep 14 MGEX Wheat closed at $5.99, down 15 cents.