Chicago Market Closing Comments
16/09/14 -- Soycomplex: Beans closed lower, despite there being some bullish news about. A worrying sign. The FSA reported prevented soybean plantings of 841,000 acres, up from 827,000 in August. A Chinese delegation to the US signed an agreement to buy 4.8 MMT of US beans in a "showcase" deal. Nov 14 beans tried to break through the $10/bushel mark on the news, but failed. Reuters actually reported that Chinese crush margins are poor and that bean imports could fall. That would be very bad news for the entire complex, with the world set to produce a record crop to cater for China's oft quoted "insatiable" desire for soybeans. As has been mentioned before, the market is extremely sensitive to any mention of Chinese soybean imports slowing up, as they are forecast to account for 66% of world bean trade in 2014/15. The Chinese government sold less than 70 TMT of the 330 TMT of soybeans that they had up for auction today. Dr Cordonnier estimated 2014 US soybean yields at a record 46.7 bu/acre versus a previous estimate of 45.5 bu/acre. He also estimated Brazil's 2014/15 soybean crop at a record 95 MMT. Nov 14 Soybeans closed at $9.80 3/4, down 8 3/4 cents; Jan 15 Soybeans closed at $9.89 1/4, down 8 1/4 cents; Oct 14 Soybean Meal closed at $338.30, down $0.50; Oct 14 Soybean Oil closed at 32.81, down 46 points.
Corn: The corn market managed small gains. The FSA reported corn prevented plantings of 1.58 million acres versus 1.54 million in August. A Bloomberg report said that Chinese regulators were discussing changing inspection requirements for shipments of US corn byproducts. They were a big buyer of US DDGS in the first half of the year, but recently threw those imports into question by saying that all future shipments would carry a zero tolerance attitude towards the MIR 162 corn variety. Cargill said that it will be closing a corn mill in Memphis in Jan 2015 due to underutilization. Dr Cordonnier increased his estimate for US 2014 US corn yields to a record 173.0 bu/acre, up 3 bu/acre from his previous forecast. Reports from the field continue to suggest much better than expected early yields. Last weekend's frost threat appears to have done little damage, and the weather forecasts for the week ahead are conducive for good progress to be made with the 2014 harvest. The US Energy Dept are out with their weekly ethanol production data tomorrow. Reuters reported that the EU-28 corn crop could top 70 MMT for the first time ever this year. Dec 14 Corn closed at $3.43 3/4, up 3/4 cent; Mar 15 Corn closed at $3.55 1/2, up 1/2 cent.
Wheat: The wheat market closed lower across the three exchanges. Egypt's GASC bought three cargoes (180 TMT) of French wheat at the knock down price of $247.49/tonne C&F. US wheat wasn't even offered. The feeling is that the French badly needed the business, given that it looks unlikely that it will export anything like it's normal volume to traditional top buyer Algeria this season. The silo system in Rouen is said to be groaning under the volume of wheat it has in store, exacerbated by sluggish exports. Ukraine said that it had exported 7 MMT of grains so far this season, including just over 4 MMT of wheat and 2.5 MMT of barley - the latter figure being the USDA's forecast for the entire season as they maintain their stance of being very aggressive early season sellers. The FSA reported US wheat prevented plantings of 1.376 million acres, up slightly on 1.36 million in August. However it then immediately cast a cloud over it's numbers by saying that due to budgetary constraints and lack of personnel, not all the paperwork was in place yet. The wheat market continues to remain under pressure, weighed down by a record world crop and an impending all time high corn crop too. Dec CBOT wheat made a new contract low of $4.91 today. Dec 14 CBOT Wheat finally closed at $4.96 1/4, down 4 1/2 cents; Dec 14 KCBT Wheat closed at $5.83 1/4, down 3 cents; Dec 14 MGEX Wheat closed at $5.65 1/2, down 3 cents.
