Chicago Markets Crash To New 4-Year Lows
19/09/14 -- Soycomplex: Beans closed at new 4-year lows on harvest pressure and talk of stunning early US yields. Dollar strength was also a negative feature. The USDA announced 1.236 MMT of US beans sold to China under the daily reporting system. This was simply part confirmation of the showcase 4.8 MMT deal announced earlier in the week. A Safras expert said that Brazilian farmers had only sold around 10% of their 2014/15 soybean crop versus being 22% sold on new crop this time a year ago. After the close Informa revised its 2014 US soybean planted area estimate to 83.7 million acres, down 1.2 million from USDA’s 84.8 million. They forecast 2015 US plantings however rising to 87.65 million acres, a new all time high. With record large production in the US this year now looking assured, and significant increases in output from South America also thought likely to be in the pipeline early next year, 2014/15 ending stocks are already seen jumping to all-time highs. The prospect of a further near 5% rise in US plantings next year would only further add to the abundance of global soybean supplies in the following season. Weekend weather forecasts look conducive for a pick up in early US harvest activity. Nov 14 Soybeans closed at $9.57, down 14 1/2 cents; Jan 15 Soybeans closed at $9.65 1/4, down 14 1/4 cents; Oct 14 Soybean Meal closed at $324.10, down $4.70; Oct 14 Soybean Oil closed at 32.46, down 26 points. For week, Nov 14 beans were down 28 1/4 cents, with Oct 14 meal losing $14.40 and Oct 14 oil sliding 9 points.
Corn: The corn market beat last Thursday's 4-year closing low for a front month by a quarter of a cent. As with beans, it's harvest pressure (historically Chicago corn often doesn't bottom until October) and reports of very impressive early yields doing the damage. "Despite the corn market sliding into oversold conditions, corn charts offer very little hope with new lows for the session and all momentum studies pointing lower," said Benson Quinn Commodities. The USDA announced 375,936 MT of US corn sold to Mexico for 2014/15 shipment. Much more will be needed if we end up with a US corn crop of around 14.4-14.5 billion bushels, or even higher. Dollar strength won't help US corn make it to destinations farther afield than Mexico either. The Argentine Ag Ministry forecast all corn plantings there down 8.2% this year. The Buenos Aires Grains Exchange forecast corn for grain plantings down 16%, and said that sowing of the 2014/15 crop is 4.3% done so far. Russia's corn crop is 20.7% harvested at 2.8 MMT. Ukraine's is 12% done at 2.42 MMT. Informa estimated US 2014 corn plantings at 89.3 million acres, down 2.3 million acres versus the current USDA estimate of 91.6 million. They estimated US corn plantings falling further to 87.27 million acres next year as growers turn to beans. US weather conditions over the weekend look largely beneficial for harvest activity. Last week the USDA said that nationally 4% of the crop had been harvested versus 9% for the 5-year average. They will update us on that on Monday night. Dec 14 Corn closed at $3.31 1/2, down 6 3/4 cents; Mar 15 Corn closed at $3.44 1/4, down 6 1/2 cents. Dec 14 corn ended the week 7 cents lower than it began it.
Wheat: The wheat market slumped to fresh more than 4-year lows of its own. Yesterday's weekly export sales of little more than 300 TMT highlight the fact that for US wheat competition remains fierce around the globe despite recent price declines. So too does the result of this week's Egyptian tender. They are said to be tendering again to buy wheat for October 21-31 delivery over the weekend. Let's see who's willing to sharpen the pencil the most on Monday. The Buenos Aires Grains Exchange left their estimate for Argentine wheat plantings unchanged at 4.1 million hectares, a 13% rise on a year ago. The Argentine Ag Ministry are even more bullish, predicting plantings up 23% at 4.5 million hectares, and saying that this area is now virtually all sown. They said that 83% of the crop is tillering and 5% already at the heading stage. The Russian wheat harvest is 73.2% complete at 53.8 MMT, with the barley crop now 85.3% cut at 19.6 MMT, according to the Ag Ministry. Kazakhstan said that their 2014 grain harvest was past halfway, at 51.4% done, producing a crop of 8.3 MMT to date. Ukraine has finished with it's wheat harvest and is now concentrating on corn. Southern Plains winter wheat areas are said to have picked up some needed moisture this week, which will be of benefit to newly planted crops there. Informa estimated US 2014 all wheat production at 2.046 billion bushels, which is 16 million above the USDA's latest figure. Dec 14 CBOT Wheat closed at $4.74 1/2, down 14 cents; Dec 14 KCBT Wheat closed at $5.60 1/4, down 9 1/2 cents; Dec 14 MGEX Wheat closed at $5.35 1/2, down 14 3/4 cents. For the week, Dec 14 Chicago wheat lost 28 cents, with Kansas down 33 cents and Minneapolis losing 42 1/2 cents.
