Chicago Corn And Soybeans Eying 5-Year Lows
30/09/14 -- Soycomplex: Beans closed lower, despite the USDA cutting Sep 1 stocks to just 92 million bushels, down 38 million from their previous estimate and the tightest in over 40 years. That came even with a 0.7 bu/acre increase in yields in 2013, and a corresponding 69.2 million bushel rise in production last year to 3.358 billion bushels. "This surprise offered the producer some opportunities during the session to sell beans higher if they were paying close attention because at the end of the day big yield reports and an expanding (2014/15) balance sheet had the market closing in the red," said Benson Quinn Commodities. Dollar strength was also a negative influence again today, they added. AgroConsult estimated Brazil’s 2014/15 bean crop at a record 94.8 MMT, although down slightly on their previous forecast of 95.1 MMT. AgRural said Brazil’s 2014/15 bean crop was 2% planted as of Friday versus 1% a year ago. Good early progress has been made in Parana where soil moisture is said to be abundant. Dr Cordonnier has the 2014/15 Brazilian bean crop estimated at 95.0 MMT, unchanged from his previous forecast. He has the Argentina bean crop estimated at 55.0 MMT, also unchanged from previously. The market appears to be far more interested in the looming record large US and South American soybean crops than looking back at how tight things were in 2013/14. A test of $9.00/bushel looks like it might be on the cards, we haven't been down there since 2009. Nov 14 Soybeans closed at $9.13 1/4, down 10 1/4 cents; Jan 15 Soybeans closed at $9.21 1/4, down 11 cents; Oct 14 Soybean Meal closed at $304.60, down $3.50; Oct 14 Soybean Oil closed at 32.27, down 52 points.
Corn: The corn market closed lower, with 2013/14 US ending stocks coming in 45 million bushels larger than the trade had been expecting at 1.236 billion bushels. Corn now trades at new contract lows and looking to test $3.00/bushel to the downside, that would be the lowest level on a front month since 2009. Reports of huge corn yields continue to hit the market. The USDA may reflect at least some of that in next week's WASDE report. Dr Cordonnier has the Brazilian total corn crop estimated at 75.0 MMT, with Argentina's at 22 MMT, both unchanged from his previous estimates. South Africa's CEC estimated the 2014 corn crop there at 14.307 MMT, unchanged from previously. The Ukraine corn harvest is said to be around 40% complete, with progress in Russia a little bit less than that. Ukraine new crop corn offers FOB the Black Sea are said to be around $162/tonne. Fund selling in corn was estimated at a net 5,000 contracts on the day today. "Technicals remain weak with new contract lows expected to trigger additional selling. Perhaps, there was more emphasis on the sell side due to quarter end, but there isn’t much of a case to be made on the long side," said Benson Quinn Commodities. As with beans, dollar strength was also a negative today. So too is the fact that the EU 2014 corn harvest is now underway, with a record crop expected there too. French corn growers group AGPM recently estimated the 2014 corn crop there at a record high 17.25 MMT, up 17% from last year. Some other estimates are now as high as 18 MMT. Dec 14 Corn closed at $3.20 3/4, down 5 cents; Mar 15 Corn closed at $3.33 1/2, down 5 cents.
Wheat: The wheat market closed mostly lower, pressured by corn sliding to contract lows. The USDA put 2014 US all wheat production at 2.035 billion bushels, which was almost exactly in line with the average trade estimate of 2.037 billion. Sept 1 all wheat stocks came in at 1.914 billion bushels, which was a little below the average trade guess. Egypt's GASC tendered for wheat for Nov 1-10 delivery late in the day, with the results expected tomorrow. It will be interesting to see if US wheat remains competitive versus French, Russian and Romanian offers - especially given the strength of the dollar. GASC are currently said to have only bought 355,000 MT of wheat for October delivery so far, not much more than half the 650,000 MT that they bought in October of 2013. It's unclear whether they've simply read the market well or are short of cash. The fact that they are now in the market for November suggests that it might be the latter. Russia kicked off it's 2014/15 intervention program buying 19,555 MT of a mixture of wheat and barley. Their aim is to buy 5 MMT over the coming months to replenish state-owned stocks. "Late price action (in corn) and Chicago wheat eventually gaining on corn hints at the need for a correction in that market. I expect there is a considerable position long corn/short Chicago wheat. A better correction in Chicago wheat could force liquidation of these spreads," said Benson Quinn Commodities. Dec 14 CBOT Wheat closed at $4.77 3/4, down 3 1/2 cents; Dec 14 KCBT Wheat closed at $5.58, down 8 1/2 cents; Dec 14 MGEX Wheat closed at $5.33 1/2, down 5 3/4 cents.
