Chicago Grains Closing Comments From Friday Night

03/10/14 -- Soycomplex: Beans closed around 12-15 cents lower on rising production estimates and the outlook for some decent harvest progress to be made over the weekend and into the early part of next week. Benson Quinn said that they expect the US harvest to be 22-27% complete when the USDA release their crop progress report on Monday night. Harvesting was 10% done a week ago. Informa raised their US yield estimate by 2 bu/acre to 48.5 bu/acre, upping production from 3.875 billion bushels to 4.017 billion. Rabobank estimated yields at 48 bu/acre, with production at 4.021 billion. The USDA were 46.6 bu/acre and 3.913 billion in September. They revise their estimates next Friday. Rabobank forecast 2014/15 soybean production in Brazil at 92 MMT, with output in Argentina at 55 MMT, a combined increase of 5% or 7 MMT on last year. Informa raised their Brazilian soybean crop forecast by 1.7 MMT to 92.5 MMT. Safras e Mercado estimated Brazil’s 2014/15 crop even higher at 95.9 MMT. They said that Brazilian farmers had only sold 12% of their new crop versus 32% a year ago at this time. Stats Canada estimate the 2014 Canadian canola crop at 14.08 MMT, up sightly from 13.908 MMT previously, but below the average trade estimate of 14.6 MMT. Rabobank forecast US soybean prices at $8.90 in Q4 of this year and not much better - $9.00 - in Q3 of 2015. "A big crop is getting bigger. USDA monthly production report is a week from today. Seasonally, the market tends to score its harvest low in the first or second week of October. Harvest delays this week may hold that off for next week. But if South American crops are as big as anticipated..further lows look to be in the future," said Benson Quinn. Nov 14 Soybeans closed at $9.12 1/4, down 12 1/4 cents; Jan 15 Soybeans closed at $9.20 1/2, down 12 1/2 cents; Oct 14 Soybean Meal closed at $308.00, down $0.70; Oct 14 Soybean Oil closed at 32.29, down 38 points. For the week that puts beans 2 cents higher on the front month, with meal up 80 cents and oil 37 points higher.

Corn: The corn market closed with little change on the day, or for the week. Informa raised their 2014 US corn yield estimate from 171.8 bu/acre to 176.4 bu/acre, with production up from 14.024 billion bushels to 14.395 billion. Despite a much higher yield estimate than the USDA's existing 171.7 bu/acre, the production number only matches that from Washington due to a lower harvested area. "The trade is focused on big yields and really hasn’t embraced the potential effects of the significant acreage reductions Informa cites," noted Benson Quinn. Rabobank said that they are currently factoring in a 2014 US corn yield of 175 bu/acre, but that could eventually climb to 178-180 bu/acre by the December report. "Expectations of increasing yields from an already record-level crop will likely continue to drive prices down," they said. They forecast a Q4 2014 average corn price of $3.15, rising to $3.50 in Q2 of 2015. Stats Canada forecast the Canadian 2014 corn crop at 11.397 MMT, down from 11.43 MMT a month ago and below the 11.8 MMT that the trade was expecting. The French corn harvest was 3% done as of Monday, said FranceAgriMer. The Russian corn harvest is 46.5% complete at 5.7 MMT, said their Ag Ministry. The Ukraine corn harvest is 31% complete at 6.7 MMT, said their Ag Ministry. That implies a finished crop of 21.6 MMT rather than the Ministry's official forecast of 30 MMT and production of 30.9 MMT last year. Dollar strength continues to weigh on US prices. Yesterday's weekly export sales total was ho-hum at 638 TMT. Benson Quinn said that they expect the 2014 US corn harvest to be around 25-30% complete when the USDA report on that on Monday night. A week ago it was 12% done. Dec 14 Corn closed at $3.23 1/4, up 1/2 cent; Mar 15 Corn closed at $3.36 1/4, up 1/2 cent. For the week that puts Dec 14 1/4 of a cent higher, with Mar 15 up 3/4 of a cent.

Wheat: The wheat market closed higher on the day, and for the week, across the three exchanges. Stats Canada pegged the 2014 Canadian all wheat crop at 27.48 MMT versus the average trade estimate of 28.0 MMT and their August estimate of 27.705 MMT. "While 26% below last year’s monster crop, this is still a very good wheat crop," opined Benson Quinn. Rabobank lowered their forecast for Q4 2014 Chicago wheat prices to $4.50, rising to $4.75 in Q1 of 2015, before tailing off again to $4.60 in Q2 and Q3 of next year. "The hunt for quality is disrupting normal trade flows as global quantity is adequate yet quality is unevenly spread between major exporters, providing some price support," they said. However "rallies will be difficult to sustain without adverse weather. In addition, plummeting corn prices have been a key reason behind recent price losses in wheat," they added. Russia said that their 2014 wheat harvest had now reached 58.9 MMT off 89% of the intended area. They've now harvested close to 100 MMT of grain this year, with the Ag Minister today raising his estimate for final production to 110 MMT in bunker weight and 104 MMT after cleaning and screening, a near 14% increase on a year ago. Despite the strong US dollar yesterday's robust weekly export sales total of 741 TMT was supportive. As Rabobank point out the global demand for quality wheat is there, and should support that market as availability of such tightens up in the second half of the season. The destiny of feed wheat prices is however a different kettle of fish, with plentiful supply already looking likely to mean that a larger than normal proportion of this year's crop is carried over into 2015/16 in the hope that higher prices will eventually return. Dec 14 CBOT Wheat closed at $4.85 3/4, up 3 cents; Dec 14 KCBT Wheat closed at $5.68, up 6 1/2 cents; Dec 14 MGEX Wheat closed at $5.43 1/2, up 8 cents. For the week that puts Chicago wheat up 11 1/2 cents, with Kansas 4 1/4 cents firmer and the Minneapolis market 10 1/4 cents firmer.