Chicago Grains Rally On Frost Talk, Delayed Harvesting
06/10/14 -- Soycomplex: Beans closed sharply higher as talk of possible weekend frost damage in the upper Midwest and northern Plains did the rounds. "With the November contract closing up 30-cents, this was the largest one day gain for a front month contract since the back-to-back two day rally in the expiring August contract on Aug 8 and 11," said Benson Quinn Commodities. Further south and east it's rain that's the problem, further stalling the already late harvest. Elsewhere there's also chatter about southern Brazil being too wet and northern Brazil being too dry! Given the existing heavily oversold nature of the soybean market it doesn't take a lot to provoke a short covering rally like this one. Weekly export inspections for beans came in at a quite impressive 974,341 MT today. Cumulative exports are now 35% ahead of where they were this time a year ago. After the close the USDA estimated the 2014 US soybean harvest at 20% complete, up from 10% a week ago, but well behind the 5-year average pace of 35% done. They increased good to excellent crop conditions by one point to 73%. They said that 83% of the crop is dropping leaves versus 84% normally. Nov 14 Soybeans closed at $9.42 1/4, up 30 cents; Jan 15 Soybeans closed at $9.50 1/2, up 30 cents; Oct 14 Soybean Meal closed at $320.30, up $12.30; Oct 14 Soybean Oil closed at 33.32, up 103 points.
Corn: The corn market closed around 9 cents higher. Again it was frost talk for a delayed US corn crop that added the bullish momentum. "Conditions have been unseasonably cold the past few mornings in the northern corn belt with freezing temperatures in immature corn. Saturday morning temperatures bottomed out at 30-32 F in eastern South Dakota, Nebraska, northern Iowa, southern Minnesota and western Wisconsin. North Dakota, not a major corn state, experienced a hard freeze with temperatures as low as 28 F. Only 60% of US corn was ripe and 'safe from frost' as of September 29, compared to 79% on average 1985-2013. An exceptionally cool July proved to be a mixed blessing, promoting favourable pollinating conditions in corn that increased yields, but also slowing down corn development," said Martell Crop Projections. "The forecast continues cool, calling for temperatures 4 - 10 F below average in the upcoming week. The jet stream would carve out a cool trough that becomes entrenched over the Great Lakes and Midwest. A hard freeze is not indicated, though minimum temperatures may drop to 37 F or 38 F on a couple nights," they added. None of that sounds too threatening to me. After the close the USDA said that the 2014 US corn harvest had only advanced 5 points from a week ago to 17% complete as of Sunday night. Some estimates had been for this year's crop to be 25-30% harvested by now. The 5 year average is 32%. Good to excellent conditions were unchanged at 74%. Dec 14 Corn closed at $3.32 1/2, up 9 1/4 cents; Mar 15 Corn closed at $3.45 1/4, up 9 cents.
Wheat: The wheat market closed around 5 to 8 cents higher, supported by corn. The frost talk isn't really an issue for US wheat, with the spring wheat harvest now 96% complete. Further south, the outlook for winter wheat for 2015 is improving. "Hurricane Simon - southwest of Baja in Mexico - is expected to move onshore spreading a swath of heavy, soaking rains into the Southwest US Desert. Soaking rains would then spread east across the middle and lower Mississippi Valley reaching the Appalachian Mountains. Winter wheat farms in Texas, Oklahoma and Kansas would benefit from showers, boosting topsoil moisture for wheat planting and development," said Martell Crop Projections. "Indeed the 2015 wheat crop is off to a favourable start with mostly good field moisture. This is sharp contrast from the severe fall drought a year ago, during the fall planting campaign that hampered wheat development, ultimately turning into a historic drought that shrank the bread-wheat harvest by 30%," they added. The USDA put winter wheat plantings at 56% complete, up from 43% a week ago and 3 points ahead of the 5-year average. Winter wheat emergence is at 28% versus 24% on average at this time. In other news, Oman bought 60,000 MT of German wheat for Jan shipment. Thailand bought 120,000 MT of Black Sea origin wheat for December shipment. Weekly export inspections were reasonably good at 650,560 MT. Dec 14 CBOT Wheat closed at $4.91 1/2, up 5 3/4 cents; Dec 14 KCBT Wheat closed at $5.75 1/2, up 7 1/2 cents; Dec 14 MGEX Wheat closed at $5.51 3/4, up 8 1/4 cents.
