Chicago Markets Decline Following Release Of USDA Report
10/12/14 -- Soycomplex: Beans closed lower, and near session lows. The decline came despite the USDA raising US 2014/15 soybean exports and lowering ending stocks a bit more than the average trade guesstimate. Exports were increased 40 million bushels, with a corresponding drop in carryout of the same magnitude to 410 million bu. That was a little below the 425 million ballpark that was the average trade guess. There were no changes to 2014/15 production for the US, Brazil, Argentina, China or India. Paraguay and Canada were tweaked a little higher. The world import picture was virtually unchanged, except for a small increase for Indonesia. A 1 MMT rise in US soybean exports was virtually matched by reductions of 700 TMT and 200 TMT respectively for Brazil and Argentina. The US crush was left unchanged, contrary to some people's ideas. World ending stocks therefore came in at around 400 TMT lower than last month at almost 89.9 MMT, which was pretty much in the middle of the 88.5-91.5 MMT range expected. Jan 15 Soybeans closed at $10.32, down 17 1/4 cents; Mar 15 Soybeans closed at $10.38 1/2, down 17 cents; Dec 14 Soybean Meal closed at $405.20, down $6.40; Dec 14 Soybean Oil closed at 31.67, down 24 points.
Corn: The corn market closed around a cent or two lower. The USDA lowered US 2014/15 corn ending stocks by 10 million bushels to just under the 2 billion mark, contrary to trade expectations for a 15 million increase. World ending stocks came in at 192.2 MMT, a small rise versus last month and almost slap bang in the middle of trade expectations of between 190 and 194 MMT. The trade was expecting production in Argentina to be unchanged, and Brazil maybe to be lowered by 1 MMT. The USDA went the other way round, cutting Argentina 1 MMT to 22 MMT and leaving Brazil unchanged at 75 MMT. China's production was raised 1.5 MMT to 215.5 MMT, and Europe's was increased 0.5 MMT to a record 73.6 MMT. China's import needs were scaled back from 2.5 MMT to now only 2 MMT "on a larger crop and as policies continue to encourage imports of alternate feed grains." Chinese sorghum imports were raised 400 TMT to 5 MMT. Conab forecast Brazil's 2014/15 corn crop at a large 78.9 MMT, which is some 10 MMT more than Informa said last week. This appears to suggest a larger "safrinha" crop than many think is possible given that this season's soybean harvest is likely to be later than hoped for. The US Energy Dept put ethanol production at a new record 988k barrels/day for the past week. Dec 14 Corn closed at $3.82 1/2, down 1/2 cent; Mar 15 Corn closed at $3.93 3/4, down 1 1/2 cents.
Wheat: The wheat market closed lower. The USDA estimated US ending stocks at 654 million bushels, up 10 million from last month. "US stocks are forecast slightly higher year-to-year in spite of a smaller crop as high relative prices make exports less competitive," they said. World wheat production was raised by more than 2 MMT to a new record 722.2 MMT. That came courtesy of a surprise hike in output for Canada, up from the 27.5 MMT forecast last month to 29.3 MMT. Kazakhstan's crop was also raised, up from 12 MMT to 12.5 MMT. Australia's crop was left unchanged at 24 MMT where some had expected a reduction. World ending stocks were increased 2 MMT to just shy of 195 MMT. These were only expected to come in around 191.8 MMT, from within a range of guesses from 189.5 MMT to 193.2 MMT. "Global wheat consumption is projected at a record in 2014/15. Food use is expanding because of population growth, urbanization, and rising incomes. Growth is particularly strong in Sub-Saharan Africa and Southeast Asia. Even with consumption at a record, exporter ending stocks are up nearly 20 percent from last year," they noted. Dec 14 CBOT Wheat closed at $5.93 1/4, down 7 1/4 cents; Dec 14 KCBT Wheat closed at $6.14 3/4, down 2 1/4 cents; Dec 14 MGEX Wheat closed at $5.98, down 6 cents.
