Chicago Market Closing Comments - Friday Night
25/04/14 -- Soycomplex: Beans continue to yo-yo around, closing higher on the day, with the front end the biggest winner. For the week though it was a different story, with old crop losing and new crop ending virtually unchanged. Fund money was said to have ended up buying the best part of around 10,000 soybean contracts on the day. The USDA are expected to report on soybean planting progress for the first time on Monday afternoon. The figure on a national level is unlikely to be much higher than 2-3%. With all the talk of corn planting being late, we haven't yet heard much in the way of a mention of this having the knock-on effect of increased soybean acres, although the IGC did give this a passing nod in their April market report today. That placed the world soybean crop in 2013/14 at a record 282 MMT. They estimated the Brazilian crop at 86 MMT, up 0.4 MMT, and also a record. They forecast the Argentine soybean crop at 53.5 MMT, which was 0.5 MMT down on last month. China's import needs were trimmed a little to 68 MMT. This still looks ambitious given their current problems with Letters of Credit and cancellations/defaults. Support today came from the news that China's plans to begin auctioning off state owned soybeans on May 6 were to be postponed for a few weeks. The Buenos Aires Grains Exchange estimated Argentina's soybean crop at 54.5 MMT, unchanged from last week. They said that harvesting is 42.5% complete versus 21.4% a week ago and 56.2% a year ago. Argentina's Córdoba Grain Exchange estimated the state's soybean crop at a record 14.278 MMT, up from the 13.206 MMT estimated in March. Yield gains in Córdoba are seen negating problems in some other areas. Toepfer estimated the EU-28 2014 rapeseed crop at 21.09 MMT versus 20.84 MMT in 2013. ODA placed rapeseed production in Europe at 21.35 MMT. Stategie Grains currently say 21.55 MMT. May 14 Soybeans closed at $14.98, up 26 cents; Jul 14 Soybeans closed at $14.94 1/4, up 24 1/4 cents; May 14 Soybean Meal closed at $490.60, up $10.40; May 14 Soybean Oil closed at 42.92, up 33 points. For the week May 14 beans still fell 16 cents despite today's gains, meal added $2.30 and oil shed 49 points.
Corn: The corn market closed around 3 to 5 cents higher on the day. The IGC trimmed 11 MMT off it's 2014/15 world corn production estimate, largely due to a 10 MMT reduction for the US due to planting delays. Global output of 950 MMT is now 15 MMT down on last year. World 2014/15 ending stocks were cut from the 171.4 MMT forecast last month to 162.9 MMT, although that's still a build on this season's 157.7 MMT. They see production in Argentina this year at 24 MMT and output in Brazil at 72.5 MMT. The US 2014 corn crop is now pegged at 350 MMT versus 353.7 MMT last year. China's import needs are seen holding steady at 5 MMT. The Buenos Aires Grains Exchange said that the 2013/14 corn harvest there is 23.3% complete versus 19.8% a week ago and 35.3% a year ago. They estimated production at 24.0 MMT, unchanged from their previous estimate. The US weather continues to hold up corn planting progress. "Strong thunderstorms rumbled through the Midwest –Mid South last night spread eastward this morning. The 5 am radar shows widespread rain in Michigan, Indiana Ohio and Kentucky, with embedded strong showers. This batch of showers would move east to the mid Atlantic region in the next 24 hours. Brief drying is expected Saturday in the Midwest before another round of showers resumes Sunday. Still more heavy rain is coming next week from a slow moving trough of low pressure aloft. This is dreary wet forecast precluding any fieldwork or planting," said Martell Crop Projections. "The forecast calls for 3-4 inches of rain in Iowa and Illinois and another 1.5-2 inches in Minnesota, Wisconsin, southern Michigan, Indiana, Ohio and eastern Missouri. Extreme wetness also is predicted in the Mid South. Once the rain finally stops, abnormally cold temperatures are predicted next week," they added. The USDA reported US corn planting at 6% complete as of last Sunday night, versus the 5-year average of 14%. A fresh update is due on Monday, when things might just about have crept up into double figures. May 14 Corn closed at $5.07, up 5 3/4 cents; Jul 14 Corn closed at $5.12 3/4, up 5 1/2 cents. For the week, May 14 corn gained 12 1/4 cents.
Wheat: The wheat market closed with double digit gains as tensions remain high in Ukraine, and things go from bad to worse for US winter wheat on the Plains. "Drought stressed wheat in the Great Plains has received some rain from this stormy weather pattern, though coverage has been widely scattered. Northern Kansas received 1-2 inches of rainfall from locally strong thunderstorms this week. Rainfall was less significant in Oklahoma and Texas with widely scattered 0.50-0.75 inch amounts. Recent rainfall has been a drop in the bucket for hard red winter wheat, considering the historic drought that has evolved over the past few months. Since December 1, only 1.95 inches of rain has occurred compared to 5.23 inches normally for 37% of average. Wheat fields are dry through a deep soil layer. Thus, drenching rain would be required for any significant improvement," said Martell Crop Projections. The IGC trimmed 3 MMT of last month's 2014/15 world wheat production estimate to 697 MMT, and a 12 MMT decline on last year's record crop. The reduction was "mainly due to more normal average yields after the very high levels of the previous year," they said. Australia's 2014/14 wheat crop was seen falling to 25.5 MMT from 27 MMT last year. Canada's was predicted down to 29 MMT from 37.5 MMT, Russia's was cut to 51 MMT from 52.1 MMT and Ukraine's reduced to 20 MMT from 22.3 MMT. Production gains in 2014/15 were forecast for Argentina, up to 11.9 MMT from 10 MMT, Europe (up to 144.8 MMT from 142.2 MMT), Kazakhstan (up to 15 MMT from 13.9 MMT) and the US (at 59 MMT versus 58 MMT, although that was down from the 60 MMT estimated in March). China's wheat imports are seen falling from 8 MMT this season to only 3 MMT in 2014/15. "While there are some persistent concerns over less than ideal crop conditions, especially for winter wheat in the US, overall availabilities and 2014/15 wheat crop prospects remain generally good," they said. May 14 CBOT Wheat closed at $7.00 1/4, up 11 1/4 cents; May 14 KCBT Wheat closed at $7.75 3/4, up 16 1/4 cents; May 14 MGEX Wheat closed at $7.47 1/2, up 11 1/4 cents. For the week that puts Chicago wheat up 9 cents, with Kansas rising 27 3/4 cents and Minneapolis up 14 3/4 cents.
EU Grains Mostly Higher On The Day, Little Changed For The Week, Although Rapeseed Dives
25/04/14 -- EU grains closed mostly higher on the day, although little changed for the week. The exception was front month May 14 Paris rapeseed, which expires next Wednesday, which has taken something of a battering over the last few days.
May 14 London ended GBP2.00/tonne higher at GBP170.00/tonne, and new crop Nov 14 rose GBP1.60/tonne to GBP159.75/tonne. May 14 Paris wheat closed up EUR1.25/tonne at EUR217.25/tonne, Jun 14 Paris corn fell EUR0.75/tonne to EUR187.25/tonne and May 14 Paris rapeseed plunged EUR10.75/tonne to EUR396.00/tonne.
For the holiday-shortened week, May 14 London wheat was 15 pence lower, and new crop Nov 14 was GBP1.75/tonne lower. May 14 Paris wheat fell 25 euro cents, Jun 14 Paris corn was 75 euro cents lower, whilst May 14 Paris rapeseed crashed EUR27.75/tonne. Aug 14 will be the new front month on Paris rapeseed once the May 14 contract goes off the board next week. That closed at EUR368.25/tonne today, for a loss of EUR4.50/tonne.
The outlook for the EU-28 2014 rapeseed crop is promising, with production of around 21.1-21.6 MMT expected (versus around 20.8 MMT last year), depending on who's estimate you run with. The French, German and Polish rapeseed crops are all said to be around 2-3 weeks ahead of normal maturity, and have benefited from recent rains, and there's more in the forecast. Early and longer lasting flowering should bode well for final yields.
Winter wheat crops in France and Germany are also advanced after a generally mild winter. FranceAgriMer said today that 89% of the French winter wheat crop is at the 2 node stage, up from 67% a week ago and compared to only 20% this time last year. The wheat crop has now started heading in some regions, and winter barley is 12% heading nationally versus zero twelve months ago. Corn planting meanwhile is 68% complete, up 29 points in a week and versus only 25% sown this time a year ago.
French winter wheat is rated 74% good/very good, down a point on a week ago but up compared to 68% this time last year. Winter barley rated good/very good is 71% versus 73% last week and 67% a year ago.
The International Grains Council today forecast the EU-28 2014/15 all wheat crop at 144.8 MMT, up 1.8% on last year's 142.2 MMT. Exports will fall from this season's all time high of 31.2 MMT to 25.3 MMT, they said. EU-28 ending stocks are placed at 10.3 MMT in the season ahead versus 9.0 MMT this year.
The IGC estimated Russia's 2014/15 wheat crop at 51 MMT versus 52.1 MMT last year. They see output in Ukraine falling from 22.3 MMT to 20 MMT.
The EU-28 corn crop this year will total 65.3 MMT versus 64.5 MMT in 2013/14. Production in Ukraine will drop to 26.8 MMT from 30.9 MMT, they added. Ukraine's corn exports will fall from a record 20 MMT this season to 18 MMT in 2014/15, they forecast.
Russia's Ag Ministry said that the country had planted 4.8 million hectares of spring grains so far, which is around 15% of the intended area. Spring barley accounts for 2.6 million ha of that (29% of plan), with spring wheat at 433k ha (3.3%) and corn at 683k ha (26%). The Russian Ag Minister said that the country could produce 95-97 MMT of grains this year, if the weather is conducive.
The Ukraine Ag Ministry meanwhile said that only 1% of this year's winter grains had failed, a historically low number. They said that 94% of winter grains were in good to satisfactory condition, which is also better than normal.
Ukraine early spring grains have now been planted on 2.6 million hectares, along with a further 1.4 million ha of corn. Sunflower planting is past halfway at 2.2 million ha and 12% of the anticipated soybean area has also been sown, the Ministry said.
Ukraine's grain exports for the season so far currently stand at 29.13 MMT, including 18.4 MMT of corn, 8.2 MMT of wheat and 2.2 MMT of barley.
The developing political situation in Ukraine is keeping the market nervous. Deteriorating US winter wheat conditions are also supportive, as is the delayed start to US spring corn plantings in the Midwest, for now.
Chicago Ends Higher On US Weather Concerns, Ukraine Tensions
24/04/14 -- Soycomplex: Beans closed with modest gains. Weekly export sales came in at just 119 TMT for both crop years, with a small 800 MT of that being old crop. There was one 55 TMT Chinese cancellation in old crop. The trade had been expecting better new crop sales, with pre-report estimates in the region of 350-550 TMT. Actual exports also slowed to 182,200 MT, down 46 percent from the previous week and 70 percent below the prior 4-week average. Even so, shipments are now at 97% of the USDA target for the season. Stats Canada forecast the 2014 Canadian canola area at 19.8 million acres, down slightly on 19.9 million last year and well below trade estimates of a rise to 21.1 million. They did however note that some growers were still undecided on their cropping ideas when their survey was conducted, so it's possible that plantings could ultimately end up higher than this. May 14 Soybeans closed at $14.73, up 4 1/2 cents; Jul 14 Soybeans closed at $14.70 1/4, up 5 1/2 cents; May 14 Soybean Meal closed at $480.70, up $2.60; May 14 Soybean Oil closed at 42.61, up 11 points.
Corn: The corn market ended around a couple of cents lower. Weekly export inspections came in at 618,900 MT of old crop and 382,900 MT for new crop. That was broadly in line with trade expectations. That takes old crop commitments to 97% of the USDA forecast for the season, although 16.4 MMT of that is still unshipped. South Korea was this week's largest old crop buyer, taking 185,000 MT, including 115,000 MT switched from China and 60,000 MT switched from unknown destinations. China also cancelled 54,000 MT, and unknown destinations cancelled 215,900 MT. The dispute with China over MIR 162 GMO corn looks no closer to being resolved, so it's entirely possible that these cancellations involve switches of US corn intended for China now going to other destinations. South Africa's Crop Estimates Committee forecast the 2014 corn crop there at just over 13 MMT, which was up slightly on their previous estimate and well above 11.7 MMT a year ago. Stats Canada estimated 2014 corn plantings there at almost 3.4 million acres, versus nearly 3.7 million a year ago but bang on trade expectations. Talk of US spring corn plantings being late and therefore yield potential being lower persist. May 14 Corn closed at $5.01 3/4, down 1 3/4 cents, Jul 14 Corn closed at $5.07 1/2, down 2 cents.
Wheat: The wheat market closed with double digit gains on concerns over US winter wheat conditions and renewed tensions in Ukraine. Weekly export sales of 339,100 MT of old crop and 271,700 MT of new crop were in line with trade expectations. Stats Canada reported that Canadian farmers plan to sown 24.8 million acres of wheat this year. That's down from 26 million a year ago, but 400k acres above what the trade was expecting. Canadian barley plantings were forecast at 6.3 million acres, down from 7.1 million last year and below the 6.7 million anticipated by the trade. The 2014 Canadian oat area was estimated at 3.2 million acres, similar to last year and in line with trade forecasts. "Fall planting is under way in Australia but there are weather concerns. While wheat prospects in New South Wales are relatively favourable, Western Australia wheat production may be limited by drought," said Martell Crop Projections. "Conditions in Australia’s top wheat state (WA) have been very dry recently. Planting is due to begin in May, though sowing may be delayed because of drought. The last serious drought in 2010 shrank Western Australia wheat production to 4.7 MMT. A favourable wheat harvest would normally be 9-10 MMT," they added. In the US meanwhile, the latest Drought Monitor confirmed deteriorating conditions in western Kansas. May 14 CBOT Wheat closed at $6.90 1/2, up 14 cents; May 14 KCBT Wheat closed at $7.61 1/4, up 15 1/2 cents; May 14 MGEX Wheat closed at $7.38, up 13 3/4 cents.
EU Grains Mostly Higher On Heightened Tensions In Ukraine
24/04/14 -- EU grains finished mostly higher, with May 14 London wheat closing GBP0.10/tonne firmer at GBP168.00/tonne, and with new crop Nov 14 London wheat up GBP0.70/tonne at GBP158.10/tonne. May 14 Paris wheat closed EUR1.25/tonne higher at EUR216.00/tonne, Jun 14 Paris corn was up EUR2.25/tonne at EUR188.00/tonne, whilst soon to expire May 14 Paris rapeseed crashed EUR8.75/tonne to EUR406.75/tonne.
Concerns over US winter wheat and heightened Ukraine tensions are what is grabbing the market's interest at the moment.
President Putin warned of unspecified "consequences" following the reported deaths of pro-Russian separatists in Ukraine. Meanwhile the US accused Russia of "distraction, deception and destabilisation" in the troubled Black Sea nation.
EU soft wheat exports are finally slowing down. Brussels granted 378 TMT of soft wheat export licences this past week. That's down from 412 TMT last week, and versus 585 TMT the week previously and 596 TMT the week prior to that.
Even so, the cumulative total for the season so far already stands at a record 24.7 MMT.
Corn imports also appear to be slowing, with 190 TMT worth of import licences granted this week, down from 497 TMT a week ago.
Russia's Ag Ministry said that spring grain plantings had been completed on 4.3 million hectares, or 13.6% of plan. That's up on 3.2 million ha this time a year ago.
Spring barley accounts for the lion's share of that, with 2.3 million ha sown. Russian farmers have also planted almost 628,000 ha of corn and just under 360,000 ha of spring wheat.
Rusagrotrans forecast Russia's April grain exports at 2 MMT, falling to 1.5-1.6 MMT in May.
Morocco were said to have bought 30,000 MT of wheat from Poland for May shipment. Jordan are tendering for 150,000 MT of optional origin milling wheat, and a similar volume of optional origin feed barley.
Stats Canada forecast the 2014 Canadian all wheat area at almost 24.8 million acres, down from just over 26 million last year, but above trade expectations of 24.4 million and more than a million higher than the area sown in 2012. Canadian barley plantings will drop almost 11% to 6.3 million acres, they added.
Chicago Mixed, Are They Really Getting A Weather Market Going In Corn Already?
23/04/14 -- Soycomplex: Beans closed lower on the old crop and higher on the new. The jungle drums concerning Chinese cancellations and switches into the US are deafening. Reuters apparently confirmed that Japan's Marubeni Corp had resold two cargoes of Brazilian beans to US buyers, naming the vessels, the volumes, the ports they've sailed from and their destinations (Mobile, Alabama and Wilmington, North Carolina). About the only thing they skipped was the prices paid. Is that just the tip of the iceberg? ADM denied that any of it's sales to China had been defaulted on, and Bunge and Cargill refused to comment, Reuters added. The Chinese government meanwhile is expected to restart its weekly soybean reserve auctions on May 6th, which may further curtail demand from the world's largest buyer. Venezuela are in the market for soymeal for July shipment, Argentina might be the most likely seller. The Rosario Grain Exchange estimated Argentina's 2013/14 soybean crop at a record 54.9 MMT, up from a previous forecast of 54.7 MMT. They said that better yields than expected in Cordoba are offsetting lower ones in other areas. Harvesting is 25% complete, 15 points behind last year, they added. The USDA attaché in Argentina estimated plantings for the 2014/15 soybean harvest rising to 20.6 million ha versus 19.1 million for the current harvest. The attaché sees next year's Argentine soybean crop at a new record 57.5 MMT. Early estimates also have Brazil producing a new record crop in 2014/15 of around 95-97 MMT, whilst US farmers are also expected to "go large" with soybeans plantings this year. That sounds like a lot of soya doesn't it, especially in the face of faltering demand from China. Tomorrow's weekly export sales from the USDA will be interesting in light of all the cancellation talk. Estimates for that are from zero to possibly negative 200 TMT on old crop, and 350-550 TMT positive on new crop. May 14 Soybeans closed at $14.69, down 10 3/4 cents; Jul 14 Soybeans closed at $14.65, down 5 3/4 cents; May 14 Soybean Meal closed at $478.80, down $1.00; May 14 Soybean Oil closed at 42.44, down 30 points.
Corn: The market ended around 7 to 8 cents higher on the day. Fund money ended up as an estimated net buyer of around 8-9,000 contracts on the day. Late planting of the 2014 US corn crop is getting spec money excited (already). There's talk that some are already prophecising (if that's not a real word then it should be) another summer weather disaster, and are looking to "get in early" on the long side. Others suggest that 2014 will be an El Nino year, and that would normally produce a beneficial growing environment for the US Midwest. Suffice to say that April is very early indeed to get into a US weather market. Anything like trendline yields this year could leave fund money looking spectacularly foolish come the autumn. Next week's weather forecast is not conducive to planting though, but could ultimately prove beneficial in the long run. "The GFS forecast is extremely wet in the Midwest, calling for 2-4 inches of rainfall with a slow moving storm. The rain potential is great. Some farms in Missouri, Illinois and Wisconsin could receive 4-6 inches of rain. This would be the equivalent to a month's worth of May rainfall. Ohio and Indiana would be “less wet” the new forecast calling for 1.5 – 2.5 inches of rain," said Martell Crop Projections. Elsewhere, the Rosario Grain Exchange increased their forecast for the 2013/14 Argentine corn crop from 22.7 MMT to 23 MMT, and said that harvesting is 23% complete. A Reuters survey put South Africa’s 2014 corn crop at 13.1 MMT. APK Inform reported that Ukraine's corn exports continue unhindered by political issues. They shipped out 1.1 MMT of corn in the April 1-22 period, and increase of 49% on a year ago. Marketing year to date corn exports are now 16.4 MMT, an increase of 56% versus the same period in 2012/13. Full season exports will total 19.3 MMT, APK Inform estimated. US ethanol production this past week fell to 910k barrels/day from 939k bpd the previous week. Tomorrow's weekly export sales are expected to be in the region of 500 TMT to 1 MMT. May 14 Corn closed at $5.03 3/4, up 7 1/2 cents; Jul 14 Corn closed at $5.09 1/2, up 7 1/2 cents.
Wheat: The market closed around 3 to 5 cents higher on the day. The trade continues to fret over US winter wheat crop conditions, slow spring wheat plantings and Ukraine. There is also some talk of Oklahoma confirming freeze damage to winter wheat from the recent sub-zero dip. The same major storm that is shaping up next week to further delay corn plantings in the Midwest, could however bring some drought relief to winter wheat on the southern Plains. "Both Oklahoma and central Kansas could receive up to 1 inch of rainfall from the slow moving storm," said Martell Crop Projections. China's weekly (or should that be weakly?) wheat auctions continue to be woefully under subscribed. Today's offering of 675,445 MT only received a 7.2% take-up rate. That's even worse than the 16-17% acceptance of the last two weeks. The USDA did however announce the sale 120 TMT of US sorghum to China for 2013/14 shipment. Japan bought 108,789 MT of food wheat for May-Sept shipment in their regular weekly tender. As usual the origins were split between the US, Canada and Australia. Iran bought 60,000 MT of Russian wheat. Kazakhstan said that it plans to export 1.2 MMT of wheat to Iran this year. Stats Canada are out with their planting intentions estimates tomorrow. The trade is expecting an all wheat area of 24.4 million acres versus 26.26 million in 2013. For barley the average estimate is 6.7 million versus 7.08 million last year. For oats it's 3.2 million versus 3.17 million in 2013. Morocco said that it only expects a cereal harvest of 6.7 MMT this year, down sharply from 9.7 MMT a year ago. Wheat will account for 3.7 MMT of that against 5.2 MMT in 2013 when good rains fell. Rains this year ave come a bit too late to boost yields the Ag Minister said. After a wet Easter, eastern Australia is seen mostly dry for the next few days, favouring field work, but more rain will soon be needed. The west remains dry. Fund money was estimated as buying around a net 2,000 Chicago wheat contracts on the day. Trade estimates for tomorrow's weekly export sales report are old crop 200–400 TMT, and new crop 250–500 TMT. May 14 CBOT Wheat closed at $6.76 1/2, up 3 1/2 cents; May 14 KCBT Wheat closed at $7.45 1/2, up 4 1/4 cents; May 14 MGEX Wheat closed at $7.25 1/4, up 5 cents.
EU Grains Mixed, Ukraine Tensions Support For Now
23/04/14 -- EU grains closed mixed as the market attempts to balance ever changing tensions in Ukraine with a weakening global fundamental outlook, and as harvest 2014 draws ever closer.
The day ended with May 14 London wheat up GBP0.40/tonne to GBP167.90/tonne, and with new crop Nov 14 London wheat closing GBP0.70/tonne firmer at GBP157.40/tonne. May 14 Paris wheat closed unchanged at EUR214.75/tonne, Jun 14 Paris corn was up EUR1.00/tonne at EUR184.75/tonne, whilst May 14 Paris rapeseed slumped EUR6.75/tonne to close at EUR415.50/tonne.
"Russia will respond if its interests in Ukraine are attacked," the Russian Foreign Minister Sergei Lavrov was quoted as having said, drawing parallels with the 2008 Georgian war, the BBC reported.
The situation there is clearly far from resolved just yet.
The Ukraine Agribusiness Club said that local prices in the domestic hryvnia are at all-time highs, although the local currency has slumped violently since the Russian taking of Crimea. Prices of 3rd grade milling wheat are up 22.7% versus a year ago, and feed wheat prices are up 14.2%, they said. However, the rapid depreciation of the hryvnia means that growers there are seeing no benefit to these local price increases, they added.
The Ukraine Ag Ministry estimated Ukraine’s 2013/14 grain exports at 33.0 MMT versus the near 29 MMT shipped abroad so far.
Kazakhstan said that they had exported 7.3 MMT of grains so far this year, and that 2013/14 exports would total 9.5 MMT (versus a previous estimate of 9.0 MMT).
Iran were reported to have bought 60,000 MT of Russian wheat in a tender.
The Moroccan Ag Ministry estimated their 2014 cereal harvest at 6.7 MMT, including 3.7 MMT of wheat. Last year's cereal harvest was said to be 9.7 MMT, with a wheat output of 7 MMT.
Nevertheless, Morocco said that it will end the suspension of custom duties on soft wheat imports on April 30th, according to Reuters.
EU crop prospects continue to generally look pretty good. Forecast widespread rains this week across almost the entire continent should prove beneficial.
The market looks tired, but any further escalation of the troubles between Ukraine and Russia could easily see fresh spec money come back into the grains sector, pushing prices higher again.
On the flip side, harvest pressure will soon be upon us. UK grain traders report end-user demand is slack, with buyers appearing well covered for their summer requirements, and relaxed about dipping their toe into the water on new crop. UK growers are estimated to have around 20% of their new crop wheat forward sold.
Chicago Ends Mixed, Soybeans Down On Chinese Demand Jitters
22/04/14 -- Soycomplex: Beans traded both sides, but ultimately ended lower, on continued worries on demand from China. A Reuters report suggesting that more Brazilian beans already sold for export were still at risk from cancellation got heavily long fund money nervous. They were estimated as ending the day as net sellers of around 7,000 soybean contracts. Reuters also reported that two cargoes of Argentine meal have been sold into the US east coast and that more deals are being discussed. Adding fuel to the fire was ABOIVE cutting their estimate for Brazilian soybean exports in 2013/14 from 44 MMT to 43 MMT, due to weaker Chinese demand. Dr Cordonnier forecast the Brazilian soybean crop at a record 86.5 MMT, with Argentina at 53.5 MMT, both were unchanged from his previous estimates. Safras e Mercado pegged the Brazilian crop at 86.9 MMT, with Argentina seen matching the previous record crop at 54.5 MMT on Friday. US farmers are soon expected to begin planting a record 2014 soybean crop of their own this year. The USDA attaché in Canada estimated 2014/15 canola production at 16.2 MMT versus 18.0 MMT last year. Despite a lower output, the attaché estimated Canadian 2014/15 canola exports at 8.5 MMT versus 8.0 MMT. Stats Canada's 2014 planting intentions report comes out on Thursday. Canola plantings could come in around 21 million acres versus 19.9 million last year it is thought. May 14 Soybeans closed at $14.79 3/4, down 19 cents; Jul 14 Soybeans closed at $14.70 3/4, down 16 1/2 cents; May 14 Soybean Meal closed at $479.80, down $5.90; May 14 Soybean Oil closed at 42.74, down 26 points.
Corn: The corn market closed higher, with trade talk of US planting delays adding support. The USDA said last night that 6% of the US corn crop was now in the ground, although up on last year's late planted 4%, it's below the 5-year average of 14% and less than the 9% that the market anticipated. A bit more support came from yesterday's large weekly export inspections total of 1.6 MMT, followed by today's announcement from the USDA that private exporters had sold 240,000 MT of US corn to Mexico for 2014/15 shipment under the daily reporting system. South Korea's KFA bought 60,000 MT of US or South American corn for Oct shipment. Dr Cordonnier forecast the 2013/14 Brazilian corn crop at 72.0 MMT, versus previous estimate of 70.0 MMT. In Argentina he held pat at 23.5 MMT. Ag Canada estimated the Canadian 2014/15 corn crop at 12.7 MMT versus previous estimate of 13.1 MMT and down from 14.2 MMT in 2013/14. Stats Canada are out with their 2014 planting intentions report on Thursday. Corn acres are expected to be around 3.4 million versus 3.7 million last year. Ukraine said that it had exported 29 MMT of grains so far this season, with 18.3 MMT of that total corn. APK Inform expect full season grain exports at a record 31.3 MMT, of which 19.5 MMT (also an all time high) will be corn. The spec community got the jitters yesterday, after news broke that Barclays was pulling out of most of its metals, energy and agri commodities trading due to "falling profitability in the face of tougher regulation". There was little sign of those nerves remaining today, with fund money estimated as finishing up as net buyers of around 10-12,000 corn contracts on the day. May 14 Corn closed at $4.96 1/4, up 7 3/4 cents; Jul 14 Corn closed at $5.02, up 8 1/4 cents.
Wheat: The wheat market closed a little higher, in light "Turnaround Tuesday" style, following yesterday's rout. Even so, only a relatively small proportion of Monday's losses were regained. Dollar weakness may have helped foster ideas that this will encourage some export demand. Last night's crop condition ratings, whilst unchanged in the good/excellent category from a week ago where hardly friendly either. Maybe the market just felt that last night's losses of 20-23 cents were a bit overdone? Some rain is in the forecast for US winter wheat, but amounts are generally low. Japan seeks 108,789 MT of food wheat for May/Sep shipment in their regular routine tender. Iraq cancelled a tender for 50 TMT of optional origin wheat due to high prices. Egypt’s state newspaper estimated the country's 2014 wheat crop at 9.0 MMT versus the Ag Minister's 9.5 MMT. Ag Canada estimated the Canadian all wheat crop in 2014 at 29.3 MMT, unchanged from a previous estimate and down versus the record 37.5 MMT produced last year. Despite the decline, all wheat exports were forecast at 22.1 MMT, unchanged from previously and up 0.5 MMT versus 2013/14. The Canadian barley crop was estimated at 8.3 MMT versus a previous estimate of 8.4 MMT and compared to 10.2 MMT in 2013/14. Stats Canada's 2014 planting intentions report, due out on Thursday, is expected to show a Canadian all wheat area of 24.4 million acres versus 26.26 million in 2013. Ukraine said that it's early spring grain plantings (mostly barley) were 97% complete. Russia’s Ag Ministry said that as of April 21st Russia had planted spring grains on 3.7 million ha (11.5% of the total planned area) versus 2.1 million a week ago and 2.8 million a year ago. May 14 CBOT Wheat closed at $6.73, up 4 3/4 cents; May 14 KCBT Wheat closed at $7.41 1/4, up 7 1/4 cents; May 14 MGEX Wheat closed at $7.20 1/4, up 5 3/4 cents.
EU Grains Suffer Bout Of Post Easter Blues
22/04/14 -- EU grains returned from the Easter break looking decidedly unwell, as if having overdosed on chocolate, with wheat under particular pressure following a dismal performance across the pond yesterday.
May 14 London ended down GBP2.65/tonne at GBP167.50/tonne, and new crop Nov 14 slumped GBP4.80/tonne lower to GBP156.70/tonne in high volume trade. May 14 Paris wheat closed down EUR2.75/tonne at EUR214.75/tonne, Jun 14 Paris corn fell EUR3.25/tonne to EUR184.75/tonne and May 14 Paris rapeseed was EUR1.50/tonne easier at EUR422.25/tonne.
The UK was treated to a largely fine Easter break, with a return to more unsettled conditions now due for the rest of the week. Most will welcome the rains, although crop conditions generally look very good anyway at the moment. Toepfer last week forecast the UK wheat crop at 15.1 MMT, a 26.7% rise on last year.
Welcome rain is also forecast across almost all over Europe in the latest 15-day forecast, with all but southern Spain expected to pick up above average totals. A huge area stretching right across almost all of France, Germany, into the western half of Poland and down through the Czech Republic, Slovakia, Hungary and into Romania and Bulgaria will pick up 2-3 times their normal rainfall in the period through to May 7, according to the latest GFS model.
Current estimates have the EU-28 wheat crop around 2% higher this year, with output in France little changed, Poland a little higher and Germany a little lower.
Most of Ukraine is also forecast to pick up beneficial rains, which will aid both winter and newly planted spring grains. Belarus, where early spring grains have been sown on almost 973k ha (or 91.2% of plan), along with just over 300k ha of corn (38% of plan), is also in for decent precipitation totals.
Ukraine exported almost 390 TMT of grains via it's seaports last week, according to APK Inform. Wheat accounted for 154.5 TMT of that total, and corn a further 176.7 TMT. APK Inform expect full season grain exports out of Ukraine to hit a record 31.3 MMT this season, including 19.5 MMT of corn, 9 MMT of wheat and 2.2 MMT of barley. "Exports will not face any significant disruptions," they said, referring to the current political tensions.
Russian spring grain planting has now been completed on 3.7 million ha, or 11.5% of plan. That's up from 2.1 million ha last week and versus 2.8 million ha this time last year. Barley accounts for 2.1 million ha of the total area planted so far.
FranceAgriMer said that 100% of the French winter wheat crop is in ear versus only 60% a year ago at this time. Spring barley emergence is 100% versus 74% this time last year. Corn planting is 39% done versus only 4% at this time in 2013.
Clearly the French harvest is going to be early. Crop conditions are also better than they were 12 months ago, with winter wheat rated 75% good/very good versus 66% this time last year, and winter barley at 73% good/very good compared to 65% a year ago.
India's wheat harvest is underway, but is around 15 days late due to rain. The Ag Ministry there say that cooler than normal temperatures throughout the growing season meant that the crop has ripened more slowly than normal, and that therefore they expect yields to be higher this year. Hail damage was described as "insignificant" by a Ministry spokesman. The government say that they plan to buy 31 MMT of wheat on the domestic market this year versus 25.4 MMT last year. The late harvest though means that they've only purchased 7.5 MMT for the state-owned fund so far this year versus 12 MMT a year ago at this time.
The pound hit a fresh 5-year high against the US dollar today, and hovers close to 1.22 versus the euro. A significant break above that level could see it test the early 2013 high of 1.2340 against the single currency. Both would keep UK corn and wheat imports cheap, and harm new crop wheat export potential.
Chicago Markets Begin The Week On The Defensive
21/04/14 -- Soycomplex: Beans closed lower, in line with losses across the rest of the complex. News that Barclays was pulling out of commodities trading was seen as broadly bearish, especially coming at a time when fund money holds a very large speculative long in soybeans and corn. "Funds are insanely long and if we break much more I see them moving to a liquidation mode," one market analyst commented. "There is a lot of room on the downside if we get normal weather the next couple of months," he warned. Will we get "normal" weather? An El Nino year, if we are in for one as many are suggesting, would typically bring good Midwest rains and relatively benign temperatures. That, coupled with expectations of record large soybean plantings in the US this spring, could indeed leave the market vulnerable to a significant downside, especially given the very hefty long that the funds currently hold. The USDA released their second weekly crop progress report of the year. That has soybeans plantings in Louisiana at 33% done versus 19% a year ago and 26% on average. Mississippi is at 14% sown versus 7% a year ago and 26% on average. Texas is 21% done versus 43% a year ago and 52% on average. Arkansas is 7% complete versus 4% a year ago and 13% on average. Alabama is 3% planted versus 1% a year ago and 2% on average. Safras e Mercado said on Friday that Brazil's soybean harvest is 90% complete versus 86% a year ago. Weekly US export inspections for soybeans came in at 270.5 TMT, taking the marketing year to date total to 41.8 MMT. That's over 97% of the USDA's projection for a season with more than 4 months still left to run. May 14 Soybeans closed at $14.99 1/4, down 14 3/4 cents; Jul 14 Soybeans closed at $14.88 1/2, down 13 3/4 cents; May 14 Soybean Meal closed at $485.90, down $2.40; May 14 Soybean Oil closed at 43.06, down 35 points.
Corn: The corn market ended around 6 to 7 cents lower on the day in what looked like general consolidation. Weekly export inspections came in at a strong 1.6 MMT, taking the 2013/14 total so far to 26.8 MMT, which is just under 60% of the USDA's forecast for the season. The USDA reported US corn planting at 6% complete, up from 3% done a week ago, and versus 4% this time last year. The 5-year average is 14%, so things are still behind normal. The weather outlook is improving though. "Strong warming developed on Easter Sunday with widespread 70s F in the Midwest. Fine sunny mild conditions are expected to a continue a few more days. However, a sharp cold wave is predicted Thursday-Friday, dropping Midwest temperatures 12-15 F below average. Maximum temperatures Friday would be high 40s F in the northern corn belt to 60s F south. Midwest rainfall has picked up in March and April with bouts of very heavy rain. Soaking rains last week developed in a wide swath of the corn belt from eastern Nebraska to Wisconsin, and including Iowa, western Missouri and southeast Minnesota. Partially frozen fields means there was run-off, but overall drenching rains were beneficial, improving soil moisture for corn planting. Stormy weather l is expected again this week in the Midwest favouring corn farms west of the Mississippi River for the heaviest rainfall. Lighter amounts of rain, .25 – 50 inch, are predicted in eastern Illinois, Indiana and Ohio," said Martell Crop Projections. On Friday, Safras e Mercado estimated Brazil’s 2nd corn crop at 42.25 MMT versus 45.2 MMT a year ago. May 14 Corn closed at $4.88 1/2, down 6 1/4 cents; Jul 14 Corn closed at $4.93 3/4, down 6 3/4 cents.
Wheat: The wheat market took a nosedive, possibly linked to an easing of tensions between Russia and Ukraine/the West over the weekend. Wheat's recent meteoric rise appears to have been directly linked to the evolving situation between the two big Black Sea exporting nations, despite the fact that very little spring wheat is sown in Ukraine. Deteriorating US winter wheat crop conditions have also been supportive to the market in recent weeks. The USDA today reported US winter wheat at 34% good/excellent, which is unchanged on a week ago and 1 point lower than this time last year. The top producing state of Kansas is only 24% good/excellent, and 32% poor/very poor. Oklahoma is even worse, with zero excellent, 11% good and 61% poor/very poor. There are prospects for rain however. "The subtropical jet stream is expected to deliver a strong wave of showers to Kansas, Oklahoma and Texas late in the period Sunday-Monday, April 27-28. Kansas wheat is also expecting rain Wednesday, when a strong short-wave disturbance tracks through the central Great Plains into the Upper Midwest," said Martell Crop Projections. The USDA said that 9% of winter wheat is headed versus 7% a year ago and 17% on average at this time. Spring wheat planting meanwhile if 10% complete versus 7% a year ago 19% for the 5-year average. Weekly export inspections came in at 495 TMT versus 712 TMT the previous week. May 14 CBOT Wheat closed at $6.68 1/4, down 23 cents; May 14 KCBT Wheat closed at $7.34 1/2, down 23 1/2 cents; May 14 MGEX Wheat closed at $7.14, down 18 3/4 cents.
