Chicago Grains Fall As Dollar Hits New Highs
22/01/15 -- Soycomplex: Beans closed around 5-7 cents lower. The US dollar rose to new highs following the news that the ECB was to pump EUR60 billion a month into the eurozone economy. The euro fell to its lowest level against the US dollar since September 2003 on the news. The spectre of this weekend's looming Greek elections is also putting the single currency under pressure. Europe are of course the world's second largest soybean buyer after China. The IGC raised their forecast for the world 2014/15 soybean crop by 4 MMT to a new record 312 MMT, a 10% rise year on year. Consumption was increased 3 MMT and ending sticks raised 2 MMT. "Output in South America is on track to surpass all records," they said. They raised their outlook on Brazil to 94 MMT and increased Argentina to 54 MMT. China's imports were increased to a record 74 MMT. Trade estimates for tomorrow's one day delayed weekly export sales report for beans are around 500-700 TMT. "Sales should really start to slow over the next couple week’s as China gets quiet ahead of Lunar New Year holidays and then demand switches to South America," said Benson Quinn. Mar 15 Soybeans closed at $9.76 3/4, down 6 3/4 cents; May 15 Soybeans closed at $9.83, down 6 1/2 cents; Mar 15 Soybean Meal closed at $330.10, down $0.40; Mar 15 Soybean Oil closed at 31.97, down 44 points.
Corn: The corn market closed around 3-4 cents lower. Falling wheat and soybeans, plus the perennially firm US dollar didn't help corn's cause today. The IGC added 10 MMT to the global corn crop in 2014/15, but also raised consumption by a similar amount. World ending stocks were cut 1 MMT to 194 MMT, which is still 5 MMT above the USDA's latest estimate though. There were "bigger than previously forecast crops in Argentina, Brazil, the EU and Ukraine, but a reduced figure for the US," they said. The EU was also seen importing 1.5 MMT more corn in 2014/15 than projected a month ago. The IGC's estimate for the 2014/15 Ukraine corn crop is now 28.5 MMT, which is the same as the Ukraine Ag Ministry. They see Ukraine's 2014/15 corn exports at 18 MMT, up 0.5 MMT from their previous estimate, although less than the 20.2 MMT predicted by the Ag Ministry. The US Energy Dept reported weekly ethanol production up slightly (1,000 barrels/day) to 979,000 bpd. Trade estimates for tomorrow's weekly export sales report for corn are in the region of 600-800 TMT. Mar 15 Corn closed at $3.83 3/4, down 4 1/4 cents; May 15 Corn closed at $3.92, down 3 3/4 cents.
Wheat: The wheat market closed lower across the three exchanges, reversing earlier action. This may have been linked to the US dollar surging to fresh highs following the ECB announcement. Constant dollar strength has been a real thorn in the side of US export hopes of late. Early strength had been tied to increased military activity in Ukraine, and another upsurge in tensions between Russia and the West. The IGC were unchanged on their estimate for the global wheat crop in 2014/15 at 717 MMT, but trimmed 4 MMT off consumption to 708 MMT. Ending stocks were increased by 3 MMT to 196 MMT, similar to the USDA's latest estimate. "Prospects for 2015/16 winter wheat remain mostly favourable in the northern hemisphere. "Crops in the US and Russia suffered from adversely cold weather at times, while conditions have been mostly favourable in the EU, India and Turkey," they said. Russia's 2014/15 wheat exports were cut from 22.7 MMT to 18.5 MMT, with Europe's increased from 30.1 MMT to 31.5 MMT. Despite a cut of 0.8 MMT to production in Ukraine, exports were raised 1.2 MMT to 11.5 MMT. Trade estimates for tomorrow's weekly export sales are modest at around 250-400 TMT. Mar 15 CBOT Wheat closed at $5.33 3/4, down 3 cents; Mar 15 KCBT Wheat closed at $5.64 3/4, down 7 1/2 cents; Mar 15 MGEX Wheat closed at $5.75 1/2, down 5 1/2 cents.
