Chicago Market Positions Itself Ahead Of Monday's USDA Reports

09/01/15 -- Soycomplex: Beans and meal closed with small gains on the day, and with fair advances for the week, heading into Monday's all important USDA reports. These have actually been neutral for beans in 3 of the last 5 years, bullish once and bearish once. "Talk that the USDA could lower US 2014 planted soybean acres due to the discrepancy between NASS and FSA registered acreage data, and thereby lower production and US carryout in next Monday’s production report has triggered a modest amount of short covering this week," noted Benson Quinn. The market is expecting harvested acres to come in at around 83.04 million, versus 83.4 million in the USDA's December report. Given the strong sales and export pace of US soybeans, currently 90% of the USDA target for the season versus only 73% typically, the USDA may raise expectations for these and correspondingly lower 2014/15 carryout from 410 million bushels to around 393 million. Conab increased their forecast for the Brazilian 2014/15 soybean crop slightly from 95.8 MMT to 95.9 MMT, which is almost 2 MMT higher than the USDA's current estimate. The latter may raise that to around 94.6 MMT on Monday, with Argentina at 55.45 MMT versus 55 MMT previously, according to a trade survey. Dr Cordonnier said that some very early soybeans have been harvested in Brazil's Mato Grosso and Parana states. Harvest pace is "timid but picking up" and yields are variable, he said. IMEA estimate Mato Grosso soybeans to only be 6% harvested by the end of the month, with the bulk of activity (66%) taking place between LH Feb and FH Mar, he added. Jan 15 Soybeans closed at $10.51 1/2, up 6 1/2 cents; Mar 15 Soybeans closed at $10.52 1/4, up 4 cents; Jan 15 Soybean Meal closed at $363.80, up $2.50; Jan 15 Soybean Oil closed at 33.54, down 4 points. For the week, nearby beans were up 49 cents, with meal up $7.30 and oil gaining 156 points.

Corn: The corn market closed around 4-6 cents higher, and back above the key $4/bushel mark on front month Mar 15. "In addition to profit-taking ahead of the weekend, credit position squaring and the inability to trigger selling below the 50 day moving average for today’s firmer tone. While it feels like the bulk of the trade favours going into Monday’s report positioned for lower price action, it didn’t feel like they wanted to add to that position during today’s trade," said Benson Quinn. As with soybeans, the trade is expecting a downwards revision to US 2014 corn harvested acres, and a subsequent drop in production from the previously forecast 83.097 billion bushels to around 82.765 billion this time round. In other news, the USDA reported 136,000 MT of corn sold to South Korea for the 2014/15 marketing year. They also reported 116,000 MT of sorghum sold to unknown for 2014/15, which will be widely assumed to be a continuation of China's recent buying spree. Conab raised their outlook on Brazil's corn crop from 78.7 MMT to 79.1 MMT, which is now more than 4 MMT above the USDA's December forecast. Dr Cordonnier said that the early 2014/15 corn harvest in Brazil's Rio Grande do Sul is underway, with good yields being reported. There's some talk that the US will restore the statutory ethanol mandate levels later this year, rather than reduce them as they proposed previously, which would be supportive for corn demand. The Buenos Aires Grain Exchange reported Argentine corn for grain planting at 80.9% complete, up 7.9 points on a week ago, but 1.9 points behind last year's pace. Farm Futures Magazine estimated US 2015 corn plantings at 88.51 million acres, a drop of 2.6% on a year ago. Monday's upcoming USDA reports have been bullish for corn in 3 of the last 5 years, and bearish twice. Mar 15 Corn closed at $4.00 1/4, up 6 cents; May 15 Corn closed at $4.08 1/4, up 5 1/2 cents. Nearby Mar 15 was up 4 1/2 cents on the week.

Wheat: The wheat market closed lower on the day and lower for the week. The perpetually firm US dollar remains a millstone around the neck of US wheat, as was backed up by yesterday's paltry weekly export sales total of only 151,000 MT for delivery in the 2014/15 marketing year, the lowest total of the season so far. The wheat bulls could do with some help from the USDA on Monday. Benson Quinn think that they might get it. "The focus on Monday’s report will be on SRW acreage. The trade is looking for something in the neighbourhood of 8 million acres, which would be down about 500,000 from the prior year. I am looking for the estimate to come in below that market," said their Brian Henry. It will also be interesting to see what the USDA do, if anything, with regards to their projections for Russian and Ukraine 2014/15 wheat exports and ending stocks, given recent developments there. The Buenos Aires Grain Exchange cut their forecast for the 2014/15 Argentine wheat crop from 11.5 MMT to 11.2 MMT due to lower than anticipated yields, although that's still 10.9% up on year ago levels. They said that the harvest is now 95.9% complete. Talk of winterkill amongst US wheat on the Plains has been pushed to the back burner, as the details of any such damage won't be fully known for a good while yet. There's similar talk of damage having been done to crops in Ukraine and Russia too, but again details are sketchy. The Russian Ag Ministry did say last year that they would review crop conditions sometime this month, but no specific date was given. Bad weather in the region is hampering traders' attempts to get as much Russian wheat shipped out as possible this month, before the Feb 1 export duty is introduced. Trade activity out of Russia has been light this week, as most there are still on holiday until Monday. Mar 15 CBOT Wheat closed at $5.63 3/4, down 3 1/4 cents; Mar 15 KCBT Wheat closed at $6.00 1/2, down 7 1/4 cents; Mar 15 MGEX Wheat closed at $6.02, down 6 1/2 cents. For the week that puts Chicago wheat 17 1/2 cents lower, with the Kansas market down 16 1/2 cents and Minneapolis 9 cents easier.