Chicago Corn And Soybeans Rally On Lower Planting Figures
19/02/15 -- Soycomplex: Beans closed higher, with front month Mar 15 back up above the magical $10/bushel mark. News from the USDA's Outlook Forum that US farmers might only plant 83.5 million acres of soybeans this spring was the catalyst. That's actually 200,000 acres below year ago levels. The average trade estimate was around 86 million, according to a Bloomberg survey - and some forecasts were as high as 88 million. It should be noted however, that despite a double digit rally, beans actually ended around 10 cents off the intra-day highs. Clearly some still see anything above $10/bu as a sell. The USDA also forecast the average US soybean price in 2015/16 at $9.00/bu. The Argentine 2015 crop certainly seems to be getting bigger. The Rosario Grain Exchange said that the bulk of the crop there has now passed the critical period for determining yields well, and said that yields could be up to 20% higher than a year ago. The same can't be said for production prospects in Brazil, although a record crop is still expected. "Very stressful January weather in the tropics has reduced soybean potential in Brazil," said Martell Crop Projections. The Mato Grosso bean harvest is said to be around 30% complete, some 10 points behind normal for this time. Nationally, the crop is said to be around 15-20% complete. Truckers are striking in Mato Grosso state. It will soon be the strike season in Argentina too. Mar 15 Soybeans closed at $10.07 1/4, up 11 1/2 cents; May 15 Soybeans closed at $10.11 1/4, up 12 cents; Mar 15 Soybean Meal closed at $347.50, up $8.90; Mar 15 Soybean Oil closed at 31.83, down 18 points.
Corn: The corn market closed around 5-6 cents higher. The USDA Outlook Forum estimated US corn plantings this spring at 89 million acres, which is in line with the average trade guess according to a Bloomberg survey. It would also be the lowest area in 5 years and fall 1.6 million below last year's level. They predict an average US corn price of $3.50/bu in 2015/16. The Energy Dept reported US weekly ethanol production up 3,000 barrels/day from a week ago to 964,000 bpd. Stocks fell slightly to 21.1 million barrels, but are still up sharply on year ago levels of 17.2 million. "The report could be considered slightly bullish as weekly stocks managed to decline for the first time since the week of December 12th on nominally unchanged production. Demand remains steady and plants continue to grind at an aggressive rate even in a weak margin environment," said Benson Quinn Commodities. The Buenos Aires Grain Exchange said that rain is hampering the corn harvest in Argentina, which is now only 1.1% complete. They see production down 16.6% on a year ago at 22.5 MMT. Brussels announced that it had granted 239 TMT worth of EU corn import licences, taking the season to date total to 5.9 MMT, which is 27% down on this time last year. Agritel increased their forecast for the Ukraine corn crop to 28 MMT, pegging exports at 17.5 MMT versus 15.5 MMT previously. The USDA estimate Ukraine's corn exports a little higher at 18 MMT, whilst the ever optimistic Ukraine Ministry of Agriculture go for 20 MMT. Agritel also raised their figure for the 2014/15 Russian corn crop slightly to 11.3 MMT, forecasting exports at 3.0 MMT. Mar 15 Corn closed at $3.89 3/4, up 6 cents; May 15 Corn closed at $3.97 3/4, up 5 3/4 cents.
Wheat: The wheat market closed mostly lower. News that EU offers today came in more than $60/tonne cheaper than the best US price in yesterday's passed on exclusively US wheat tender did most of the damage. An attempt to rally on the back of firmer corn and soybean markets failed to hold and fizzled out towards the end of the session. US wheat is simply not competitive with other global offers, especially those out of Europe. The US dollar is strong and the euro is weak, further hurting US export hopes and ambitions. The USDA Outlook Forum suggested a US all wheat area for the 2015 harvest (winter and spring wheat) at 55.5 million acres. which is half a million below the "baseline" projection and 1.3 million down on last year. They predict an average US wheat price of $5.10/bushel in 2015/16. Japan bought 101,128 MT of milling wheat for March-April shipment, of mostly US origin, in a routine tender. Algeria were reported to have bought 400,000 MT of what is expected to be EU, and most likely French, wheat for June shipment. Tunisia are in the market for 59,000 MT of optional origin durum wheat for March-April shipment. I'm hearing that the Russian Ag Ministry said that winter grain production there might fall to 28-30 MMT, down sharply from 48 MMT a year ago due to poor establishment in the autumn and winterkill. Winter crops in the South and Central regions are said to be rated 29% in poor condition. Another report I read from a company in the Rostov region says that as much as a third of winter crops in the area failed to emerge, and around half the planted area may have to be resown in the spring. If producers have the money to do so that is. Mar 15 CBOT Wheat closed at $5.27 3/4, unchanged; Mar 15 KCBT Wheat closed at $5.44 1/2, down 3 1/2 cents; Mar 15 MGEX Wheat closed at $5.74, down 8 cents.
