Chicago Grains Jump On Short-Covering, Rising Crude Oil

03/02/15 -- Soycomplex: Beans and meal closed with good gains on the back of a "risk on" mentality across the whole of the grains sector, helped by a suddenly resurgent crude oil market. Today's rise in prices may have triggered some short-covering amongst the fund community who are sitting on an unusually large short in beans. Dr Cordonnier estimated the Brazilian bean crop at 93.0 MMT, unchanged from previous estimate, still a record volume although 2.5 MMT less than the USDA's January estimate. He goes for 56 MMT in Argentina, also a record, and in this case 1 MMT more than the USDA said a month ago. Crop conditions in Argentina generally look very good where soybeans are flowering and beginning to set pods, said Martell Crop Projections. A Brazil crop tour estimated Brazil’s soybean crop at 93.2 MMT versus a previous estimate of 96.1 MMT. The USDA attaché in Brazil estimated the Brazilian bean crop at 93.0 MMT, with exports at 47 MMT (versus the USDA's own official forecast of 46 MMT). Informa estimated the Brazilian bean crop at 93.5 MMT (unchanged) and went for 57 MMT in Argentina versus 55.5 MMT previously. Mar 15 Soybeans closed at $9.87, up 27 1/2 cents; May 15 Soybeans closed at $9.93, up 26 3/4 cents; Mar 15 Soybean Meal closed at $340.60, up $12.70; Mar 15 Soybean Oil closed at 30.80, up 39 points.

Corn: The corn market closed with strong gains, helped by soaring crude oil values, which have now gained 19% in the past 3 sessions, closing above $53/barrel tonight. Dr Cordonnier estimated this year's Brazilian corn crop at 74.0 MMT, unchanged from his previous estimate and 1 MMT below the USDA. He increased his Argentine corn crop forecast to 22.0 MMT versus a previous estimate of 21.0 MMT, and now matches the USDA figure. Informa now has the Brazilian corn crop estimated at 72.8 MMT versus a previous estimate of 72.25 MMT. In Argentina they go 23.0 MMT versus a previous estimate of 22.0 MMT. They have the South African corn crop estimated at 13.0 MMT, down from a previous estimate of 13.5 MMT. In Argentina, "the majority of corn has already pollinated under favourable wet weather conditions, locking in a favourable yield," said Martell Crop Projections. Agritel forecast Russia's 2014/15 corn exports at around 3 MMT versus 1.2 MMT currently. "The EIA will be out with their weekly ethanol report tomorrow, it should be interesting to see how ethanol plants have reacted to a tight margin environment," said Benson Quinn. Last week's production was 979,000 barrels/day, up 1,000 bpd from the previous week. ADM estimated 2015 US ethanol exports at around 800 million gallons, which is similar to last year. Mar 15 Corn closed at $3.85 3/4, up 16 cents; May 15 Corn closed at $3.93 3/4, up 16 cents.

Wheat: The wheat market took off on short-covering triggered by reduced US winter wheat crop ratings from the USDA. They cut the proportion of Kansas wheat rated good to excellent from 49% at the end of December to 46%, raising poor/very poor from 9% to 13%. Oklahoma good to excellent fell from 54% to 41%, and poor/very poor was up from 12% to 13%. Egypt's GASC bought two cargoes of French wheat and three of Romanian origin in their tender. US wheat didn't figure, but the market didn't seem to care about that today. Current low levels seem to have flushed out quite a few other buyers. Iraq seek 50,000 MT of optional origin wheat. Jordan are in the market for 100,000 MT of hard wheat for Aug/Sep shipment. Japan are tendering for 112,920 MT of US and Canadian wheat for March-April shipment. South Korea's NOFI seek 55,000 MT of optional origin feed wheat for June shipment. Turkey are in the market for 60,000 MT of durum wheat. Saudi Arabia bought 690,000 MT of optional origin wheat over the weekend too. Stats Canada are due out with their Dec 31 stocks estimates tomorrow. The average trade guess for all wheat is 25 MMT, down 17% on a year ago. Canadian barley stocks are estimated at 4.9 MMT, down 27% on a year ago. There's already some talk of the Russian Ag Ministry making adjustments to their newly introduced wheat export duty in the next couple of weeks. Agritel consider Russian wheat exports more or less finished for the season, but Russagrotrans forecast these at 500-600,000 MT this month. Mar 15 CBOT Wheat closed at $5.13 3/4, up 21 cents; Mar 15 KCBT Wheat closed at $5.59, up 24 1/2 cents; Mar 15 MGEX Wheat closed at $5.76, up 22 cents.