Chicago Corn And Beans Post Small Weekly Gains, Wheat Down Again As Fund Money Builds Record Short
17/04/15 -- Soycomplex: Beans closed with small gains on the day (on old crop at least), and finished up with relatively modest advances for the week too. Fund money was seen as ending up a net buyer of around 2,000 soybean contracts on the day. "This afternoon’s Commitment of Traders report shows that the speculative funds piled on the new short positions last week as the market tumbled 34 1/2 cents basis the May future. The spec trader increased his short position by 27,845 contracts to net short 76,269 lots," noted Benson Quinn. Support for old crop beans comes from the fact that US exporters have already sold 48.537 MMT of US soybeans for export this season, with the vast majority of that (almost 45 MMT) already shipped and gone. The USDA forecast for the entire season is "only" for US exports of 48.716 MMT, so shippers are already at 99.6% of that target. This week's better than expected old crop weekly export sales and a March NOPA crush at record levels, and well above even the highest trade estimate, are also supportive to the nears. However, Celeres today estimated the Brazilian bean crop at a record 93.9 MMT. The Buenos Aires Grain Exchange yesterday estimated this year's Argentine soybean crop at a record 58.5 MMT. With the Brazilian soybean harvest winding down, and the Argentine one making rapid progress, attention is now starting to switch to US planting potential. So all eyes will be on the fluctuating US weather forecasts across the coming months. The magnitude of the fund short in beans leaves the market vulnerable to an upside correction should there be a perceived threat to US output this year, which might prompt a re-test of the $10/bu level. If the weather plays ball, then record plantings and likely record US production in 2015 could see prices in the low $9/bu region, we haven't seen beans close below $9/bu since October 2009. May 15 Soybeans closed at $9.68 3/4, up 2 3/4 cents; Jul 15 Soybeans closed at $9.71 1/2, up 2 1/2 cents; May 15 Soybean Meal closed at $315.00, up $2.60; May 15 Soybean Oil closed at 31.52, down 24 points. For the week, front month beans were up 17 1/4 cents, meal advanced $5.80 and oil gained 43 points. The new crop soybean:corn price ratio ends the week at 2.36:1, up from 2.34:1 a week ago.
Corn: The corn market managed small gains on the day and for the week. Fresh news was thin on the ground today. "Monday’s (US) planting progress estimate is expected to confirm limited progress, which may have triggered light short covering," suggested Benson Quinn. The USDA reported US corn plantings at only 2% complete in their first numbers of the season last week. That was one point behind this time last year, and three behind the previous 5-year average pace. Ukraine said that they aim to export 3.5 MMT of corn to China this calendar year. Planting of the 2015 corn crop in Ukraine is now underway at 2% complete. UkrAgroConsult see plantings falling from 4.7 million ha to 4.4 million this year. Agritel estimated the EU corn crop in 2015 down from last year's record 74 MMT to 66 MMT. FranceAgriMer said that sowing of the French corn crop was 27% complete as of Apr 13, up from only 2% done a week previously, but still behind last year's pace of 35% sown. Agritel said that warm and dry weather should see further rapid progress made in the week ahead. Dr Cordonnier said that "the weather in Brazil continues to be beneficial for the development of the safrinha corn crop." Growers in Mato Grosso already have almost half their safrinha corn crop sold versus only 15% committed this time a year ago, say IMEA. The reason for the faster selling this year is the weaker Brazilian real, says Dr Cordonnier. Celeres estimated the Brazilian corn crop at 80.3 MMT, much higher than the USDA's 75 MMT forecast, and up 3.5 MMT on their last prediction. China reportedly only sold 1% of the near 300 TMT of domestic corn offered up for sale at auction today. In contrast all the near 36 TMT of US origin corn was sold. The reason for the difference is the low quality of the domestically produced corn on offer, said CNGOIC. For the week through to Tuesday night, fund money increased their net short in corn by around 39,000 lots to nearly 87,000 contracts. May 15 Corn closed at $3.79 3/4, up 3 1/2 cents; Jul 15 Corn closed at $3.86 3/4, up 3 1/2 cents. May 15 was up 2 3/4 cents on the week.
Wheat: The wheat market ended the day narrowly mixed, but lower across the board for the week on all three exchanges. In Chicago, prices are now below $5/bu, and could be lining up a test of the September lows around $4.75-4.80/bu. We haven't seen prices trade below that since the first half of 2010. The strong dollar, and consequent lack of US exports, is the problem. Concerns over the state of health of the 2015 US winter wheat crop is about the only fundamental left to prevent a total capitulation. Rain is on the radar, moving across parts of Nebraska, Kansas and Oklahoma today, and are forecast to last at least through to Sunday. Have these rains come too late to do much good though? The USDA will update us with their latest crop condition ratings on Monday. Last week they had the US winter wheat crop rated 42% good to excellent, down by two points from previous week. The crop was then rated 19% poor to very poor, up from 16% a week previously. They will also report on spring wheat planting progress, which was 17% complete last Sunday night versus 5% a year ago and 11% done for the 5 year average. Tonight's commitment of traders report reveals fund money sitting on a record net short of around 82k contracts in Chicago wheat. That's over 11 MMT, and more than the expected entire size of the 2015 US SRW crop, so there could be some upside if they get spooked by anything. But what? Russia has said that it will be June before it decides on what to do next with the country's wheat export duty. The Russian Ag Minister is reported to have said that he sees no reason to prolong the duty beyond the end of June. Stats Canada are due out next Thursday April with their Canadian 2015 planting intentions report. A Reuters survey pegs the all wheat average trade estimate at 24.2 million acres versus the 2014 area of 23.835 million. For barley the average estimate is 6.7 million acres versus the 2014 area of 5.88 million. May 15 CBOT Wheat closed at $4.94 1/2, unchanged; May 15 KCBT Wheat closed at $5.09 1/4, up 1 cent; May 15 MGEX Wheat closed at $5.32 3/4, down 2 1/4 cents. For the week that puts Chicago wheat 32 cents lower, with Kansas down 52 1/2 cents and Minneapolis down 48 1/4 cents.
