Chicago Markets All End Lower Following USDA Report

09/04/15 -- Soycomplex: Beans tumbled despite the USDA lowering 2014/15 US ending stocks from the 385 million estimated last month to 370 million. The latter number was exactly in line with the average trade guess, so was of little surprise to the market. A sharply higher US dollar, and weekly soybean export sales of a net negative 176,700 MT for 2014/15 overshadowed everything else. New crop export sales of 502,400 MT were in line with expectations. Also pretty much in line with trade ideas was a 1 MMT increase for potential Argentine soybean production this year to 57 MMT, and Brazil being left unchanged at 94.5 MMT. The export potential of all the leading protagonists was left unchanged, as were Chinese imports. Global ending stocks were also virtually unaltered from a month ago at 89.55 MMT. In other news, the Buenos Aires Grain Exchange said that the Argentine soybean harvest is 13.8% complete, up 6.8 percentage points in a week. They forecast Argentine production higher than the USDA at 58.5 MMT, either figure would be a record. The Rosario Grain Exchange said that soybean harvesting in their region is now past halfway done. Yields are very variable it would seem, ranging from "below expectations" in some of the areas flooded earlier in the season to "exceptional". Current prices mean that margins aren't good on rented land, they add. MDA CropCast forecast the 2014/15 Argentine soybean crop at 56.12 MMT, pegging Brazil at 94.34 MMT, both unchanged on a week ago. For 2015/16 they estimate Argentina to produce 55.55 MMT, and have Brazil at 93.85 MMT. ABOIVE said that at least 400 TMT of Brazilian soybeans and meal are "stuck" in Santos port waiting to be shipped, but delayed by the major fire at a fuel depot on the docks there. May 15 Soybeans closed at $9.53 1/2, down 18 cents; Jul 15 Soybeans closed at $9.58 1/4, down 18 1/4 cents; May 15 Soybean Meal closed at $312.10, down $7.80; May 15 Soybean Oil closed at $30.84, down $0.11

Corn: The corn market closed a little bit easier, doing its best to ignore the strong dollar, and falling wheat and soybean values. The new crop soybean:corn price ratio closed at 2.34:1 tonight. In line with expectations, the USDA raised Argentine corn production this year by 0.5 MMT to 24 MMT and held pat on Brazil at 75 MMT. Sneaking in under the radar a little was a near 1 MMT hike for production in Serbia to 7.7 MMT. The USDA raised US ending stocks from 1.777 billion in March to 1.827 billion, although that was actually a bit lower than the 1.854 billion that the market was expecting. US corn consumption was lowered from 302.15 MMT to 300.88 MMT. World ending stocks were raised more than 3 MMT to nearly 188.5 MMT. US corn exports were left unchanged, along with Brazil. Argentina and Serbia both got a 0.5 MMT increase. The Buenos Aires Grain Exchange estimated that the Argentine corn harvest is now 17.1% complete, and pegged production 1 MMT below the USDA at 23.0 MMT. MDA CropCast estimated Argentina's crop at 23.6 MMT, unchanged from a week ago. They also were unchanged on their outlook for Brazil at 76.9 MMT. Looking ahead, they cut their view on Argentina in 2015/16 to 20 MMT, but upped Brazil to 75.3 MMT. South Korea's NOFI are tendering for 207,000 MT of optional origin corn for November shipment. COFCO said that the Chinese government aim to stockpile a record 80.0 MMT of corn by the end of April versus the 69 MMT bought for stockpiling in 2014. Weekly US export sales of 639,600 MT for delivery in 2014/15 were up 57 percent from the previous week and up 45 percent from the prior 4-week average. There were also sales of 62,900 MT for 2015/16. That was at the top end of trade expectations. Weekly exports of 1.17 MMT were also quite robust. May 15 Corn closed at $3.78, down 1 1/4 cents; Jul 15 Corn closed at $3.85 3/4, down 1 1/2 cents.

Wheat: The wheat market was anywhere from 6-10 cents lower across the three exchanges. Weekly export sales of 319,900 MT for delivery in 2014/15 were up 97 percent from the previous week and 16 percent above the prior 4-week average. Of note was a sale to China (57,500 MT). Exports themselves were "ho hum" at 375,700 MT. It's saying something when sales of less than 320 TMT are almost viewed as impressive. Nevertheless, the USDA highlighted the plight of US wheat exports, which were lowered 1 MMT to 24 MMT, noting that these are now seen down 24% year-on-year and the lowest in 12 years. Exacerbating the problem for the US, Canada's wheat exports will match those of their illustrious cousin at 24 MMT for the first time ever, they added. Sitting very comfortably at the top of the world wheat export table now is Europe, who's export potential was raised 2 MMT from a month ago to a record 33.5 MMT, nearly 40% more than those from the US. World wheat ending stocks were reduced around 0.5 MMT to a still more than ample 197.2 MMT. US wheat ending stocks were trimmed back a little to 684 million bushels, slightly lower than the 692 million average trade estimate. In other news, MDA CropCast cut their forecast for the 2015 Indian wheat crop by 2.2 MMT to 92.3 MMT, reflecting recent reports of rain and hail damage just prior to harvesting. They also reduced their outlook on production in both Argentina and Brazil in 2015/16 by 0.5 MMT each to 12.0 MMT and 7.3 MMT respectively. Turkey's 2015 crop was raised 1.8 MMT to 18.0 MMT however. Japan bought 122,429 tons of milling wheat for May–June shipment in its regular combo of US, Canadian and Australian origin material. Rusagrotrans forecast Russia's 2014/15 grain carryout at a record 15.5 MMT, as wheat shipments slow following the introduction of the new export duty on Feb 1. May 15 CBOT Wheat closed at $5.18 3/4, down 7 1/2 cents; May 15 KCBT Wheat closed at $5.51 1/2, down 9 3/4 cents; May 15 MGEX Wheat closed at $5.74, down 6 1/2 cents.