Chicago Pre-Easter Closing Comments

02/04/15 -- Soycomplex: Beans closed higher both on the day and for the week. The firmer tone came despite news from the USDA that demand seems to have finally switched to South America once and for all. Weekly export sales of only 27,400 MT for 2014/15 were down 95 percent from the previous week and 92 percent below the prior 4-week average. There were however decent new crop sales of 568,300 MT, mainly for unknown destinations (359,500 MT), China (118,000 MT) and Mexico (90,000 MT). The modest old crop sales included decreases for unknown destinations (51,000 MT), China (40,500 MT) and Japan (39,200 MT). Actual exports of 665,100 MT were down 13 percent from the previous week and 3 percent from the prior 4-week average, but still not too bad. Old crop sales commitments are now 99.6% of the USDA forecast for the season, so a significant slowdown at this point is needed and not unexpected. Meal sales were strong at 214,100 MT for 2014/15 and 183,500 MT for 2015/16. MDA CropCast estimated the US 2015 soybean crop at 103.93 MMT, down 0.31 MMT from last week and 3.8% down on last year as yields decline 4.5%. The FAO cut their forecast for the world 2014/15 soybean crop from 314 MMT to 312 MMT, although they still raised ending stocks 4 MMT to 46 MMT. The USDA's FAS in Brazil said that the country would plant 300k ha less soybeans for the 2015/16 harvest (31.1 million ha) than a year ago. This would be the first reduction in area in 9 years. They peg production next season at 94 MMT, with exports at 48 MMT. Informa were said to have estimated Brazilian production at 93.0 MMT this year, with Argentina at 57.5 MMT. May 15 Soybeans closed at $9.86, down 3 3/4 cents; Jul 15 Soybeans closed at $9.91 1/4, down 3 1/4 cents; May 15 Soybean Meal closed at $327.30, down $4.60; May 15 Soybean Oil closed at 31.04, up 35 points. For the week, front month beans added 18 3/4 cents, meal gained $5.90 and oil added 44 points. The new crop soybean:corn price ratio closed the week at 2.37:1 versus less than 2.3:1 last Friday, and the 1 1/2-year low of 2.24:1 set Monday night, prior to the release of Tuesday's USDA planting intentions report. US corn planting in southern states remains slow, and dryness and cool temperatures in the Midwest is also threatening to delay corn planting there, which could ultimately mean more soybeans getting sown than the USDA predicted on Tuesday.

Corn: The corn market closed around 4 cents higher on the day, but with small losses for the week. Weekly export sales of 406,600 MT for delivery in 2014/15 were down 7 percent from the previous week and 26 percent below the prior 4-week average. These were also the second lowest of the marketing year so far. There were also new crop sales of 25,100 MT. Exports of 683,400 MT were down 36 percent from the previous week and 37 percent below the prior 4-week average. Total commitments on old crop are now 82% of the USDA target for the season versus 85% a year ago and 78% typically at this time. Interestingly for sorghum there were net sales reductions of 212,700 MT. Still, US exporters have already sold 103% of the USDA’s target for the season, much of it to China. MDA CropCast estimated the US 2015 corn crop at 351.1 MMT, or 13.822 billion bushels. That's down 3.8% on last year, and down 0.7 MMT from last week. Rains in the Mississippi Delta region continue to slow fieldwork, they noted. The FAO added 3 MMT to their forecast for the global 2014/15 corn crop to 1025 MMT, that's far above the 990 MMT estimated by the USDA and IGC. They also increased world ending stocks by 9 MMT to 219 MMT. Again this is well above the USDA's 185 MMT and the IGC's 191 MMT forecasts. EU corn imports so far this season now stand at 7.1 MMT, down almost a third on those of a year ago at this time. South Korea's KOCOPIA tendered for 55,000 MT of optional origin corn for August shipment. Informa added 2.4 MMT to their Brazilian 2014/15 corn production forecast, raising their estimate to 74.7 MMT, which now puts them broadly in line with the USDA. The Memphis-based analyst said that said yields in full season corn in Rio Grande do Sul are higher than previously estimated. MDA CropCast were unchanged on Brazil (76.91 MMT) and Argentina (23.55 MMT). Corn planting in the Delta remains retarded by persistent wetness. The USDA are due to resume their regular weekly planting progress reports on Monday. May 15 Corn closed at $3.86 1/2, up 4 3/4 cents; Jul 15 Corn closed at $3.94 1/2, up 4 1/2 cents. For the week May corn lost 4 1/2 cents.

Wheat: The wheat market closed anywhere from 5 to more than 10 cents higher on the day, and with decent gains for the week. The wheat market has now closed higher for 4 out of the last 5 sessions, largely on the back of US winter wheat concerns due to dryness and winterkill issues. The latter is said to be a particular problem in Nebraska. "In 50 years of being in west-central and southwest Nebraska, this is the worst I've ever seen," a University of Nebraska Extension Cropping Systems Specialist was quoted as saying by DTN. Many growers are now waiting for a visit from their crop insurance agent to get permission to rip up the crop, he added. Arlan Suderman of Farm Futures Magazine said that he'd seen pictures of even worse damage than in Nebraska from northwestern Kansas. MDA CropCast cut their forecast for the US 2015 winter wheat crop by 41 million bushels to 1.5 billion on the back of continued dryness in the Southern Plains. That lopped 1.1 MMT off their forecast for the 2015 US all wheat crop, reducing that to 58.5 MMT from a week ago, although that's still up 4.5% on a year ago. Informa projected US 2015 winter wheat production will total 1.497 billion bushels, up 120 million from a year ago. Demand for US wheat isn't great though, unless you are a fund manager with a short position to cover. Weekly export sales this week only came in at a poor 162,100 MT for delivery in 2014/15. Even if this was up 58 percent from the previous week's disaster, it was still down 54 percent from the prior 4-week average. There were also relatively modest sales of 131,000 MT for 2015/16. Exports came in at a less than spectacular 338,200 MT, and were down 32 percent from the previous week and 29 percent below the prior 4-week average. EU wheat sales on the other hand are booming. Brussels issued a third highest ever volume of soft wheat export licences this week, which took the March total to a record in excess of 4 MMT. The FAO added 1 MMT to their forecast for the world 2014/15 wheat crop, pegging that at 728 MMT, and raised ending stocks by 6 MMT to 205 MMT - mostly due to increases for China and Australia. May 15 CBOT Wheat closed at $5.36 1/4, up 7 3/4 cents; May 15 KCBT Wheat closed at $5.82 3/4, up 10 3/4 cents; May 15 MGEX Wheat closed at $5.95 1/2, up 5 cents. For the week, Chicago wheat gained 28 1/2 cents, Kansas added 29 3/4 cents and Minneapolis advanced 20 1/2 cents.