USDA Report Sends Chicago Corn Into A Tailspin, And Wheat Follows

31/03/15 -- Soycomplex: Beans closed a little bit higher in a choppy session that saw front month May 15 post a 30 cent trading range before eventually settling 5 1/2 cents higher. "It was a wild session today with USDA report creating a wide ranging and very quick knee-jerk price reaction in the beans," said Benson Quinn. The USDA pegged the 2015 prospective soybean planted area at 84.635 million That's up from 83.7 million acres a year ago and the February Forum provisional forecast of 83.5 million, although not by as much as the trade was expecting. The average pre-report guess was 85.919 million, from within a range of estimates that went as high as 88 million. As was noted last week, given the fact that USDA were only lining up at 83.5 million at their February Outlook Forum AND that they came out with a forecast that was in fact more than 2 million on the low side of what eventually got planted in last year's March 31 report, then it seemed entirely possible to me that the USDA would not not go "all in" with their soybean acreage estimate quite this early in the game. Quarterly stocks were also a bit friendly, coming in at 1.334 million bushels, slightly below the average trade estimate at 1.348 million. That's still well up on 994 million a year ago however. Assuming 46.0 bu/acre a US trendline yield, using demand from the USDA outlook forum estimates the then 2015/16 ending stocks forecast looks closer to 420 million bushels than some private analysts’ estimates that are over 550 million, noted Benson Quinn. There is no shortage of soybeans in the world in 2014/15 however now that we have the South American harvest upon us. Oil World pegged the global crop up 11% this season at 312.8 MMT, and up from from 312.2 MMT a month ago. May 15 Soybeans closed at $9.73 1/4, up 5 1/2 cents; Jul 15 Soybeans closed at $9.77 3/4, up 5 cents; May 15 Soybean Meal closed at $326.80, up $3.60; May 15 Soybean Oil closed at 30.39, down 10 points.

Corn: The corn market posted significant losses, which took the new crop soybean:corn price ratio up from yesterday’s fresh 1 1/2-year low of 2.24:1 to close at 2.38:1 tonight. A Reuters survey last week estimated 2015 US corn plantings at 88.73 million acres. A Bloomberg survey said 88.83 million. The USDA today said 89.2 million. That was in fact higher than the USDA outlook forum estimate of 89.0 million in February, so the trade didn't get it's expected near 2 million acre switch away from last year's 90.6 million acres that they were expecting. Quarterly stocks were pegged at 7.745 billion bushels, up from 7.008 billion last year, and above the average trade estimate of 7.609 billion. The USDA also forecast 2015 US sorghum plantings up more than 11% at 7.9 million acres, led by strong Chinese demand, and the fact that it is a relatively inexpensive crop to grow. In other news, last night the USDA reported Texas corn planting is 20% complete versus 14% a week ago, 27% a year ago and well behind the 43% average for this time of year. Louisiana corn planting is even further behind at 16% complete versus 1% a week ago, 67% a year ago and 81% average on average for this time. Arkansas is 2% planted versus 28% on average and Mississippi was 7% planted versus 39% on average. "Forecasts are leaning drier, but planting progress needs to pick up significantly. Needless to say, the story of today was centered on the USDA report which didn’t offer much price support," noted Benson Quinn. Ukraine said that they'd exported 12.74 MMT of corn so far this season, Russia said that they'd shipped out a more modest 1.91 MMT. Taiwan bought for 65 TMT of what was said to be US origin corn for May/Jun shipment. Argentine transport workers staged a one day strike, and port workers at the Argentine grain export hub of Rosario joined in for good measure. The US Energy Dept are due to release their latest weekly ethanol production numbers tomorrow. May 15 Corn closed at $3.76 1/4, down 18 1/4 cents; Jul 15 Corn closed at $3.84 1/4, down 18 1/4 cents.

Wheat: The wheat market closed sharply lower, more or less reversing last night's strong gains, in classic "turnaround Tuesday" style. The USDA numbers were relatively neutral for wheat, pegging the 2015 all wheat area at 55.4 million acres versus an average guess of 55.8 million and last year’s 56.8 million. The stocks number of 1.124 million bushels was a little below the average trade estimate of 1.140 million. Plunging corn values however dragged the wheat market down with it. Colorado winter wheat conditions improved to 58% good to excellent from 55% a week ago. Kansas was down to 39% good to excellent from 41% a week ago. Oklahoma was unchanged at 44% good to excellent. Nebraska was down sharply to 34% good to excellent from 62% a month ago. In global news, Bloomberg reported that French barley exports to China may rise more than 20-fold to 2.19 MMT this season, according to forecasts from Offre et Demande Agricole. UkrAgroConsult said that Russian barley exports this season could reach 5 MMT up from a previous estimate of 4.2 MMT. Russian barley exports Feb 1 to Mar 25 were up 10-fold from the same period a year ago at 932 TMT, aided by the new export duty on wheat. The head of the Russian Grain Union is apparently calling on the government there to abolish the duty on wheat exports before it is set to automatically expire on Jun 30. The HGCA report that Russian traders are holding off new crop wheat sales whilst the duty remains in place. "Dry weather conditions have dominated the Volga and Southern districts in recent weeks, although wheat is holding its own in the North Caucasus (Stavropol) district with near normal winter-spring rainfall," said Martell Crop Projections. Elswhere, "unseasonably warm weather in western Canada may promote early wheat planting this season, especially in Alberta and southwestern Saskatchewan," they add. May 15 CBOT Wheat closed at $5.11 3/4, down 18 1/2 cents; May 15 KCBT Wheat closed at $5.59 1/4, down 17 cents; May 15 MGEX Wheat closed at $5.76, down 14 3/4 cents.