Chicago Grains Closing Comments - Friday Night

22/05/15 -- Soycomplex: Beans closed lower on the day, and for the week, setting fresh contract lows. Midwest weather forecasts lean warm and wet, offering little in the way of threat. The USDA reported 109,400 MT of new crop soymeal sold to Thailand under the daily reporting system today. The US are on holiday on Monday for Memorial Day, so the regular weekly crop progress report from the USDA is delayed until Tuesday. The trade is expecting US soybean plantings to have reached 55-60% done. Beans look like they are lining up to test the September front month low around the $9.10 area, before possibly staging a push below $9/bushel. "A minor correction to the upside in soybeans isn’t out of the question. Sustaining a rally, absent a weather scare, seems impossible at this point," said Benson Quinn. Rabobank forecast soybean prices at $8.90 in Q4 of 2015 and $8.80 in Q1 of 2016. The USDA's forecast of a 2015 US soybean area of 84.6 million acres could be exceeded given the strong early pace of plantings, they said. They suggest that the final planted area could be 1 million acres more than this, which is exactly the number quoted by Lanworth earlier in the week. Yields however might only average 45 bu/acre, which is a bushel less than the USDA estimated earlier in the month, say Robobank. They see meal prices at $295 in Q4 of this year, before gradually rising in the first half of 2016. The commitment of traders report shows fund money sitting on a record soybean short of over 90k contracts as of Tuesday night, and they are thought likely to have extended that position since, having been an estimated net seller of around 8,000 lots today alone. Jul 15 Soybeans closed at $9.24 1/4, down 14 1/4 cents; Nov 15 Soybeans closed at $9.07, down 11 1/2 cents; Jul 15 Soybean Meal closed at $304.20, up $0.10; Jul 15 Soybean Oil closed at 31.64, down 61 points. For the week that puts front month beans 29 cents lower, with meal up 90 cents and oil down 143 points.

Corn: The corn market closed around 4-5 cents lower on the day and for the week. "A private but respected analyst pumped his new crop domestic estimate to 170 bushels per acre citing the emergence of El Nino," said Benson Quinn. The USDA were at 166.8 bu/acre earlier in the month. Rabobank are neutral to slightly bullish on corn, forecasting prices at $3.80/bushel at the end of the year, rising modestly to $3.90 in Q1 and $4.00 in Q2 of 2016. That's about where the market forward prices are already. They see US plantings this year at 89.2 million acres, a bit less than Lanworth's 89.5 million estimate, and exactly in line with the USDA. They currently only project US yields at a conservative 163 bu/acre, but concede that if the weather co-operates and anything above the USDA's 166.8 bu/acre estimate is achieved, then prices could fall below $3.50/bushel. The USDA will report on corn planting progress on Tuesday, with a figure somewhere in the low 90's expected. They are also likely to give us their first corn crop ratings of the season, with expectations being that a high, possibly record high, proportion of the crop to be in good to excellent condition. Tonight's closes put the new crop soybean:corn price ratio at 2.40:1 versus 2.43:1 a week ago. Russia reported corn plantings there at 84.5% complete on 2.4 million hectares. Ukraine's corn planting is now just about finished. Reuters report that China imported 605,438 MT of DDGs in April, the largest volume since September 2014, and more than double the amount shipped in during March. "We expect monthly imports would stay at about this level until September," Shanghai-based JC Intelligence said. CNGOIC report that China only imported 140,837 MT of corn last month. with Ukraine (around 94,800 MT) and Russia (37,800 MT) the largest suppliers. They are also importing large volumes of sorghum as a corn replacement too. Jul 15 Corn closed at $3.60, down 5 cents; Sep 15 Corn closed at $3.66 3/4, down 4 3/4 cents. For the week Jul 15 was 5 1/2 cents easier.

Wheat: The wheat market closed lower on the day but higher for the week. US weather forecasts on the Plains are now less wet than they were for next week. Whilst US wheat exports struggle, Europe's are flying with another 647 TMT worth of soft wheat export licences granted this week, taking the season to date total to 29.1 MMT, more than 12% ahead of last season's record pace. EU barley exports meanwhile are more than 50% ahead of where they were this time a year ago at a cumulative 8.4 MMT. The USDA did however report the sale of 101,950 MT of US wheat for delivery to Taiwan during the 2015/16 marketing year under the daily reporting system today. Rabobank said the the current US wet weather concerns are unlikely to provide the wheat market with long-term support. "The fundamental situation has not changed, 2014/15 US wheat stocks will be big, given the sluggish export pace, and 2015/16 stocks are forecast to build further," they said. They forecast Chicago wheat prices at $5.20/bushel in Q4 of this year, rising modestly to $5.30/bushel in Q1 and Q2 of 2016. Both are below the levels where the market is currently at. They see Russia's 2015/16 wheat crop at 54-55 MMT and exports at more than 20 MMT. They see production in Ukraine at 22-23 MMT and exports at around 11 MMT. Strong competition once more from the Black Sea region will trim EU exports back to around 30 MMT next season, they predict. Production in Europe is estimated at 149 MMT. The Buenos Aires Grain Exchange forecast Argentine wheat plantings at 4.1 million hectares this year, a decline of around 7% on last year. As expected tonight's commitment of traders report shows fund money exiting some of their hefty short bets on wheat for the week through to Tuesday. Sep 15 CBOT Wheat closed at $5.23, down 6 1/2 cents; Sep 15 KCBT Wheat closed at $5.57, down 10 3/4 cents; Sep 15 MGEX Wheat closed at $5.80, down 9 1/4 cents. For the week, CBOT wheat was up 12 cents, with KCBT 15 1/4 cents higher and MGEX adding 18 3/4 cents.