Chicago Grains Market Closing Comments
13/05/15 -- Soycomplex: Beans managed to regain some of yesterday's losses, with the best advancement coming, as you might expect, on the nears. That's where the tightness is, and that's where the big US exports are. Further down the line though, the picture looks bearish. El Nino seems to be on the way, and that is typically a rain maker for the Midwest in the summer months. The Rosario Grain Exchange upped their forecast for the Argentine soybean crop by 600,000 MT to 59.6 MMT. That's now close to the Buenos Aires Exchange's estimate of 60 MMT and eclipses the new 58.5 MMT forecast from the USDA, already making that yesterday's news. The US weather forecast remains friendly, soybean planting is well ahead of schedule, and there isn't anything threatening on the horizon yet. Chinese imports of a monster 77.5 MMT in 2015/16 may be a bit ambitious from the USDA, with their economic growth stuttering. That's an average of 6.5 MMT for every single month of the year. Trade estimates for the April NOPA crush due out on Friday average 148 million bushels, down sharply from the record 162.82 million crushed in March. May 15 Soybeans closed at $9.75, up 8 cents; Jul 15 Soybeans closed at $9.57 1/4, up 1 3/4 cents; May 15 Soybean Meal closed at $301.70, down $0.80; May 15 Soybean Oil closed at 33.11, up 30 points.
Corn: The corn market closed mixed, with fresh news thin on the ground now that yesterday's USDA report has been digested. The US Energy Dept reported weekly ethanol production at 921,000 barrels/day, up from 881,000 bpd the previous week. US ethanol inventories fell 463,000 barrels to 20.3 million barrels. The sharply lower US dollar was a supportive factor. The French Ag Ministry estimated corn plantings there to be down 7.6% this year at 1.71 million ha. Russian corn planting is said to be 62% complete on 1.7 million ha versus 1.8 million ha this time a year ago. Taiwan bought 65,000 MT of Brazilian corn for Jun/Jul shipment in a tender. Tonight's close puts the new crop soybean:corn price ratio at 2.47:1, down from 2.48:1 yesterday and a 7-month high of 2.53:1 set earlier in the week. US plantings are going very well, and the weather outlook offers a friendly tone, although wetness may have slowed up planting progress a bit this week. It looks like a summer El Nino weather event is on the cards. As well as bringing good rains to the US corn belt, this would also typically keep heat stress away. May 15 Corn closed at $3.56, down 1 cent; Jul 15 Corn closed at $3.62 1/4, up 1 1/4 cents.
Wheat: The wheat market closed with small gains on all three exchanges. The now heavily tipped arrival of a "substantial" El Nino event is one of interest to the wheat market. That would typically bring wet weather to the US, and that is what they are getting at the moment. Whilst that might benefit corn and soybeans just after they've been planted, it could be detrimental to US wheat just before it's due to get harvested. El Nino also frequently causes crop losses in Australia, particularly in the east of the country. More than 80% of the Australian state of Queensland is now said to be in drought - the largest percentage on record. Russia's spring wheat crop is said to be 18.9% planted on 2.5 million ha versus 3.1 million ha a year ago. Tunisia said that it's grain crop would fall from 2.3 MMT to 1.5-1.8 MMT due to lack of rain in April. South Korea bought 20,000 MT of optional origin feed wheat in a tender. Conab forecast the Brazilian 2015/16 wheat crop at 7.05 MMT, up 18% on last year despite a 5.3% decline in planted area. The CWB said that Canadian spring wheat planting is progressing at the fastest pace in a decade. Jul 15 CBOT Wheat closed at $4.81 1/2, up 1 cent; Jul 15 KCBT Wheat closed at $5.09 1/2, up 1 3/4 cents; Jul 15 MGEX Wheat closed at $5.40, up 3 1/2 cents.
