Mixed Week For Chicago Grains: Beans Sharply Lower, Wheat Sharply Higher, Corn Unchanged
15/05/15 -- Soycomplex: Beans closed lower on the day and for the week. Tuesday's WASDE report, and more specifically the forecast 500 million bushels US carryout at the end of the 2015/16 continue to weigh on the market. Even a record large for the month of April NOPA soybean crush of 150.3 million bushels couldn't help beans close in positive territory today. That was well above the average trade estimate of 148.2 million bushels according to a Bloomberg survey and also more than 13% up on 132.7 million in April 2014. It was also 10 million bushels higher than the previous April record crush set in 2008. The Buenos Aires Grain Exchange said that the Argentine soybean harvest was approaching 80% complete, and held steady with their forecast for a record 60 MMT crop, that's 1.5 MMT more than the USDA's revised forecast released Tuesday. Beans tested $9.50 on the Jul 15 contract, which just about held. We've only had two front month closes below that level since the market set 4-year lows back in late September/early October. The new crop soybean:corn price ratio finished the week at 2.44:1 - down from the 7-month high of 2.53:1 set prior to Tuesday's USDA numbers. The trade will be looking to Monday for the regular weekly export inspections report and to see how much progress has been made with planting soybeans this past week. US farmers were 31% done with soybeans a week ago, that should have edged up somewhere into the 40's this week, it is thought. Ukraine's Ag Ministry said that the country is 84% planted on both sunflower and soybeans at 3.86 million ha and 1.58 million ha respectively. Jul 15 Soybeans closed at $9.53 1/4, down 3 3/4 cents; Aug 15 Soybeans closed at $9.46 1/2, down 3 3/4 cents; Jul 15 Soybean Meal closed at $303.30, up $1.10; Jul 15 Soybean Oil closed at 33.07, down 27 points. On a front month basis beans fell 31 1/4 cents during the course of the week, meal was down $11.90 and oil grained 27 points. Managed money has a net short on beans of over 50k contracts as of Tuesday night, today's Commitment of Traders report shows.
Corn: The corn market closed a couple of cents or so lower on the day, with little in the way of fresh news. Ukraine said that its corn crop was now 87% planted on 3.89 million ha. The Ukraine Ministry said that the country had exported 15.4 MMT of corn so far this season. APK Inform said that they expect full season Ukraine corn exports down 3.9% year on year at 19 MMT. Zambia's Ag Ministry said that dry weather will cut their 2015 corn harvest by 21% to 2.6 MMT. The Buenos Aires Grain Exchange said that the Argentine corn harvest was a third done, and forecast production unchanged from a week ago at 25 MMT. The French corn crop was reported at 92% sown as of Monday, up 10 points in a week and 4 points ahead of this time last year. Taiwan was said to have bought 130,000 MT of Brazilian corn for Jun/Aug shipment in a tender. There's talk of a Chinese "clampdown" on sorghum imports, in an effort to create a bit more demand for its own burdensome domestic corn stocks. Some analysts estimate these at 20 MMT more than Tuesday's official USDA figure of 80 MMT as at the end of 2014/15. An Australian sorghum shipment to China has apparently been rejected this week due to the presence of a thing called Johnsongrass - one of the most troublesome of perennial grasses. Johnsongrass hybridizes with grain sorghum and, under certain conditions, the leaves can produce toxic amounts of hydrocyanic acid, which can poison livestock when ingested. This looks reminiscent of the sudden rise in rejections of US corn shipments to China more than a year ago which suddenly brought that trade to a halt. The market is expecting that US 2015 corn planting could be as much as 90% done in Monday night's report from the USDA. Planting last week was 75% complete versus the 5-year average pace of only 57% done. There's some talk of a frost risk in parts of the north western US Corn Belt next week. Jul 15 Corn closed at $3.65 1/2, down 2 1/2 cents; Sep 15 Corn closed at $3.72 1/2, down 2 cents. For the week corn was even on a front month basis. Managed money is still sitting on a hefty short according to tonight's Commitment of Traders report.
Wheat: The wheat market closed slightly lower on the day, but with good gains for the week. Wheat stumbled for most of the session, but still looks pretty good on the charts, Benson Quinn suggested. Russia cancelled its export duty on wheat today, which may allow a further 1-2 MMT to be shipped out between now and the end of the season. Egypt's GASC said that it had bought 4.6 MMT of foreign wheat for import in their just ended 2014/15 season, that's down sharply on the 6.4 MMT purchased a year previously. The top suppliers were France (2 MMT), Romanina (1.1 MMT), Russia (910 TMT), the US (345 TMT) and Ukraine (190 TMT). "A bumper wheat harvest is anticipated in China from exceptionally generous spring rainfall on the North China Plain. The two leading wheat provinces Henan and Shandong were extremely wet receiving 150-200% of normal rainfall mid March to mid May. USDA anticipates a record China wheat harvest of 130 MMT. Abundant wheat supplies would increase ending stocks to 71.6 million tons, a 14% increase from last year. Exceptionally wet conditions are linked to a strong El Nino influence. The North China Plain is especially sensitive to the ENSO signal, receiving drenching rain with the El Nino, but drought with La Nina," said Martell Crop Projections. FranceAgriMer raised the proportion of the French winter wheat crop rated good to very good one point to 91%. "A prolonged period of drought has come to an end in Western Europe giving wheat a needed boost. France is the leading wheat country in the European Union and also wettest, following drenching rainfall the past 2-3 weeks. Parched wheat farms in United Kingdom also got a needed boost from heavy rainfall recently, boosting wheat potential. Denmark is also very wet. Very significant rainfall reached Germany and Poland, all important important wheat countries," said Martell Crop Projections. Ukraine said it has exported 10.1 MMT of wheat so far this season. APK Inform estimated full season wheat exports there at 11 MMT. Russia said that is spring wheat crop was 25.8% sown on 3.4 million ha versus 4.1 million ha a year ago. Jul 15 CBOT Wheat closed at $5.11, down 3 1/4 cents; Jul 15 KCBT Wheat closed at $5.41 3/4, down 1 1/2 cents; Jul 15 MGEX Wheat closed at $5.61 1/4, down 5 1/4 cents. On a front month basis Chicago wheat gained 34 1/2 cents, with the Kansas market adding 31 1/4 cents and Minneapolis advancing 32 3/4 cents.
