Chicago Grains Jump Higher On Short-Covering, Dollar Weakness

02/06/15 -- Soycomplex: Beans closed with decent gains, posting their largest one-day advance since Apr 1. "The combination of short covering and a lack of appetite on the sell side as the dollar sold off sharply were the primary factors behind today’s move," said Benson Quinn. Generally, speaking the fundamental side hasn’t changed however, they noted. US soybean planting maybe didn't advance as much in the past week as many in the market expected in last night's crop progress report, and plantings are now only on par with normal and not as well ahead of schedule as they were. Old crop demand continues to hold up well meanwhile. Rapeseed prices in Canada and Europe have moved sharply higher, making soybeans look cheap. The same could be said for meal. Canadian canola crops in Manitoba were said to have been hit by "extensive" frost damage over the weekend. Stats Canada reported that the country has exported 2.41 MMT of soybeans Aug/Apr, up from 2.38 MMT a year ago. China (780 TMT) and the Netherlands (320 TMT) were the largest homes, but 199 TMT was also shipped to the US where there is a niche market for non-GM beans. Oil World forecast world production of the 10 major oilseeds to fall to 522.4 MMT in 2015/16, down from 528.8 MMT in previous season, with bumper 2014/15 soybean and rapeseed yields unlikely to be repeated. World soybean production is seen falling 1.2% to 314.9 MMT, with rapeseed output predicted to drop 2.9% to 67 MMT. The USDA currently has the world soybean crop at 317.3 MMT, and global rapeseed production at 68.1 MMT. Jul 15 Soybeans closed at $9.40 3/4, up 14 3/4 cents; Nov 15 Soybeans closed at $9.17, up 15 3/4 cents; Jul 15 Soybean Meal closed at $301.80, up $5.20; Jul 15 Soybean Oil closed at 34.17, down 34 points following two sessions of "out-performance" relative to beans and meal.

Corn: The corn market closed around 7 cents higher. Again, some in the trade will have been surprised that the USDA only reported corn planting advancing 3 points on the week last night. " there are roughly 3 million acres of corn left to plant at what would typically be considered after the optimal planting window. On one hand, these areas have plenty of moisture. On the other hand, current prices aren’t offering much incentive," suggested Benson Quinn. Colorado, Kansas, Missouri and Texas have the most left to plant. Dollar weakness today was also a supportive factor, along with renewed strength in wheat. The early Brazilian safrinha corn harvest is said to be underway in Mato Grosso and Parana. In Mato Grosso good rains are seen boosting yields, with IMEA predicting production in the state at 17.8 MMT, a 0.5% rise on last year despite plantings being down 8%. Mato Grosso is said to be 1% harvested and Parana is at 2% done. South Korea are tendering for 138 TMT of optional origin corn for Oct/Dec shipment. Russia said that its 2015 corn crop was 94.3% planted on 2.6 million ha. Ukraine said that it was 98% done on 4.26 million ha. There's some talk of the developing El Nino potentially causing some crop losses in China this year, although their domestic corn stocks are so high it is unlikely that this would create much fresh demand for corn on the international markets. Jul 15 Corn closed at $3.59, up 6 3/4 cents; Dec 15 Corn closed at $3.76, up 7 cents.

Wheat: The wheat market closed sharply higher in what looks like short-covering and consolidation following recent losses. Rain deluged winter wheat on the southern Plains is finally set to get a break, with warmer and drier weather in the forecast. The market will now be nervous what sort of quality wheat the trade is going to find itself with once the combines finally get a chance to move in. Parts of Oklahoma are said to have received more than 15 inches of rain during the month of May, so some serious quality downgrades are likely. There's trade talk of hot and dry weather potentially being a problem for wheat in Russia, despite constant Ag Ministry assurances that all is well, and that total grain production there this year could/should be anywhere between 95-105 MMT. Russia bought more than 36 TMT of grain at their latest intervention purchase round today, taking the total volume purchased so far to past 1 MMT. There's also talk that the new export duty on wheat could harm exports, particularly of high end quality wheat, later in the year. The Russian Grain Union have reportedly requested that the new duty will only kick in if prices hit RUB13,000/tonne rather than the RUB11,000/tonne currently in the mandate. Rusagrotrans said that wheat exports in 2014/15 could hit a record 21.5 MMT, excluding those to Kazakhstan which the government doesn't class as "exports" as they are part of a closed trade union. Including Kazakhstan total Russian wheat exports could be 22.2 MMT, they added. Jul 15 CBOT Wheat closed at $5.12 1/2, up 18 3/4 cents; Jul 15 KCBT Wheat closed at $5.35 1/2, up 21 1/4 cents; Jul 15 MGEX Wheat closed at $5.71 1/4, up 23 1/4 cents.