Chicago Closing Comments - Monday Night

13/07/15 -- Soycomplex: Beans closed with modest gains as the USDA trimmed good to excellent crop ratings by one point from a week ago to 62% - in line with trade expectations and 10 points behind last year. Indiana, Ohio, Illinois and Missouri are the states with the poorest conditions - some of the largest producing states in the country. Illinois has 26% of the crop in poor to very poor condition, and that is the second largest producer in the US. They said that 6% of the crop is setting pods, one point behind the 5-year average, 38% is blooming, one point ahead of the 5-year average, and put emergence at 96% versus 100% normally at this time. "Soybean yields are more difficult to estimate than corn, but the crop is at a significant disadvantage from Kansas to Ohio. The crop has been slow to canopy to maximise sunlight and has been sitting in saturated soils in much of that area," said Arlan Suderman of Water Street Solutions. He estimates 2015 US soybean yields at closer to 44 bu/acre or less, versus the USDA's current 46 bu/acre. "That would suggest prices above current levels, perhaps much higher, depending on how the crop performs in the weeks ahead," he suggests. Having recently flipped to a long position in beans, fund money will be hoping for some upside themselves, and if they can help to kick the can along that way to suit themselves then they surely will. Customs data showed that China imported 8.09 MMT of soybeans in June, up sharply from 6.13 MMT in May. Weekly export inspections came in at 134,666 MT. Exporters have now shipped 97% of the USDA’s target for the season. Jul 15 Soybeans closed at $10.45 1/4, up 1 3/4 cents; Nov 15 Soybeans closed at $10.28 1/2, up 6 1/4 cents; Jul 15 Soybean Meal closed at $368.00, up $2.00; Jul 15 Soybean Oil closed at 32.65, up 34 points.

Corn: The corn market closed around 6-7 cents higher. The trade was expecting the USDA to cut corn crop ratings by one point to 68% good to excellent. What they got after the close however was unchanged at 69%. Conditions are the poorest in Indian, North Carolina and Ohio. The USDA said that 27% of the crop was silking compared to 34% for the 5-year average at this time. "Field conditions have become excessively wet in a wide swath of the corn belt damaging yield potential in Missouri, Illinois, Indiana and Ohio. Heavy rainfall developed once again last week in central Illinois and Indiana, 3-5 inches, worsening flood damage. This was the equivalent of a full month’s worth of July rainfall. Note that extremely heavy rain was received in June too, from 8 to 12 inches in the Eastern Midwest and Missouri," said Martell Crop Projections. "The time-worn motto for Midwest corn is that 'rain makes grain', though conditions have become excessively wet this season. Episodic flooding has flushed fertilizers out of the root zone, also stunting growth and drowning small plants in the low-lying areas. Corn prospects vary sharply across the Midwest depending on where flooding has developed," they add. Iowa, the largest corn state in the nation, has 82% of the crop rated good to excellent, but in Ohio only 41% of the crop is rated that high. Weekly export inspections came in at just over 1 MMT. Cumulative exports are running at 81% of the USDA's target for the season versus 82% typically at this time. "I think it is reasonable at this point to suggest that the national average yield is probably closer to 160 than to the USDA’s trend 166.8 bushel," said Arlan Suderman. Fund money was sitting on a net long in corn of 173,280 contracts as of last Tuesday night, a sharp reversal from the significant net short position that they had previously held. They will be hoping for some further weather-related upside. Jul 15 Corn closed at $4.33 1/2, up 6 1/4 cents; Dec 15 Corn closed at $4.51 3/4, up 6 3/4 cents.

Wheat: The wheat market closed mixed. Expiring tomorrow July contracts are displaying some erratic behaviour. Weekly export inspections were a pretty modest affair at 249,787 MT, underlying the fact that the strong US dollar is keeping US wheat from being competitive on the export market. Exports for the new season so far are only 7% of the USDA's target for the season versus 10% normally at this time. The USDA reported the 2015 US winter wheat harvest at 65% done, 10 points up on the week, but 3 points behind the norm. The top producing state of Kansas is now 93% done. Spring wheat was estimated at 91% headed, well ahead of only 61% typically at this time. Spring wheat crop conditions were up a point on a week ago at 71% good to excellent. Russia said that it had shipped out 255 TMT of grains in the first week of the new season, some 83% less than in the same week in 2014. Whether this is simply due to weather-related harvest delays, or the new export duty on wheat is unclear. Russia has harvested 2.7 million ha so far this season, down from 3.5 million ha a year ago. That's produced a 10 MMT grain harvest so far, down from 12.4 MMT a year ago, although average yields are said to be up at 3.71 MT/ha compared to 3.53 MT/ha in 2014. Bloomberg report that Russian Deputy Agriculture Minister Sergei Levin and the Deputy Head of Federal Customs Service Vladimir Malinin met representatives of Russian grain companies on Monday to discuss the wheat export tax, but the outcome of that meeting is unstated. Ukraine said that they'd exported 527 TMT of grains so far in the new season. APK Inform raised their estimate for Ukraine's 2014/15 grain ending stocks from 8.2 MMT to 8.5 MMT, slightly below 8.6 MMT a year previously. Jul 15 CBOT Wheat closed at $5.86 3/4, up 5 1/4 cents; Jul 15 KCBT Wheat closed at $5.58, up 1/2 cent; Jul 15 MGEX Wheat closed at $5.86 1/2, down 10 3/4 cents.