Chicago Closing Comments - Thursday

30/07/15 -- Soycomplex: Beans closed higher, helped by strong export sales. The USDA announced old crop soybean sales of 416,700 MT, along with those for new crop of 898,100 MT versus trade expectations of around 500 TMT to 1 MMT for both marketing years combined. The old crop supply side is already tight as we know. Exports of 195,500 MT this week were up 41 percent from the previous week and 11 percent above the prior 4-week average too. That takes total shipments so far this season to 48.47 MMT. That's now above the USDA target for the season of 48.3 MMT and there's still 2.62 MMT worth of outstanding sales on the books, taking total commitments to almost 106% of the USDA's current 2014/15 estimate. The USDA also announced 140,000 MT of US beans sold to unknown for 2015/16 delivery under the daily reporting system. Conflictingly, Reuters carried a report saying that South American soybeans would dominate sales into China for much longer than normal this year "thanks to back-to-back record crops in Brazil and huge stocks in Argentina." Chinese customs data shows that the country imported 35.2 MMT of soybeans in the first half of 2015, up 3% from a year ago. They imported more Brazilian and Argentine material and less from the US. Weakness of the Brazilian real and Argentine peso will continue to aid South American exports, the article said. The IGC were unchanged on their forecast for world soybean production in 2015/16 at 316 MMT, but raised trade and consumption levels, lowering ending stocks by 4 MMT to 48 MMT. "Nevertheless, this would still be a new high, and is linked to an expected 16% increase in major exporters’ stocks," they said. "World trade in rapeseed/canola in 2015/16 is projected to be 13% lower y/y. While shipments to the EU are likely to expand due a heavy fall in local output, deliveries to Asia are expected to drop as buyers shift to attractively priced alternatives." The latter presumably referring to soybeans as well as other oilseeds. Aug 15 Soybeans closed at $9.90 1/4, up 7 1/4 cents; Nov 15 Soybeans closed at $9.50, up 6 3/4 cents; Aug 15 Soybean Meal closed at $357.10, up $7.10; Aug 15 Soybean Oil closed at 30.28, up 7 points.

Corn: The corn market managed to regain most of yesterday's 7 cent or so losses. Weekly export sales of 364,900 MT of old crop and 443,300 MT of new crop were at the top end of trade estimates. The old crop sales were also up 63 percent from the previous week. Actual shipments held steady at just over the 1 MMT mark, which is where they have been hovering for just about every week since the end of February. Total shipments so far plus outstanding sales have now hit the USDA's target for the season. The IGC cut their EU corn crop estimate from 67.6 MMT to 67.9 MMT. A Bloomberg survey provisionally pegged it even lower at 63.3 MMT. Coceral were at 65.7 MMT last month versus 2014 production of a record 73.8 MMT. The IGC raised EU corn imports from 12.0 MMT to 12.7 MMT, which is up 40% versus 2014/15. For corn that's about as much positive news as there is really. Net sales of 107,200 MT of sorghum for 2014/15 were reported for China, along with sales of 108,000 MT for 2015/16 split between China and unknown. The IGC raised their forecast for the global crop in 2015/16 by 3 MMT and hiked carryover stocks by 7 MMT. In with all that was a 5 MMT increase for China's corn crop this year, now pegging that at an all time high 225 MMT. China already holds massive corn reserves, and are attempting to auction off 5.3 MMT of these today and tomorrow. Recent auctions haven't been greeted with huge amounts of enthusiasm. There are reports circulating that another 2-3 Brazilian corn cargoes have been sold for shipment into the US for Oct-Nov delivery in the past day or two - right when the US should be awash with their own new crop corn they are importing from South America! South Korea bought 136,000 MT of optional origin corn in a tender. Reuters reported that Asia has been booking large volumes of cheap Black Sea feed wheat in the past few months for delivery July right through to December, directly displacing (mostly South American) corn in the rations. The Buenos Aires Grain Exchange said that the 2014/15 corn harvest in Argentina is now 78.9% complete, up 5.5 points versus a week ago. They raised their production estimate from 25 MMT to 26 MMT due to better yields from late planted corn than anticipated. The USDA were at 25 MMT earlier this month. The market now goes back to trading the weather, and currently the US forecast for August is looking relatively benign. Normal temps are expected occur across the Midwest until Monday, after that things turn a bit cooler than normal for most - apart from the western fringes of the Dakotas, Nebraska and Kansas. Sep 15 Corn closed at $3.73 1/4, up 5 1/2 cents; Dec 15 Corn closed at $3.83 3/4, up 5 1/2 cents.

Wheat: The wheat market closed mostly lower. Weekly export sales of 699,400 MT were a bit better than expected, being up 39 percent from the previous week and 86 percent above the prior 4-week average. The previous 4 weeks have been very modest affairs though, to put that statement into perspective. Exports of 366,700 MT were down 37 percent from the previous week and 2 percent below the prior-4 week average. The IGC lowered their 2015/16 global wheat crop estimate by 1 MMT to 710 MMT, but increased ending stocks by 5 MMT to 201 MMT. On the production side they cut output in Europe by 0.3 MMT to 148.5 MMT, took 2 MMT off Canada to 28 MMT and added 0.3 MMT to the US to 58.5 MMT. Tunisia bought 84,000 MT of optional origin milling wheat for Sep/Nov shipment. South Korea's CJ bought 50,000 MT of Australian wheat for Dec/Jan shipment, and the country's KFMC are tendering 43,100 MT of Australian wheat for December shipment. Reports suggest that Mexico finished up buying Russian wheat this week, having booked French material the previous week, snubbing wheat from next door neighbour the US both times. Russia said that their 2015 grain harvest was 21.9% complete on 10.2 million ha producing a crop of 35.4 MMT to date. That includes 28.4 MMT of wheat and 4.1 MMT of barley, for which the harvests are 29.2% and 14.9% complete respectively. Both are somewhat behind last year's pace. Yields are a bit better than a year ago so far, but are falling as things move on and look like ending up lower at the finish. Reuters said that the Philippines has been buying Ukraine feed wheat for Sep/Oct shipment in preference to Brazilian corn. South Korean and Thai buyers have also been booking feed wheat cargoes from the Black Sea for delivery between now and the end of the year, they added. MDA CropCast raised their world wheat production estimate by 1.07 MMT from last week to 707.4 MMT. Conditions are improving in the US, Canada and Argentina they say. The US spring wheat crop was raised 0.65 MMT to 19.1 MMT, up 10% on a year ago. Day Two of the US Wheat Quality Council’s spring wheat tour produced a yield estimate of 47.3 bu/acre, down from the record Day One estimate of 51.1 bu/acre. Their final average yield estimate is 49.9 bu/acre, up from the 2014 yield of 48.6 bu/acre, and the five year average of 45.2 bu/acre. The Buenos Aires Grain Exchange trimmed back their forecast for Argentine wheat plantings this year from 3.75 million ha to 3.70 million, and down almost 16% on 4.40 million a year ago. Planting of that is 97.9% complete, they added. Sep 15 CBOT Wheat closed at $4.96 1/2, up 1/4 cent; Sep 15 KCBT Wheat closed at $4.91, down 4 1/4 cents; Sep 15 MGEX Wheat closed at $5.26 3/4, down 2 3/4 cents.