Chicago Corn Bombs
14/07/15 -- Soycomplex: Beans closed lower after hitting an 8 month high in the overnight session. Fresh news was generally lacking. Maybe today's action was a reaction to the fact that the USDA only cut US crop ratings one point in the good to excellent category? The bulls do after all need to be fed every day. Europe's rapeseed crop continues to shrink, with Oil World today cutting their production estimate by 400,000 MT to 21.6 MMT, down 12% on a year ago. The German analysts also predicted China's July soybean imports at a record 9.2-9.5 MMT, which they said would be "substantially above earlier expectations". China’s stockpiles are also increasing, and may be 3 MMT higher than a year earlier by the end of July, they added. The NOPA crush figure for June is due out tomorrow, with the average trade estimate for that at 141.478 million bushels. If realised that would be the second largest June crush on record. The highest being set in 2007 at 141.583 million bushels. Jul 15 Soybeans closed at $10.39, down 6 1/4 cents; Nov 15 Soybeans closed at $10.25, down 3 1/2 cents; Jul 15 Soybean Meal closed at $374.80, up $8.80; Jul 15 Soybean Oil closed at 32.32, up a point.
Corn: The corn market closed sharply lower. As with beans fresh news was scarce, and perhaps this was a reaction to the fact that the USDA left crop condition ratings unchanged in the good to excellent category last night, when a one point fall was anticipated. Fund money is now heavily long Chicago corn, so there may also have been an element of profit-taking today. There's much debate about whether the old adage of "rain makes grain" will prove to be true of this year's US corn crop. "Widely divergent conditions are being reported in Midwest corn, worst where historic flooding has developed, and best in the drier areas," said Martell Crop Projections. "Corn prospects are most promising in the drier areas of the Midwest. Iowa, Nebraska, Minnesota, South Dakota, and Wisconsin all have reported 77% - 85% good-excellent corn in the July 12th report from USDA. This is the offset to sub-standard corn in flooded areas," they said. Between today and Sunday the US should have normal temperatures across central areas, with more heat across the southwest third of the central US. Cooler conditions are on the cards after that. The NWS 6-10 and 8-14 day forecasts call for above to much above normal temperatures and normal to below normal rains east of the Rockies. Germany's DRV forecast corn production there unchanged from previously at 4.7 MMT, although that's more than 9% down on a year ago. Jul 15 Corn closed at $4.24, down 9 1/2 cents; Dec 15 Corn closed at $4.38 3/4, down 13 cents.
Wheat: The wheat market closed mixed. The sharply lower move in corn didn't help wheat's cause today. Egypt's GASC bought 235,000 MT of Romanian and Russian wheat at around $200/tonne or less on an FOB basis. French wheat was comfortably out-priced. US wheat wasn't even offered. Egypt said that they now have enough wheat purchased to cover their needs through to February, so we can expect another tender from them next week! Algeria are also tendering for optional origin wheat for October delivery. Japan are in the market for 137,487 MT of food wheat from the US, Canada and Australia for Aug-Sept shipment in their regular weekly tender. The 2015 harvest in Russia and Ukraine is underway, but behind last year's pace. Ukraine has only harvested 2.25 million ha compared to over 4 million ha a year ago. Yields however are said to be up on year ago levels. The same is also said to be the case in Russia, where 3.7 million ha has been cut so far compared to 5.1 million ha a year ago. Yields there are said to be averaging 3.76 MT/ha on wheat versus 3.60 MT/ha this time last year. Germany's DRV cut their forecast for the country's 2015 wheat crop by 400,000 MT to 25.4 MMT, significantly below the previous year's figure of just under 27.8 MMT. The heat wave of the past two weeks "has led to some record high temperatures in an accelerated ripening and possibly reduced yields," they said. Wheat harvesting in some parts of the country is now underway, they added. Jul 15 CBOT Wheat closed at $5.83 1/2, up 2 cents; Jul 15 KCBT Wheat closed at $5.50, down 8 cents; Jul 15 MGEX Wheat closed at $5.79 1/4, down 7 1/4 cents.
