Chicago Corn Ends Limit Up, Leading US Grains Sharply Higher
30/06/15 -- Soycomplex: Beans closed with strong gains after the USDA put Jun 1 US soybean stocks at 625 million bushels versus trade ideas of 670-680 million. "Based on the USDA demand balance sheet, 4th quarter demand should be 470 million bu which implies a 14/15 carryout of 200 million bushels or 130 million less than their June estimate of 330 million," noted Benson Quinn. Plantings this year were placed at a record high 85.14 million acres, a bit below the average trade guess of 85.332 million acres, although up versus the USDA's March figure of 84.635 million. Analysts were already pointing out prior to this that this was based on a survey done before the worst of the Midwest wetness hit, so it is widely anticipated that plantings will in fact come in lower than today's forecast. The USDA will apparently re-survey some states and update their acreage figures in their August WASDE report. "From early talk of large increase in soybean acres, today’s number along with lower carryin estimate is bullish with US 15/16 carryout now closer to 325 million than June’s USDA estimate at 475 million," said Benson Quinn. Volume today was "huge" they added, doubtless helped by fund money caught on the wrong side short-covering. Jul 15 Soybeans closed at $10.56 1/4, up 53 3/4 cents; Nov 15 Soybeans closed at $10.37 1/4, up 57 1/4 cents; Jul 15 Soybean Meal closed at $359.50, up $17.60; Jul 15 Soybean Oil closed at 33.56, up 51 points.
Corn: The corn market closed around limit up. It's been a long time since I last wrote those words. The USDA put US corn stocks and plantings lower than the trade expected, sparking some frantic short-covering. US June 1 corn stocks were pegged at 4.447 billion bushels versus an average trade guess of 4.557 billion. US corn plantings were estimated at 88.897 million acres versus the March USDA figure of 89.199 million and the average trade guess in a Bloomberg survey of 89.136 million. It is also 1.7 million lower than a year ago. The USDA put harvested acres at 81.101 million which is more than 2 million below last year. "Combine the lower stocks estimate with tighter acres and decreasing yield expectations and things begin to tighten for the 2015 crop. Undoubtedly the top has been taken off the crop with most analyst now pegging the crop towards the mid to lower 160’s per acre. Using 162.5 bushels per acre and 81.101 million acres, total production would be 13.178 bln bushels versus 13.630 bln in the June WASDE report," calculated Benson Quinn. The EU Commission estimated corn production there this year at 68.45 MMT, down 7% from a year ago. South Africa's CEC cut their estimate for this year's corn crop there to 9.755 MMT from 9.84 MMT previously. This would be the smallest crop since 2007, said Bloomberg. Jul 15 Corn closed at $4.14, up 30 3/4 cents; Dec 15 Corn closed at $4.31 1/2, up 29 1/4 cents.
Wheat: The wheat market closed with strong gains, supported by spillover from beans and corn. This was despite the USDA pegging US June 1 stocks and the 2015 US wheat acreage higher than the average trade estimates. Wheat stocks of all classes were 753 million bushels versus an average trade guess of 712 million. Plantings were pegged at 56.079 million acres compared to the average pre-report guess of 55.707 million. None of that seemed to matter on a day like today, and wheat joined the other markets and moved strongly higher for a fourth session in a row. Chicago wheat ended at it's highest close of the year on a front month basis. Stats Canada added some friendly news by cutting their forecast for Canadian all wheat plantings to 24.1 million acres, down from a previous government estimate of 24.8 million, and also below the average trade guess of 24.77 million. Rusagrotrans cut their forecast for this year's Russian grain crop to 98 MMT, down from 105.3 MMT a year ago, on dryness in some areas. The head of the Russian Grain Union said that they may drop their wheat production forecast from the current 55 MMT when they release their next estimate. Dryness and extreme heat in many parts of Europe this week might be trimming wheat production potential there. The EU Commission today cut their forecast for this year's EU wheat crop from 141.46 MMT to 139.95 MMT versus 148.76 MMT a year ago. Jul 15 CBOT Wheat closed at $6.14 3/4, up 34 1/4 cents; Jul 15 KCBT Wheat closed at $5.93 1/4, up 21 3/4 cents; Jul 15 MGEX Wheat closed at $6.22 1/4, up 18 1/4 cents.
