Chicago Markets Mixed, Beans And Wheat Lower, Meal and Corn Higher
16/07/15 -- Soycomplex: Beans closed lower for the third session in a row. "Weather played big factor in today’s session with the market higher early in the day session on a hotter outlook for next week, but a shift in the mid-day model that moved the heat back to the southwest allowed market to drift back lower," said Benson Quinn. Meal was up, in the nearby months at least, despite a rumour that South American product was being imported into the SE of the US, they noted. There are supportive stories around for meal too, like that some US dairy farmers are switching into it and away from canola meal at current price differentials. Weekly export sales of 45,500 MT of old crop and 507,000 MT of new crop were a bit better than some trade estimates. Most of the new crop (403,000 MT) went to "unknown" destinations. Lanworth estimated the US 2015 soybean crop at 3.81 billion bushels, somewhat lower than the USDA's 3.885 billion and 4% down on last year's 3.969 billion. MDA CropCast were unchanged on their US soybean forecast at 3.694 billion bushels, along with making no alteration to a world crop estimate of 299.2 MMT, down 2.3% on a year ago. There are reports that China bought two cargoes of Argentine beans yesterday for Sept-Oct shipment. There's also talk that they may have bought as many as 25 cargoes of South American beans over the last couple of weeks for Oct-Nov shipment. China's July bean imports are expected to be at record levels of 9 MMT or more. Aug 15 Soybeans closed at $10.19, down 6 cents; Nov 15 Soybeans closed at $10.11, down 5 cents; Aug 15 Soybean Meal closed at $363.60, up $1.40; Aug 15 Soybean Oil closed at 31.46, down 19 points.
Corn: The corn market closed with small token gains. That came despite weekly export sales of 331,100 MT for delivery in 2014/15 being a marketing-year low. Sales of 325,100 MT for 2015/16 weren't the greatest either. Sorghum sales were just 100 MT. A report on Reuters suggested that China's new love affair with sorghum could come to an abrupt end in 2015/16, with imports forecast down 30% compared to 2014/15. The country's huge domestic corn stockpile means that Beijing will be forced to cut local prices in an attempt to shift some surplus stocks. In addition current new crop US sorghum prices are around $270 CIF versus feed barley from Europe, Australia or Canada at around $240 and even cheaper options available from Ukraine. China are said to have imported 4.27 MMT of sorghum in the first 5 months of the year, a 51% hike compared to a year ago. Lanworth estimated the US 2015 corn crop at 13.9 billion bushels, some 2.7% higher than the USDA's 13.53 billion, although 2.2% lower than 14.216 billion a year ago. MDA CropCast estimated the US crop at 13.525 billion, unchanged from a week ago. They raised their view on the global corn crop in 2015/16 by 2.07 MMT due to a corresponding increase for Brazil. Conab say that Brazil’s second harvest of corn will boost the national corn crop to 81.81 MMT, which if achieved, would set a new record, note Martell Crop Projections. "Weather conditions have favoured the development of 'safrinha' corn, grown as a second crop after the summer harvest is finished, they say. Mato Grosso is around a third harvested on their safrinha corn, and in Parana they're about a quarter done, slowed by heavy rain. Strategie Grains cut their EU-28 corn production forecast by 800,000 MT to 66.7 MMT on heat/dryness, although that's still around 1 MMT higher than the USDA's current 65.77 MMT estimate. Sep 15 Corn closed at $4.30, up 1/2 cent; Dec 15 Corn closed at $4.41, up 3/4 cent.
Wheat: The wheat market closed lower. Weekly export sales of only 291,500 MT were pretty dismal, and once again highlight the lack of competitiveness of US wheat on the international stage. How on earth are the US going to manage to increase exports 15% this year, as the USDA currently predict? Today's numbers mean that US exporters are 25% sold on the USDA's target for the season. A year ago that figure was 36% sold. There are reports that Mexico has bought EU wheat rather than material from its next door neighbour. With the euro remaining under pressure it's not inconceivable that EU wheat will be turning up on the US east coast before too long. Strategie Grains cut their view on EU soft wheat production this year from 141.6 MMT to 140.9 MMT, Despite the drop, they see exports going the other way. They estimated those at 26.6 MMT versus a previous forecast of 25.7 MMT. MDA CropCast were unchanged on their forecasts for the global, US and EU wheat crops at 706.9 MMT, 2.133 billion bushels and 141.4 MMT respectively. Lanworth estimated the US all wheat crop at 58.8 MMT versus 58.46 MMT from the USDA and 55.13 MMT a year ago. Official Russian Ministry reports say that whilst this year's harvest is running behind last year's pace, yields are up. Ukraine are saying the same thing. Exports in the new 2015/16 have been slow to get going out of Russia, but have been brisk out of Ukraine. The latter have already exported close on 1 MMT of grain in little over the 2 weeks of the 2015/16 season. The Buenos Aires Grain Exchange said that rains in Argentina are delaying wheat planting, which they estimate to be 75% complete. They forecast the final area at 3.75 million ha this year, down 15% versus 4.4 million ha a year ago. The Rosario Grain Exchange are even lower with their planting estimate at 3.5 million ha. Sep 15 CBOT Wheat closed at $5.62 1/4, down 4 1/2 cents; Sep 15 KCBT Wheat closed at $5.53 1/4, down 5 3/4 cents; Sep 15 MGEX Wheat closed at $5.82, down 7 1/2 cents.
