Chicago Corn Manages Small Weekly Gain On Ideas USDA Too High On Yields/Production

21/08/15 -- Soycomplex: Beans closed lower on the day and for the week. Sentiment over the Chinese economy is weighing on the entire complex, despite the news that the country imported a record large 9.5 MMT of soybeans in July. Over 90% of those imports came from Brazil and Argentina though. The Chinese hog herd has decreased 20% over the last 2 years, said Rabobank. Thanks to modernisation in livestock and aquaculture methods though demand for soybeans/meal will remain strong though, they added. The Argentine Ag Ministry estimated their 2014/15 soybean crop at a record 61.4 MMTs versus previous estimate of 60.8 MMT. US 2015 soybean yields will average 45.4 bu/acre, a Bloomberg survey of 13 ProFarmer crop tour scouts showed. That's more than 3% below the USDA estimate of 46.9 bu/acre. John Deere estimate yields at 46.7 bu/acre and forecast average prices of $9.20/bu for the 2015/16 marketing year. Rabobank see prices bottoming at $9.40/bu in Q4 this year. ProFarmer estimated the US soybean crop at 3.887 billion bushels versus the USDA's 3.916 billion. That figure is on the basis that the USDA’s August harvested acreage estimate is accurate. A Bloomberg survey of 11 scouts on the tour came up with an average production estimate of 3.757 billion bushels. Rabobank estimated Brazil's soybean plantings for next season to rise 2-3%, aided by the weak Brazilian real. The weekly commitment of traders report shows managed money cutting almost 40k contracts off their net long position in the week through to Tuesday night. StatsCanada said that canola production there will fall to 13.3 MMT, down almost 15% from 15.6 MMT a year ago, and below the average analyst forecast of 13.7 MMT. Sep 15 Soybeans closed at $9.05 1/4, down 16 1/4 cents; Nov 15 Soybeans closed at $8.89 1/2, down 17 3/4 cents; Sep 15 Soybean Meal closed at $326.90, down $4.00; Sep 15 Soybean Oil closed at 27.36, down 62 points. For the week beans were 19 3/4 cents lower, with meal down $4.00 and oil down 142 points on a front month basis.

Corn: The corn market closed around 5 cents lower on the day, but still with small gains for the week. ProFarmer estimated the US 2015 corn crop at 13.323 billion bushels on a yield of 164.3 bu/acre. The USDA are at 13.686 billion bushels and 168.8 bu/acre. Corn yields will average 164.5 bu/acre, according to a Bloomberg poll of 17 participants on the tour. A similar survey estimated production at 13.391 billion bushels. Rabobank are at 165 bu/acre. Confidence is therefore rising that the USDA numbers on corn are too high. John Deere are right up there though with an estimate of 168.5 bu/acre. China reported July corn imports of 1.1 MMT, taking Jan/Jul imports to 3.76 MMT. DDGs imports were a record 1.1 MMT last month. Russia forecast their 2015 corn crop at a record 13 MMT. StatsCanada estimated their corn crop at 12.3 MMT. French corn crop conditions were left unchanged this week at 55% good to very good. They were 87% good to very good a year ago. Corn in Europe is being affected by excessive heat, said Rabobank. They cut their production estimate to 60 MMT versus the USDA's 62.3 MMT forecast. The EU will be forced to import a near record 16 MMT of corn in 2015/16, they said. A lot of that will come from Brazil and Ukraine, aided by their weak domestic currencies, they added. They see US corn prices at $3.80/bushel in the final quarter of this year, rising to $3.90, $4.00 and $4.10 in the first three quarters of 2016. "Midwest temperatures are predicted to drop 5-7 F below normal in the upcoming week. If there is a worry in Midwest corn, it would be reduced heat units from cooler temperatures that would slow down maturation. Worry number two is that June flooding caused irreversible damage to the corn yield in Missouri, Illinois, Indiana and Ohio," said Martell Crop Projections. "For now, it’s all about caution. Money managers are fleeing the commodity and equity sectors for the relative safety of government bonds," said Arlan Suderman of Water Street Solutions. The weekly commitment of traders report shows managed money reducing their net long position by 27,492 contracts for the week through to Tuesday night. Sep 15 Corn closed at $3.65 1/4, down 5 3/4 cents; Dec 15 Corn closed at $3.77 1/4, down 5 1/4 cents. For the week Sep 15 corn was up 1 1/4 cents and Dec 15 was 1 3/4 cents higher.

Wheat: The wheat market finished lower on the day and for the week across the three exchanges. Wheat also succumbed to the general global economic malaise. Production estimates in Europe and the Black Sea are increasing. France is said to be "maxed out" with wheat as various silos in both Rouen and Dunkirk announce that they are closed for intake until exports pick up. Russia's Ag Ministry estimated their wheat crop at 59.6 MMT this year. Rabobank raised their forecast 2 MMT to 59 MMT due to improved conditions in the spring wheat belt. Black Sea wheat exports in 2015/16 will beat last season by 3 MMT at 42 MMT, they predict. EU exports will drop to 31 MMT, they add. Rabobank now have the EU 2015 wheat crop at 151 MMT, which is 3 MMT higher than a month ago. It is also 3.2 MMT above the current USDA forecast. Production in Argentina and Canada is shrinking though. Some 600,000 hectares of Argentine wheat, equivalent to almost 20% of plantings nationwide, are at risk of being lost by flooding in the centre and north of the provinces of Buenos Aires and southern Santa Fe, according to a report in the country's La Nacion newspaper. Meanwhile StatsCanada today estimated this year's wheat crop at 24.6 MMT, down 16% from 29.3 million in 2014. It's also well below the average trade estimate of 26.2 MMT. John Deere estimated the 2015 US wheat yield to rise to 44.1 bu/acre, up from 43.7 bu/acre a year ago. They reduced their price forecast for 2015/16 to $5.05/bu from a previous estimate of $5.10/bu. Rabobank see prices a little higher, at $5.20 in Q4 of this year and $5.30 and $5.40 in Q1 and Q2 of 2016. Russia said that it's 2015 grain harvest was 47.4% complete producing a crop of 62.7 MMT to date. That includes 44.7 MMT of wheat off 52.5% of the planned area. Average wheat yields are down 8.6% at 3.1 MT/ha. Tonight's commitment of traders report shows that managed money has a small 3,537 net contract short in Chicago wheat and one of 6,978 contracts in Kansas as of Tuesday night. Sep 15 CBOT Wheat closed at $4.99 1/2, down 6 3/4 cents; Sep 15 KCBT Wheat closed at $4.71, down 10 1/4 cents; Sep 15 MGEX Wheat closed at $5.02, down 11 cents. For the week that puts Chicago wheat 6 1/2 cents lower, with the Kansas market down 18 3/4 cents and Minneapolis 16 1/2 cents easier.