Chicago Grains End Mixed On The Day, But All Are Lower On The Week
28/08/15 -- Soycomplex: Beans closed higher on the day, but lower for the week. China's economy appears to hold the key short-term, followed by US production prospects and then South American plantings. The Chinese Shanghai Composite Index closed 4.8% higher today, after a 5.3% gain yesterday. As far as US production goes, we are due to have the latest round of private analyst releases next week, with FCStone due out Tuesday, and also Informa at some point. Last time round FCStone had the US bean crop estimated at 3.797 billion bushels, with yields at 45.0 bu/acre. Informa were at 3.789 billion and 45.4 bu/acre last time. The USDA were at 3.916 billion bushels and 46.9 bu/acre earlier this month. Their new figures are due out on Sep 11. In Brazil is now seems widely expected that 2015 soybean plantings will rise by around 3%. There is also widespread talk that this won't necessarily be translated into a 3% production increase. The weather needs to co-operate of course, but also the weak Brazilian real means that the cost of fertiliser is much higher, thus application rates could be reduced, meaning possible lower yields. The weekly commitment of traders report shows managed money cutting their net long in beans by around 19k lots for the week through to Tuesday night. They are still net long, but only to the tune of 775 contracts. Sep 15 Soybeans closed at $8.93 1/4, up 7 cents; Nov 15 Soybeans closed at $8.85 1/2, up 6 1/2 cents; Sep 15 Soybean Meal closed at $321.40, down $1.50; Sep 15 Soybean Oil closed at 27.79, up 90 points. For the week front month beans were still 12 cents easier, meal fell $5.90 whilst oil advanced 43 points.
Corn: The market closed around unchanged on the day, and marginally lower for the week. The Chinese situation is seen as less of a big thing for US corn (and indeed corn in general) than it potentially is for beans. A Chinese government auction of domestic corn stocks went spectacularly badly this week, with them selling only around 40 TMT of the 5.0 MMT on offer. The trade talk of increased soybean plantings in Brazil due to higher fertiliser costs may mean a decrease in the corn area, as it is the more input-hungry crop. It could also mean reduced yield potential, although all that is still a fairly long way off. As mentioned above, we have FCStone and Informa due to enlighten us with their yield and production forecasts next week. Last time round FCStone had US corn yields at 165.0 bu/acre and production at 13.381 billion bushels. Informa lined up at 165.4 bu/acre on yields and 13.412 billion on production. The USDA's August estimates were for production of 13.686 billion bushels, with yields at 168.8 bu/acre. Planalytics Inc. were yesterday said to have estimated 2015 US corn yields at 166.8 bu/acre versus a previous estimate of 167.2 bu/acre. The EU Commission today forecast EU-28 corn production at only 58.7 MMT versus a previous estimate of 65.5 MMT. The USDA are currently at 62.25 MMT, and the new EU Commission estimate would be down nearly 22% from 75.13 MMT a year ago. If China doesn't want Ukraine's corn this year then Europe will probably take it. FranceAgriMer raised French corn crop conditions one point to 56% good to very good today, the first increase in more than 2 months. The Buenos Aires Grain Exchange said that the Argentine corn harvest is 95.6% complete versus 93.2% a week ago and 98% a year ago. Managed money was net long around 73.5k corn lots as of Tuesday night, almost identical to a week previously. Sep 15 Corn closed at $3.63 1/4, down 1/2 cent; Dec 15 Corn closed at $3.75, unchanged. For the week that puts Sep 15 2 cents lower, with Dec 15 down 2 1/4 cents.
Wheat: The market closed around 4-8 cents lower on the day and with losses in the region of 10-20 cents for the week. Where the EU corn crop this year appears to have been badly damaged by heat and drought, wheat seems to have "got out of jail free" with production estimates rising as yields come in better than expected, and in some cases at record levels. The EU Commission today forecasting a 2015 soft wheat crop there of 140.7 MMT versus a previous estimate of 139.4 MMT. The German Ag Ministry estimated their 2015 wheat crop at 26.4 MMT, down only relatively modestly (-5%) from a year ago. The UK harvest is ongoing, and yields are said to be well above the 10-year averages. The Russian wheat harvest as 58% complete, producing a crop of 47.7 MMT to date, according to their Ag Ministry. Egypt bought 55,000 MT of Ukraine wheat in a tender at just $177.20/tonne FOB, or little more than $190/tonne including freight, having yesterday yesterday bought 60,000 MT of Russian wheat. There were 16 cargoes offered, and 9 of them were Russian, but the Ukraine bid beat them all, even if not by much once slightly higher freight had been added on. The point is that there were no shortage of Russian offers, despite talk of exporters drawing in their horns somewhat until they get further clarification on proposed changes to the current export duty. As well as getting production figures from FCStone and Informa this week, Stats Canada are also due out on Thursday with their Jul 31 stocks estimates. For all wheat the average trade estimate 6.5 MMT versus 10.351 MMT a year ago. Sep 15 CBOT Wheat closed at $4.77, down 7 1/4 cents; Sep 15 KCBT Wheat closed at $4.57 3/4, down 6 3/4 cents; Sep 15 MGEX Wheat closed at $4.90 1/2, down 4 cents. That puts Chicago wheat 22 1/2 cents lower on the week, with Minneapolis down 11 1/2 cents and the Kansas market down 13 1/4 cents. Managed money was shown doubling their net short in CBOT wheat for the week through to Tuesday night, they are now net short 7.2k contracts.
