Chicago Grains Head Home To Kick The Cat
11/08/15 -- Soycomplex: Beans closed lower, giving up almost all of yesterday's gains. News of a Chinese currency devaluation, aimed at boosting their exports (but hampering imports) hit all commodities in general. Brazil's Conab estimated this year's soybean crop there at a record 96.2 MMT, unchanged on previously but up sharply on 86.1 MMT a year ago. The weak Brazilian real means that exports are flooding out of the country, up about 35 percent in the past three months, according to Oil World. Brazil's 2014/15 soybean exports are estimated at 49.1 MMT versus 2013/14 exports of 45.7 MMT. In Argentina the June soybean crush was said to be 4.516 MMT, up 7.9% from a year ago, leaving plenty of meal to export. They are of course the world's leading exporter of meal. All of yesterday's confidence seems to have evaporated in just 24 hours. The market will now be nervous heading into tomorrow's USDA report. The trade is expecting the USDA to cut 2015 US plantings by more than 1 million acres, and lower yields from 46 bu/acre to somewhere between 44-45 bu/acre. It also expects 2015/16 ending stocks to fall from 425 million bushels to close to 300 million. Aug 15 Soybeans closed at $10.14, down 30 3/4 cents; Nov 15 Soybeans closed at $9.71 1/2, down 23 cents; Aug 15 Soybean Meal closed at $347.90, down $14.60; Aug 15 Soybean Oil closed at 30.08, down 33 points.
Corn: The corn market closed around 13 cents lower, also giving up most of Monday's advances in a fairly spectacular "Turnaround Tuesday" style. The fund money that was a featured buyer must be going home to give the cat a right good kicking tonight. Once a magical talisman that could do no wrong, "managed money" at the moment it would seem simply can't get on the right side of the market. The trade is looking for the USDA to cut 2015 US corn yields to around 164.5 bu/acre, down from 166.8 bu/acre a month ago, in tomorrow's report. It is also expecting acres and therefore production to be reduced, with the latter coming in at an average 13.332 billion bushels in a recent Bloomberg survey, down versus 13.530 billion from the USDA in July and 6.2% below the record 14.216 produced in 2014. Conab forecast the Brazilian corn crop at 84.3 MMT versus 81.8 MMT a year ago. Exports are seen rising sharply to 26.4 MMT from 20.9 MMT a year ago, aided by bumper production and the weak Brazilian real. The country's exports exports last month were more than double those of a year ago. Rusagrotrans forecast a record Russian corn crop of 12.3 MMT this year, with 2015/16 exports rising to 3.5 MMT. Ukraine's Ag Ministry forecast a 2015 corn crop there of 26.5 MMT, saying that recent heat and dryness hasn't done too much damage. APK Inform estimated Ukraine's 2015/16 domestic corn consumption at 9.1 MMT, down 8.5% on a year ago. Europe's corn crop remains "fried" and production there could fall to 60 MMT, say Strategie Grains, almost 6 MMT below the USDA's July estimate. They get a chance to correct that tomorrow. Sep 15 Corn closed at $3.76 1/2, down 13 3/4 cents; Dec 15 Corn closed at $3.87 1/2, down 13 1/2 cents.
Wheat: It was never going to take much to get the wheat market, a reluctant follower of corn and beans yesterday, to end lower. And so it proved to be the case today. The Russian wheat harvest has advanced to 45% complete, producing a crop of 40.2 MMT to date. Rusagrotrans estimated total grain production there at 100-102 MMT, including 57.3 MMT of wheat (down from 59.7 MMT a year ago) and 17.4 MMT of barley (20.4 MMT in 2014). All those forecasts are higher than their earlier estimates though. Glencore estimated Russia's 2015 wheat crop at 58.5 MMT, with 2015/16 export potential of 22.1 MMT. Kazakhstan said that their 2015 harvest is 5.3% complete on 788k ha, producing a crop of 1.31 MMT to date. Yields are up from 1.22 MT/ha in 2014 to 1.66 MT/ha. Belarus said that their 2015 grain harvest is 75% complete on 1.69 million ha, producing 6.36 MMT so far with yields averaging 3.76 MT/ha versus 3.96 MT/ha a year ago. The USDA's FAS in Bangladesh estimated the country's 2015/16 wheat imports down from 3.8 MMT to 3.6 MMT. Conab estimated Brazil's 2015 wheat crop at 7.00 MMT. A Manitoba weekly crop progress report said that winter wheat yields are ranging from 55-90 bu/acre, with good quality. "A return to warmer and drier weather conditions is welcome to aid in ripening of spring crops," they added. In tomorrow's USDA report US all wheat production is estimated at 2.153 billion bushels, from within a range of estimates of 2.075–2.210 billion. The USDA July estimate was 2.148 billion and US 2014/15 all wheat production was 2.026 billion. US ending stocks in 2015/16 are seen at 858 million bushels, from a range of estimates of 742-913 million and the USDA July estimate of 842 million. Sep 15 CBOT Wheat closed at $5.07 1/4, down 18 1/4 cents; Sep 15 KCBT Wheat closed at $4.88, down 16 1/2 cents; Sep 15 MGEX Wheat closed at $5.19 1/4, down 15 cents.
