Chicago Soybeans Hit Lowest Level Since 2009

24/08/15 -- Soycomplex: Beans closed lower, but well off session lows, as traders attempted to weigh up the implications of the developing situation in China. They account for two thirds of all global soybean trade after all. Despite ending well off the lows of the day, this was still the first sub-$9/bushel close on a front month since 2009. The USDA reported weekly export inspections of 210,128 MT, taking cumulative shipments to 1.822 billion bushels, with 11 days remaining in the 2014/15 marketing year. The USDA projection for exports this season is 1.825 billion bushels. They left crop ratings unchanged at 63% good to excellent. They said 87% of the crop is setting pods, one point behind the 5-year average, with 96% of the crop blooming - 2 points behind the norm. The final results of last week's ProFarmer crop tour put the average US soybean yield at 46.5 bu/acre and estimated production at 3.887 billion bushels, both are slightly below the USDA's thinking - but not by much. If Chinese demand was to fall off a cliff then the soybean market really is in trouble. As yet though there is no evidence that it has, or will. Soybean imports in July were in fact at record levels. Since the Chinese devalued the yuan it's lost around 3% in value against the US dollar, which will make imports more expensive, but not dramatically so. The USDA reported 120,000 MT of soybeans sold to "unknown" for 2015/16 today, which frequently means "China" of course. Sep 15 Soybeans closed at $8.92 3/4, down 12 1/2 cents; Nov 15 Soybeans closed at $8.74, down 15 1/2 cents; Sep 15 Soybean Meal closed at $326.40, down $0.50; Sep 15 Soybean Oil closed at 26.55, down 81 points. The low of the day on Nov 15 beans was $8.55, almost 20 cents below the close.

Corn: The corn market closed around 3 cents higher, having been around 12 cents lower at one stage. The market seemed to conclude that China isn't a major player in the world corn import market. It certainly doesn't buy much from the US at the moment, although it is a significant home for corn from Ukraine. The USDA left crop conditions unchanged at 69% good to excellent, although there was a one point switch into excellent. They said that 85% of the crop is at the dough stage, up from 71% a week ago and 4 points ahead of the 5-year average. Denting, at 39% was 18 points up on the week, but 4 points behind the 5-year average. MARS cut their estimate for EU-28 corn yields this year from 6.71 MT/ha a month ago to 6.40 MT/ha, saying that "large areas of Europe have been negatively impacted by high temperatures and dry conditions, hitting summer crops during their most critical grain-filling stage." Adding that "record temperatures and critically low soil moisture levels led to critical situations in eastern France and southern Germany. Another area of concern is the status of summer crops in Poland which have been affected by the hot and dry conditions." Weekly US corn export inspections came in at 883,987 MT. Marketing year shipments to all destinations total 1.721 billion bushels versus the USDA's projection for the full season of 1.81 billion. APK Inform said that Ukraine seaports exported over 150 TMT of corn last week. Russia's Ag Ministry estimated corn production there this year at a record 13 MMT. Weakness of the Russian rouble and Ukraine hryvnia will help both their exports in 2015/16, which should get off to a brisk start once the harvest begins. Sep 15 Corn closed at $3.68 3/4, up 3 1/2 cents; Dec 15 Corn closed at $3.80 1/2, up 3 1/4 cents. The low of the day on Dec 15 was 365 1/2 cents.

Wheat: The wheat market closed with small gains, having been more than 12 cents lower at one stage. As with corn, the market seemed to conclude that the Chinese situation will have more of a negative impact on beans than it will for wheat. The USDA reported that the 2015 US spring wheat harvest has raced to 75% complete as of Sunday night. That's up from 53% done a week ago, and far higher than the 5-year average of 47%. The US barley harvest is similarly advance at 86% complete versus only 50% normally at this time. Weekly US export inspections were poor at only 277,992 MT, that was around half those of the previous week and for the same week a year ago. A sudden switch to a strong euro and weaker US dollar might now start to help US exports a bit though. Excessive wetness in Argentine (possibly El Nino related) is causing damage to their winter wheat crop. Plantings were already down 700,000 ha on last year, according to the Buenos Aires Grain Exchange (the Rosario exchange has them even lower). Rain now threatens to wipe out 200-300,000 ha of what did get planted, in a best case scenario, says Dr Cordonnier. A worst case scenario is for losses on up to 700,000 ha, he says. Some private local estimates now put production there at only 8-9 MMT, versus 12.8 MMT a year ago. That would obviously cut their 2015/16 exports significantly, and leave Brazil looking for supplies from outside the Mercosur trade bloc once again. The US would be well-positioned to supply those needs. Russia's Ag Ministry forecast a wheat crop there this year of 59.8 MMT, similar to last year's levels. Exports still lag a year ago significantly though due to the current duty tied to the value of the ever falling rouble. That hit new lows versus the dollar and euro today as crude dipped to fresh lows. Sep 15 CBOT Wheat closed at $5.03 1/4, up 3 3/4 cents; Sep 15 KCBT Wheat closed at $4.75 3/4, up 4 3/4 cents; Sep 15 MGEX Wheat closed at $5.04 1/2, up 3 cents. The low of the day in Chicago was $4.86 3/4 cents.