Chicago Grains Close Mostly Higher, Are The Lows In?
14/09/15 -- Soycomplex: Beans closed mostly higher, although expiring Sep 15 was down 5 cents as it went off the board. Weekly export inspections of 370,901 MT were fairly decent for the time of year. The USDA cut soybean good to excellent ratings by 2 points to 61% which is 11 points behind where they were last year at this time. They said that 35% of the crop is dropping leaves, 4 points ahead of the 5-year average and up from 19% a week ago. The trade was expecting 62% good to excellent and 29% dropping leaves. A Bloomberg survey into trader/analyst sentiment from Friday reported 5 bulls, 13 bears and 6 neutrals on beans, Friday's USDA report was bearish for beans, but the market reversed early losses to closed higher then, and followed through today. That might prompt some to believe that the lows are in, although the seasonal chart would suggest that there's a couple of weeks to go yet before that traditionally happens. With the Brazilian real weak versus the US dollar, any rallies now will only encourage increased soybean plantings there. The market is already expecting a 2-3% increased in planted area, with some private estimates suggesting 2015/16 Brazilian production around the 102 MMT mark. They are expected to begin planting in Mato Grosso late this week or early next week. If the Fed decide to raise US interest rates on Wednesday then we could see a further push to the downside yet as the US dollar firms. Sep 15 Soybeans closed at $8.82 3/4, down 5 cents; Nov 15 Soybeans closed at $8.84 1/4, up 10 cents; Sep 15 Soybean Meal closed at $312.70, down $1.40; Sep 15 Soybean Oil closed at 26.89, up 31 points.
Corn: The corn market closed around 5-6 cents higher. Friday's USDA report was a bit, but not hugely so, friendly for corn, lowering yields and both old and new crop US stocks. The market is convinced that further yield reductions, and hence lower new crop stocks, are to come. The USDA left corn crop ratings unchanged from a week ago at 68% good to excellent. The trade was expecting a one point decline. They also said that 87% of the crop is dented, one point ahead of the 5-year average, that 35% of the crop is mature (5 points behind the average) and that 5% of the crop is now harvested versus 9% on average. Harvest progress is most advanced in North Carolina (57% done versus 58% normally) and Texas (53% versus 58% typically). Cepea estimated Brazil’s September corn exports at 3.5 MMT, which would be their highest monthly volume since November 2013. Agritel said that Friday's USDA forecast for a Ukraine corn crop of 27 MMT this year is too high and that 23-25 MMT is closer to reality. Still, they expect that Ukraine could still provide more than half of Europe's 16 MMT worth of corn import needs in 2015/16. APK Inform said that Ukraine seaports exported 66,400 MT of corn last week. Russian seaports shipped out 29,500 MT. AgroInfoMarket said that Spain's 2015 corn crop will total 4.01 MMT versus 4.47 MMT a year ago. They see the country importing 6.25 MMT of corn in 2015/16 versus 5.95 MMT last season, with ending stocks falling from 958 TMT to 673 TMT. Weekly US export inspections of 711,178 MT were down over 21% on last week. Any US dollar upside remains a threat to exports. As with beans, the seasonal charts say that traditionally the corn market puts in its lows in early October. Sep 15 Corn closed at $3.79, up 4 1/2 cents; Dec 15 Corn closed at $3.93 1/2, up 6 1/2 cents.
Wheat: The wheat market closed with strong double digit gains. Weekly export inspections of 647,551 MT were up sharply on 371,343 MT a week ago. They were also the highest of the marketing year so far. Nevertheless, the cumulative total for the season so far is still 20% down on where things were a year ago. The USDA currently forecasts US all wheat exports rising 10% this season versus 2014/15 so some progress needs to be made to get anywhere near that total. As with the other grains the market will be anxious to see what the Fed does on Wednesday. A newly resurgent US dollar, should they raise interest rates, isn't going to help US wheat exports any. The USDA reported that the US spring wheat harvest is 97% complete versus 86% done typically at this time. US winter wheat plantings for the 2016 harvest are 9% done which is in line with the 5-year average. US Wheat Associates said that the quality of this year's US HRS wheat crop is better than last year. ABARES estimated 2015/16 global wheat production at 723.0 MMT versus a previous estimate of 715.0 MMT. That's still nowhere near as high as the USDA's 731.6 MMT estimate released Friday though. ABARES see Australian 2015/16 wheat exports at 17.5 MMT, up from a previous estimate of 16.5 MMT and versus 2014/15 wheat exports of 16.6 MMT. The USDA have these at 18 MMT. Bangladesh cancelled a tender to buy 50,000 MT of optional origin wheat. There are reports that frost in southern Brazil could have caused some damage to the wheat crop there over the weekend. The CWB said that Canada's wheat exports so far this season are down 15% on a year ago at 1.9 MMT. Russia indicated that it is ready to raise the price it pays for intervention grain "significantly" but that it is also likely to soon lower the export duty on wheat. Sep 15 CBOT Wheat closed at $4.85 3/4, up 10 1/4 cents; Sep 15 KCBT Wheat closed at $4.70 3/4, up 11 3/4 cents; Sep 15 MGEX Wheat closed at $5.09 3/4, up 22 cents.
