Chicago Grains Rally, Led By Wheat For Once
23/09/15 -- Soycomplex: Beans closed with small gains. The USDA announced 284,500 MT of US beans sold to China for 2015/16 shipment. That could be just a drop in the ocean, with a Chinese delegation in town this week, expected to buy at least 3-5 MMT of US beans in a showcase deal. Even so, concerns over China remain, and what beans they are buying at the moment are coming mostly from Brazil. The Shanghai Composite Index closed down 2.2% today. The trade is now estimating Brazilian soybean plantings to rise at least 3% this year, and possibly more like 5-6%, meaning that another record crop of around 100 MMT is likely in 2015/16 from that quarter. Argentina is thought also likely to at least match this year's production of 60 MMT. Safras e Mercado estimated Brazil’s 2016 soybean exports at 52.3 MMT up 4% from 2015. Argentine presidential elections are coming up on October 25th. Peronist presidential candidate Scioli, who is leading in the polls, may favour an export tax cut of 5% it is thought. That potentially means higher exports from them too in 2016. CitiGroup estimated CBOT 2016 average soybean prices at $9.15/bu. Trade estimates for tomorrow's weekly export sales report for beans are 1.0-1.2 MMT, with meal sales of 120-225 TMT. Nov 15 Soybeans closed at $8.63 3/4, up 2 cents; Jan 16 Soybeans closed at $8.68 1/4, up 1 3/4 cents; Oct 15 Soybean Meal closed at $303.10, down $1.80; Oct 15 Soybean Oil closed at 26.33, up 20 points.
Corn: The corn market closed around a couple of cents firmer, although concerns about the health of the global economy continue. Dryness in Ukraine may be harming 2015 corn production potential there. The Ukraine Ag Ministry estimated the country's 2015 grain crop at 59.5 MMT versus a previous estimate of 60.0 MMT. Local analysts Agritel said that they may cut their Ukraine corn production forecast from the current 25 MMT to 23 MMT, which is 4 MMT less that where the USDA currently stand. Average yields there have been coming in well below the USDA's projected national average of 6.59 MT/ha. Russia said that it's 2015 corn harvest is now 23.7% complete on 662k ha, producing a crop of 3.4 MMT to date. Average yields there are said to be 5.06 MT/ha, slightly better than last year and marginally above the USDA's estimated 5.0 MT/ha national average. Based on a Reuters poll South Africa’s 2015 corn crop was estimated at an average of 9.76 MMT, which is well below the USDA's estimate. CitiGroup estimated CBOT 2016 average corn prices at $4.05/bu. The US Energy Dept said weekly US ethanol production last week was only 938,000 barrels per day, down from 961,000 bpd the previous week and the lowest since early May. A Brazilian Federal Agricultural Agents strike may be holding up some cargoes of soybeans and corn from leaving the country due to a lack of the appropriate paperwork it is said. Trade estimates for tomorrow's weekly export sales report are in the region of 550-750 TMT. Dec 15 Corn closed at $3.83 1/4, up 2 3/4 cents; Mar 16 Corn closed at $3.94 3/4, up 2 1/2 cents.
Wheat: The wheat market closed with double digit gains. Nervousness over dryness issues in both the US and FSU seem to have sparked some short-covering. There's also now talk that Australia's wheat crop might not be quite as large as some earlier estimates had been predicting. Russia's Ag Ministry said that their 2015 grain harvest was 79% complete at 90.2 MMT with an average yield of 2.42 MT/ha versus 2.60 MT/ha a year ago. That includes 58.8 MMT of wheat off 83.9% of the planned area, with yields there averaging 2.61 MT/ha versus 2.86 MT/ha this time last year. The Russian barley harvest is said to be 83.3% complete on 7.4 million ha for a crop of 16.9 MMT to date. The USDA currently estimate the final 2015 Russian wheat crop at 61 MMT, with barley output projected at 19.5 MMT. The Russian Ag Ministry say that plantings for the 2016 harvest, mostly winter wheat, have been completed on 10.1 million ha, or 59.3% of the government target area. That's almost identical to the 10.2 million ha that had been sown this time a year ago. It's the health, or otherwise, of these newly planted crops that the market is focusing on at the moment. Weather maps show much of southern and central Russia, and all of Ukraine, to have been significantly drier than normal across the last 30 days. The GFS forecast is calling for only 40-60% of normal rainfall for almost the entire region save for the west of Ukraine across the next 15 days. Temperatures in the region are also much above normal through the next 7 days, and although cooling a little after that, remain above normal in the 8-15 day period. Trade estimates for tomorrow's weekly export sales report are 250-600 TMT. Dec 15 CBOT Wheat closed at $5.07 1/2, up 12 cents; Dec 15 KCBT Wheat closed at $5.01 3/4, up 13 3/4 cents; Dec 15 MGEX Wheat closed at $5.27 1/4, up 10 1/4 cents.
