Chicago Grains Stage Turnaround Tuesday Trade
22/09/15 -- Soycomplex: Beans and meal closed lower in "Turnaround Tuesday" style, completely reversing Monday's gains and then some. The Brazilian real hit a new record low against the US dollar today. The timing of that is bad, as it means the price of soybeans in the country is rising, just as farmers there begin their plantings for the 2016 harvest. Dr Cordonnier estimated Brazilian plantings to rise 3.3% to 33 million ha, with production jumping to a record 99 MMT. Some other estimates are even higher. "Early soybean planting began in Brazil last week, but it remained rather limited because the weather last week ended up being dryer than expected especially in Mato Grosso and central Brazil. The forecast for this week also looks generally dry as well in central Brazil, but there is some rain in the forecast for next week," said Dr Cordonnier. This isn't really much of an issue at the moment, providing that rains do come eventually. In Argentina Dr Cordonnier estimates soybean plantings to rise 2% to 20.9 million ha, and sees production at 60 MMT, matching the 2014/15 record crop. Output could reach 63 MMT with ideal growing conditions, or fall to 57 MMT if the weather fails to cooperate, he feels. Nov 15 Soybeans closed at $8.61 3/4, down 12 1/2 cents; Jan 16 Soybeans closed at $8.66 1/2, down 12 1/4 cents; Oct 15 Soybean Meal closed at $304.90, down $4.70; Oct 15 Soybean Oil closed at 26.13, down 37 points.
Corn: The corn market closed around 4 cents lower, giving up some, but not all, of yesterday's gains. CNGOIC estimated China’s 2015/16 corn imports at 2.8 MMT versus 2014/15 imports of 5.4 MMT and the USDA's 3.0 MMT forecast. They see China’s 2015/16 sorghum imports at 8.0 MMT, and have feed barley imports at 5.0 MMT. The fall in value of the Brazilian real is even supporting corn prices. Earlier ideas of a drop in Brazilian plantings in favour of a major switch into beans are turning expectations back to around unchanged levels. Dr Cordonnier estimated Brazilian corn plantings to be unchanged at 15.7 million ha, with production also likely to be unchanged from a year previously at 84.3 MMT. His range of estimates, depending on exactly how favourable the growing season is, are between 81-88 MMT. In Argentina he sees 2015/16 plantings down 12.5% to 2.8 million ha, with production falling from 25.5 MMT to 21.6 MMT. "For the (South American) corn crop, I have a neutral bias because the safrinha corn acreage may increase in Brazil while the corn acreage in Argentina may decline even further. The total South American corn production is estimated at 110.2 million tons or 3.8 million tons less than last year (- 3.3%)," he said. Russia said that it's 2015 corn harvest was 22.4% complete on 626k ha producing a crop of 3.2 MMT with average yields of 5.06 MT/ha a little above last year. Dec 15 Corn closed at $3.80 1/2, down 4 cents; Mar 16 Corn closed at $3.92 1/4, down 3 3/4 cents.
Wheat: The wheat market closed with small losses. Commerzbank said that the USDA was "too optimistic" with it's forecast for a record 2015/16 world wheat crop of 731.6 MMT. "Commerzbank kept its forecasts for wheat futures a little above the futures curve, seeing them average $5.20 a bushel in Chicago in the first three months of next year, compared with the $5.01 a bushel that March 2016 futures were trading at on Tuesday. For Paris prices, the forecast of EUR180 a tonne for the January-to-March period was also a little above the futures curve," said Agrimoney. Dryness concerns in Russia and Ukraine keep getting a mention in just about every news report going for wheat at the moment too. Russia said that it's winter grain plantings were 57.2% done on 9.8 million ha, almost identical to the 9.9 million ha sown this time last year. They also said that their 2015 wheat harvest was now 83.3% done on 22.4 million ha for a crop of 58.6 MMT to date. Average yields are said to be coming in at 2.62 MT/ha, down from 2.87 MT/ha a year ago. The 2015 Russian barley harvest is now said to be 82.9% complete on 7.4 million ha for a crop of 16.9 MMT to date. Average yields here are down to 2.28 MT/ha from 2.42 MT/ha a year ago. The Russian Grain Union said that the country would export a record 4.7 MMT of grains this month. That matches the forecast of Rusagrotrans, and is 0.2 MMT above that of SovEcon. Dec 15 CBOT Wheat closed at $4.95 1/2, down 1 1/4 cents; Dec 15 KCBT Wheat closed at $4.88, down 2 1/2 cents; Dec 15 MGEX Wheat closed at $5.17, down 1 1/4 cents.
