Chicago Markets End Mostly Higher, But Chinese Worries Remain
31/08/15 -- Soycomplex: Beans closed with small gains. Weekly export inspections of 184,285 MT were fairly decent for the time of year, given the pace that they've been running at all season. The USDA announced 125,000 MT of US soybeans sold to unknown, assumed to be China, for 2015/16 delivery. Worries about Chinese demand remain. The Shanghai Composite Index closed down 0.8% today for a 12.5% decline for the month of August. That's the third monthly fall in a row. The trade was expecting the USDA to maybe trim good to excellent soybean ratings a little in their latest crop progress report due after the close. They left things unchanged at 63% G/E, and in fact there was a one point shift from good into excellent. They said that 93% of the crop is setting pods, 2 points behind the 5-year average, and that 9% of the crop is dropping leaves, 2 points ahead of average. We are now at the end of August, long regarded as the key yield-determining month for US soybeans. So how have things been? "Soybeans got a boost from generous August rainfall west of the Mississippi Valley, though the Eastern Midwest has grown steadily drier," say Martell Crop Projections. "Farms west of the Mississippi Valley have received very ample August rainfall in Iowa, Minnesota, Nebraska and South Dakota. Higher soybean yields than last season are predicted in those states. The heavy rainfall in August is due to an active monsoon circulation. The Southwest monsoon is a climate anomaly that promotes a moist air stream from tropical Mexico up into the United States heartland. The new forecast for the upcoming week predicts more heavy rain for the western Midwest," they add. Sep 15 Soybeans closed at $8.97 1/2, up 4 1/4 cents; Nov 15 Soybeans closed at $8.87 1/2, up 2 cents; Sep 15 Soybean Meal closed at $320.90, down $0.50; Sep 15 Soybean Oil closed at 27.92, up 13 points.
Corn: The corn market closed narrowly mixed. Weekly export inspections came in at just over 1 MMT, which was better than the recent average, and up 13% on last week. NYMEX crude oil closed around $4/barrel higher in a topsy turvy trading session. There's continued talk of dryness in Ukraine and southern Russia starting to hurt corn crops there, with traders paring back their production estimates for the region. The Russian Ag Ministry said that their 2015 corn harvest is 2.5% complete on 69.1k ha, and that average yields so far are more than 12% down at 4.78 MT/ha, although it's obviously very early days yet. The EU Commission said that the bloc had exported 4.0 MMT of corn to non-EU destinations in 2014/15, a 78% rise compared to the recent average. Romania was the top exporting nation, shipping out 2.6 MMT, a 140% increase. The top homes were Turkey, South Korea and Egypt. EU corn imports were also higher however. At 9.3 MMT these were up 12% on the recent average, with Ukraine accounting for 60% of the total volume. Russia said that it had exported 171 TMT of corn so far this season. APK Inform said that Ukraine exported 51.9 TMT of corn last week. After the close the USDA pared back US corn crop ratings by one point in the good to excellent category to 68%, which is 4 points behind this time last year - when yields went on to break all previous records. On that basis this year's US corn crop isn't in bad shape at all. The USDA said that 92% of the crop is at the "dough" stage, 2 points ahead of the 5-year average and 3 points more that this time last year. They have 60% of the crop "dented" which is in line with the recent average and 10 points up on this time last year. They say that 9% of the crop is mature, 2 points ahead of this time a year ago, but 6 points behind the recent average. Chinese corn futures traded limit down last night, setting new contract lows, on continued talk that the government might revise down the support price it pays for corn by 15-20% this year. Domestic Chinese corn prices are far higher than world levels. Sep 15 Corn closed at $3.63 3/4, up 1/2 cent; Dec 15 Corn closed at $3.75 1/4, up 1/4 cent.
Wheat: The wheat market finished higher on all three exchanges. The hot and dry weather said to be harming corn crops in Ukraine and the south of Russia also means that winter wheat plants are in need of a drink. The Russian Ag Ministry said that winter wheat plantings there are 16.7% complete on 2.9 million ha. They also said that this year's wheat harvest is now past 60% complete on 16.2 million ha. Production currently stands at 48.7 MMT, with average yields down 8% at 3.01 MT/ha. The Russian barley harvest is said to be 67% complete on 6.0 million ha, with production at 14.2 MMT. Yields there are down 5.6% at 2.38 MT/ha. US hard wheat was said to be comfortably out-priced in the latest Iraq tender. Australian wheat was the cheapest at $231.70/tonne, with Russian at $234/tonne, Canadian at $247.20/tonne and US wheat at $265/tonne - some $33.30/tonne dearer than the best Australian offer. Bangladesh seeks 50,000 MT of optional origin wheat in a tender. Algeria are in the market for a similar volume of optional origin milling wheat for October delivery. Bulgaria said that it's 2015 wheat harvest had come in at 4.6 MMT, better than the official 4.3-4.5 MMT estimate from their Ag Ministry, although down on 4.9 MMT a year ago. The EU Commission said that the bloc had exported 33.3 MMT of soft wheat/flour/products in 2014/15, a 64% increase on the recent average and also a record volume. France was the leading exporting nation, followed by Germany, Romania and Poland. Algeria was the top buyer, followed by Egypt, Morocco, Saudi Arabia and Iran. EU barley exports jumped 80% on the recent average to 12.7 MMT, with France again the leader. China took 3 MMT of EU barley in 2014/15, a massive 1452% increase on the recent average, making it the leading home followed by Saudi Arabia on 2.6 MMT. The USDA said that the 2015 US spring wheat harvest was 88% complete. This time a year ago it was only 36% done, and the 5-year average is 62% complete, so things are well advanced on normal. Weekly export inspections of 601,639 MT were a step in the right direction, but more weeks like that are needed. Sep 15 CBOT Wheat closed at $4.82 1/2, up 5 1/2 cents; Sep 15 KCBT Wheat closed at $4.63 3/4, up 6 cents; Sep 15 MGEX Wheat closed at $4.96 1/2, up 6 cents.
