Chicago Wheat An Corn End Lower, Beans Post Modest Gains Despite Some Bullish News
24/09/15 -- Soycomplex: Beans closed with just small gains. A rather astonishing fact, considering that the Chinese delegation in the US to buy soybeans apparently agreed to take over 13 MMT in a deal said to be worth $5.3 billion! The deal is spread over both the 2015/16 and 2016/17 marketing years. In addition to that news the USDA also announced 313,000 MT of US beans sold to unknown destinations for 2015/16 shipment. Weekly export sales of 1.32 MMT also topped trade expectations. As ever, these sales were were primarily for China (762,700 MT) and unknown destinations (302,500 MT). A market that can only manage a 4 cent rally on news like this has to be on a bear run. A Bloomberg survey into trader/analyst sentiment found 4 soybean bulls, 13 bears and 8 neutrals. The IGC forecast the global 2015/16 soybean crop at 317 MMT, down 1 MMT from a month ago and 2.6 MMT lower than the USDA. They reduced consumption by 2 MMT however and raised 2015/16 carryout by 5 MMT to 49 MMT. Production in the US this year was increased 0.5 MMT to 106 MMT versus the USDA's 107.1 MMT. Argentina was lowered from 57 MMT to 56 MMT and Brazil was left unchanged at 98 MMT. Chinese imports were pegged at 79.5 MMT, unchanged from a month ago and 0.5 MMT above the USDA's prediction. In other news, Brazil's Cerealpar said that the nation's growers had sold 45-50% of their 2015/16 soybean crop. IMEA said Mato Grosso producers have sold 40% of their 2015/16 soybean crop, far higher than 11% a year ago, as the Brazilian real falls to record lows against the US dollar making prices there fairly attractive. Planting for the 2015/16 harvest is just about getting going now. Nov 15 Soybeans closed at $8.68, up 4 1/4 cents; Jan 16 Soybeans closed at $8.72 1/2, up 4 1/4 cents; Oct 15 Soybean Meal closed at $302.40, down $0.70; Oct 15 Soybean Oil closed at 26.98, up 65 points.
Corn: The market closed around a couple of cents lower, with much of the friendly news today centred around soybeans. The IGC lowered their estimate for the global 2015/16 corn crop by 1 MMT to 967 MMT, but dropped consumption by 2 MMT taking ending stocks 1 MMT higher to 199 MMT, and 9.3 MMT above those predicted by the USDA. They cut their estimate for the EU-28 corn crop from 60.1 MMT to 57.6 MMT, but lowered feed usage here by 3 MMT to 50 MMT. That means that ending stocks in Europe were only reduced slightly, down from 5.6 MMT to 5.2 MMT. Ukraine's corn crop estimate was raised by 0.5 MMT to 24.5 MMT of which 16.5 MMT will be exported, they predict. The Bloomberg survey into trader sentiment found 8 bulls, 4 bears and 14 neutrals on corn. Russia said that it's corn harvest was 24.3% done on 679k ha for a crop of 3.4 MMT so far. Average yields of 5.07 MT/ha are up a little on 4.95 MT/ha a year ago and also slightly above the USDA's predicted 5.0 MT/ha. The latter can't be said for Ukraine though, where their corn harvest is 14% done on 566k ha, with yields only averaging 4.4 MT/ha so far, which is well below the USDA's prediction of 6.59 MT/ha. China are said to be attempting to auction off a total of 5.0 MMT of corn from reserves today and tomorrow. Weekly US corn export sales of 426,300 MT for delivery in 2015/16 were down 20 percent from the previous week and fell below trade expectations for sales of 550-750 TMT. Increases were reported primarily for Mexico (159,600 MT), Colombia (154,700 MT), Bangladesh (54,300 MT), Guatemala (39,900 MT), and Taiwan (18,100 MT). Shipments were 795,400 MT, down slightly on the previous week, and accumulated exports are down 24% from last year for the first three weeks of the marketing year. Dec 15 Corn closed at $3.81 1/2, down 1 3/4 cents; Mar 16 Corn closed at $3.92 3/4, down 2 cents.
Wheat: The market closed with double digit losses. The IGC painted a picture of abundant global wheat and coarse grain supplies, raising their world wheat production estimate by 7 MMT from a month ago to 727 MMT - the third record crop in a row - and upping 2015/16 carryover stocks by 5 MMT to 211 MMT. They increased the size of this year's EU-28 wheat crop from 151.9 MMT to 155.5 MMT, but made no change to European exports, leaving those at 31.3 MMT. That takes EU 2015/16 ending stocks up to 16.2 MMT, the highest since 2009/10. They added 1 MMT to their Russian wheat production estimate, taking that up to 60 MMT. There was also a 0.5 MMT increase for Ukraine, with their crop now forecast at 25.5 MMT. Russia's 2015/16 wheat export potential was raised from 22.9 MMT to 23.1 MMT, but that still sees their ending stocks increase from 6.9 MMT to 7.7 MMT. Ukraine is also now seen exporting more wheat than a month ago at 12.7 MMT versus the 12.0 MMT predicted in August. The IGC lowered US exports by 0.5 MMT to 24.0 MMT which is now 1 MMT less than the USDA optimistically predict. US ending stocks were thus raised to 24.7 MMT versus the USDA's 23.8 MMT. There was also 1.5 MMT increase to wheat production in China this year, with their crop now forecast at 129 MMT. In other news it's being reported that the Russian PM has passed the Ag Ministry's proposed adjustments to their wheat export duty and that the new rules will come into effect on Oct 1. That could mean increased export activity from them. Another poor set of weekly export sales figures was perhaps the final nail in the wheat coffin today. These came in at only 282,800 MT for 2015/16, a 25% reduction on last week. Total old crop commitments (sales and shipments) are 14% behind the pace of a year ago. Dec 15 CBOT Wheat closed at $4.97 1/4, down 10 1/4 cents; Dec 15 KCBT Wheat closed at $4.90, down 11 3/4 cents; Dec 15 MGEX Wheat closed at $5.14, down 13 1/4 cents.
