Chicago Close: Beans Fare Best, But Still End Lower

Corn: The corn market closed around 5-6 cents lower, giving up yesterday's gains and then some. Corn hasn't got the "strong demand" story to hang it's hat on that soybeans have. Yesterday's weekly export inspections were disappointing, and China isn't buying large quantities of corn from the US or anybody else at the moment. In fact they have their own very large domestic stockpile to shift. Production problems in Europe and Ukraine, where output is seen sharply lower this year is the best bull story that corn has at the moment. The US harvest is moving along well, and 94% of the crop is mature and this "safe from frost" it would seem. I think that the market still believes that current USDA yield estimates are too high, but wholesale revisions to the downside aren't the norm once we get past the October WASDE report. "The largest yield reduction that the USDA made after the October report was 4.4 bushels in 2006, followed by a 4.0 bushel reduction the following year. Otherwise, yield losses after October have tended to be more in the 2 to 3 bushel range, if they occurred at all," noted Arlan Suderman of Water Street Solutions in an online report. The FSA reported us 2015 "prevent plant" corn acres at 2.362 million versus their September estimate of 2.352 million. The Argentine Ag Ministry says that growers there are 77% sold on their 2014/15 corn crop versus 79% a year ago. On new crop corn they are 1.4% sold against 2.3% a year ago. Russia said that their 2015 corn harvest, seemingly unaffected by the dryness that has beset the Ukraine crop, was 54% done at 7.5 MMT. That leaves them on track for a record crop this year. Dec 15 Corn closed at $3.79, down 5 1/2 cents; Mar 16 Corn closed at $3.89 3/4, down 5 3/4 cents.
Wheat: The wheat market closed with double digit losses, more or less entirely reversing yesterday's gains. Dryness in Russia, Ukraine, the US heartland and Australia are the stories that have been supporting the market of late. "Australia has fallen victim to drought over the past several weeks. El Niño is a known drought-maker in Eastern Australia. The wheat states most vulnerable to drought are New South Wales, Victoria and South Australia all of which currently are dry," said Martell Crop Projections. "Very little rainfall has developed in October in Australia’s top wheat growing areas. Mostly, less than 20% of average rainfall has developed in the top wheat states, though isolated areas have received 20-40% of normal rainfall. The problem is a very dry atmosphere, not conducive to showers. This is manifested by extreme differences between the daily maximum and minimum temperatures. One example, October 6, shows New South Wales with maximum temperatures of 36-39 C, compared to night-time lows of 9-12 C. That’s a daily spread of approximately 27 C degrees (48 F)," they add. Whilst El Niño is usually associated with below-average spring rainfall in eastern Australia, it isn't normally a drought-maker in WA. Dryness here is being blamed on a different climate anomaly, the Indian Ocean Dipole (IOD) - currently in its positive phase, they add. The FSA reported "prevent plant" wheat acres at 697k, almost identical to their September estimate of 696k. The Argentine Ag Ministry said that growers there are fully sold on their old crop wheat versus only 73% sold this time a year ago. New crop commitments are running at 2.5% versus 6.6% a year ago. Dec 15 CBOT Wheat closed at $5.08 1/4, down 10 3/4 cents; Dec 15 KCBT Wheat closed at $5.00 3/4, down 10 1/4 cents; Dec 15 MGEX Wheat closed at $5.26, down 10 1/4 cents.