Chicago Grains Afternoon Comments

08/10/15 -- Soycomplex: Beans trade around 4-5 cents lower approaching 13.00 BST, with meal down 20-60 cents. It looks therefore like the trade has largely now positioned itself where it wants to be heading into tomorrow's USDA report. The FAO today usurped that by releasing their own world supply and demand estimates. For soybeans they were unchanged on their global 2015/16 production estimate at 318 MMT, some 2 MMT below the USDA's September figure. They raised world ending stocks by 3 MMT to 52 MMT, although intriguingly that is fully 35 MMT below what the USDA gave us last month - a 40% difference! "In the US, a very good crop is expected as conditions have been mostly favourable and consistent throughout the season. Harvest has begun and production is expected to be just under the record of last year," they said. MDA CropCast raised their forecast for this year's US soybean crop by 20 million bushels to 3.845 billion today. The average trade guess for that tomorrow is slightly higher than that at 3.908 billion. Oil World said that Ukraine's rapeseed planted area will decline 29% to 570k ha due to persistent dryness. The UK's rapeseed area is being called 10% lower at 580k ha, and Germany's is seen around unchanged at 1.28 million ha. Romania said that they exported a record rapeseed volume in excess of 1 MMT in 2014/15, with 60% of that going to fellow EU-member states.

Corn: The corn market trades around a cent to a cent and a half lower, still seemingly unable to breach the $4/bu level. Will the USDA give it a helping hand tomorrow, or will the corn bull's hopes crash on the cruel rocks of fate just off Washington once again? MDA CropCast estimated the US corn crop at 13.651 billion bushels today, unchanged from their previous forecast. The average trade guess for tomorrow's report is 13.504 billion. MDA CropCast see Ukraine's 2015 corn crop at 23 MMT, down 19% from a year ago, and surely a far more realistic estimate than the USDA's current 27 MMT prediction. The FAO today forecast the world 2015/16 corn crop at 1007 MMT, down 4 MMT from previously. Again their figure is notable for it's remarkable difference compared to the USDA's take on things - they are at 978 MMT in Washington, at least until tomorrow. The FAO see global corn ending stocks at 223 MMT, which is 3 MMT below their September estimate, but 33 MMT above the USDA! "In the US harvest is underway and a good crop is materializing. Some areas, particularly around Minnesota, will likely see record yields and will offset underperforming areas in the eastern Corn Belt. Overall, production is expected to be slightly less than the last two high production years," the FAO said. "In Ukraine, harvest is ongoing and there is concern due to persistent dryness and high temperatures in central and western regions. In the EU conditions are largely unfavorable and production is expected to be below the 5 year average due to the heat wave and lack of rainfall in central and eastern Europe," they added.

Wheat: The wheat market trades around 2 cents higher. MDA CropCast raised their forecast for the Canadian wheat crop by 0.64 MMT to 25.5 MMT due to improved expectations for spring wheat. They lowered Australia by 0.34 MMT to 24.7 MMT however, citing very hot conditions last week that increased stress in wheat in South Australia, Victoria and southern NSW. Dryness is widespread in central and eastern Ukraine and much of southern Russia, they noted. Moscow got it's first snow of winter overnight, say the BBC. Much colder weather this week will slow crop growth in Russia, MDA said. The FAO estimated the world wheat crop at 735 MMT, up 7 MMT from a month ago and 3 MMT more than the USDA. They see world ending stocks at 206 MMT, up 3 MMT from previously but almost 21 MMT lower than the USDA. "In Australia, conditions marginally deteriorated in most states due to lack of September rainfall. Timely rainfall in October is critical for maintaining average yield potential," they said. "In Brazil, there is some concern due to the mixed weather earlier in the season (wet followed by dryness) and localized frosts in September," they added. Ukraine said that their 2015 grain harvest was now past 45 MMT, with a final total of 58-60 MMT expected. Full season exports are predicted at a record 36.8 MMT, split roughly 16 MMT each wheat and corn and around 4 MMT of barley. Exports so far this season are running 20% ahead of those of a year ago. Saudi Arabia are tendering for 715,000 MT of hard wheat for Dec/Feb shipment.