Chicago Grains End Lower, Pressured By Firmer US Dollar
28/10/15 -- Soycomplex: Beans closed easier, and at the lowest level in three weeks on harvest pressure and a firmer US dollar. Demand for beans and meal remains robust though. Trade estimates for tomorrow's weekly export sales report for beans are in the 1.6-2.0 MMT area. Meal sales are expected to be in the region of 150,000 to 350,000 MT. Dr Cordonnier was said to have left his 2015/16 Brazilian bean production estimate unchanged at a record 100 MMT, but took 2 MMT of the outlook for Argentina to 58 MMT. "With the prospect of yet another record large soybean crop in 2015/16, various agricultural related industries in Brazil want the Brazilian government to increase the blending of vegetable oil into the nation's diesel fuel. Currently, the requirement is that petroleum diesel must be blended with 7% vegetable oil (B7) and the industries want that increased to a 10% blend (B10). Brazil has been at a B7 blend since November of 2014," he said. Next year's Ukraine rapeseed crop already looks to be in big trouble. Only around two thirds of the intended area got sown this year, and at least 20% of that isn't thought to have yet germinated. Add on some winter-kill losses to poorly established crops and production in 2016 might not be much more than 1 MMT - the lowest since at least 2007. Nov 15 Soybeans settled at $8.81 1/2, down 9 3/4 cents; Jan 16 Soybeans settled at $8.82 3/4, down 8 1/4 cents; Dec 15 Soybean Meal settled at $299.90, down $4.80; Dec 15 Soybean Oil settled at 28.11, up 22 points.
Corn: The corn market settled around 3-4 cents lower. Harvest pressure, sluggish exports and a firmer dollar all added to the bearish tone. Reports also that Chinese importers were to temporarily suspend buying US DDGS also leans bearish. They are apparently worried that Beijing is looking at introducing new anti-dumping measure on the commodity as it struggles to get rid of it's own enormous domestic corn surplus. The US Energy Dept confirmed weekly ethanol production at 944,000 barrels per day, down 7,000 bpd from the previous week, which was another negative today. Russia said that their 2015 corn harvest was now 72.6% complete at 10.1 MMT, with a record crop this year now looking assured. Potential winter wheat crop losses there this year could also mean further increases in corn production in 2016 too it is thought. Ukraine said that they'd exported 2.22 MMT of corn so far in 2015/16. Trade estimates for tomorrow's weekly corn export sales report are a modest 300-500,000 MT. Corn prices are also suffering from the strong showing by Mr. Macri in the Argentine presidential elections at the weekend. A win for him ultimately could lead to increased corn exports from the country. Bloomberg report that South African farmers will plant 6.3 million acres to corn, the lowest area since 2011. Dec 15 Corn settled at $3.76, down 4 cents; Mar 16 Corn settled at $3.86, down 3 3/4 cents.
Wheat: The market closed mixed, but with little overall dramatic change. Concerns remain about newly planted US and FSU winter wheat. One analyst is already forecasting next year's Russian wheat crop at around 55 MMT versus the 63.8 MMT in bunker weight that they are said to have harvested this year. Ukraine's crop is also in trouble, with only 84% of the intended area planted so far, and emergence low. We are already passed the optimum planting time for winter wheat there too. Meanwhile the USDA reported worse than expected US winter wheat crop conditions in its first crop report of the season on Monday night. In other news, the USDA's FAS in Australia estimated their wheat crop this year at 24 MMT, which is 3 MMT below the current USDA's own forecast. Global competition for business is fierce though. Reuters report the Philippines buying 55,000 MT of what is thought likely to be South American feed wheat for March shipment. There are reports of Mexico booking French wheat in preference to product from near neighbour the US. Egypt are back in the market for wheat for Dec 1-10 shipment, with the results expected tomorrow. Few would expect US wheat to feature there. French wheat might get a look in though. Kazakhstan reported that their 2015 grain harvest is just about over at 19.9 MMT, up sharply on 16.2 MMT a year ago. Trade estimates for tomorrow's weekly export sales report are in the range of 350,000 to 600,000 MT. Dec 15 CBOT Wheat settled at $5.06, down 3 1/4 cents; Dec 15 KCBT Wheat settled at $4.85 1/2, down 2 1/2 cents; Dec 15 MGEX Wheat settled at $5.16, up 1/4 cent.
