Chicago Grains Closing Comments - Friday

20/11/15 -- General: The Argentine presidential run-ff is Sunday. The trade expects opposition leader Macri to win and take office on December 10th. Both candidates have promised to lower grain and soybean export taxes, so either way this weekend's result could be viewed as bearish - provided that they stick to their pre-election mandate of course. The impact in the long run could be more bearish for gains than soybeans, as the current ad-hoc system of on/off quotas and tariffs has seen a dramatic shift into sowing of the latter in recent years. Argentina is currently in the middle of harvesting an estimated 3.5 million ha of wheat, down a third on the area sown as recently as 2011/12 (5.2 million ha). Some are saying that wheat acres could rise to 7-8 million in the next few years. Corn plantings for 2015/16 are seen at 3.2 million ha bu the USDA versus 4.0 million in 2012/13. This year's soybean area is estimated by Washington at 20.0 million ha compared to 17.6 million in 2011/12.

Soycomplex: Beans closed a touch lower on the day, but a tad higher for the week. The IGC raised their outlook for the global 2015/16 soybean crop by 2 MMT from a month ago to 321 MMT (unchanged versus 2014/15), and cut ending stocks by 2 MMT to 47 MMT, although these are still up 2 MMT versus last season. "China’s needs accounting for the modest y/y rise. Brazil is seen as the largest exporter in 2015/16, its shipments significantly exceeding those by the US," they said. China's imports were raised 1 MMT to a new record 81 MMT. The USDA announced 120,000 MT of US beans sold to unknown for 2015/16 shipment. In Argentina, the Buenos Aires Grains Exchange said that 6 million ha of soybeans out of a final area of 19.8 million ha had been planted so far, mostly concentrated on the centre of the agricultural region. The Argentine Ag Ministry see final plantings at a new record 20.6 million ha, up 4% from 19.8 million a year ago. They say plantings are 23% complete so far. A Bloomberg survey into trader sentiment in beans found 4 bulls, 9 bears and 10 neutral. Jan 16 Soybeans settled at $8.57 1/2, down 2 1/2 cents; Mar 16 Soybeans settled at $8.60 1/2, down 2 1/2 cents; Dec 15 Soybean Meal settled at $283.00, down $3.60; Dec 15 Soybean Oil settled at 27.90, up 35 points. For the week Jan 16 beans were up 2 1/4 cents, meal was down $5.80 and oil was up 86 points.

Corn: As with beans, the corn market closed slightly lower on the day, but a bit higher for the week. The IGC lowered their global 2015/16 corn production estimate by 3 MMT to 967 MMT, down 4.5% from last season. They were unchanged on ending stocks however at 200 MMT (down from 207 MMT in 2014/15). Chinese production took a sizeable 7 MMT hit, down to 220 MMT. The Buenos Aires Grains Exchange said that Argentine corn planting is only making slow progress. EU corn import licences were issued for 314 TMT this week, and the season to date total now stands at 3.9 MMT versus 2.8 MMT this time a year ago. Ukraine said that it had exported 3.5 MMT of corn so far this season. A Bloomberg survey into trader sentiment in corn found 6 bulls, 8 bears and 9 neutral. Brazil are said to be actively offering corn 18 to 20 cents/bu cheaper than the US in the world market. Crude oil prices continue to struggle on oversupply, with NYMEX just about managing to hold above $40/barrel for now. OPEC are due to meet in Vienna in a couple of week's time to discuss matters. Brazilian markets were closed today for a holiday, trading there resumes on Monday. Dec 15 Corn settled at $3.63 1/4, down 1 cent; Mar 16 Corn settled at $3.69 3/4, down 1/2 cent. For the week Dec 15 was up 5 cents and Mar 16 added 4 1/4 cents.

Wheat: The wheat market closed a bit lower on the day, and mostly easier for the week. The IGC were unchanged on their outlook for the global 2015/16 wheat crop at 726 MMT, and lowered carryout by 1 MMT to 208 MMT (versus 201 MMT last season). The Argentina Ag Ministry estimated the 2015/16 wheat crop there at 10-12 MMT versus 13.9 MMT a year ago. They see plantings at 4.0 million ha, down 24%. Reduced production in Argentina again this year, and also quality issues due to heavy rain in southern Brazil harming their crop, could once more provide US wheat with an export opportunity. There's talk of Brazil buying at least one cargo of US HRW wheat this week, with the potential of more to follow in 2016. Kazakhstan said that they had now finished bringing in a 2015 grain harvest of 20 MMT, up 5.8% on a year ago. Wheat accounts for 14.7 MMT of that versus 14.4 MMT a year ago. Ukraine said that they'd exported 8.4 MMT of wheat so far this season. A Bloomberg survey into trader sentiment in wheat found 5 bulls, 9 bears and 9 neutral. Dec 15 CBOT Wheat settled at $4.88 1/2, down 2 1/4 cents; Dec 15 KCBT Wheat settled at $4.57, down 5 1/2 cents; Dec 15 MGEX Wheat settled at $5.08 3/4, down 1/4 cent. For the week Chicago wheat was down 7 1/4 cents, with Kansas losing 8 1/2 cents and Minneapolis adding 4 1/2 cents.