Chicago Grains Drift Lower Despite Some South American Weather Concerns

23/12/15 -- Soycomplex: Beans closed a touch lower, although Brazilian planting delays remain. "Hot and dry weather across central Brazil is delaying the completion of the 2015/16 soybean planting as well as forcing some farmers to replant their soybeans. As a result, various farm organizations in the states of Mato Grosso and Goias are petitioning the state government to grant an extension of 30 days concerning the last day when farmers are permitted to plant soybeans," said Dr Cordonnier. IMEA recently cut their forecast for the soybean harvest in Mato Grosso by 1 MMT to 28.3 MMT citing dryness. Nevertheless, a probable record crop is still on the cards again nationally. Argentina is said to be around 90% planted with their first lot of soybean planting, and 50% done with their second wave, according to the Buenos Aires Grain Exchange. Exports from both countries will remain strong in 2015/16, helped by local currency weakness and the phasing out of the export tax on beans in Argentina. Trade estimates for tomorrow's US weekly export sales report on beans are 850,000 MT and 1.1 MMT and 100,000 – 250,000 MT on meal. Jan 16 Soybeans settled at $8.81 3/4, down 3 1/2 cents; Mar 16 Soybeans settled at $8.80 3/4, down 4 3/4 cents; Jan 16 Soybean Meal settled at $272.40, down $4.50; Jan 16 Soybean Oil settled at 30.52, up 8 points.

Corn: The corn market closed fractionally lower. Talk of late bean plantings in central/northern Brazil inevitably leads to discussion of second string "safrinha" corn going in late, or some not at all. The weekly Energy Dept report had ethanol production down to 973,000 barrels/day, down from 1 million barrels per day for the second time in four weeks last week. Ethanol stocks were up 100,000 barrels at 20.4 million barrels. With Argentina surprising the market somewhat with a very cheap offer on wheat for Egypt's tender today, the trade may well be considering if it will soon start to do likewise on corn under the new leadership of president Macri. The Buenos Aires Grain Exchange stuck by their Argentine 2015/16 corn for grain planting estimate of 2.85 million ha, of which they say planting is 68.7% complete. That's still a sharp reduction on sowings of 3.4 million ha a year ago, and quite a few think that the 11th hour Macri election victory could have come just in time to spur that area up to 3 million ha or more in light of the more relaxed export vibe. Trade estimates for tomorrow's weekly export sales report are in the region of 500,000 and 750,000 MT. Mar 16 Corn settled at $3.65 1/2, down 3/4 cent; May 16 Corn settled at $3.71 3/4, down 3/4 cent.

Wheat: The wheat market closed with small losses. US wheat was never likely to be in with a shout of winning a slice of the Egyptian tender, but despite rumblings that Argentine wheat might feature, it was a surprise to see them win so emphatically. The cheapest, and winning, FOB offers out of Argentina were $174.85/tonne and $176.20/tonne. They were well over $10/tonne below the best French FOB bids, and around $17.50/tonne under the lowest Russian offer. It would seem that the change of leadership and subsequent removal of the export duty on wheat in Argentina has indeed opened up some fresh supply pipeline. More time will be needed to see if this was little more than a one-off. Argentina have now harvested more than two thirds of their new crop wheat area for a crop of 6.43 MMT to date. With heavy interest likely from Brazil in the season ahead, exactly how much wheat Argentina will have to send to such far flung destinations remains to be seen, even if international freight is cheap at the moment. Syria were said to have bought 200,000 MT of Russian wheat in a tender. Weekly export sales of 250-500,000 MT are expected tomorrow. May 16 CBOT Wheat settled at $4.77, down 2 cents; May 16 KCBT Wheat settled at $4.79, down 2 cents; May 16 MGEX Wheat settled at $5.06, down 1/4 cent.