Chicago Grains Closing Comments From Friday Night
13/02/15 -- Soycomplex: Beans closed higher on the day and higher for the week. Yesterday's better than expected weekly export sales total appears to confirm that demand for US beans hasn't switched entirely to South America just yet. In addition, the USDA today reported 110,000 MT of US beans sold to China for 2015/16 shipment. There's talk of a truckers strike in Santos, Brazil. Also in Brazil, Parana’s soybean harvest is said to be 17% complete versus 12% a week ago. The Buenos Aires Grains Exchange estimated Argentina's soybean crop at a record 57 MMT, unchanged from a week ago. US markets will be closed Monday for the Presidents Day holiday. Brazil and Argentina are closed Monday and Tuesday for a Carnival. The NOPA January crush report comes out on Tuesday. Chinese New Year begins on Thursday when their markets will be closed for a week so activity from that quarter will be limited. The USDA's annual Outlook Conference takes place Thursday and Friday next week. They will give us some initial thoughts on US corn and soybean plantings this spring. The weather pattern has fundamentally changed in Brazil, said Martell Crop Projections. "Much cooler temperatures are predicted in Mato Grosso and the tropics at large. The new rainfall forecast is significantly wetter than previously, also. Parana and Mato Grosso do Sul would receive heavy drenching rain due to a stalled trough of low pressure. Southern Mato Grosso is also expecting soaking rains, the leading soybean state. Heavy February rainfall may be too late to rescue tropical soybeans from a reduced yield. The key pod filling period is already finished, occurring in January. Very serious drought developed last month. This would have reduced the size and weight of developing soybeans inside pods," they said. Mar 15 Soybeans closed at $9.90 1/2, up 6 3/4 cents; May 15 Soybeans closed at $9.94 3/4, up 8 cents; Mar 15 Soybean Meal closed at $332.30, up $1.80; Mar 15 Soybean Oil closed at 32.40, up 39 points. For the week front month beans were up 21 1/4 cents, with meal up $2.90 and oil gaining 58 points.
Corn: The corn market closed higher on the day and with small gains for the week. There may have been an element of book-squaring ahead of the three-day weekend. Taiwan were said to have bought 60,000 MT of US corn for April shipment. In Brazil, DERAL said that the state of Parana’s full season corn harvest is 11% complete versus 8% a week ago. They estimated safrinha corn planting in the state at 31% complete versus 25% a week ago. The Buenos Aires Grains Exchange estimated Argentina's corn area at 3.14 million hectares versus a previous estimate of 3.0 million. They see production at 22.5 MMT in their first estimate of the season. That's in line with other estimates in the ring. China appears to be continuing with its policy of buying large volumes of sorghum and barley in preference to corn. The USDA's long-term baseline projections this week said that China will import 6.5 MMT of corn in 2023/24. A year ago that estimate was 22 MMT. Ukraine seaports shipped 2.3 MMT of grains in January, a 15.7% decline on a year previously, said the Ukraine Seaports Authority. Most of that will have been corn. Ukraine still has around half of it's projected 2014/15 corn exports to market. The US dollar was lower for once, following the agreed ceasefire in Ukraine and following weaker than expected US economic data yesterday. Crude oil was also higher, adding a bit of extra support for corn. Lack of farmer enthusiasm to sell corn at below $4/bushel may also have provided some support today. A survey by Farm Journal Pulse magazine suggested that 21% of US farmers have zero corn forward priced at this point, and a further 38% have priced a quarter of less of their 2014 corm harvest. Only 18% have all their corn sold, the survey found. Mar 15 Corn closed at $3.87 1/4, up 4 1/4 cents; May 15 Corn closed at $3.95 1/4, up 4 1/4 cents. For the week, Mar 15 corn was up 1 1/2 cents and May 15 was 1 1/4 cents higher.
Wheat: The wheat market closed with good gains for the day, and small gains for the week. A harsh weekend Arctic blast hitting the Midwest maybe encouraged some shorts to get out today, ahead of a 3-day weekend. Ukraine said that 82% of their winter grains are in good to satisfactory condition, and 18% weak/thinned, unchanged from a week ago. Fierce fighting in eastern Ukraine is apparently ongoing, just ahead of the supposedly agreed ceasefire. Local confidence that this one will hold where others have failed doesn't seem to be too high. APK Inform increased their forecast for Russian barley exports this season by 25% from their previous estimate to 5 MMT. That's sharply higher than the 2.7 MMT exported last season and 39% above the previous annual record total of 3.6 MMT shipped out in 2011/12. The EU is also seen exporting a record volume of barley this season, and possibly will beat last season's all time high wheat shipments too. The weak euro and low world freight rates is enabling European grains to make inroads into Asia and other non-traditional destinations which have been largely closed to them in previous years. The Philippines, Thailand, and South Korea are reported by Reuters to be seeking French feed wheat cargoes. Bangladesh is tendering for wheat too, having bought a large consignment of French material earlier in the month for the first time since 2000/01. China are due to auction 970,600 MT of wheat from state-owned reserves next week. Recent sales haven't been massively well subscribed to. They only sold 34% of the total 805,872 MT of domestic wheat offered up at auction from it's reserves last week. Iraq's wheat tender offers are due this weekend. Morocco are tendering for 360,000 MT of EU soft wheat and small volume of durum. Mar 15 CBOT Wheat closed at $5.33, up 11 3/4 cents; Mar 15 KCBT Wheat closed at $5.62 3/4, up 8 3/4 cents; Mar 15 MGEX Wheat closed at $5.87, up 12 3/4 cents. For the week, Chicago wheat finished with gains of 6 cents, with Kansas a cent higher and Minneapolis up 10 cents.
EU Grains End Day Higher, Exports On Pace To Set New Records
13/02/15 -- EU grains closed mostly higher on the day, but mainly lower for the week.
At the close, Mar 15 London wheat was GBP1.10/tonne higher at GBP122.75/tonne, Mar 15 Paris wheat was EUR2.50/tonne firmer at EUR187.00/tonne, Mar 15 Paris corn was up EUR0.75/tonne at EUR153.00/tonne and May 15 Paris rapeseed rose EUR0.75/tonne to EUR357.25/tonne.
For the week that puts London wheat down a pound, with Paris wheat EUR1.25/tonne lower, corn down EUR2.75/tonne and rapeseed half a euro higher.
The euro closed at its lowest level against the pound in 7 years tonight, which continues to help grain on the continent find export homes. Slumping global freight rates are an added bonus, enabling EU grains to find their way to non-traditional far away homes.
There's talk of French feed wheat attracting buying interest from the likes of the Philippines, Thailand and South Korea.
Strategie Grains, the USDA and EU Commission have all increased their forecasts for EU wheat exports in the last week, with two of those three now estimating these at record levels, higher even than last year's all time highs. Production this season though was also a record.
Brussels announced that it had granted 626,000 MT of soft wheat export licences this past week, taking the season to date total to 19 MMT, which is half a million up on the record pace set this time last year.
EU barley exports are now running at 4.9 MMT so far this season, and will total a record 7.9 MMT by the end of it, according to Strategie Grains. That would easily beat the previous all time high for EU barley exports of 6.5 MMT set in 2012/13 (using the USDA's numbers).
This abundance of wheat and barley, means that EU corn imports so far this season only total 5.63 MMT, down almost 28% from 7.79 MMT this time a year ago.
The UK is also managing to pick up some business to unusual locations. The first ever large feed barley vessel sailed from Portbury to Japan last week, and a 60,000 MT vessel is currently loading at Tyne Dock destined for Saudi Arabia.
December wheat exports from the UK were also confirmed at a 3-year high this week, although of course that compares to two very low volume export years in 2012/13 and 2013/14. The UK is still faced with the prospect of a large wheat carryover to take into 2015/16.
There's a GBP5.60/tonne premium on offer for Nov 15 over May 15 London wheat, to tempt UK growers into doing just that (and interestingly a further similar amount on offer to carry your 2014 wheat all the way to May 16). How many have the room in the barn and don't need the money for cashflow purposes though is an entirely different matter.
Chicago Closing Comments - Thursday
12/02/15 -- Soycomplex: Beans closed higher, helped by strong weekly export sales which defied expectations of a slump to around 250-450,000 MT by coming in at 745,400 MT for 2014/15. These were up 52 percent from the previous week and 29 percent above the prior 4-week average. China took 603,300 MT of that total. Exports of 1.6 MMT were also robust. The US has now exported more than 38 MMT of soybeans this season, with a further 8 MMT of outstanding sales. That makes more than 46 MMT of export commitments versus a USDA projection for the season of 48.7 MMT, meaning that the US are already 95% sold on beans for 2014/15. That is unless some of these outstanding sales don't get shipped or are cancelled, but few will be betting big money on that. MDA CropCast raise their view on Argentina's soybean crop by 1.35 MMT to 57.34 MMT. They were unchanged on Brazil at 93.49 MMT. Celeres estimated Brazil’s 2014/15 soybean crop at 91.0 MMT. Conab trimmed their Brazilian soybean crop estimate to 94.6 MMT versus a previous estimate of 95.9 MMT. They now see 2014/15 Brazilian soybean exports estimated at 47.8 MMT versus a previous estimate of 49.6 MMT. The USDA are at 46 MMT. The Paraguayan Oilseed Crushers Association estimated the nation's 2014/15 soybean crop at 7.9-8.0 MMT versus a USDA estimate of 8.5 MMT. Sinograin estimated China’s soybean crop at 11.65 MMT, and estimated consumption this season at 83.5 MMT, up 4.5 MMT from a year ago. They see China’s 2014/15 bean imports at 71.5 MMT versus 74 MMT from the USDA. Mar 15 Soybeans closed at $9.83 3/4, up 6 cents; May 15 Soybeans closed at $9.86 3/4, up 6 cents; Mar 15 Soybean Meal closed at $330.50, up $0.90; Mar 15 Soybean Oil closed at 32.01, up 26 points.
Corn: The corn market closed around 2-3 cents lower. Crude oil prices were higher, although ethanol values were lower. US stocks of the latter continue to run at very high levels. Weekly export sales topped 1 MMT, up 19 percent from the previous week, but down 17 percent from the prior 4-week average. There were also sales of 117,700 MT for 2015/16 split between Mexico and Japan. Total net commitments on corn are now running at 75% of the USDA forecast for the season versus 73% this time last year and 70% for the 5-year average. MDA CropCast increased their forecast for the 2014/15 Ukraine corn crop by 1.2 MMT to 28.4 MMT. They also increased Argentina by 1.4 MMT to 23.1 MMT, and were unchanged on Brazil at 75.7 MMT. Conab estimated the Brazilian corn crop at 78.4 MMT versus a previous estimate of 79.1 MMT. Celeres estimated Brazil’s corn crop at 76.7 MMT. The Buenos Aires Grains Exchange estimated Argentina’ s 2014/15 corn crop at 22.5 MMT. South Korea's KOCOPIA bought 53,000 MT of optional origin corn for June shipment. South Korea's KFA bought 60,000 MT of optional origin corn for August shipment. The US is in for another blast of Arctic air. "A cold wave is underway this morning as a polar air mass descends into the United States. Early morning temperatures in Saskatchewan and Manitoba ranged from -20 F to -25 F with one of the coldest air masses this winter. North Dakota temperatures fell to -10 to -15 F as the large polar air mass spreads southward. Temperatures in the Midwest are expected to plummet the next several days. The GFS model predicts much colder than normal weather 15 F-22 F below average. Bitterly cold temperatures are developing with just a scanty snow cover for insulation. Some Midwest areas have no snow at all, western Iowa and southwest Minnesota, for example. The deepest snow with the best insulating properties is concentrated in the Upper Midwest," said Martell Crop Projections. Mar 15 Corn closed at $3.83, down 2 3/4 cents; May 15 Corn closed at $3.91, down 2 3/4 cents.
Wheat: The wheat market closed lower on all three exchanges. Weekly export sales of 409,300 MT for delivery in the 2014/15 marketing year were up 3 percent from the previous week, but down 3 percent from the prior 4-week average. Exports themselves were less than spectacular at 373,800 MT, down 15 percent from the previous week. A labour dispute may be slowing shipments out of the West Coast it is reported. Monday is Washington's birthday, so some companies will be aiming to save themselves the increased premium that they would have to dockers to get them to work over the holiday weekend. On the weather front "Hard red winter wheat in the Great Plains has been subject to volatile winter temperatures abnormally warm the last half of January, but sharply colder in February. Wheat has lost some of its hardiness. Sharply colder weather in the Great Plains may pose a threat to less hardy wheat," said Martell Crop Projections. "On the positive side, generous rainfall has developed in Kansas recently, improving soil moisture. Wheat prospects have increased also in Texas, Nebraska and Colorado with favourable precipitation the past 14 days. Oklahoma is still dry, however, the second leading US bread wheat state. Just scanty precipitation is expected in the Great Plains the next week," they added. The Egyptian delegation to Russia to ask them to reconsider their position on wheat export duties reportedly met with a polite no. Strategie Grains hiked their forecast for EU-28 2014/15 soft wheat exports by 3.0 MMT to a record 32.5 MMT. They also upped their forecast for exports in 2015/16 by 2 MMT to 29.0 MMT. Japan bought 129,395 MT of food wheat for April shipment split between US, Canadian and Australian origin. South Korea's KFA cancelled a tender for 30,000 MT of optional origin feed wheat for May shipment. Jordan re-tendered for 100,000 MT of feed barley optional origin for Aug-Sept shipment. Morocco tendered for 360,000 MT of EU soft wheat and 45,000 MT of EU durum wheat for May shipment. Mar 15 CBOT Wheat closed at $5.21 1/4, down 4 1/2 cents; Mar 15 KCBT Wheat closed at $5.54, down 5 1/4 cents; Mar 15 MGEX Wheat closed at $5.74 1/4, down 1 3/4 cents.
EU Grains Mostly Lower, Despite Forecasts For Strong Exports
12/02/15 -- EU grains were mostly lower, with Mar 15 London wheat down GBP0.20/tonne at GBP121.65/tonne, Mar 15 Paris wheat was down EUR1.25/tonne at EUR184.50/tonne, Mar 15 Paris corn fell EUR1.00/tonne to EUR152.25/tonne and May 15 Paris rapeseed was EUR0.25/tonne lower at EUR356.50/tonne.
Yesterday's news that the UK exported 225 TMT of wheat in December - a near 3 year high and three times the volume shipped out in December 2013 - was welcome. Whilst that take the marketing year-to-date total to almost 1 MMT, that's still less than a third of our exportable surplus, even if it is more than four times the volume shipped out a year ago.
It was also interesting to see that around 30% of these exports went to non-EU homes, the largest volume for this period since 1996/97, according to the HGCA.
Whilst the pound itself is not particularly strong, it's not as weak as the euro, against which it hit a new 7-year high of over 1.35 today. That is obviously limiting opportunities to export UK wheat to Europe.
UK wheat has though managed to make inroads into some unusual and exotic destinations this season, such as Thailand, Japan and the US. Barley exports have also been doing well, with GrainCo in Newcastle currently loading a 60,000-tonner, the MV Rosco Poplar, at Tyne Dock destined for Saudi Arabia.
The fall in crude oil prices and the corresponding slump in global freight rates is clearly helping UK and EU grain get to some of these far-flung destinations.
The weak euro is certainly helping exports from the continent this season, with wheat shipments at an all time high last week.
Strategie Grains today estimated the EU’s 2014/15 soft wheat exports at a record 32.5 MMT, up 3.2 MMT from their previous estimate. Exports next season were forecast at 29.0 MMT, up 2.0 MMT from their previous estimate.
The French analysts also increased their forecast for EU barley exports in 2014/15 by 400 TMT from a month ago to 7.9 MMT. That's a near 39% increase on last season. They said that China will take 1.62 MMT of EU barley this season.
In 2015/16 they forecast EU barley exports even higher, at 8.1 MMT, of which China will import 2 MMT. French traders said that China has already bought around 400-600 TMT of French barley for next season.
In other news, MDA CropCast increased their forecast for the Ukraine corn crop by 1.2 MMT to 28.5 MMT.
Morocco seeks 360,000 MT of EU soft wheat and 45,000 MT of EU durum wheat for May shipment. Jordan has re-tendered for 100,000 MT of feed barley of optional origin for Aug-Sept shipment.
The agreed ceasefire in Ukraine was given some credit for a weaker US dollar and a rise in crude oil values today, even though previous such deals have failed to be observed for very long.
Chicago Grains, Wheat And Beans Higher, Corn Lower
11/02/15 -- Soycomplex: Beans closed higher, more or less reversing last night's losses. It's hard to find a reason why the market had this sudden change of heart today, as nothing much has changed. The dollar remains strong, crude was back below $50/barrel and the Argentine soybean crop appears to be getting larger by the day. The Rosario Grain Exchange today pegged that at a record 58 MMT versus a previous estimate of 54.5 MMT. The USDA were "only" at 56 MMT just yesterday. Lanworth went even higher, coming out with a figure of 59.7 MMT for Argentina. They did trim their forecast for Brazil, down from 96.5 MMT to 94.5 MMT, now matching the USDA, although that's still a record crop. Conab are due to release their Brazilian estimates tomorrow. They had the Brazilian crop at 95.9 MMT last time. Chinese buying interest has cooled, as it usually does at this time of year, ahead of their Lunar New Year celebrations that start next week. Chinese markets will be closed February 19-25. Brazil and Argentina are on holiday Monday and Tuesday. Tomorrow's weekly export sales report from the USDA will make interesting reading. The trade has been expecting US sales to, if not exactly fall off a cliff, then slow down pretty dramatically in recent weeks, and this hasn't really happened yet. Last week's sales of 489,700 MT for 2014/15 were down 35 percent from the previous week, but still at the top end of trade estimates. This week the market is looking for something around 250-450 TMT, according to Benson Quinn. Mar 15 Soybeans closed at $9.77 3/4, up 8 3/4 cents; May 15 Soybeans closed at $9.80 3/4, up 6 1/2 cents; Mar 15 Soybean Meal closed at $329.60, up $2.70; Mar 15 Soybean Oil closed at 31.75, up 30 points.
Corn: The corn market closed around 2-3 cents lower. Ukraine said that it had exported 9.7 MMT of corn so far this season, meaning that it's just past halfway through matching the USDA's new estimate for the season of 18 MMT. "Pending any major increases to hostilities, the Ukraine will remain the global price setter for corn for the foreseeable future," said Benson Quinn. South Korea's NOFI bought 128,000 MT of optional origin corn for August–September shipment. Lanworth increased their forecast for this year's Argentine corn crop to a hefty looking 28.8 MMT versus a previous estimate of 28.5 MMT and the USDA's estimate of only 23 MMT from yesterday. "Recent rains have reversed the dryness in the south, including central Buenos Aires, La Pampa, and western Cordoba and in the northern and western fringes of the agricultural regions. Only about half the corn crop was seeded by the first week of December and crop stage varies across the country. The crop condition is reported as excellent around the delegation of Marco Juárez within the province of Cordoba, where some corn was planted later and is just now entering the late vegetative stage into pollination. In the drier region of Entre Rios, early planted corn is ready for harvest," the USDA said. The Rosario Grains Exchange estimated Argentina’s corn crop at 23.5 MMT versus 22.4 MMT previously. Lanworth now have the Brazilian corn crop estimated at 75.5 MMT versus a previous figure of 75.7 MMT. Conab are due out tomorrow, last time they had the Brazilian corn crop estimated at 79.1 MMT. The US Energy Dept reported weekly ethanol production up 13,000 barrels/day to 961,000 bpd. The USDA said in it's baseline projections that it sees US corn for ethanol usage relatively flat across the next 10 years, using around 35% of the US corn crop annually. Weekly export sales tomorrow are expected at around 600-850 TMT. Mar 15 Corn closed at $3.85 3/4, down 2 1/4 cent; May 15 Corn closed at $3.93 3/4, down 2 1/2 cents.
Wheat: The wheat market closed around 4-6 cents higher across the three exchanges. As with soybeans, there didn't really seem to be any particular reason for the change in sentiment. Last night's USDA report didn't offer a lot of encouragement for US wheat in particular, with US exports lowered and ending stocks increased. World production was also raised to a new record high and global ending stocks pegged at a very ample near 198 MMT. Egypt are said to have sent a trade delegation to Russia to appeal for them to drop their new export duty on wheat. "It isn’t clear whether this would be in place of a rumoured purchase of US wheat, but it does appear the restrictions have left the world’s largest importer in need of wheat," said Benson Quinn. China sold 34% of the total 805,872 MT of domestic wheat offered up at auction from it's reserves today. They also sold 21% of the volume of imported wheat offered from reserves. South Korea's NOFI bought 55,000 MT of optional origin feed wheat for June shipment. Jordan bought 100,000 MT of optional origin wheat and cancelled a tender for 100,000 MT of optional origin barley. South Korea's MFG bought 45,000 MT of optional origin wheat for June shipment. Kazakhstan's Stats Agency said that the country's 2014 grain crop was 17.2 MMT, including 13.0 MMT of wheat, down 6% on last year. Ukraine said that it had exported nearly 9 MMT of wheat so far this season. You will recall that the Ukraine Ag Ministry recently said it had agreed to cap exports at 12.8 MMT this season. Martell Crop Projections say that recent precipitation in Russian winter wheat areas may have boosted the what was a rather grim outlook for the crop. "Heavy precipitation affected a wide swath of the winter grain belt, eastern Ukraine, Russia’s Southern District, the Black Earth and Volga Valley. All are important winter grain areas. By mid January, a thick layer of snow accumulated, protecting wheat from gusty winds and very cold temperatures. Precipitation has continued generous up through early February except for drying in Stavropol in the Southern District. The turnaround in Russia wheat prospects seemed unimaginable last fall in the midst of severe drought," they said. Mar 15 CBOT Wheat closed at $5.25 3/4, up 4 cents; Mar 15 KCBT Wheat closed at $5.59 1/4, up 5 1/4 cents; Mar 15 MGEX Wheat closed at $5.76, up 6 cents.
EU Grains Closing Report - Moon Made Of Green Cheese Says Russian Ag Min
11/02/15 -- EU grains were mixed, as traders digested the details of last night's USDA report.
At the finish, Mar 15 London wheat was down GBP0.55/tonne to GBP121.85/tonne; Mar 15 Paris wheat was EUR0.75/tonne higher at EUR18.75/tonne; Mar 15 Paris corn was EUR1.25/tonne lower at EUR153.25/tonne; May 15 Paris rapeseed was up EUR0.25/tonne to EUR356.75/tonne.
Whilst the USDA increased 2014/15 world wheat production (to a new record 725 MMT) and ending stocks, they also raised projected EU exports to a second highest ever 31 MMT and reduced carryout here, although the latter would still be the highest since 2008/09 at 16.3 MMT.
At 155.7 MMT this season's EU-28 wheat crop is an all time high, and up more than 12 MMT on a year ago for an 8.5% rise. Corn production in Europe in 2014 was also a record high in excess of 74 MMT. At just shy of 60 MMT the EU-28 barley crop, whilst not a record, was the highest since 2009/10.
Meanwhile rapeseed output in Europe in 2014 also set a new record in excess of 24 MMT, for a 14% increase on a year ago.
In addition, the USDA raised their forecast for last year's Ukraine corn crop by 1.45 MMT to a second highest ever 28.5 MMT. "A steady increase in the use of imported hybrid seed over the past ten years has been largely responsible for a concurrent increase in yield, and seed imports for the 2014/15 crop increased by about 20 percent from the previous year," they said.
Ukraine's corn exports were raised 1.5 MMT to 18 MMT, and a decent proportion of that of course will be destined for Europe.
So clearly, from a production perspective, EU consumers are blessed with an array of grains and oilseeds from which to chose. Nothing very bullish there then.
The Ukraine Ag Ministry said that the country had exported nearly 22.7 MMT of grains so far this season, including 8.9 MMT of wheat, 3.8 MMT of barley and 9.7 MMT of corn.
In other news, the latest UK customs data shows that we exported 225 TMT of wheat in December, bringing the season so far total to 938 TMT. The HGCA report that around 30% of these exports went to non-EU homes, which is the largest volume for this period since 1996/97, they say.
The reduced volume of exports to Europe is clearly partly down to euro weakness, as well as an abundance of lower quality grain on the continent this year.
Jordan bought 100,000 MT of optional origin hard wheat for September shipment in a tender. They cancelled a tender for a similar volume of feed barley.
The head of the Russian Ag Ministry forecast that the country would produce 100 MMT of grains in 2015. Seriously. He just about had enough time to also say that the moon in made of green cheese before he had to leave the podium of the conference he was speaking at because his trousers had caught fire.
Chicago Grains Fall Following Negative USDA Report
10/02/15 -- Soycomplex: Beans closed lower following a generally bearish USDA WASDE report. "Oilseed supplies are currently transitioning from a prolonged period of tightness to one of relative abundance. Global oilseed ending stocks are forecast to rise significantly this year led by a nearly 40 percent rise in soybean stocks," they said. As was generally anticipated they cut 1 MMT off their Brazilian crop estimate to 94.5 MMT, and added 1 MMT to Argentina, raising output there to 56 MMT. US soybean exports were raised from 48.2 MMT to 48.7 MMT. Imports for China, the EU and other leading players were all left unchanged from a month ago. The US crush was increased from 48.4 MMT to 48.9 MMT. US ending stocks were trimmed back a bit more than expected to 10.5 MMT, or 385 million bushels. World ending stocks were cut from 90.8 MMT to 89.3 MMT. The larger than anticipated cut to US carryout sparked a short-lived mini rally, but the reality of those stocks still being 320% higher than in 2013/14 soon bit back. World ending stocks are also sharply higher, up 35% on a year previously. "The Brazilian farmer was there to sell the rally along with the funds that upon further inspection of the report really found nothing bullish and piled back into short positions," said Benson Quinn. Dr Cordonnier estimated Brazil's bean crop at 93 MMT and went for 56 MMT in Argentina, both unchanged from his previous estimates. Aboive went for 92.3 MMT in Brazil. Mar 15 Soybeans closed at $9.69, down 9 1/2 cents; May 15 Soybeans closed at $9.74 1/4, down 10 3/4 cents; Mar 15 Soybean Meal closed at $326.90, down $2.70; Mar 15 Soybean Oil closed at 31.45, down 56 points.
Corn: The corn market closed around 3 cents or so lower. The firm US dollar and weaker crude oil were bearish influences. The USDA raised their forecast for the world 2014/15 corn crop up from 988 MMT in January to a record 991.3 MMT. "Larger crops in Ukraine, Argentina, and India more than offset lower production in Russia," they said. Argentina's crop was raised 1 MMT to 23 MMT and Brazil's was left unchanged at 75 MMT. Exports from Argentina and Ukraine were both hiked by 1.5 MMT from last month to 13.5 MMT and 18 MMT respectively. US exports were seen unchanged at 44.5 MMT. Chinese imports were increased by 0.5 MMT to 2.5 MMT. World ending stocks were raised by half a million tonnes to 189.64 MMT, despite those in the US being reduced a bit more than expected, from 47.7 MMT to 46.4 MMT (1.827 billion bushels). The USDA added 75 million bushels to the US ethanol grind. "To offset a portion of a higher ethanol grind, they reduced the feed usage by 25 million bu due to the expected rise in available DDG’s for feed use. They also narrowed the range of the season-average farm price by a nickel on both sides to $3.40-3.90," noted Benson Quinn. The USDA also raised their forecast for US sorghum exports from 6.8 MMT to 7.5 MMT, and increased Chinese imports from 6.2 MMT to 7.0 MMT. In other news, Taiwan's MFIG bought 60,000 MT of US corn for Apr/May shipment. Dr Cordonnier estimated the Brazilian corn crop at 74 MMT, pegging Argentina's output at 22 MMT, both unchanged from his previous forecasts. Mar 15 Corn closed at $3.88, down 3 1/4 cents; May 15 Corn closed at $3.96 1/4, down 3 1/4 cents.
Wheat: The wheat market closed around 6-9 cents lower across the three exchanges. The USDA painted a picture of record world wheat production, abundant stocks and lower US exports due to a variety of factors, not least the strong US dollar and fierce competition from Europe and elsewhere. "US wheat exports to Brazil are likely to drop significantly in 2014/15 compared to last year on competition from traditional South American suppliers. Brazil also has record production, and imports are forecast slightly lower than last year. Argentina, Paraguay, and Uruguay have recently harvested larger crops and are expected to export more to Brazil. Mercosur exporters have freight and logistical advantages in addition to tariff-free access, while others, including the United States, are subject to a 10% import duty. The situation is very different from last year,
when US wheat filled an unusual gap left by short crops in both Argentina and Paraguay," they said. The world wheat crop was pegged at 725 MMT, up from 723.4 MMT previously and versus 716.1 MMT a year ago. Consumption was raised 1.5 MMT to 714.65 MMT, but ending stocks were still increased by the best part of 2 MMT to almost 198 MMT. US wheat exports were lowered from 25.5 MMT to 25.0 MMT, and Europe's increased from 30 MMT to 31 MMT, although still below last season's record near 32 MMT. Egypt's imports were raised 0.5 MMT to 10.5 MMT. In other news, South Korea bought 47 TMT of US milling wheat, and 50 TMT of Australian milling wheat. Bahrain bought 25,000 MT of Australian wheat for Mar-Apr shipment. Morocco are tendering for 360,000 MT each of US soft wheat and US durum wheat for May shipment. Mar 15 CBOT Wheat closed at $5.21 3/4, down 8 cents; Mar 15 KCBT Wheat closed at $5.54, down 9 1/2 cents; Mar 15 MGEX Wheat closed at $5.70, down 6 cents.
EU Grains Decline Ahead Of Bearish USDA Report
10/02/15 -- EU grains closed mostly lower heading into the February USDA WASDE report.
At the close, Mar 15 London wheat was GBP0.75/tonne weaker at GBP122.40/tonne, Mar 15 Paris wheat was EUR2.25/tonne lower at EUR185.00/tonne, Mar 15 Paris corn was down EUR1.00/tonne at EUR154.50/tonne and May 15 Paris rapeseed fell EUR1.00/tonne to EUR356.50/tonne.
ABARES increased their forecasts for Australian wheat, barley and canola production, although output of all three is still significantly lower than a year ago. They upped their estimate for wheat from 23.22 MMT to 23.61 MMT, which is 12% down on last year. Canola was increased from 3.32 MMT to 3.41 MMT, a 10% fall compared with a year ago, and barley production was pegged at 8 MMT, an 18% decline versus last year.
Russia only managed to pick up less than a thousand tonnes of grain in their bi-weekly intervention purchase round - one of the poorest results of the season so far. That came just 24 hours after the Ag Ministry said that raising the prices on offer would be inappropriate.
They've only bought less than 350 TMT of their stated aim to purchase 2.3-3.0 MMT for the state intervention fund since buying began in late September.
The Ukraine Ag Ministry said that 82% of winter grains in the country are in good to satisfactory condition, and 18% are weak/thinned, unchanged from their previous estimates.
APK Inform said that in a survey that they conducted only two thirds of Ukraine farmers have at least 80% of their crop protections products bought, and less than that (57%) have at least 80% of their fertiliser purchased. Prices for both are sharply higher this year following the demise of the Ukraine currency.
A separate survey yesterday said that 45% of Ukraine farmers expect to cut their fertiliser usage this year after prices rose between 35-100% in the last 6 months.
The USDA's FAS in Ukraine estimated wheat exports this year at 10.8 MMT versus 9.8 MMT a year ago, with barley shipments at 4.2 MMT (2.5 MMT last season) and corn exports at 20 MMT (around unchanged). By the end of December Ukraine's wheat exports were 8.1 MMT, with those for barley at 3.7 MMT and corn at 6.0 MMT.
The French Farm Ministry estimated their winter soft wheat area at 5.13 million hectares versus a previous estimate of 5.10 million and up 3.1% from a year ago.
They see the French winter rapeseed area at 1.5 million ha, unchanged from previous their estimate and down 0.6% from a year ago.
Late in the day the USDA increased their forecast for the 2014/15 world wheat crop from 723.4 MMT to a new record 725 MMT. Ending stocks were up by almost 2 MMT to 197.8 MMT. Production increases came from Argentina, Kazakhstan, the EU, Turkey, and Ukraine.
They also raised EU wheat exports by 1 MMT to a second highest ever 31 MMT, leaving their outlook for Russia and Ukraine unchanged at 20 MMT and 11 MMT respectively.
Chicago Grains Mostly Higher Ahead Of USDA Report
09/02/15 -- Soycomplex: Beans closed around 5-6 cents higher. For all the talk of demand switching to South America, the USDA announced 120,000 MT of US beans sold to China for 2014/15 shipment. They also reported export inspections of almost 1.5 MMT. That was down on 1.7 MMT a week ago, but not drastically so. Cumulative year-to-date inspections are now nearly 39 MMT, which is 18% up on this time a year ago. IMEA said that in Brazil's leading producing state of Mato Grosso the soybean harvest is 17% complete versus 10.4% a week ago and 21.7% a year ago. They estimated yields at the equivalent of 46.8 bu/acre versus 46.23 bu/acre a year ago. AgRural estimated Brazil’s 2014/15 bean crop at 91.9 MMT, down from a previous estimate of 95.0 MMT, due to dry weather in January. "The key centre west area (of Mato Grosso) has received only 59% of normal rainfall the past 30 days, despite an uptick in showers. The soil moisture deficit is still 131 mm in the top soybean state, reflecting intense drought in January," said Martell Crop Projections. "The February 9-15 forecast is dry in Mato Grosso and the tropics, at large. However, the outlook for South Brazil is wet. Temperatures are expected to be 2-3 F above normal in Mato Grosso and the tropics, at large. A high rate of evaporation would result from the heat worsening moisture stress in soybeans. South Brazil temperatures would be near average, however, with frequent thunderstorms and heavy rainfall," they added. The trade is now looking to tomorrow's WASDE report from the USDA. US 2014/15 soybean ending stocks are expected to be reduced from last month's 410 million bushels to around 398 million. Argentine production is expected to be raised from last month's 55 MMT, compensating for a reduction in Brazil from the 95.5 MMT forecast in January. Mar 15 Soybeans closed at $9.78 1/2, up 5 cents; May 15 Soybeans closed at $9.85, up 5 cents; Mar 15 Soybean Meal closed at $329.60, up $0.20; Mar 15 Soybean Oil closed at 32.01, up 19 points.
Corn: The corn market closed closed around 5 cents higher heading into tomorrow's USDA report. Weekly export inspections of just over 700 TMT were in line with trade forecasts. "The pace of inspections is expected to pick up. Over the last 5 reporting periods inspections have averaged 700,000 MT. Moving forward, inspections will have to average around 1 MMT weekly to meet the current year-end USDA expectation," said Benson Quinn Commodities. Crude oil closed higher, up near $53/barrel, adding some support. CNGOIC estimated China’s 2014/15 corn imports at 3.0 MMT, up slightly from a previous estimate of 2.7 MMT. The USDA are currently only at 2 MMT. They estimated China’s 2014/15 sorghum imports at 6.4 MMT, more than double those of corn and up more than 50% on 2013/14 imports of 4.16 MMT. Reuters report that Cargill said on Friday that it is suspending deliveries to their corn mill in Fort Dodge, Iowa due to significant mechanical failure. The French government said that France had exported 3.1 MMT of corn in the first five months of 2014/15 (Jul/Nov), up from 2.5 MMT a year previously. APK Inform said that Ukraine's corn exports via seaports last week were 721.7 TMMT, 86% of all grain shipments, and up sharply from 198.2 TMT the week previously. The Buenos Aires Grain Exchange said that the early Argentine corn harvest is underway in one or two places, despite that fact that planting is not yet 100% done nationally. As far as tomorrow's USDA report goes, the trade isn't expecting much change to US 2014/15 corn ending stocks from the 1.877 billion bushels estimated a month ago. World corn carryout is also expected to be little different to the 189.15 MMT forecast in January. Argentine corn production might be raised by around 0.5 MMT from last month's 22.0 MMT forecast, and Brazilian output could go the other way, seen down around 0.5 MMT from the 75.0 MMT predicted in January. Mar 15 Corn closed at $3.91 1/4, up 5 1/2 cents; May 15 Corn closed at $3.99 1/2, up 5 1/2 cents.
Wheat: The wheat market closed mixed, up a little in Chicago and Kansas and a little lower in Minneapolis. Weekly export inspections came in at close to 400,000 MT, which was at the top end of trade expectations. Year to date inspections of 15.5 MMT are down more than 30% on this time a year ago though, indicating just how much the strong dollar and competitive world offers elsewhere are hurting US wheat export prospects. The USDA currently forecast US wheat exports in 2014/15 down "only" 19% year-on-year. The Canadian Grain Commission said that the country had exported 20.9 MMT of grains, oilseeds and pulses in the first half of 2014/15. That total includes 8.1 MMT of wheat (excluding durum), a 7% increase on a year ago, and 2.7 MMT of durum wheat, up 21% versus last year. CNGOIC estimated China’s 2014/15 barley imports at 5.6 MMT, up more than 55% versus 3.61 MMT in 2013/14. Russia's Ag Ministry said that the country exported 177 TMT of grains in the Feb 1-4 period, including 68 TMT of wheat and 89 TMT of barley. They said that takes Jul 1 - Feb 4 exports to 23.5 MMT of grain, of which 18.5 MMT is wheat and 3.4 MMT barley. They estimate Russia's 2014/15 grain exports at 28-30 MMT. They also said that it would be "inappropriate" to raise the prices on offer in their current intervention purchase programme. IKAR said that the proportion of winter grains that are in poor to very poor condition is much higher than normal. Plantings were however up 12% versus a year previously when autumn conditions were very wet, they noted. France said that it had exported 1.4 MMT of soft wheat in December, which is 20% down on a year ago. The French government estimated the nation's Jan 1 grain stocks at 22.7 MMT versus 19.6 MMT a year ago. Turkey bought 60,000 MT of durum wheat in a tender. The Philippines bought 93,000 MT of feed wheat for Jun/Jul shipment in a tender. Tomorrow's USDA report isn't expected to offer little change to US or world wheat ending stocks from last month's estimates. Mar 15 CBOT Wheat closed at $5.29 3/4, up 2 3/4 cents; Mar 15 KCBT Wheat closed at $5.63 1/2, up 1 3/4 cents; Mar 15 MGEX Wheat closed at $5.76, down 1 cent.
EU Grains Begin Week Mostly Lower
09/02/15 -- EU grains began the week mostly lower, with the exception of Paris rapeseed which posted small gains.
At the close, Mar 15 London wheat was down GBP0.60/tonne at GBP123.15/tonne, Mar 15 Paris wheat was down EUR1.00/tonne at EUR187.25/tonne, Mar 15 Paris corn fell EUR0.25/tonne to EUR155.50/tonne and May 15 Paris rapeseed was EUR0.75/tonne firmer to EUR357.50/tonne.
The Russian Ag Ministry said that the nation's grain exports (Jul 1 to Feb 4) now stand at 23.5 MMT, including 18.5 MMT of wheat, 3.4 MMT of barley and 1.2 MMT of corn.
Despite the new export duty, wheat is still being shipped out, at least it was last week. It remains to be seen if this was merely due to boats already loaded in late January that were being held back by paperwork, or not.
APK Inform reported that Russian seaports shipped 270.3 TMT of grains last week, most of that (237.9 TMT) was wheat.
Despite the fact that the country's intervention purchase programme has met with a rather tepid response from Russian farmers, the Ag Ministry say that it would currently be "inappropriate" to consider raising the prices that they are willing to pay.
Meanwhile, IKAR said that the proportion of winter grains in Russia destined to be harvested later this year that are rated as poor/very poor is "much higher than average". They did also however note that the area sown was 12% higher than a year ago, which should at least partially offset any damage.
The question of affordability to replant failed crops in the spring remains an issue, even if the Russian government insist that subsidised loans will be available to farmers to fund the spring planting campaign. This is after all the same government that insist that they aren't backing the rebels in Ukraine.
Which leads nicely onto news from there that Ukraine seaports shipped out 837.9 TMT of grains last week, up from 529.9 TMT the week previously. Corn accounted for 86% of that total with 721.7 TMT.
APK Inform said that in a survey that they had conducted, 45% of Ukraine growers said that they will be forced to reduce fertiliser applications this year due to much increased costs. Of those that do intend to cut, 58% said that they plan to reduce by 10-20%, with 31% expecting to cut by 21-35% and the remaining 11% likely to apply over 35% less fertiliser this year.
Ukraine fertiliser prices have risen by 35-100% in the last six months, they said. Supply/availability is also currently and issue, they added.
French customs data shows that they exported 1.422 MMT of soft wheat in December, a 20% fall year-on-year. Egypt was the top home.
French millers are imported 50% more milling wheat in the first six months of 2014/15 than they did in the same period a year ago, due to the lower quality of this season's crop.
