Chicago Beans End Lower On The Day But Higher For The Week
19/06/15 -- Soycomplex: Beans closed lower on the day, but higher for the week. Informa today estimated the 2015 US soybean area at 86.7 million acres, down 400,000 acres from their previous forecast, but still more than 2 million more than the USDA projected back in March. The Argentine Ag Ministry added 1 MMT to their forecast for this year's soybean crop there, taking that now up to 61 MMT. That's also 200,000 MT above what the Buenos Aires Grain Exchange said yesterday and 1.5 MMT above the current USDA figure. The trade seems to be anticipating a drop in US soybean crop condition ratings in Monday's USDA report due to excessive recent rainfall. The forecast for the weekend is a bit more friendly, but large areas of the soybean belt are set to still receive above average rains in the next 15 days. More eastern states, from the Dakota's all the way south down to Texas, should be a bit drier than normal though. Planting progress will also be under scrutiny on Monday, with 13% or 11 million acres still to be sown as of last Sunday night. I guess that we might see progress up from 87% done to around 92% complete there. The latest Commitment of Traders report shows managed money reducing their net short position in beans for the week through to Tuesday night. Jul 15 Soybeans closed at $9.71 1/2, down 6 1/4 cents; Nov 15 Soybeans closed at $9.39 3/4, down 2 1/2 cents; Jul 15 Soybean Meal closed at $323.10, down $3.50; Jul 15 Soybean Oil closed at 32.55, up 30 points. On a front month basis beans gained 31 1/2 cents for the week, with meal $5.70 higher and oil down 59 points.
Corn: The corn market closed around 4-5 cents lower. Informa estimated US corn plantings at 88.78 million acres, which was up a little from 88.74 million in May, but below the USDA's 89.2 million forecast from March. The USDA revise their acreage numbers at the end of the month. "Rumours are rampant that the latest swath of moisture won’t be taken into consideration in the June 30 acreage report and therefore be missing potentially the greatest impact of the crop year," said Benson Quinn. The acreage survey was conducted Jun 1-10. The trade is thinking that the USDA might cut US corn ratings by around 2-3% in the good to excellent category on Monday. The latest Commitment of Traders Report shows managed money adding almost 30,000 contracts to their net short position in corn for the week through to Tuesday night. That's an increase of around 25% in a week. The trade seems largely fairly optimistic that US corn yields will ultimately turn out pretty well this year, despite the well advertised heavy moisture totals. Rain makes grain, as the old saying goes. FranceAgriMer reported that 85% of the French corn crop was in good to very good condition, up one point from a week ago. They said that 91% of the crop had 6-8 visible leaves versus 83% a week earlier and 84% a year ago. Indonesia were said to have bought around 50,000 MT of optional origin corn for August-October shipment in a tender at $190/tonne C&F. Ukraine said that it had now exported a record 33.73 MMT of grains this season, including 18.27 MMT of corn. Jul 15 Corn closed at $3.53 1/4, down 4 3/4 cents; Dec 15 Corn closed at $3.68 3/4, down 4 1/2 cents. For the week Jul 15 corn was 1/4 cent higher and Dec 15 was 3/4 of a cent lower.
Wheat: The wheat market closed with small gains on the day, but still with some sizable losses for the week. I guess we could call today's action consolidation from recent losses therefore. Informa estimated the US all wheat acreage at 56.1 million, up from their May estimate of 55.9 million and above the USDA intentions number of 55.3 million. Wheat growers on the Plains will welcome the drier than normal forecast that's on the cards for most across the next 14 days. Plains Grains in Oklahoma estimate that the winter wheat harvest in Texas and Oklahoma is 49% and 41% complete respectively. The USDA said 47% and 38% done as of Sunday night, and will update us on that on Monday. Agriculture and Agri-Food Canada estimated the wheat crop there at 29.7 MMT this year, down from a previous forecast of 30.1 MMT. Ukraine said that it's 2014/15 wheat exports now stand at 10.75 MMT, with a further 4.46 MMT of barley having also been shipped out. The Russian Deputy Prime Minister said that the government plan no changes to the new "floating" export tax on wheat which comes into force on Jul 1. He did add however that if the financial markets stabilise then this might change at some point later in the season. FranceAgriMer trimmed 2 percentage points off winter wheat crop conditions there, although things are still better than they were a year ago. Jul 15 CBOT Wheat closed at $4.88 1/2, up 1/2 cent; Jul 15 KCBT Wheat closed at $5.03 1/4, up 5 cents; Jul 15 MGEX Wheat closed at $5.43, up 3 1/4 cents. For the week, Chicago wheat lost 15 1/4 cents, with Kansas down 14 3/4 cents and the Minneapolis market losing 18 1/4 cents.
EU Grains Mostly Higher On The Day, But Lower For The Week
At the close Jul 15 London wheat was down GBP0.50/tonne at GBP111.00/tonne, although new crop Nov 15 was GBP1.00/tonne firmer at GBP122.50/tonne. Sep 15 Paris wheat was EUR0.25/tonne higher at EUR178.50/tonne, Aug 15 Paris corn was down EUR0.25/tonne at EUR161.75/tonne, whilst Aug 15 Paris rapeseed jumped EUR5.75/tonne to close at EUR379.25/tonne.
For the week, old crop London wheat suffered losses of GBP5.50/tonne, whilst new crop did a bit better, shedding GBP2.00/tonne over the course of the week. Paris wheat was down EUR1.75/tonne compared with last Friday, corn fell EUR1.50/tonne, whilst rapeseed finished the week EUR6.75/tonne higher than it began it.
Various analysts have reported reduced rapeseed production expectations around the globe recently, explaining the strength being displayed in that market. Europe, Canada, Australia and Ukraine are all expected to see production levels this year fall anywhere between 5-18% as plantings of the oilseed decline.
In Europe, rapeseed crops in Germany and France are suffering from dryness and production estimates are being downsized. Another problem in French rapeseed was noted this week, when a Thompson Reuters crop tour of the country said that they had been "consistently told by local agronomists that the flowering stage lasted only 50-75% as long as it should have" this year.
They found rapeseed yield potential around 10-15% lower this year, "At this point, the weather no longer matters in terms of yield formation for the vast majority of rapeseed in France, as now the crop will sit and wait for harvest to start mid-July, with the hopes that severe summer storms steer clear until then," they noted.
Germany's DRV meanwhile forecast the 2015 rapeseed crop there to fall 20% this year, albeit from a record crop in 2014, on a combination of a 6% drop in plantings and a 15% decline in potential yields.
The Thompson Reuters tour of France found that yield potential in wheat was also in decline, although they said that there was still a few more week's time for life-saving rains, should they arrive, to reverse that trend.
FranceAgriMer today cut the proportion of the French winter wheat crop rated good to very good by 2 percentage points to 85% - that included a 4 point decline in the top "very good" category to 27%. At the end of May 36% of the crop was rated as being in very good condition.
French winter barley rated good to very good was trimmed one point also to 85%, spring barley in the top two categories was cut from 86% to 82%, although the proportion of corn rated that high was increased one point from a week ago to 85%.
A small amount of winter barley has been cut in the Midi-Pyrenees and Acquitaine regions, they said. Spring barley is now 99% headed, and 91% of the French corn crop has 6-8 visible leaves versus 83% a week ago and 84% a year ago, they added.
Spring barley in Burgundy is in good shape “but in urgent need of water,” according to Evergrain International. They cut their forecast for French spring barley yields from 6.7 MT/ha to 6.6 MT/ha, but raised their view on English spring barley yields from 6.0 MT/ha to 6.1 MT/ha.
In Spain meanwhile, the driest and warmest May ever will cut this year's cereal crop to 13.28 MMT versus a 5-year average of 15.8 MMT, said Asaja. They said that this was "remarkably lower than expected". Soft wheat production will fall to 5.1 MMT, down 10.5% on last year, with barley output falling 12% to 6.1 MMT, they predicted.
The EU Commission's MARS unit is due to released revised EU yield estimates on Monday, which will be watched with interest.
Chicago Beans End Higher, But Wheat And Corn Prices Fall
18/06/15 -- Soycomplex: Beans closed higher for a third session in a row. Weekly export sales of 132,900 MT on old crop and 532,000 MT on new crop were supportive. Exports of 353,900 MT were up 45 percent from the previous week and 38 percent above the prior 4-week average, adding further to the friendly tone. So too did dollar weakness today. Cumulative season to date exports are now 47.22 MMT, with a further 3.18 MMT worth of outstanding sales taking total old crop commitments to 50.4 MMT. The USDA currently has 2014/15 exports at 48.3 MMT, so current net commitments are 104% of that forecast. Continued wetness associated with Tropical Depression Bill leans supportive for beans. A Bloomberg survey into trader/analyst sentiment found 20 bullish, 6 bearish and 3 neutral on bean prices. That's a marked change on a week ago when the results were 6 bullish, 10 bearish and 5 neutral. MDA CropCast estimated the world soybean crop in 2015/16 at 302.7 MMT, unchanged from a week ago and 1.2% lower than the current season. They made no adjustment to their US soybean production estimate, pegging this year's crop at 3.823 billion bushels, down 3.6% on last year's record. They see US yields this year averaging 45.8 bu/acre versus 48.1 bu/acre a year ago. Informa are due to release revised US acreage estimates tomorrow. The Buenos Aires Grain Exchange said that the Argentine soybean harvest advanced 1.9 percentage points this week to 98.5% complete. That means that Argentine growers have now already brought in 60.4 MMT of their projected record 60.8 MMT crop this year. Jul 15 Soybeans closed at $9.77 3/4, up 8 3/4 cents; Nov 15 Soybeans closed at $9.42 1/4, up 2 1/2 cents; Jul 15 Soybean Meal closed at $326.60, up $2.90; Jul 15 Soybean Oil closed at 32.25, down 60 points.
Corn: The corn market closed around a cent or two easier. For now the trade seems to think that the excessive wetness being seen in the US is more of a potential problem for beans than corn. Weekly export sales of 627,200 MT for delivery in 2014/15 were up 27 percent from the previous week and 3 percent above the prior 4-week average, and ahead of expectations for old crop sales of around only 200,000 MT. New crop sales of 200,400 MT were a bit disappointing however. Exports of over 1 MMT were respectable. The Argentine corn harvest is making only slow progress. The Buenos Aires Grain Exchange estimates it at 43.1% complete, up only 2.5 percentage points on the week. They held steady with their production estimate at 25 MMT, but said that the arrival of the first frosts will reduce grain moisture and speed up the harvest of later sown corn. Many of these later crops have yield potential above average, so final production could end up higher than the current 25 MMT forecast, they said. A Bloomberg survey into trader/analyst sentiment found 14 bullish, 8 bearish and 7 neutral on corn prices. A week ago it was 7 bullish, 10 bearish and 4 neutral. MDA CropCast trimmed 0.25 MMT off their world 2015/16 corn production forecast, pegging the global crop at 960.8 MMT. They were unchanged on US production at 13.8 billion bushels, down 4% on last year's record. They see US yields this year averaging 167.4 bu/acre, down 3.2% on 172.7 bu/acre a year ago. Informa are due out with their latest US acreage estimates tomorrow, they had corn plantings at 88.7 million acres versus the USDA’s 89.2 million last time. The USDA themselves are out at the end of the month. The US National Climatic Data Centre said that El Nino means that the water in the Pacific is about 3.6 degrees above normal in the eastern end of the basin, and that there is an 80 percent chance that it will persist through the first three months of 2016. Jul 15 Corn closed at $3.58, down 1 1/4 cents; Dec 15 Corn closed at $3.73 1/4, down 1 3/4 cents.
Wheat: The wheat market closed lower on all three exchanges. Weekly export sales of 315,700 MT were in line with fairly modest trade expectations. The Buenos Aires Grain Exchange reduced their forecast for Argentine wheat plantings from 4.1 million ha to 3.9 million, and said that sowing of that is now 34.7% complete. Dryness is an issue in some parts of the Argentine wheat belt, and growers are also falling out of love with the crop due to low prices and fickle on-off export quotas. An area of 3.9 million ha would be a drop of 11.4% on plantings of 4.4 million a year ago. Some analysts are suggesting that even that is too high and an area as low as 3.5 million ha could be on the cards this year. Rain is in the forecast for some of the drier areas of eastern Australia. MDA CropCast cut 1.13 MMT off their world wheat production estimate, taking that down to 710.7 MMT, a 1.2% decline on a year ago. They took 0.95 MMT off their European estimate, reduced the size of the US crop by 0.43 MMT, added 0.25 MMT to Ukraine and were unchanged on Russia. Japan bought 113 TMT of US, Canadian and Australian wheat in their regular weekly tender. Heavy rains on the US Plains continue to frustrate winter wheat harvest attempts and could be driving down quality and causing disease issues. A Bloomberg survey into trader/analyst sentiment found 14 bullish, 4 bearish and 11 neutral on wheat prices. A week ago it was 6 bullish, 9 bearish and 5 neutral. Russia said that they'd agreed to sell 160,000 MT of wheat to Nicaragua. Russia's Deputy Prime Minister, Arkady Dvorkovich, said that the country could export 25-27 MMT of grains in 2015/16 if the current government target for production of 100 MMT is met, however unlikely that might be. Jul 15 CBOT Wheat closed at $4.88, down 3 1/4 cents; Jul 15 KCBT Wheat closed at $4.98 1/4, down 7 1/4 cents; Jul 15 MGEX Wheat closed at $5.39 3/4, down 8 cents.
EU Grains Stumble Hindered By Firmer Sterling/Euro
At the close, Jul 15 London wheat was GBP1.50/tonne lower at GBP111.50/tonne, Sep 15 Paris was EUR0.25/tonne weaker at EUR178.25/tonne, Aug 15 Paris corn was down EUR1.00/tonne at EUR162.00/tonne, whilst Aug 15 Paris rapeseed had fallen EUR1.50/tonne to close at EUR373.50/tonne.
News that UK wages are up 2.7% this month, compared to only 2.3% higher the previous month and market expectations of only a 2.1% rise, are buoying the pound. The Bank of England has long since said that the timing of interest rates in the UK finally beginning to rise is closely linked to improved earnings being able to support the move.
With these apparently now rising much faster than inflation, and unemployment also falling, the forex market is starting to think that a UK interest rate rise might not be too far away.
The minutes of the latest MPC meeting on monetary policy show that two members of the committee were "finely balanced" on whether to leave UK rates on hold or start to raise them. There could be a few more now starting to waiver next month.
This news comes just after the US Federal Reserve trimmed US growth forecasts and signalled a shallower path for interest rate rises there in the year ahead. Up until now the market had been factoring in US interest rates to start rising sooner than those in the UK, but now it's starting to look like the opposite could in fact be true.
The dollar was lower against even the euro today, with the German Chancellor Angela Merkel saying that she is "still convinced" that a Greek debt deal is possible.
A firmer sterling and euro were therefore a bit bearish for the EU grain markets today.
Strategie Grains cut their forecast for EU soft wheat production by 1 MMT to 141.6 MMT, and lopped 300 TMT off their durum wheat estimate too, taking the EU all wheat crop to 149.3 MMT, which is now 1.4 MMT less than the USDA's most recent forecast. Dryness in France, Germany, Poland and Spain was the main reason for today's cuts.
MDA CropCast trimmed 1.13 MMT off their world wheat production estimate this year, coming out with a figure of 710.7 MMT, a modest 1.2% decline on last year. The continued excessive wetness in the US saw them knock 0.43 MMT of winter wheat production there. They now have the US all wheat crop at 59.5 MMT this year, which is nevertheless still more than 6% up on a year ago.
Ukraine's wheat crop was raised 0.25 MMT to 23.0 MMT, a 3.8% fall compared to last year. Russia's was left unchanged at 55.0 MMT, a 5.3% decline on a year ago. Russia's anticipated crop size keeps nudging higher, they were calling it at 53.9 MMT at the beginning of March. Other analysts now think it could come in as high as 59 MMT, which would be little changed on a year ago.
Rosstat said that Russia's Jun 1 grain stocks in the hands of "harvesting and processing organisations" were 14.6 MMT, up 3.1 MMT (or +26%) on a year previously. Wheat accounted for 5.23 MMT of that total, a near 28% rise compared to 12 months ago. Grain stocks held in other hands were 7.8 MMT, also 26% more than a year ago.
MDA CropCast pared back their forecasts for the EU corn and barley crops this year too. They now estimated corn production here at 61.7 MMT, down 0.25 MMT from a week ago and 9.3% below last year. Barley production was seen at 56.2 MMT, down 0.34 MMT from last week and 2.4% below last year's output.
The move is consistent with other analysts ideas, with the German farmers co-operative DRV yesterday reducing their forecasts for wheat, corn, barley and rapeseed production there this year on dryness, adding that further losses are feared if the current warm and dry conditions continue.
The combines are said to be rolling in southern Russia, and probably also are in Ukraine too, bringing in the first of the 2015 winter barley crop. Isolated parts of France are also said to be cutting barley.
Chicago Grains Move Higher On Excessive Rains
17/06/15 -- Soycomplex: Beans closed with double digit gains, building on yesterday's advances. Everyone is now looking at the US weather, and pondering how much rain is too much. Reuters reported that flooding had halted barge traffic on the Illinois River today. "CME, which owns the Chicago Board of Trade (CBOT) and other markets, said a majority of shipping stations on the river were unable to load crops due to high water levels," the report said. The trade is now wondering whether or not US growers will get all their intended soybean acres in this year. As Benson Quinn point out "the June 30th (acreage) report will offer as many questions as answers". This is supposed to inform us what the final area will be for soybeans and corn, but as of Sunday night there was still around 11 million acres of soybeans unplanted. The figures in the report are based on a survey conducted Jun 1-10, and as we now know things have got worse since then. The trade will also be mulling over what sort of yield will beans planted in mud and then sitting in water will produce. Keep in mind that fund money is sitting on a net soybean short of around 100k contracts. Trade ideas for tomorrow's weekly export sales report are around 250,000-500,000 MT for beans for both crop years combined. Jul 15 Soybeans closed at $9.69, up 11 1/2 cents; Nov 15 Soybeans closed at $9.39 3/4, up 12 1/4 cents; Jul 15 Soybean Meal closed at $323.70, up $2.90; Jul 15 Soybean Oil closed at 32.85, down 5 points.
Corn: The corn market closed around 5 cents higher as the corn belt continues to take a battering from the weather. "Reports of ponding and yellow corn have made it to the top of the headlines as central MO, southern IL, and southern IN have received upwards of 2 inches of rain in the last 24 hours. Forecasts continue to lean wet in those areas with the five day accumulation estimates near 5 inches," said Benson Quinn. Fund money has reduced the magnitude of it's short position in corn significantly, but it still holds a sizable one nevertheless. The USDA reported 100,000 MT of old crop corn delivery to unknown destinations for the 2014/15 marketing year. The US Energy Dept reported ethanol production at 980,000 barrels/day, down from last week's record 992,000 bpd. Livestock numbers in the US are falling. One report in the media says that bird flu could cause the loss of 47 million chickens and turkeys in the US before the problem is eradicated. Additionally, a Bloomberg survey predicted that "US feedlots probably purchased or placed into their herds 8 percent fewer cattle last month than a year earlier". Ukraine said that it had exported 18.1 MMT of corn so far this season. Ukraine's Jun 1 corn stocks were said to be 4.8 MMT. Germany's DRV cut their forecast for this year's corn crop there to under 4.7 MMT, a 9% reduction on a year ago, due to dryness issues. Trade estimates for tomorrow's weekly export sales report are around 200,000 MT of old crop and 300,000 MT on the new crop. Jul 15 Corn closed at $3.59 1/4, up 5 1/4 cents; Dec 15 Corn closed at $3.75, up 5 cents.
Wheat: The wheat market closed mixed, garnering some limited support from higher corn and soybeans. Taiwan was a buyer of US wheat overnight, but they are regarded as a stonewall US customer. Non-traditional US wheat buyers are still spoilt for choice when it comes to international suppliers fighting for their business. The weaker US dollar today may have added a bit of support, after the Fed indicated that it has not seen the economic conditions needed to raise interest rates for the time being. The vast majority of analysts had been forecasting a US rate rise in September. Ukraine said that it is on target to export a record volume of grain this season, having shipped out 33.5 MMT so far, including 10.7 MMT of wheat. Russia's exports are also increasing again now that the old export duty has been abolished, and before the new one kicks in on Jul 1. As prices currently stand, the new tax will only be minimal after Jul 1. IKAR estimated this year's Russian grain crop at 96-103 MMT, with wheat accounting for 55-59 MMT of that. The combines are now said to be rolling in southern Russia, harvesting winter barley. The Russian Ministry say that the spring planting campaign is now complete on 31.1 million ha. That includes 13.4 million ha of spring wheat and 8.3 million ha of spring barley. Germany's DRV cut the size of this year's wheat crop there to 25.8 MMT, down 4.2% from a month ago and 7.2% below production last year due to persistent dryness. Northern France has been experiencing similar conditions. FranceAgriMer has been paring back on crop conditions there in the past couple of weeks. Trade estimates for tomorrow's weekly export sales are around 250-400,000 MT. Jul 15 CBOT Wheat closed at $4.91 1/4, up 2 1/2 cents; Jul 15 KCBT Wheat closed at $5.05 1/2, down 1 cent; Jul 15 MGEX Wheat closed at $5.47 3/4, up 1/4 cent.
French Grains Rise Aided By Weak Euro
17/06/15 -- EU grains closed mixed. London wheat was lower, but the Paris market closed higher helped by the weak euro following a Greek Central Bank statement that the country could be in for a "painful" eurozone exit.
Jul 15 London wheat ended GBP2.25/tonne lower at GBP113.00/tonne, Sep 15 Paris was up EUR1.75/tonne at EUR178.50/tonne, Aug 15 Paris corn was EUR0.50/tonne higher at EUR163.00/tonne, whilst Aug 15 Paris rapeseed was up EUR4.00/tonne to close at EUR375.00/tonne.
Germany's DRV cut their forecasts for the country's grain and rapeseed production this year due to persistent dryness. They now predict only an "average" cereal harvest of just over 47.7 MMT.
"This value is about 2 MMT below the forecast of the previous month and more than 8 percent below the record result in 2014 of 52 MMT. The reason for this adjustment is that in many parts of Germany continued dry, warm weather. In many regions, too little precipitation has fallen," they said.
A 4.6% reduction from their previous estimate added to the friendly tone for price prospects rapeseed. They now see this year's output 20% down on last year at just under 5 MMT.
They trimmed 4.2% off their previous estimate for German wheat production too, now pegging that at 25.78 MMT, down 2 MMT (or -7.2%) on a year ago.
Germany's winter barley crop was estimated at 8.6 MMT versus 9 MMT previously and down 9.5% on a year ago. Spring barley production is now seen 5.3% lower than a year ago at 1.96 MMT. Corn production is seen 9.1% lower at 4.67 MMT.
Ukraine said that it is on target to export a record volume of grain in 2014/15, with a total of 33.5 MMT shipped out so far. That includes 10.7 MMT of wheat, 4.5 MMT of barley and 18.1 MMT of corn.
Despite record shipments, the Ukraine State Stats Service said that domestic grain stocks as of Jun 1 were 49% higher than a year ago at around 10 MMT, including 4 MMT of wheat, 0.8 MMT of barley and 4.8 MMT of corn.
Russia's intervention fund picked up 7,425 MT of grain in today's latest purchasing round. They've now bought 1.1 MMT since buying began on Sep 30. The average price being paid for the best so called "grade 3" wheat being RUB9,964, the equivalent of around $184/tonne at today's exchange rate.
Winter barley harvesting is now said to be underway in the Stavropol region of southern Russia.
Bloomberg report that Chinese government inspectors have been touring UK farms and storage facilities with a view to adding Britain to the list of approved barley suppliers. Currently China will only accept barley from Denmark, France, Argentina, Australia, Canada and Ukraine, they say. France has been a big supplier of barley to the Far Eastern powerhouse this season.
There are reports of dryness continuing to build across the North China Plain, which may be linked to the developing El Nino event, and merits watching.
The region is a significant wheat and corn producing area. Although the winter wheat harvest there should pretty much be over by now, they won't start harvesting corn until September.
Chicago Beans Rally As Bill Moves Into Town
16/06/15 -- Soycomplex: Beans posted strong gains. "What had started as 'turn-around Tuesday' firmer trade in the overnight session turned into a full blown rally by the end of the day," said Benson Quinn. There's a bit of a felling that the current unusually wet weather in the US might be a case of "too much of a good thing" for beans more than corn. Last night's USDA crop progress report said that 13% of this year's crop has still to be planted in the US. That's 11 million acres using the USDA's March planting intentions estimate of 84.635 million acres. It's even higher based on Informa's 87.2 million forecast. Kansas and Missouri are the furthest behind and the forecast there is very wet for the next 5 days as Tropical Storm Bill hits the region. A significant proportion of the unplanted area in these two states will be second crop beans following on from winter wheat. The Kansas winter wheat harvest is only 2% harvested versus 18% on average and Missouri is 4% harvested versus 22% on average as rain lashes the region. In other news, the Argentine Ag Ministry said that growers there have 45% of their 2014/15 soybean crop sold versus 38.5% a year ago. Oil World forecast a 2015/16 world soybean crop of 315.8 MMT versus this season's record 320.6 MMT crop. Brazil's output was seen at a new record 95.3 MMT. They cut their outlook on the world rapeseed crop this year to 66 MMT, down 1.2 MMT from previously, 3.2 MMT below last year and 2.5 MMT less than the current USDA forecast. Egypt said that it had bought 45,000 MT of soybean oil and 25,000T of sunflower oil in a tender. Jul 15 Soybeans closed at $9.57 1/2, up 19 3/4 cents; Nov 15 Soybeans closed at $9.27 1/2, up 23 1/4 cents; Jul 15 Soybean Meal closed at $320.80, up $7.60; Jul 15 Soybean Oil closed at 32.90, up 21 points.
Corn: The corn market closed around 6-7 cents higher, reversing yesterday's losses in "turnaround Tuesday" style. " Continued moisture is starting to be destructive as reports out the central plains and Corn Belt indicate yellow corn due to heavy moisture and lack of nitrogen," said Benson Quinn. Tropical Storm Bill is just off the cost of Texas, and is forecast reaching into Missouri, Illinois and parts of Indiana by the end of the week, bringing more heavy rains to the region. Crop ratings are holding up, for now. Next week's crop ratings will make interesting reading though. As mentioned above, the current feeling is that these rains are more of an issue for soybeans than they are a "deal breaker" for corn at the moment, although that sentiment could change. Fund money is short corn, but nowhere near as much as it was, so they appear reasonably comfortable with that position at the moment. They were estimated as being net buyers of around 7,000 contracts on the day today. The Argentine Ag Ministry said that growers there have 52% of their 2014/15 corn crop sold versus 42% a year ago. FranceAgriMer raised their forecast for French corn exports this season from 7.09 MMT to 7.54 MMT. Rusagrotrans forecast a Russian corn crop of 11.8 MMT this year, up 4.4% from a year ago and a record level. Other estimates are even higher in the 12.0-12.5 MMT region. The crop is 97% sown on 2.7 million hectares, said the Russian Ag Ministry. China's CNGOIC said that the country will import more than 9 MMT of sorghum this season, of which 7.8 MMT is already on contract with the US, they say. Their foreign corn purchases are running at low levels, and very little of what they are buying is coming from the US. Jul 15 Corn closed at $3.54, up 5 3/4 cents; Dec 15 Corn closed at $3.70, up 6 1/2 cents.
Wheat: The wheat market closed with little change. Tropical Storm Bill is seen bringing more unwanted heavy rains to US winter wheat areas on the Plains this week. Harvesting in Texas is in line with normal, but just about everywhere else is well behind. The top producing state of Kansas being only 2% done versus 18% for the 5-year average, Oklahoma is 38% complete versus 57% normally and Illinois is 1% harvested compared to 15% on average. The Argentine Ag Ministry said that growers there have 80% of their 2014/15 wheat crop sold versus 57% a year ago. The ever optimistic Ministry also said that winter wheat planting, which is now underway in Argentina, will get sown on an area similar to last year. The Buenos Aires Grain Exchange and their fellows at the Rosario Exchange see things quite differently, and are forecasting a significant drop in area this year, with the latter particularly bearish - seeing plantings down 20%. FranceAgriMer raised their forecast for French soft wheat and barley exports this season, consequently lowering their estimates for ending stocks of both. Very strong barley sales to China should continue into at least the first part of 2015/16, they told Bloomberg. Algeria tendered for 50,000 MT of feed barley, which will probably end up coming from France. Rusagrotrans forecast Russia's wheat exports at 22.3 MMT this season. The figure includes sales to Kazakhstan which aren't included in official government numbers due to the existence of a preferential trade agreement between the two countries. Russian grain production in 2015 was increased to 99-100 MMT, That includes a wheat crop estimated at 57.3 MMT. IKAR fine-tuned their forecast in Russian wheat this year to 55-59 MMT. Jul 15 CBOT Wheat closed at $4.88 3/4, down 1/2 cent; Jul 15 KCBT Wheat closed at $5.06 1/2, down 2 1/4 cents; Jul 15 MGEX Wheat closed at $5.47 1/2, up 2 cents.
EU Grains Mixed, French Export Estimates Raised
16/06/15 -- EU grains closed mixed. London wheat was mostly a little lower as the pound firmed against both the US dollar and euro today. In Paris, wheat and corn were a touch higher and rapeseed was flat despite the outlook for lower production this year.
At the close Jul 15 London wheat was down GBP0.05/tonne at GBP115.25/tonne, Sep 15 Paris was EUR0.50/tonne higher at EUR176.75/tonne, Aug 15 Paris corn was up EUR1.00/tonne at EUR162.50/tonne, whilst Aug 15 Paris rapeseed was unchanged at EUR371.00/tonne.
FranceAgriMer raised their forecast for French soft wheat exports this season from 18.26 MMT to 18.92 MMT, including an increase in exports to non-EU destinations from 10.6 MMT to 11.1 MMT.
These increased sales trim French soft wheat ending stocks from the 3.59 MMT forecast a month ago to 2.98 MMT.
They also raised their estimates for French corn and barley exports this season, The former are now seen at 7.54 MMT (from 7.09 MMT previously), and the latter were upped to 6.67 MMT from 6.32 MMT. That means that ending stocks for both were trimmed, with corn carryout now seen at 3.36 MMT (from 3.8 MMT previously) and barley inventories at 962 TMT from 1.29 MMT last month.
French barley exports this season have been boosted by strong interest from China, and this is seen continuing into at least the early part of 2015/16, they said.
Oil World cut 1.2 MMT off their previous forecast for the global rapeseed crop in 2015, now pegging that at 66 MMT. That's now 2.5 MMT below the current USDA estimate and 3.2 MMT down on last year.
The reason for the cut was dryness in parts of Europe, Australia and Canada, as well as frost damage in Canada around a month ago.
Last week ABARES pegged Australian canola plantings at 2.35 million ha, down 400k ha, or 14%, on a year ago. Yesterday they estimated Australia's 2015/16 canola exports at 2.18 MMT, down 11.3% from a year ago and the lowest since 2010/11.
A Thompson Reuters crop tour of France recently concluded that rapeseed yields there could be down 10-15% in the normally most productive Centre region due to spring dryness, and said that any rain relief now might still help wheat yields but would probably do little for rapeseed.
That tour has now moved on to the Poitou-Charentes area, in the centre west of France, which they say is responsible for around 7% of French wheat production, 5% of the French rapeseed crop, and 9% of French corn.
They said that no lower than 11.5% protein wheat is expected in this area this year, and that whilst the recent warm and dry weather may have had an adverse impact on grain fill, it should actually have helped protein levels.
Around 85% of the wheat crop in the area should be cut by 25 July, they said. Corn in the region is currently looking good, but with about 50% of the crop non-irrigated summer rainfall is a key determining factor in final yields, they noted.
Rusagrotrans said that Russia's total grain exports this season, including those to Kazakhstan which aren't included in official government data, could reach a record 31.9 MMT. Exports in the coming season could be similar at around 30-32 MMT, they added.
Russia's June grain exports were estimated at 1.6 MMT, including 1.1 MMT of wheat, they said.
They also raised their forecast for the 2015/16 Russian grain crop from 97-98 MMT to 99-100 MMT. That includes 57.3 MMT of wheat, a 4.1% drop on last year, along with 17.1 MMT of barley (down 16.1%) and 11.8 MMT of corn (up 4.4%).
Rapeseed Shortage Looming In 2015/16?
Last week they pegged the planted area for the new season at 2.35 million ha, down 400k ha, or 14%, on a year ago.
Meanwhile: "World rapeseed, including canola, stocks are forecast to decline by 19% in 2015/16 to 6 MMT, largely reflecting an expected run-down in stocks in the European Union and Canada in response to expected falls in domestic production," they say.
Production in the EU this year is forecast to be somewhere around the 21-22 MMT region, depending on who's estimate you decide to run with. The USDA see plantings down 3% and yields falling 6% this year. Domestic consumption meanwhile is estimated at around 25 MMT.
A Thompson Reuters crop tour of France last week visited the Centre Region, the largest rapeseed growing region in the country, said that "rapeseed yields are fairly final, meaning that forward weather will not really matter".
They found yield potential 10-15% lower than last year due to spring dryness, and noted that those conditions meant that flowering in the region only lasted for about 3 weeks this year, compared to up to six weeks normally.
Production potential in Canada this year is also seen lower, with some spring crops damaged by frost needing replanting, and dryness on the Prairies there also an issue. The USDA currently has plantings down 4.7%, and Stats Canada will update us on that at the end of the month.
Chicago Grains End Mostly Lower
15/06/15 -- Soycomplex: Beans and meal closed mixed, with the nears losing ground to the deferred positions for a change. AgRural estimated the Brazilian soybean area for the 2015/16 crop, planting of which mostly tales place in October/November, could rise 2.3% to 32.6 million acres. That could give them a potential output pushing the 100 MMT mark. The May NOPA crush came in at a record large for the month at 148.4 million bushels. Trade estimates for that ranged from 143.5 million to 150.7 million bushels, with an average guess of 147.3 million. The crush over the remaining three months of the season now only needs to average 131.1 million bushels to reach the USDA forecast for the season, said Benson Quinn. Weekly export inspections were also friendly at 226,614 MT. The USDA reported US soybean planting at 87% complete, up from 79% a week ago, but now 3 points behind the 5-year average. That means that there's 11 million acres still left to sow, using the USDA's March planting intentions estimate. Kansas (57% complete versus 85% typically) and Missouri (42% done versus 79%) are the principal laggards. Soybean emergence was placed at 75% nationally, up from 64% a week ago, but 2 points behind the norm. Crop conditions in the good to excellent category were down 2 points from last week at 67% versus 73% a year ago. Jul 15 Soybeans closed at $9.37 3/4, down 2 1/4 cents; Nov 15 Soybeans closed at $9.04 1/4, unchanged; Jul 15 Soybean Meal closed at $313.20, down $4.20; Jul 15 Soybean Oil closed at 32.69, down 45 points.
Corn: The corn market closed around 5-6 cents lower. A stronger dollar didn't help, although weekly export inspections beat market ideas, coming in at 1.1 MMT. The USDA also reported 120 TMT of old crop corn sold to Japan under the daily reporting system. Reports of China cancelling DDGs purchases isn't too friendly though. "This morning reports indicated that Chinese officials would double the subsidies to end users of reserve (state-owned) corn from 200 yaun to 400 yaun or $32.50/ MT to $65/MT. Moreover, rumours are the Chinese could cancel up to 6 cargoes of DDG’s as well," said Benson Quinn. There's been the suggestion around for a while that the Chinese government are looking for ways to shift some of their huge domestic corn reserves, which some are forecasting could exceed 100 MMT this year. The USDA reported corn crop conditions at 73% good to excellent, down one point from a week ago. Emergence is at 97% versus 91% a week ago and 95% for the 5-year average. Agritel raised their forecast for the Russian 2015 corn crop from 11.7 MMT to a record 12.1 MMT. Other analysts are in much the same 12.0-12.5 MMT ballpark now. They predict exports in 2015/16 at 2.8 MMT. Russia said that it had exported 2.86 MMT of corn so far this season. Ukraine said that it had exported 17.78 MMT of corn in 2014/15, with more than 84% of the grain cargoes handled by Ukraine seaports last week being corn. Agritel estimated Ukraine's corn crop at 26 MMT this year, with 2015/16 exports at 16 MMT. Continued wetness in the US corn belt isn't being seen as a threat to corn, at least not yet it isn't. Jul 15 Corn closed at $3.48 1/4, down 4 3/4 cents; Dec 15 Corn closed at $3.63 1/2, down 6 cents.
Wheat: The wheat market closed with double digit losses on all three exchanges. Weekly export inspections were in line with expectations at 377,847 MT. Last week's Egyptian tenders highlighted once again that US wheat is largely too dear to attract a lot of attention internationally, apart from buying from the usual suspects. Russian origin material was said to be the cheapest offer on the table in an Iraq tender for hard wheat, quoted at $231 C&F. The best priced Australian offer was said to be $267.50, with Canadian material lining up at $266 and US product at $285.42 being well priced out. Russia said that it had exported 20.87 MMT of wheat so far this season, a 15% increase on a year ago. APK Inform said that more than 75% of all the grain cargoes handled by Russian seaports last week were wheat. Ukraine said that they'd shipped out 10.63 MMT of wheat so far this season. Agritel raised their estimate for the 2015 Russian wheat crop from 54 MMT to 55.5 MMT. They also increased Russia's 2015/16 wheat export potential from 20.8 MMT to 21.1 MMT. French winter wheat crop conditions fell 2 points in the good to very good category, but are still a lot better than they were a year ago. ABARES cut their forecast for Australia's 2015/16 wheat exports by 1.5 MMT to 16.5 MMT, citing tough competition from other sellers. The USDA said that the US winter wheat crop is 11% harvested, up from 4% done a week ago but down from 20% complete for the 5-year average. Good to excellent ratings were unchanged at 43%. Spring wheat was rated 70% good to excellent versus 69% a week ago and 72% this time last year. Jul 15 CBOT Wheat closed at $4.89 1/4, down 14 1/2 cents; Jul 15 KCBT Wheat closed at $5.08 3/4, down 17 1/4 cents; Jul 15 MGEX Wheat closed at $5.45 1/2, down 15 3/4 cents.
EU Grains Fall, French Barley Harvest Now Underway
15/06/15 -- EU grains closed almost entirely in the red to start the week. The euro was little changed, despite the news that talks between Greece and EU officials had broken down over the weekend.
At the finish Jul 15 London wheat ended GBP1.20/tonne lower at GBP115.3.20/tonne, Sep 15 Paris was EUR4.00/tonne weaker at EUR176.25/tonne, Aug 15 Paris corn was down EUR1.75/tonne at EUR161.50/tonne, whilst Aug 15 Paris rapeseed fell EUR1.50/tonne to close at EUR371.00/tonne.
There wasn't a great deal of fresh news around to start the week. As the combines get ready to start rolling (they've already started in France), we are maybe now starting to see some pre-harvest pressure developing, especially considering the large volume of old crop stocks still being carried in the market and in the face of slack demand.
Ensus remains shut, and is likely to stay that way for "up to a year or more" according to a report on Reuters. That report also said that the company was in consultations with staff about possible job cuts at the plant.
Another bearish factor is the emerging news that crops in Russia, and particularly Ukraine, appear to be heading towards harvest in much better condition than had been expected earlier in the year.
Agritel became the latest analyst to up their forecast for Russia's 2015 wheat crop, increasing their estimate from 54 MMT to 55.5 MMT. They also raised their 2015/16 Russian wheat export forecast from 20.8 MMT to 21.1 MMT. They left their barley production estimate unchanged at 16.4 MMT, with exports in the coming season seen at 2.8 MMT. Corn production potential was raised from 11.7 MMT to a record 12.1 MMT.
In Ukraine, they forecast a wheat crop of 21.6 MMT this year, unchanged from previously, although they raised 2015/16 wheat exports from 9.7 MMT to 10.1 MMT. Ukraine's barley crop was increased from 6.7 MMT to 6.9 MMT, with exports seen at 2.4 MMT. Corn production was estimated at 26 MMT, with exports of 16 MMT.
APK Inform said that Ukraine seaports had exported 402.5 TMT of grains last week, down from 525.1 TMT the previous week. Corn accounted for over 84% of that total, and wheat the remainder.
The Ukraine Ag Ministry said that the country had now exported more than 33 MMT of grains this season, including 17.78 MMT of corn, 10.63 MMT of wheat and 4.46 MMT of barley.
The Ukraine State Stats Service said that winter losses in grains were only 2.5% this year versus 3.6% a year previously.
Russian-based agronomist Mike Lee is currently conducting a crop tour of southern Russia and Ukraine, and is reporting on some decent looking crops - particularly in Ukraine.
APK Inform said that Russia's grain exports via seaports last week totalled 280.5 MMT, up from 258.4 TMT the previous week, of which over 75% was wheat and the remainder corn.
The Russian Ag Ministry said that the country's grain exports to Jun 10 were 29.42 MMT, up 17.8% on a year ago. Wheat exports were 20.87 MMT (versus 18.15 MMT this time last year), barley exports stand at 5.22 MMT (2.54 MMT) and those for corn are 2.86 MMT (3.97 MMT).
The release if the regular weekly French crop condition report from FranceAgriMer was delayed from Friday until today due to "technical issues".
Today that said that the proportion of French wheat rated good to very good was down 2 points on a week previously at 87%, although that's still much better than 73% this time last year. French winter barley ratings were also trimmed 2 points to 86% good to very good (versus 71% a year ago). The proportion of spring barley in the top two categories was cut from 91% to 86%, and corn was reduced from 86% to 84%.
The report also said that the French winter barley harvest had just about begun as of last Monday, with 1% of the crop harvested in the Midi-Pyrenees region in the south of the country.
Egypt said that following a strong domestic wheat purchasing campaign, and including recent international buying, they now have enough wheat bought to last them through to the end of 2015.
Tunisia tendered for 59 TMT of durum wheat, 84 TMT of soft wheat and 75 TMT of feed barley, all of optional origin for Jul/Sep shipment. Syria tendered for 150 TMT of milling wheat. Russian wheat was said to be the cheapest offer in an Iraqi tender for hard wheat.
Chicago Market Closing Comments - Friday Night
12/06/15 -- Soycomplex: Beans closed little changed on the day and for the week. The trade will be pondering how soybean plantings have gone this week. The USDA will tell us on Monday. There was still 21% of the crop left to plant as of last Sunday night. Missouri was only 30% done versus 69% normally, and Kansas was 31% sown compared to 76% on average. Also due on Monday is the NOPA crush report for May, with a possible record large crush for the month of 147.3 million bushels expected. Trade estimates range from 143.5 million to 150.7 million bushels. Informa's acreage numbers, which were due today, have apparently been delayed until early next week. Their previous soybean area estimate was 87.185 million acres compared with the USDA's March planting intentions of 84.635 million. The latter number means that there were over 17.75 million acres of soybeans left unplanted as of last Sunday night. If Informa are right it's 18.3 million acres. The latest commitment of traders report shows that managed money reduced their net short position in beans by almost 12k contracts for the week through to Tuesday night. Jul 15 Soybeans closed at $9.40, unchanged; Nov 15 Soybeans closed at $9.04 1/4, down 4 1/2 cents; Jul 15 Soybean Meal closed at $317.40, up $4.00; Jul 15 Soybean Oil closed at 33.14, down 15 points. For the week, front month beans were 2 1/2 cents higher, meal gained $12.50 and oil shed 164 points.
Corn: The corn market closed around 3-5 cents lower on the day and 7-8 cents easier for the week. There's another very wet forecast for the week ahead for the the southern Great Plains and Midwest. For the time being the trade is reading that as being bearish for corn using the old "rain makes grain" adage. This is seen as being typical of the emerging El Nino. There's now an 85 percent chance El Nino will persist into January and beyond, according to the US Climate Prediction Centre. In addition to that "much of today’s weakness stemmed from the global front with China indicating they are a preparing to lower their subsidies on domestically raised corn while delaying or cancelling US DDG cargo’s. Rumours of cancellation has put cash values of DDG’s on the defence with prices shedding $15/tonne over the week," noted Benson Quinn. Agritel raised their forecast for the 2015 Russian corn crop from 11.7 MMT to a record 12.1 MMT. Planting of that is 96.4% complete, according to the Russian Ag Ministry. Estimates for Brazil's safrinha corn crop are increasing due to good rains. The latest commitment of traders report sows fund money reducing their net short position in corn by 44,268 contracts for the week through to Tuesday night. Jul 15 Corn closed at $3.53, down 3 1/2 cents; Dec 15 Corn closed at $3.69 1/2, down 4 3/4 cents. For the week, corn was down 7 1/2 cents on the front month.
Wheat: The wheat market closed mixed on the day, but lower for the week. The heavy rain forecast for the Plains is seen as further hampering early harvesting attempts, and possibly causing some quality issues as well as perhaps yield losses. "The rainfall forecast continues very wet in the upcoming week. Heaviest rain is predicted in the southern Great Plains, 4-7 inches in west Texas and Oklahoma," said Martell Crop Projections. Plains Grains estimate that the Texas wheat crop is 23% harvested, Oklahoma is 17% harvested, and the Kansas wheat crop is 1% cut. The USDA will update us with their figures on Monday. Egypt's GASC were back in the market, booking two cargoes of Romanian and one of Russian wheat today. The fact that this business is being done at huge discounts to US offers remains a bearish consideration for US wheat. Tunisia is tendering for 84,000 MT of soft wheat, 59,000 MT of durum wheat, and 75,000 MT of of feed barley, all of optional origins for Jul-Sep shipment. Tonight's commitment of traders report shows fund money cutting their Chicago wheat short by more than half for the week through to Tuesday night. Jul 15 CBOT Wheat closed at $5.03 3/4, down 1/2 cent; Jul 15 KCBT Wheat closed at $5.26, up 2 3/4 cents; Jul 15 MGEX Wheat closed at $5.61 1/4, down 1 1/2 cents. For the week that puts Chicago wheat 13 1/4 cents lower, with the Kansas market down 9 1/4 cents and Minneapolis 10 1/4 cents weaker.
