Chicago Grains Close Mixed In Aftermath Of USDA Numbers
13/01/16 -- Soycomplex: Beans closed firmer, adding to yesterday's USDA inspired gains. Reduced US and world availability were supportive. IMEA today cut their forecast for the soybean crop in Brazil's Mato Grosso state to 27.82 MMT, down 0.27 MMT from last year, and notably the first year-on-year decline since 2008/09. They see 30-35% of the state's crop rated poor to very poor, 39% average and 32% good to very good. Conab yesterday trimmed their national soybean production forecast from 192.45 MMT to 102.1 MMT, and AgRural went from 99.7 MMT (and 100.2 MMT prior to that) down to 98.7 MMT. These are all still record highs though, simply not quite as large a crop as they might have been. Chinese demand remains robust, despite concerns over the state of their economy. China imported 9.12 MMT of soybeans in December, the second highest monthly level on record and taking total 2015 imports to a record high 81.69 MMT. CNGOIC say that demand is tapering and that 2015/16 imports will be 80 MMT versus 78.4 MMT in 2014/15, up but the slowest rate of increase since 2011/12. The NOPA crush for December comes out on Friday with the trade expecting a figure of 157.8 million bu. Jan 16 Soybeans closed at $8.99, up 8 1/4 cents; Mar 16 Soybeans closed at $8.80, up 5 1/2 cents; Jan 16 Soybean Meal closed at $275.50, down $0.50; Jan 16 Soybean Oil closed at $29.54, up 53 points.
Corn: The corn market closed modestly higher. Weekly ethanol production topped 1 million barrels/day again for only the time on record, and all three of these occasions have been in recent weeks. Brent dipped below $30/barrel today though, for a low of $29.94/barrel. The trade is expecting some fairly modest weekly export sales for corn tomorrow as Argentina continues to flex it's new found muscles in that quarter, and Ukraine also scours the market for business despite a sharply lower crop there this year. The strong US dollar and the weakness if their domestic currencies, the peso and hryvnia, make it a bit of a no-brainer. Brazil is also keen to sell corn too, and similar comments apply in relation to it's currency the real. FCStone say that "Argentina is actively offering corn 21 cents/bu or 8 dollars/mt under equivalent US corn into China which would calculate similarly for our regular importers Japan and Korea. Ukraine is the lowest offer into India for its most recent tender for 290 tmt." They predict weekly US corn sales of only 400-650 TMT tomorrow, although that would still beat last week's total of only 357,820 MT. Mar 16 Corn closed at $3.58, up 1 1/4 cents; May 16 Corn closed at $3.63, up 3/4 of a cent.
Wheat: The wheat market closed lower, giving up some of yesterday's gains. Yesterday's headline grabber for wheat was a more than 7% cut in US winter wheat plantings for the 2016 harvest, the harsh fact of the matter is that the world still has plenty of wheat, both in the US and elsewhere. Yesterday's price action can perhaps best be described as a knee jerk reaction to a US-specific supply situation (and one that is several months away yet). The US provided 7.6% of the world all wheat crop in 2015/16, according to the USDA, and accounted for 13.6% of global wheat trade. That compares to 35.7% of all the corn grown in the world in 20154/16 and 33.9% of global trade, and for beans those figures are 33.5% and 35.4% respectively. At the end of the day then, the US wheat S&D numbers aren't as important on a world level as those for corn and beans. Europe is still awash with wheat, and has already planted a similar crop for 2016 as last year. Stocks here are high, with FranceAgriMer today lowering their export forecasts both within the bloc and outside it for 2015/16, and raising ending stocks by 26% on 2.521 MMT a year previously. Mar 16 CBOT Wheat closed at $4.78, down 3 1/4 cents; Mar 16 KCBT Wheat closed at $4.76, down 2 cents; Mar 16 MGEX Wheat closed at $5.00, down 5 1/2 cents.
