Chicago Grains Start 2016 In The Red

04/01/16 -- General: It wasn't the start to 2016 that the bulls might have been hoping for, just more of the same basically. Chinese economic worries saw shares in the Shanghai fall 7%, and US and EU stocks followed suit. The US dollar remains strong, and is forecast to continue to appreciate especially versus currencies like the Brazilian real, Argentine peso, Russian rouble, Ukraine hryvnia etc., all of which is bearish for demand for US grains.

Soycomplex: Beans closed lower, with a wetter forecast for northern and central Brazil behind the move. Any worries about China inevitably affect US beans too, with the global market heavily dependent on demand from them to support the world balance sheet. Weekly US export inspections of 1.5 MMT were pretty respectable. The USDA announced an existing sale of 217,000 MT of soybeans was switched from unknown destinations to the Netherlands for 2015/16 delivery. The monthly USDA Oilseed Crush report said that the Nov US crush was 165.768 million bushels. Dr Cordonnier said that early irrigated soybean harvesting in Brazil's Mato Gross had begin, with yields down 13.5% at 64 sacks/ha versus 74 sacks/ha a year ago. Jan 16 Soybeans settled at $8.64 1/2, down 6 3/4 cents; Mar 16 Soybeans settled at $8.56, down 8 1/4 cents; Jan 16 Soybean Meal settled at $263.20, down $1.10; Jan 16 Soybean Oil settled at 29.93, down 62 points.

Corn: The corn market closed lower. Weekly export sales of 324,566 MT were less than spectacular (and also less even than those for wheat), being down 40% from the same week a year ago. The strong dollar won't be helping that cause too much. The USDA reported 435 million bushels of corn was used to produce ethanol during November, down 1.5% versus October. The weakness in the Brazilian real means that the price on offer in dollar terms down there is around the equivalent of the US producer being offered $6.25/bushel. Ukraine said that they'd exported 21.2 MMT of grains so far this season (to Dec 30), of which 32% was corn. Russia said that they'd exported 20.5 MMT of grains during the same period, of which 8.6% was corn. South Africa said that they may be forced to import corn as early as May or June due to drought. Argentina said that their 2015/16 corn harvest may total 26 MMT. Mar 16 Corn settled at $3.51 1/2, down 7 1/4 cents; May 16 Corn settled at $3.57 1/2, down 7 cents.

Wheat: The wheat market closed lower across the three exchanges. Weekly export inspections of 348,273 MT were ho-hum even if they did beat corn for once. YTD inspections are still 12% behind the previous campaign. Russia said that they'd exported 15.35 MMT of wheat so far this season, or 75% of all grain exports. Ukraine's wheat exports of 10.4 MMT account for just under 50% of all total grain exports. The USDA rated Kansas winter wheat at 54% good to excellent, up 6 points versus where things stood at the end of November, and 6 points ahead of this time last year. Oklahoma has raced from 51% good to excellent in November to 77% as of the end of last month. That is also far better than 54% a year ago. Ethiopia are tendering for 70,000 MT of wheat (with Black Sea origin probably the favourite). Taiwan are in the market for 88,750 MT of US milling wheat. May 16 CBOT Wheat settled at $4.64 1/2, down 12 cents; May 16 KCBT Wheat settled at $4.64 1/2, down 14 1/4 cents; May 16 MGEX Wheat settled at $4.94 1/4, down 7 3/4 cents.