Chicago Grains Wednesday - China Finally Embracing GMO's?
03/02/15 -- General: China's state-owned ChemChina agreed a $43 billion bid for Swiss seeds and pesticides group Syngenta today, according to Reuters. It would be "The largest ever foreign purchase by a Chinese firm, announced by both companies, will accelerate a shake-up in global agrochemicals," reports the article. How does this affect China's stance on GMO's? And will it fast-track their approval for a widespread usage in China? It doesn't read bullish at first glance that's for sure.
Soycomplex: Beans closed lower, helped on their way by reports that Informa had raised their production estimate for Argentina to 60 MMT, up 1.5 MMT last month. They cut Brazil by 0.9 MMT to 100.5 MMT. Both forecasts are higher than the USDA's current 57 MMT and 100 MMT estimates released last month though. Brazil's Conab are expected to release revised production estimates of their own tomorrow. Trade estimates for tomorrow's weekly export sales report for beans see these continuing to slip seasonally to 400,000 to 650,000 MT. Meal estimates range from 100,000 to 250,000 MT. Chinese New Year begins Monday so their import needs normally start to drop off around now. For the record this upcoming year is year of the monkey - generally considered to be one of the more unlucky ones - perhaps not just what you needed to hear. A Monsanto press release said they have received approval from the Chinese government to import its RR2 Xtend soybeans. Mar 16 Soybeans settled at $8.76 3/4, down 9 1/2 cents; May 16 Soybeans settled at $8.79 3/4, down 9 cents; Mar 16 Soybean Meal settled at $270.10, down $4.50; Mar 16 Soybean Oil settled at 30.98, up 19 points.
Corn: The corn market closed a touch lower, dragged down by beans. Informa raised their production estimates for both Brazil and Argentina. In Brazil, total production is now pegged at 81.6 MMT versus a previous figure of 81.3 MMT. In Argentina they now go for 26 MMT, up sharply from only 22 MMT last month. The USDA were at 81.5 MMT and 25.6 MMT respectively a month ago. They get a shot at revising those estimates higher next Tuesday. Conab are expected to tweak their Brazilian numbers tomorrow. This year looks like one of those difficult years where yields could easily be spread between "disaster" and "bin-buster" - and not separated by too much distance geographically either, so coming up with an overall overage will be tricky in both Argentina and Brazil. Certainly the latter has been making a new name for itself on the export front, shipping out a record 6.3 MMT of corn in December, up 32% versus November and 85% higher than Dec 2014. The weak Brazilian real and low global freight rates will be helping that cause. Trade estimates for tomorrow's weekly export sales report are 750,000 MT to 1.0 MMT. Mar 16 Corn settled at $3.71, down 1 1/2 cents; May 16 Corn settled at $3.76, down 1 1/2 cents.
Wheat: The market closed a few cents higher. Egypt reportedly asked Russia for preferrential payment terms on future wheat purchases. It is also being suggested that GASC will now accept wheat containing ergot levels of up to 0.05% as opposed to "zero" which met with a pretty emphatic response by global wheat exporters yesterday. "Zero ergot equals zero offers," one trader wittily said. StatsCanada are due out tomorrow with their latest Canadian numbers., with trade estimates putting these (as at Dec 31) around 21.8 MMT. US weekly export sales hopes remain a modest 200,000 to 400,000 MT. Informa estimated the Indian wheat crop at 87 MMT, some way below the USDA's current 88.9 MMT forecast. The USDA are out with their February WASDE report next Tuesday, and ABARES are also due with their Australian production numbers the same day. The UDSA's FAS in Russia now has their final 2015 wheat production estimate at 61 MMT, up 3% versus the previous year. Barley output is seen down 15% at 17.1 MMT and corn production up 12.7% to a record 12.7 MMT. Total Russian grain and wheat exports in 2015/16 are expected at similar levels to those last season. May 16 CBOT Wheat settled at $4.83 3/4, up 3 3/4 cents; May 16 KCBT Wheat settled at $4.78 1/2, up 3 1/4 cents; May 16 MGEX Wheat settled at $5.05 3/4, up 4 cents.
