Chicago Falls On EU Turmoil Fears
24/06/16 -- Soycomplex: Soybeans closed with some fairly steep losses for the day and the week. A sharply higher dollar following the release of the result of the UK "Leave" vote on Europe had both sterling and the euro under pressure. The fear now is that other EU member states might also end up holding referendums on membership and the entire bloc could fall apart. Europe are the world's second largest soybean buyer after China of course. A Bloomberg survey estimated the US planted area for soybeans will be 83.9 million acres, up from the USDA March Intentions figure of 82.2 million. The USDA announced the sale of 411,000 MT of soybeans to ‘unknown’ destinations. Fund money remains long more than 200k lots of Chicago beans as of Tuesday. Jul 16 Soybeans settled at $11.03, down 21 1/2 cents; Nov 16 Soybeans settled at $10.78 1/2, down 23 cents; Jul 16 Soybean Meal settled at $375.60, down $7.60; Jul 16 Soybean Oil settled at 30.99, down 76 points. For the week Jul 16 beans were down 56 1/2 cents, with Jul 16 meal $31.80 lower and oil down 94 pips.
Corn: The corn market finished the day 2-3 cents lower. The UK referendum vote isn't seen as such a big deal for US corn, which is barred from going there anyway by a punitive import tariff. Still, downwards pressure for beans was enough to drag the market a few cents lower. The stronger US dollar will be a hindrance to US export hopes. The Buenos Aires Grain Exchange said that the Argentine corn harvest is 38% complete. A Bloomberg survey estimated 2016 US corn plantings to be 92.8 million acres, versus the March USDA figure of 93.6 million. The CFTC report shows fund money net long 224,827 contracts as of Tuesday night. Weather perhaps holds the key to this week's direction, although Europe warrants keeping an eye on. With corn in the southern corn belt nearing tasselling and pollination a cooler outlook is welcome. These forecasts can, and do, change on a daily basis though. Jul 16 Corn settled at $3.84 1/2, down 2 3/4 cents; Sep 16 Corn settled at $3.89, down 3 1/2 cents. For the week Jul 16 was down 53 1/4 cents, the worst weekly performance on a front month for 3 years.
Wheat: The wheat market closed mixed but mostly lower. A sharply weaker euro is bearish for US wheat exports. Fund money is however short Chicago wheat (-63,228 as of the end of Tuesday), which may be discouraging further selling. It is noteworthy too that the seasonal lows in CBOT wheat often come the end of June/beginning of July. The US winter wheat harvest is probably now about 40% done, and better than expected yields are still the story filtering through from the field. In Europe, wet weather continues to potentially harm yield and quality, especially in France where FranceAgriMer again cut quality ratings in their regular weekly report. Only 71% of the crop is now rated good to very good, ten points behind this time last year, and 4 points down on the week. That's not the situation in Russia though where production forecasts are increasing and reports form the field indicate excellent yield potential. Jul 16 CBOT Wheat settled at $4.54 3/4, up 1/2 cent; Jul 16 KCBT Wheat settled at $4.22 3/4, down 5 cents; Sep 16 MGEX Wheat settled at $5.26 1/2, down 4 1/2 cents. Chicago wheat was 26 1/2 cents lower for the week.
