Chicago Beans Crash, Dragging Corn Lower
05/07/16 -- Soycomplex: Soybeans closed heavily lower on weekend rains that reached some of the drier areas. A wetter and cooler outlook got fund money scrambling for the exits. "A series of short wave disturbances would bring showers to the Midwest this week generating heavy rainfall in corn and soybeans. Cooler temperatures would dominate the farm belt in the upcoming week, 4-6 degrees F below average," Said Martell Crop Projections. However longer term August outlooks continue to maintain hot/dry, so this weather market probably isn't over just yet. Weekly export inspections were below expectations. The weekly crop progress report showed a 2 point drop in soybeans good to excellent to 70%. That also said that 22% of the crop is blooming versus 16% normally at this time. Celeres in Brazil estimates that 2015/16 soybean production there will be 97.7 MT (USDA: 97.0 MT), down from their estimate of 100.2 MT in June. Jul 16 Soybeans settled at $11.17, down 51 3/4 cents; Nov 16 Soybeans settled at $10.77 1/4, down 60 1/4 cents; Jul 16 Soybean Meal settled at $385.40, down $19.40; Jul 16 Soybean Oil settled at 30.82, down 21 points.
Corn: The corn market finished the day sharply lower. The change in the weather is seen benefiting corn as well as beans. "Heavy rainfall would be ideal for developing corn and soybeans needed to replenish dry fields. Hardly any rainfall developed last week, so showers are welcome. Cooler temperatures this past week would also benefit corn and soybeans, slowing evaporation from the soil surface that thus conserving ground moisture. Drenching rain would develop at the ideal time as corn is just starting to pollinate," said Martell Crop Projections. After the close the USDA said that 15% of the crop is silking (pollinating) versus 13% on average. They left good to excellent crop conditions unchanged on a week ago at 75%. Weekly export inspections were in line with expectations at 1.64 MMT. Private Israeli buyers are tendering for 120,000 MT of optional origin corn, with Ukraine material likely to figure. They exported 17.4 MMT of corn in 2015/16, according to the Ukrainian Ag Ministry, versus USDA forecasts of 16.0 MMT. Jul 16 Corn settled at $3.44, down 9 cents; Sep 16 Corn settled at $3.50 3/4, down 9 1/4 cents.
Wheat: The wheat market shrugged off the downwards pull of corn and beans and managed to close a wee bit higher. Weekly export inspections of 560,598 MT were up 9% from the week before, and 50% larger than the same week a year ago. Japan tendered for 102,000 MT of US/Canadian wheat. The FAS in Morocco said that their 2016 harvest was down by two thirds and that the country would probably need to import more wheat and barley in 2016/17. Israeli buyers are tendering for 115,000 MT of feed wheat and 15,000 MT of feed barley of option origin. Ukraine said that they'd exported 17.35 MMT of wheat in 2015/16 versus a USDA estimate of 15.8 MMT. Various estimates now have the 2016 Russian grain harvest as high as 112 MMT (2005: 104.8 MMT), with wheat accounting for at least 65 MMT of that. Harvesting there is underway now, with 6 MMT of grain in the bin already. The Egyptian Ag Min said that they'd now formally agreed a 0.05% limit on ergot which should pave the way for "a return to normal" business there. They should be in the market soon with prices at multi-year lows. Jul 16 CBOT Wheat settled at $4.19 1/2, up 3 1/4 cents; Jul 16 KCBT Wheat settled at $4.02, up 7 3/4 cents; Sep 16 MGEX Wheat settled at $5.08 1/4, up 8 1/4 cents.
