Chicago Grains Crash Lower - Led By Beans
19/07/16 -- Soycomplex: Beans closed sharply lower. Latest weather forecasts showed a wetter 5 day pattern, little change to the hot/dry 6-10 day prediction but then a cooler trend for the 11-15 day model. That was seemingly all it took to get the market down 30 cents. Oil World see China importing a lot less beans in 2016/17 (80-82 MMT) than the USDA currently think (87 MMT). Dr Cordonnier reports that the Argentine government are waivering over their promise to phase in the reduction in the soybean export tax in 5 percentage point increments when they look at how much needed revenue the tax brings in. Aug 16 Soybeans settled at $10.44, down 34 1/4 cents; Nov 16 Soybeans settled at $10.27 3/4, down 38 1/2 cents; Aug 16 Soybean Meal settled at $359.70, down $13.30; Aug 16 Soybean Oil settled at 30.66, down 28 points.
Corn: The market closed substantially lower on a subtle change in the US weather outlook. The market is fixated on the US weather and crop conditions. "Conditions Mid July are better in many big production states than they were a year ago and point towards a national yield of 175.3 bu/acre and a 3 bln bushel carryout. A 3 bln bushel carryout is a 22% carryout to ratio and the last time the US experienced a carryout to use ratio like that corn was $2.00 in October 17 years ago," observed FCStone. The South American harvest is about halfway done. There are trucker strikes in Argentina but no serious delays in exporting grains are being reported yet. ProZerno forecast Russia's 2016/17 corn exports at 4.7 MMT - more than those for barley (4.3 MMT). Corn production in FSU nations is becoming the new "big thing" as they turn on to higher much yielding hybrid varieties. DRV forecast the Germany corn crop at 4.5 MMT, unchanged from 2015. Sep 16 Corn settled at $3.41 3/4, down 15 1/4 cents; Dec 16 Corn settled at $3.48 1/2, down 14 3/4 cents.
Wheat: The wheat market ended with significant losses across the three exchanges. The US winter wheat harvest is now past three quarters done, and in Ukraine it's approaching halfway. Russia's harvest is also fairly well advanced. Yields in all three countries are reported to be impressive. Harvesting in France and Germany is only just getting going. France is expecting disappointing yields and quality, but overall in Germany things might be more like "just average". The UK will get going imminently if the weather holds. ProZerno forecast Russian grain exports in 2016/17 at a record 36.1 MMT (34.6 MMT in 2015/16), including 26 MMT of wheat, 4.7 MMT of corn and 4.3 MMT of barley. Rosstat said that Russian grain stocks as of Jul 1 were down 6.8% year-over-year at 13.3 MMT. Ukraine said that they'd harvested 9.9 MMT of wheat and 5.7 MMT of barley so far. Sep 16 CBOT Wheat settled at $4.18, down 11 1/2 cents; Sep 16 KCBT Wheat settled at $4.10 1/2, down 9 1/2 cents; Dec 16 MGEX Wheat settled at $5.04, down 9 3/4 cents.
