Chicago Grains Bounce On Weak Dollar, But Not Wheat
06/09/16 -- Soycomplex: Soybeans closed higher, helped by strong weekly export inspections of 1.233 MMT, up 33% from the previous week. Oil World estimated the global rapeseed crop to contract to the smallest in 8 years, with consumption outstripping production for the third year in a row. The Ukraine Oilseed Association estimated the rapeseed crop there at only 1.1 MMT, down 31% from 1.6 MMT a year ago. The Australian equivalent pegged their crop at 3.39 MMT (USDA: 3.5 MMT). There's talk of a developing La Nina weather pattern. "The La Nina transition is tracking closely with 1998 which saw 95% of trend yields for Brazil and 97% of trend yields for Argentina," said FCStone. Brazilian soybean plantings have been slowing, and are expected to remain static for 2016/17 as growers switch to corn. A similar situation is evident in Argentina where the corn export tax is now zero and soybean exports are still taxed at 30%. The USDA left soybean crop conditions unchanged at 73% good to excellent, they said that 97% of the crop is setting pods and 12% dropping leaves. The latter two figures are exactly in line with the 5-year average. Sep 16 Soybeans closed at $9.74 1/4, up 5 3/4 cents; Nov 16 Soybeans closed at $9.59 3/4, up 7 1/4 cents; Sep 16 Soybean Meal closed at $317.10, up $3.40; Sep 16 Soybean Oil closed at 32.76, up 10 points.
Corn: The corn market closed flat. A sharply lower US dollar helped commodities in general today. Weekly export inspections were decent at 1.47 MMT last week (1.15 MMT for 2015/16). CONAB cut their Brazilian corn crop estimate from 68.48 MMT to 66.98 MMT (USDA: 68.50 MMT). Russian fledgling corn harvest is 1.9% done at 273.4 TMT, say their Ag Ministry. The USDA trimmed US crop conditions by one point tp 74% good to excellent, still a very decent number for this time of year. They have 96% of the crop at the dough stage (94% normally), with 76% dented (69% normally) and 18% of the crop mature (20% typically at this time). US DDGS exports topped 1 MMT in July, the largest month since last September, with China the largest buyer taking 358,900 MT. Dr Cordonnier sees Argentine farmers expanding their corn plantings for 2016/17 by 25% to 3.5 million ha. "Most of that increase will occur in the core production regions of the country where the yield potential is the highest and the transportation costs are the lowest," he says. He has production at 35 MMT versus 27 MMT in 2015/16. The Chinese government has started offering $335/hectare to producers who will switch from growing corn to soybeans. The aim is to reduce their domestic corn stockpile and cut the country's dependency on soybean imports. Sep 16 Corn closed at $3.16 3/4, up 1/4 cent; Dec 16 Corn closed at $3.28 1/2, unchanged.
Wheat: The wheat market closed lower despite a weak US dollar. Weekly export inspections came in at 639,315 MT, up 11% from the previous week. Harvest pressure may heave been a factor today, the US spring wheat harvest raced to 91% complete versus only 75% normally, the USDA said. Russia's harvest continues to shape up to be a post-Soviet era record. They've harvested 95.6 MMT of grains already off only 73% of the combinable area. (IKAR now estimate final production at 118 MMT). Wheat accounts for 66.3 MMT of that total (77.1% harvested) and barley an additional 17.4 MMT (87.1%). Russian exports so far this season are however down 7% y-o-y at 5.366 MMT (Jul 1 to Aug 31). Wheat makes up 83.7% of that volume (4.49 MMT). Once the Russian export duty is removed on Sep 15 then these should start to pick up again. Russian seaports exported 637.1 TMT of grains last week. There's continued talk that Ukraine is in need of rain before they can start planting autumn/winter wheat. "Argentina’s wheat areas expected to receive some light rains next week but nothing significant enough to stave off the growing dry areas," said FCStone. Jordan tendered for 100,000 MT of feed barley for Feb/Mar shipment. Algeria were in for a minimum 50,000 MT of soft wheat of optional origin, although they are expected to buy more (they purchased 520,000 MT last time). Sep 16 CBOT Wheat closed at $3.71, down 2 1/4 cents; Sep 16 KCBT Wheat closed at $3.84, down 2 1/2 cents; Sep 16 MGEX Wheat closed at $4.90, down 6 1/4 cents.
