Chicago Soybeans $9/bu Before Long?
01/09/16 -- Soycomplex: Beans closed narrowly mixed. Weekly export sales of 107,500 MT of old crop and 1,476,400 MT of new crop were at the top end of trade expectations. China (679,000 MT, including 183,000 MT switched from 2015/16) and unknown destinations (519,500 MT) took the majority of the new crop. Exports of 1,119,600 MT were up 55 percent from the previous week and 38 percent from the prior 4-week average. The primary destinations were China (579,100 MT), Germany (221,200 MT), Indonesia (97,300 MT), Italy (55,100 MT) and Mexico (33,300 MT). Trade belief that August weather added to yield potential is strong. "Funds are long and wrong, growing conditions are idyllic," said FCStone, adding that they anticipate prices around $9/bu before long. A Bloomberg survey into trader/analyst sentiment found 4 bulls, 12 bears and 4 neutrals on beans. The USDA July census crush (released after the close) came in at 153.5 million bushels, in line with expectations. Sep 16 Soybeans closed at $9.59, down 1 cent; Nov 16 Soybeans closed at $9.43 3/4, up 3/4 cent; Sep 16 Soybean Meal closed at $313.10, up $0.90; Sep 16 Soybean Oil closed at 32.20, down 27 points.
Corn: Corn closed with strong gains which may have been linked to consolidation at the start of a new month. Weekly export sales of 214,100 MT for 2015/16 and 647,500 MT for 2016/17 were no better than in line with expectations. The USDA also reported the sale of 129,540 MT of US corn to Mexico under the daily reporting system. China sold 516 TMT of corn of the 3.1 MMT offered up at auction, most of it said to be at least 3 years old. They appear to have decided that the long term corn storage business no longer suits them. FranceAgriMer cut the proportion of the French corn crop rated good to very good by 3 percentage points to 60% today. Harvesting of that crop has yet to begin. Production is placed around 13.0-13.5 MMT, similar to a year ago. The market thinks that the US corn crop is getting bigger, whilst possibly not matching the USDA's inflated ideas from last month. Allendale today said 172.6 bu/acre and 14.942 billion bushels. Informa and FC Stone will release their yield projections tomorrow. The USDA were 175.1 bu/acre and 15.153 billion bushels in August. Brazil is reported to be importing Argentine corn and looking at US origin as an option to cover a poor safrinha crop. A Bloomberg survey into trader/analyst sentiment found 4 bulls, 12 bears and 4 neutrals on corn. Sep 16 Corn closed at $3.11, up 9 1/2 cents; Dec 16 Corn closed at $3.23 3/4, up 8 1/4 cents.
Wheat: Wheat closed with some fairly decent gains for a change. As with corn this may have been linked to bargain hunting with prices at 10-year lows, and also new money coming into the market at the start of September. Weekly export sales of 279,400 MT for 2016/17 didn't offer any support, they were down 26 percent from the previous week and 38 percent from the prior 4-week average. Japan bought 144 TMT of US and Canadian wheat in their regular weekly tender. Australian wheat prices are reported to have fallen below $200/tonne as they search for buyers. Russian material is offered around $25/tonne cheaper than that, and Ukraine origin even less. There's some talk of a dry next couple of weeks in Ukraine/Southern Russia possibly delaying autumn wheat planting. Russia are reported to be resetting their export duty on wheat to zero starting Sep 15. This year's wheat harvest is currently around 70% done. A crop in excess of 75 MMT could be on the cards, according to Agritel. The USDA are currently at 72 MMT. Brussels announced 522,825 MT worth of EU-28 soft wheat export licences, taking the season to date total to 4.54 MMT so far. A Bloomberg survey into trader/analyst sentiment found 4 bulls, 10 bears and 6 neutrals on wheat. Sep 16 CBOT Wheat closed at $3.68 1/4, up 7 1/4 cents; Sep 16 KCBT Wheat closed at $3.79 3/4, up 8 1/2 cents; Sep 16 MGEX Wheat closed at $4.90 1/2, up 4 3/4 cents.
