Chicago Grains End Lower Following USDA Report
12/10/16 -- Soycomplex: Beans closed lower. The USDA put the national average yield at 51.4 bu/acre, up 0.8 bu/acre from last month but slightly lower than the average trade guess of 51.5 bu/acre. It was also not as high as some pundits had been predicting, with 53.0-53.5 bu/acre getting a mention in some quarters. Brazil's crop was upped from 101 MMT to 102 MMT, Argentina's was left unchanged at 57 MMT. China's import needs were also unaltered at 86 MMT. Global 2016/17 ending stocks were however raised more than 5 MMT to 77.4 MMT. Nov 16 Soybeans settled at $9.45 1/2, down 8 3/4 cents; Jan 17 Soybeans settled at $9.53 1/2, down 8 1/4 cents; Oct 16 Soybean Meal settled at $294.50, down $3.10; Oct 16 Soybean Oil settled at 33.14, down 2 points.
Corn: The market closed with sharp losses. The USDA came out with 2016 US corn production at 15.057 billion bushels and yields of 173.4 bu/acre. Both were pretty much exactly what the trade had been expecting. US 2016/17 ending stocks were estimated at 2.32 billion bu. On a global level the world 2016/17 crop was lowered 1 MMT to 1026 MMT, with ending stocks down from 219.5 MMT to 216.8 MMT. US 2016/17 exports were raised 1.5 MMT to 56.5 MMT and Brazil's were upped 1 MMT to 21 MMT. The usual Wednesday weekly ethanol production data is delayed a day until tomorrow. Brazilian full season corn planting is reported at 38% done, some 15 points lower than at this time last year. A hard freeze warning is in place for the WCB tonight, but should come too late in the season to cause much damage. Dec 16 Corn settled at $3.37, down 8 1/2 cents; Mar 17 Corn settled at $3.47, down 8 1/4 cents.
Wheat: The wheat market closed lower across the three exchanges, with Chicago wheat the hardest hit. "Global production in 2016/17 is lowered slightly but remains a record. Larger crops in Australia, Brazil, and Canada are more than offset by cuts in the EU and the United States," the USDA said. US 2016/17 ending stocks were estimated at 1.138 billion bu (trade estimates were between 1.050 and 1.400 billion bu). US exports in 2016/17 were raised 0.5 MMT to 26 MMT due to the strong early-season pace of sales and shipments. Australian and Canadian production and exports were also raised. Russia was left unchanged on both fronts. Russia said that it exported 3.655 MMT of wheat in September, up 20% on August, despite problems with shipments to Egypt. The USDA today lowered Egypt's imports a little, down from 12.2 MMT to 11.8 MMT. Dec 16 CBOT Wheat settled at $3.96 3/4, down 10 1/2 cents; Dec 16 KCBT Wheat settled at $3.98 1/2, down 7 3/4 cents; Dec 16 MGEX Wheat settled at $5.21 3/4, down 2 1/2 cents.
EU Grains Mostly Higher, UK Stocks Seen Tightening
12/10/16 -- EU grains closed mostly higher on the day. For rapeseed this was the highest close since Jun 8.
At the close Nov 16 London wheat was down GBP0.25/tonne at GBP131.25/tonne, Dec 16 Paris wheat was EUR1.50/tonne higher to EUR159.50/tonne, Nov 16 Paris corn was EUR0.50/tonne easier at EUR157.50/tonne, Nov 16 Paris rapeseed was EUR1.75/tonne higher at EUR383.50/tonne.
Algeria tendered for an arbitary 50,000 MT of soft wheat of optional origin for Nov/Dec shipment. They frequently purchase much more than they tender for - booking 700 TMT of what was thought mostly EU wheat last time.
Jordan tendered for 100 TMT of optional origin feed barley for March delivery.
Ukraine's harvest (currently standing at 80% done) is reported stalled due to high winds and heavy rain.
The latest figures from Defra show that the balance of wheat availability and domestic consumption this season is 2.75 MMT in the UK in 2016/17, 51% lower year on year and only above 2013/14 within the past ten years, say the HGCA.
"Barley supply and demand is also forecast to be tighter than last two seasons as a result of the smaller crop but less so than in 2013/14," they add.
Late in the day the USDA cut their estimate for this year's EU-28 all wheat crop by 2 MMT to 143.2 MMT, reducing exports in 2016/17 by 1 MMT to 25 MMT "on large production cuts in major exporting countries, particularly France and Germany." Production therefore is now seen 16.8 MMT, or 10.5%, down on a year ago, with exports declining 9.7 MMT, or 28%.
Globally however output was only lowered 0.4 MMT due to production increases for Canada, Australia and Brazil. World ending stocks were trimmed 0.7 MMT to a still huge 248.3 MMT - a third of the global crop.
The size of the EU-28 corn crop was cut by 0.9 MMT to 60.3 MMT, rapeseed output was left unchanged at 20 MMT.
Little Change In Chicago Ahead Of USDA Report
11/10/16 -- Soycomplex: Beans closed little changed, with the trade seemingly already where it wants to be heading into Wednesday's USDA report. Export inspections of 1.8 MMT were pretty robust, underlining the strong demand theme. Yet the trade is expecting a record supply and bumper yield theme also to be confirmed in tomorrow's WASDE report. Yields of 51.5 bu/acre are the average trade guess, but some are talking as high as 53.0 bu/acre, smashing all previous records. Trade ideas for production run between 4.147 and 4.357 billion bu. After the close the USDA estimated the 2016 US soybean harvest at 44% complete, not as high as the 50% done that the trade was expecting. Conditions were unchanged on a week ago at 74% good to excellent. Nov 16 Soybeans settled at $9.54 1/4, down 1/4 cent; Jan 17 Soybeans settled at $9.61 3/4, up 1/4 cent; Oct 16 Soybean Meal settled at $297.60, up $1.30; Oct 16 Soybean Oil settled at 33.16, down 46 points.
Corn: Corn closed a couple of cents or so higher. Weekly export inspections of 1.13 MMT were down around 24% from last week, but still up some 87% on the same week last year. The USDA also announced export sales of 161,544 MT of corn for delivery to unknown destinations during the 2016/17 marketing year under the daily reporting system. The market is expecting the USDA to lower 2016 US corn yields by around 1 bu/acre in tomorrow's report, with the average trade guess coming in around 173.4 bu/acre. Production is estimated around 15.06 billion bu. After the close the USDA put this year's US corn harvest at 35% done versus the expected 40-45% and 38% on average. Maturity was placed at 93% versus 88% on average. Crop conditions were left unchanged at 73% good to excellent, in line with expectations. "South American weather remains beneficial for planting in central Brazil, southern Brazil, and all of Argentina’s corn belt the next 5 days. The northern Brazil corn belt is due for some much needed showers in the 6-10 forecast," said FCStone. Dec 16 Corn settled at $3.45 1/2, up 2 1/4 cents; Mar 17 Corn settled at $3.55 1/4, up 2 cents.
Wheat: Wheat closed mixed. Weekly export inspections of only 432,859 MT didn't pull up any trees. That is only around 65% of last week's total, but still better than the same poor week last year (322 TMT). Loadings to date are running 2.21 MMT over a year ago. The USDA reported winter wheat planting for the 2017 harvest at 59% complete versus 60% on average. Emergence is at 34% versus 30% on average. The trade is looking for US ending stocks of between 1.050 and 1.400 billion bushels on Wednesday, with global carryout seen at 246 to 252.70 MMT. Bullish surprises for wheat are not expected. Still, the funds remain heavily short and may be unwilling to press the downside to much more for the time being. Japan are in the market for their regular Tuesday wheat tender, looking for 100 TMT of US/Canadian origin material (no room for Australia this week), with the results expected on Thursday. Russia said that they'd harvested 114.5 MMT of grains so far this season off 92.5% of the combinable area. That includes 75.5 MMT of wheat (97.7%) and 19.0 MMT of barley (96.7%). Dec 16 CBOT Wheat settled at $4.07 1/4, up 3 1/2 cents; Dec 16 KCBT Wheat settled at $4.06 1/4, down 3/4 cent; Dec 16 MGEX Wheat settled at $5.24 1/4, up 2 cents.
UK Wheat Boosted By French Exports
The day ended with Nov 16 London up GBP1.15/tonne at GBP131.50/tonne, Dec 16 Paris wheat was up EUR0.25/tonne at EUR158.00/tonne, Nov 16 corn was unchanged at EUR158.00/tonne and Nov 16 rapeseed was up EUR1.25/tonne to EUR381.25/tonne.
Sterling weakness continues to support London wheat. How low can the pound go? Pundits are lining up to predict parity with the euro and 1.10 versus the US dollar - maybe lower in the case of the latter.
The economic news coming out of the UK doesn't stack up with such sterling weakness however, and the pound is certainly oversold and undervalued at these levels. Still, the market is the market, and spec money has the sniff of some easy cash to be made, so the path of least resistance is for now undoubtedly lower.
This means that London wheat is probably over-priced, but likely to go higher still, before there's a shake-out.
Exports are going well, with France providing a nice new nearby ready market. The UK exported 255.9 TMT of wheat in August, up from 201 TMT in July, with 78 TMT (or 30%) of that going to France.
That means that two months into the 2016/17 season the UK has exported 456.9 TMT of wheat versus only 181.6 TMT in the same period in 2015/16.
Barley exports are also going well. At 280.9 TMT for Jul/Aug these are the highest since 2003/04 and up on 266.6 TMT a year ago. Spain is the top barley home during this period(131.5 TMT).
As long as the pound remains under pressure, UK exports should continue to do well into these nearby homes.
Further afield competition from Russia among others remains strong. They've harvested 114.5 MMT of grains so far this season off 92.5% of the combinable area. That includes 75.5 MMT of wheat (97.7%) and 19.0 MMT of barley (96.7%). The 2016 corn harvest is 34.7% complete at 5.4 MMT. Plantings for the 2017 harvest are now said to be 83.8% complete in 14.5 million ha.
Russian grain exports via seaports are up 2.1% Jan/Sep to 24.3 MMT.
Ukraine's 2016 grain harvest meanwhile now stands at 46.7 MMT off 80% of the planned area. The wheat and barley harvests are over. Corn is 33% harvested at 7.8 MMT. Winter grain planting for 2017 is 72% complete.
Chicago Cautious Ahead Of USDA Report
10/10/10 -- Soycomplex: Soybeans closed narrowly mixed. The trade is cautious ahead of Wednesday's USDA report, expecting a yield increase from last month's already record 50.6 bu/acre, but not sure by how much. The average trade guess is 51.5 bu/acre, but few would be surprised to see a higher number. The usual Monday crop progress report is delayed a day to tomorrow due to the Coumbus Day holiday. Trade ideas are for beans to be 50% harvested by now. China were back from their week-long holiday but there were no sales announced under the daily reporting system. Nov 16 Soybeans settled at $9.54 1/2, down 2 1/4 cents; Jan 17 Soybeans settled at $9.61 1/2, down 1 1/2 cents; Oct 16 Soybean Meal settled at $296.30, down $2.30; Oct 16 Soybean Oil settled at 33.62, up 51 points.
EU Grains Mostly Higher To Start Week
Chicago Grains Closing Report - Friday
07/10/16 -- Soycomplex: Beans closed with small losses on the day, and small gains for the week. The USDA reported the sale of 195,000 MT of US soybeans for delivery to unknown destinations during the 2016/17 marketing year under the daily reporting system. China will be back from their Golden Week holiday next week so more sales could follow. Government offices are closed Monday for Columbus Day, so weekly export inspections will be delayed until Tuesday. The USDA will then be out on Wednesday wit their latest October WASDE report. Trade ideas for that are a yield increase to a new record 51.5 bu/acre and production at 4.286 billion bushels. Fund money added a further 7,500 lots to their overall net long in beans for the week through to Tuesday night. Parts of northern Brazil remain dry, but further south planting is on schedule. In Argentina corn looks like picking up a few more acres at the expense of soybeans following the recent government change of heart on the export tax on beans. Nov 16 Soybeans settled at $9.56 3/4, down 1 3/4 cents; Jan 17 Soybeans settled at $9.63, down 1 3/4 cents; Oct 16 Soybean Meal settled at $298.60, down $2.90; Oct 16 Soybean Oil settled at 33.11, up 1 point. For the week nearby beans were up 2 3/4 cents, meal was 70 cents higher and oil was down 13 points.
Corn: The market closed around a cent or so lower on the day and 3 cents or so higher on the week. Crude oil fell back below the $50/barrel mark after only a brief period above that level, as it did the last time it reached that mark. The Buenos Aires Grain Exchange estimated the Argentine corn area at 4.9 million ha, up from a previous forecast of 4.5 million and 27% more than a year ago. They said that 26% of this, or 1.26 million ha, had been planted already. Russia said that their corn harvest was 30% done at 4.6 MMT. Ukraine said that their corn harvest was also 30% complete at 6.88 MMT. FranceAgriMer today reported the French corn harvest at 10% complete as of Oct 3, up from 4% done the previous week and versus 18% this time last year. Crop conditions good to very good fell one point to 53%. In next week's WASDE report the trade is looking for US production to come in around 15.06 billion bushels, with a national average yield of 173.5 bu/acre. The USDA were at 15.093 billion bushels on a 174.4 bu/acre national average yield last month. Dec 16 Corn settled at $3.39 3/4, down 3/4 cent; Mar 17 Corn settled at $3.49 1/2, down 3/4 cent. For the week Dec 16 corn was up 3 cents and Mar 17 was also 3 cents higher.
Wheat: The wheat market closed slightly lower on the day, and mixed for the week. Minneapolis wheat moved higher this week on ideas that quality milling wheat will be in short supply in 2016/17. Managed money is holding a record short 151,417 contracts in Chicago wheat futures and options as of Tuesday night, 20,000 more than a week ago, according to CFTC data. That leaves the market vulnerable to a corrective bounce, but when? The US needs some export business, and yesterday's weekly sales numbers were disappointing. South Korea's Deahan tendered for 42 TMT of Australian wheat. Russia's exports are picking up, the Ag Ministry placed these at 10.4 MMT of grains Jul 1 to Oct 5, a 2.7% increase on this time last year. Wheat accounts for 8.6 MMT of that total. Rusagrotrans forecast October grain exports at 3.8-4.0 MMT. Russian plantings for the 2017 harvest are said to be 76.5% done on 13.3 million ha. French winter wheat planting was reported at 6% complete versus 17% a year ago, delayed by dryness. In Ukraine, winter grains are 69% planted on 4.37 million ha including 4.0 million of wheat (65% of the government forecast). Dec 16 CBOT Wheat settled at $3.94 3/4, down 1 cent; Dec 16 KCBT Wheat settled at $4.03, down 2 cents; Dec 16 MGEX Wheat settled at $5.22, down 2 3/4 cents. For the week Chicago wheat was down 7 1/4 cents, Kansas lost 12 1/2 cents and Minneapolis was 7 1/2 cents higher.
EU Grains Mixed, Slumping Pound Aids London Wheat
07/10/16 -- EU grains closed mixed on the day and for the week. London wheat got another shot in the arm from the pound falling to fresh multi-year lows.
At the close Nov 16 London wheat was up GBP1.20/tonne at GBP129.25/tonne, Dec 16 Paris wheat was EUR1.25/tonne lower to EUR157.00/tonne, Nov 16 Paris corn was EUR1.00/tonne easier at EUR158.50/tonne, Nov 16 Paris rapeseed was EUR0.25/tonne higher at EUR377.50/tonne.
For the week that puts London wheat GBP2.20/tonne firmer, with Paris wheat down EUR3.50/tonne, corn EUR1.75/tonne weaker and rapeseed up EUR1.75/tonne.
London wheat continues to benefit from falling sterling. The British currency is down 17% against the US dollar since the Brexit vote and has fallen by 14% versus the single currency in the same period. Nov 16 London wheat has appreciated 12% during this time, whereas Dec 16 Paris wheat is 4% lower.
Pundits and bank analysts are now lining up to predict parity being on the cards for GBP/USD and GBP/EUR before too long, which would seem to indicate that further London wheat appreciation is on the cards regardless of what the world market does.
UK wheat will also be deriving some benefit from the lower French crop, both in terms of production and quality, this year. French wheat exports in August were down to 913 TMT from 1.03 MMT in July, taking the season so far total to 2 MMT, a 20% decline year-on-year. French wheat imports meanwhile are 71% higher for the first 2 months of the new season.
FranceAgriMer today reported the French corn harvest at 10% complete as of Oct 3, up from 4% done the previous week and versus 18% this time last year. Crop conditions good to very good fell one point to 53%,
French winter wheat planting was reported at 6% complete versus 17% a year ago. Winter barley is 10% sown versus 27% a year ago. Dry weather remains a problem.
Russia said that they'd exported 10.4 MMT of grains Jul 1 to Oct 5, a 2.7% increase on this time last year. Wheat accounts for 8.6 MMT of that total, barley 1.3 MMT and corn 479 TMT.
The Russian 2016 harvest is officially 92% complete at 113.5 MMT in bunker weight. That includes 75.4 MMT of wheat (97.6%) and 19 MMT of barley (96.7%). The 2016 corn harvest is 30% complete at 4.6 MMT. Plantings for the 2017 harvest are said to be 76.5% done on 13.3 million ha.
Ukraine said that their 2016 corn harvest was also 30% complete at 6.88 MMT. Winter grains are 69% planted on 4.37 million ha including 4.0 million of wheat (65% of the government forecast). Winter OSR is now fully sown on 738k ha, some 142k more than a year ago.
