Chicago Close - Thursday
21/03/13 -- Soycomplex: The soybean market stormed higher despite disappointing weekly export sales of only a combined 341,000 MT versus trade expectations of 600-800 TMT. Net sales of little more than 100 TMT of old crop still leave total commitments for 2012/13 at 97% of USDA projections versus the 5-year average of 89%. Bloomberg ran a story apparently refuting claims of wholesale Chinese cancellations of Brazilian soybean purchases. That said that only one cargo of beans was resold by crusher and none were cancelled. Reports suggest that the Brazilian dock strike scheduled for 25th March is now cancelled and that talks between the unions and the government are making progress. Argentina’s Ag Ministry estimated the 2012/13 soybean crop at 51.3 MMT versus the USDA's 53 MMT forecast. MDA CropCast are less optimistic at 49.34 MMT. BLD (a local Argentine consultancy) are even lower at 48.3 MMT, whilst the Buenos Aires Grains Exchange estimate 48.5 MMT. Cooler than normal and dry seems to be the recurring weather theme there. In Brazil "rains increased across southern and northwestern areas this past week, which slowed harvesting in those areas," said MDA CropCast. They left their estimate fr soybean production in Brazil unchanged at 81.43 MMT versus 83.5 MMT from the USDA. Ahead of next week's planting intentions report from the USDA, Farm Futures Magazine estimated the 2013 US soybean acreage at a record 79.09 million, up 2.5% from a year ago. Informa are scheduled to release their latest estimate tomorrow, an increase from their previous forecast of 78.77 million acres could be on the cards. May 13 Soybeans closed at USD14.49, up 29 1/4 cents; Jul 13 Soybeans closed at USD14.25 1/2, up 26 1/4 cents; May 13 Soybean Meal closed at USD422.90, up USD9.10; May 13 Soybean Oil closed at 50.42, up 58 points. Funds were said to have been net buyers of around 7-8,000 soybean contracts on the day.
Corn: Corn just about managed a positive close. Front month corn has now closed higher for nine of the last eleven trading sessions. Weekly export sales of a combined 275,500 were a disappointment compared to trade expectations of 300-600 TMT. Argentina’s Ag Ministry estimated the 2012/13 corn crop at 25.7 MMT versus the USDA's 26.5 MMT. MDA CropCast estimate 23.1 MMT, noting that limited rains should at least allow harvesting of corn there to progress well. They left their Brazilian corn production estimate unchanged from last week at 74.10 MMT. "Rains increased across southern and northwestern areas this past week, which slowed first crop corn harvesting but also maintained sufficient moisture for safrinha corn growth," they said. Farm Futures Magazine estimated US corn plantings in 2013 at 97.43 million acres, up marginally on a year ago. Informa are due to release their March estimate tomorrow, last time they forecast US plantings at 99.3 million acres, although at a conference earlier this month their CEO apparently said that the corn acreage this year will be about 97.0 million, so a reduction from their previous forecast could be on the cards. The IGC forecast the world 2012/13 corn crop at 850 MMT, unchanged from their previous estimate. For 2013/14 they said that "there is the potential for a greater rebound in production, which is projected up 9% year on year in 2013/14. Consumption is also likely to recover from this year’s unusual decline, but stocks could still rise by 19% year on year from the 16-year low forecast for end 2012/13." Yesterday's energy report showed corn used for ethanol production last week was estimated at 84.95 million bushels, up from 83.69 million the week before, but still below the 88.06 million bushels/week needed to meet this crop year’s USDA estimate of 4.5 billion bushels of demand from the ethanol sector. Funds were judged to have been modest net buyers of corn on the day to the tune of 1-2,000 contracts. May 13 Corn closed at USD7.33, up 1/2 cent; Jul 13 Corn closed at USD7.17 1/4, unchanged.
Wheat: Wheat closed lower as weekly export sales of 484,500 MT of old crop and 88,800 MT of new crop fell short of trade expectations. Despite a busy week on the tender front internationally US wheat hasn't picked up as much business as the trade expected it would seem. Total net wheat commitments currently stand at 89% of the USDA target for the season compared to the 5-year average of 97% at this time. India picked up bids around USD306-307/tonne in a couple of tenders, with prices having seemingly recovered to levels where they have previously traded. Iran bought 120 TMT of wheat from Australia and Germany for April/May shipment. A Bloomberg survey of 10 analysts estimated Russia’s 2013/14 wheat output at 48.0 MMT, up 30% versus 2012/13 production of 37.7 MMT. Wheat exports in 2013/14 however were only seen up 10% to 11.45 MMT versus the 2012/13 estimate of 10.5 MMT and well below exports of 21.6 MMT in 2011/12. Argentina’s Ag Ministry estimated the 2012/13 wheat crop at only 9.0 MMT, well below the USDA's 11 MMT. Analysts Agritren forecast Argentine wheat plantings for 2013/14 at 4.5 million hectares, an increase of 40% on this season. Farm Futures Magazine estimated 2013 US all wheat plantings at 56.12 million ares, down 1 million from their previous estimate. They have the 2013 spring wheat area at 11.9 million acres, down 3% from a year ago. Informa are due out tomorrow, they had the US all wheat acreage at 56.2 million last month. The IGC forecast the world wheat crop for 2012/13 unchanged at 656 MMT. For 2013/14 "while wheat output is expected to rise by 4%, a recovery in global use will leave little room to rebuild stocks, which are forecast to increase by just 5 MMT year on year," they said. The Ukraine Weather Centre estimated the 2013 winter wheat crop at 18-19.5 MMT versus 14 MMT a year ago. May 13 CBOT Wheat closed at USD7.28 3/4, down 7 1/4 cents; May 13 KCBT Wheat closed at USD7.60 1/2, down 5 3/4 cents; May 13 MGEX Wheat closed at USD8.02 3/4, down 6 3/4 cents.