Chicago Slumps Following USDA Data, Nears Remain Tight Though
28/06/13 -- Soycomplex: The USDA's capacity to spring a surprise knows no bounds. The market has done something dramatic in each of the last five years on the day of the June plantings and quarterly stocks report, and today didn't break that trend. This time it was corn where the curveball came from. For soybeans the USDA came out with a planted area estimate roughly in line with trade forecasts of 77.9 million acres at 77.7 million. June 1st stocks of 434 million bushels were below trade expectations of 442 million. These are the tightest June 1 stocks number since 2004. We knew that US stocks were already tight, now they look even tighter. That supported front month Jul 13, which rose to it's highest level since September, and close to the lifetime contract high of USD15.94/bu. The forward months however gave way to spillover weakness from corn. At the end of the day 77.7 million acres of soybeans is a record area, after all, and one that could still throw up a 3.4 billion bushel crop given normal yields. It should be noted however that the acreage number is based on a Jun 1st survey, so that there could still be some acres in there which have subsequently gone the way of "prevent plant" insurance. Weather forecasts are non-threatening for the next 2 weeks. Jul 13 Soybeans closed at USD15.64 1/2, up 16 cents; Nov 13 Soybeans closed at USD12.52, down 23 1/4 cents; Jul 13 Soybean Meal closed at USD490.30, up USD10.70; Jul 13 Soybean Oil closed at 46.42, up 2 points.
Corn: The USDA surprised the trade by increasing the US corn planted area estimate from 97.3 million acres to 97.4 million, where the market was expecting a 2 million acre cut. That caught everyone unawares and sent new crop prices lower for an eighth session in row, the longest losing streak in more than 3 years. June 1st US corn ending stocks came in below expectations of 2.845 billion bushels as 2.764 billion, supporting front month Jul 13. As with soybeans, it would appear that old crop stocks are even tighter than the trade thought. This tightness is particularly acute in a year when the new crop harvest is likely to be delayed. In other news, the Buenos Aires Grains Exchange estimated that the Argentine corn harvest is 76.9% complete, up from 71.8% a week ago. They estimated the Argentine corn crop at 24.8 MMT, unchanged from last week, but said that they may raise their corn crop estimate in due course due to better than expected yields being noted. FranceAgriMer said that 55% of the French corn crop was rated good/excellent, down 3 points on a week ago. Only 96% of the French crop has been planted. Some analysts are forecasting 50-60,000 ha of French corn may go unplanted this year due to persistent wetness and cold temperatures. There are similar problems in Italy and Germany too. Jul 13 Corn closed at USD6.79 1/4, up 12 cents; Dec 13 Corn closed at USD5.11, down 27 1/2 cents.
Wheat: The USDA forecast the US 2013 all wheat area significantly higher than the 55.9 million acres that the trade was expecting at 56.5 million. June 1st stocks were however lower than the 745 million bushels anticipated at 718 million. Spillover weakness from corn didn't see wheat put up much of a fight though, with CBOT prices falling to their lowest levels for a front month in more than a year. Iraq passed on a tender to import 50 TMT of wheat due to high prices and immediately re-issued another similar tender. South Korea bought 30 TMT of Canadian milling wheat for Sept shipment. Another South Korean buyer is looking for 15 TMT of milling wheat from Australia for October shipment. Indonesia are said to have bought 200 TMT of Russian milling wheat this week for August shipment. Argentina has blocked wheat exports as domestic supplies run out. The Argentine government is also said to have ordered 350 TMT of wheat already scheduled for export to be sold on the domestic market instead. Argentina may have to import wheat for the first time in 60 years before their own harvest kicks off in November it is now thought. Brazil may also have to look elsewhere for supplies. APK Inform estimated Ukraine wheat crop at 20.5 MMT vs. 15.7 MMT a year ago. They see exports at 9.2 MMT, up 37% from a year ago and 1.2 MMT higher than the USDA's estimate of 8.0 MMT. Jul 13 CBOT Wheat closed at USD6.48 1/2, down 15 cents; Jul 13 KCBT Wheat closed at USD6.76 1/4, down 10 1/4 cents; Jul 13 MGEX Wheat closed at USD7.85, down 1 1/2 cents.