Chicago Grains Mostly Firmer Heading Into USDA Report
07/02/14 -- Soycomplex: Beans closed around 5 cents higher on the day, and with gains of almost 50 cents on the week for nearby Mar 14 which posted its best close since mid-December tonight. The trade is looking for the USDA to cut 2013/14 US ending stocks in Monday's WASDE report to around 143 million bushels, down from 150 million in January. The range of estimates is 125-164 million. The cut is anticipated to reflect strong nearby demand for US beans both domestically and internationally. Global soybean ending stocks are however expected to rise slightly to 72.67 MMT, from 72.33 MMT last month. The range of estimates is 71.00-75.35 MMT. The average trade guess for the Brazilian soybean crop is 89.76 MMT, from within a range of 88.3-91.0 MMT. The January UDSA estimate was 89.0 MMT. The Argentine crop is expected to be forecast at 54.13 MMT on average, with a range of guesses of 52.7-57.0 MMT and 54.5 MMT in January. Conflicting reports are coming out of Brazil's Mato Grosso, with some saying that early yields are well above expectations, but others citing reduced potential in the east of the state due to dryness. There's also talk of possible drought damage in the south of the country. Much better rains in Argentina of late seem to have improved crop prospects there though. The latest Commitment of Traders report shows managed money increasing their net long position in soybeans for the week through to Tuesday night by 24,902 contracts, taking their overall net long position to 146,333 contracts. Mar 14 Soybeans closed at $13.31 1/2, up 5 3/4 cents; May 14 Soybeans closed at $13.17 1/2, up 5 3/4 cents; Mar 14 Soybean Meal closed at $446.40, up $0.40; Mar 14 Soybean Oil closed at 38.56, down 10 points. For the week front month beans added 49 1/2 cents, with meal up $18.70 and oil gaining 120 points.
Corn: The corn market closed a cent or two higher as fund money covered in some of it's short position ahead of the USDA's WASDE report due Monday. Fund buying was estimated at around a net 4,000 corn contracts on the day. The latest CFTC report shows managed money reducing their net short position in corn by a weighty 46,803 contracts for the week through to Tuesday night. They are now only sitting on a net short of 5,314 contracts. In Monday's USDA report the trade is expecting 2013/14 US corn ending stocks to be cut to an average guess of 1.619 billion bushels, from within a range of estimates are 1.574-1.748 billion. The January USDA estimate was 1.631 billion. The cut is expected due to the fact that current US corn export commitments stand at 90.5% of the USDA forecast for the 2013/14 marketing year versus a 5-year average of 65.3%. Global inventories are also expected to be reduced with the average estimate coming in at 159.60 MMT, from within a range of estimates of 156.27-163.20 MMT. The January USDA estimate was 160.23 MMT. In South America, the Brazilian corn crop average estimate is 69.99 MMT, from within a range of estimates of 66.1-74.0 MMT. The January USDA estimate was 70.0 MMT. In Argentina the average trade guess is 23.82 MMT, from within a range of estimates of 19.8–25.0 MMT. The January USDA estimate was 25.0 MMT. Producer selling in the US is said to have slowed up during the course of the week, but could pick up again if prices break through the $4.50/bushel level. Some analysts are saying that a bird flu outbreak in China may be worse than is being reported. Mar 14 Corn closed at $4.44 1/4, up 1 1/4 cents; May 14 Corn closed at $4.50, up 1 1/2 cents. For the week front month Mar 14 gained 11 1/4 cents.
Wheat: The wheat market ended mixed on the day, around 3 cents lower to a cent higher across the three exchanges. Fund money has been booking profits on wheat shorts heading into Monday's USDA report. The latest Commitment of Traders report shows managed money decreased their short position in CBOT wheat for the week through to Tuesday night by 9,538 contracts, bringing their overall net short position down to 52,963 contracts. Monday's USDA report is expected to show little change for 2013/14 US wheat ending stocks, with an average trade guess of 603 million bushels. The range of estimates are 574–653 million, and in January the USDA estimate was 608 million. World ending stocks are estimated at 184.97 MMT, from within a range of estimates of 182.80-187.00 MMT. The January USDA estimate was 185.40 MMT. On the international front, Iran were said to have bought 400-600 TMT of wheat from Russia and the EU. Lebanon were said to have bought 25 TMT of Russian wheat. The USDA's FAS in Kazakhstan forecast 2013/14 wheat exports rising from 6.474 MMT last year to 7.5 MMT this time round. The USDA's FAS in Canada forecast the 2014/15 grain crop there at 52 MMT, down 20% from this season's record output. Wheat production will fall 27% to 27 MMT, barley production by 15% to 8.7 MMT and the corn crop by 9% to 12.9 MT. They estimate Canadian wheat exports in 2014/15 at 20 MMT versus 22.2 MMT this season, with barley exports declining from 1.5 MMT to 1.45 MMT and corn exports falling from 1.5 MMT to 1.0 MMT. Mar 14 CBOT Wheat closed at $5.77 1/2, down 3 1/4 cents; Mar 14 KCBT Wheat closed at $6.49 1/4, up 1/2 cent; Mar 14 MGEX Wheat closed at $6.39 1/4, up 1 cent. For the week, CBOT wheat gained 22 cents, with Kansas up 36 1/4 cents and Minneapolis adding 40 1/4 cents.