Chicago Markets Mixed, Monday's USDA Report Eyed
06/11/14 -- Soycomplex: Beans and meal closed higher, with the largest gains at the front end. Weekly export sales of over 1.6 MMT were up 28 percent from the previous week and 22 percent above the prior 4-week average. They also topped trade estimates for sales of 1.0-1.2 MMT. There was also some chatter during the session that USDA may lower US 2014 soybean acres in the November WASDE report on Monday, which seemed to coincide with the rally back towards Monday’s highs, said Benson Quinn Commodities. The FAO lowered slightly their world soybean production estimate "on downward revisions for Brazil and Argentina, reflecting, respectively, unfavourable weather and lower than anticipated plantings." They now see global output in 2014/15 at 308 MMT, down 1 MMT from last month and 3 MMT below the USDA's October forecast. Weather concerns in Brazil remain. "Drier conditions have settled into Brazil in November, resuming worries over soybean prospects. The tropical monsoon seemed to be strengthening in October, but rainfall in the past week has tapered off. The rainfall deficit in eastern Mato Grosso has increased to 166 mm in the 90 days up to November 3," said Martell Crop Projections. Shanghai JCI Intelligence Co. estimated China’s October bean imports at 4.3-4.5 MMT, rising to 5.81 MMT in November. Nov 14 Soybeans closed at $10.31, up 10 1/2 cents; Jan 15 Soybeans closed at $10.28, up 8 3/4 cents; Dec 14 Soybean Meal closed at $391.70, up $16.40; Dec 14 Soybean Oil closed at 32.53, down 19 points.
Corn: The corn market closed marginally higher. Weekly export sales of 478,200 MT were a disappointment versus expectations of 600-800 TMT. "Weekly sales have reached 43.2% of the USDA estimate, which compares to a 5 year average of 48.2% for the current week," noted Benson Quinn. Still, "renewed strength in the soymeal and ultimately the soybean market offered much of the support seen in today’s trade...corn also got a boost from trading back above the 100 day moving average," they added. It may be that the USDA decide to pare back their expectations for US corn exports in 2014/15, starting next week. The FAO cut their forecast for the world 2014/15 corn crop by 3 MMT to 1015 MMT. That's still a hefty 16 MMT above where the USDA currently line up though. "Conditions in the northern hemisphere remain overall favourable. In the US and EU, harvest has begun and conditions are very good in the US and good in the EU," they said. "In Russia, the harvest is underway and advancing without delay. Yields are slightly down from last year. In Ukraine, harvest is progressing and conditions are favourable. In China, conditions remain mixed with concern across North China Plain and Northeast growing regions due to earlier dry conditions," they added. Russia's Ag Ministry said that their corn harvest was 83.8% done at 10 MMT. Monday's WASDE report from the USDA appears to hold the key as to where we go from here. Dec 14 Corn closed at $3.71 1/4, up 1 cent; Mar 15 Corn closed at $3.84, up 1 cent.
Wheat: The wheat market stumbled lower, getting no help from modest weekly export sales of only 265,800 MT for delivery in the 2014/15 marketing year. These were down 40 percent from the previous week and 32 percent below the prior 4-week average. "In terms of meeting the USDA estimate, wheat sales remain on pace with the prior 5 year average for this week. However, this week’s sales were well below the 317,000 MT weekly total needed to meet the USDA estimate," noted Benson Quinn. The FAO raised their world 2014/15 wheat production estimate by 4 MMT citing larger harvests in the EU and Ukraine than forecast a month ago. "In Argentina, harvest has begun in the northern growing regions and conditions are good. In Brazil, conditions are mixed. In southern growing regions, above-average rainfall has caused a loss of grain quality. The crops are mostly in reproductive to harvest stages. In Australia, conditions remain mixed and overall yield prospects are reduced. Warm temperatures and below-normal precipitation exacerbated crop deterioration particularly in southern growing regions where soil moisture deficits persisted since August. In contrast, September rainfall across Western Australia benefited late planted crops. Harvest will begin early November and continue through December," they said. Japan bought 133,521 MT of wheat from the US and from Canada for Dec-Jan shipment. Dec 14 CBOT Wheat closed at $5.20 1/4, down 4 1/2 cents; Dec 14 KCBT Wheat closed at $5.79, down 5 1/2 cents; Dec 14 MGEX Wheat closed at $5.54, down 5 3/4 cents.