Soycomplex
Beans closed lower, setting contract lows and ending at the worst level for a front month since Feb 2010. The US harvest is expected to have made decent progress this week and over the weekend. The USDA will update us on just how much progress on Monday night.
After that it will give us their Sept 1 US stocks numbers on Tuesday, and following that their October WASDE report two weeks today on Oct 10. Old crop soybean ending stocks (2013/14) are forecast anywhere from as low as 100 million bushels to up to 150 million versus 141 million a year ago and their 130 million estimate last month. It's 2014/15 carryout that the trade is now more interested in though. We won't get those figures until the WASDE comes out however, but these are expected to be huge - estimated at 475 million bushels in August.
A report on Reuters said that China "has suspended the import approval process for a genetically modified soybean variety, citing low public acceptance of GMO food." The variety in question hasn't been named. That really could set the cat amongst the pigeons, given that their unwillingness to approve MIR 162 corn has seen US exports of the grain to China dry up. China also celebrate "Golden Week" next week, which would usually mean a slowdown in their activity.
Abiove estimated Brazil’s 2014/15 soybean crop at a record 91.0 MMT, up 5.4% from the previous year. They see exports at 48 MMT, up 6.7% compared to 2013/14. They estimated Brazil’s 2014/15 soybean ending stocks at 5.78 MMT versus 3.8 MMT in 2013/14. The weekly commitment of traders report shows fund money adding to their net short position in beans. Nov 14 Soybeans closed at $9.10 1/4, down 12 1/2 cents; Jan 15 Soybeans closed at $9.18 3/4, down 12 3/4 cents; Oct 14 Soybean Meal closed at $307.20, down $5.20; Oct 14 Soybean Oil closed at 31.92, down 70 points. For the week that puts front month beans down 46 3/4 cents, with meal down $16.90 and oil shedding 54 points.
Corn
The corn market closed lower on the day, and lower for the week. Corn has now closed lower for 7 out of the last 8 trading sessions. "At $2.93 per bushel, the national average cash corn price has not been this low since the week of September 21, 2009," according to Brugler Marketing.
The USDA is expected to report around 20% of the 2014 US corn harvest is now complete on Monday night, up from 7% done a week ago, although that figure may be a little high I feel. The trade is running out of superlatives to describe yields this year. Few think that anything but a rise, and probably a significant one, is still on the cards compared to the USDA's 171.7 bu/acre August yield forecast. We will have to wait until Oct 10 for that. Before that, the trade is expecting a Sept 1 US corn stocks figure of an average 1.185 billion bushels on Tuesday. The range of estimates is 1.020-1.350 billion versus the Sept 1 2013 figure of 821 million. Ukraine corn prices are reported to have dropped $10/tonne in a week, basis FOB the Black Sea.
ADM Germany estimated the EU-28 2014 corn crop at a record 70.46 MMT versus 64.48 MMT a year ago. "The significantly larger feed grain supply in Europe continues to put pressure on the maize price," they said. The French corn harvest is stuttering into life, at 1% complete versus zero a year ago, according to FranceAgriMer. The Buenos Aires Grain Exchange said that corn planting there for the 2014/15 harvest was 6.4% complete, around 2 points behind last year. Mexico bought 107,188 MT of US corn, split 59,309 MT for this season and 47,879 MT for 2015/16. Taiwan’s MFIG bought 60,000 MT of Brazilian corn in a tender. Based on a Reuters survey South Africa’s 2014 corn crop is estimated at 14.39 MMT. The weekly commitment of traders report shows fund money continuing to reduce their net corn long by around 5,500 contracts for the week through to Tuesday night. Dec 14 Corn closed at $3.23, down 3 cents; Mar 15 Corn closed at $3.35 3/4, down 3 1/4 cents. That puts Dec 14 down 8 1/2 cents on the week.
Wheat
The wheat market closed narrowly mixed. "A lower overnight trade and a push to new lows early in the day session developed into orderly, low volume wheat trade," said Benson Quinn Commodities. A Reuters poll estimated the Australian 2014 wheat crop at 24 MMT versus 27 MMT last year and the current USDA forecast of 25.5 MMT. The range of estimates was 23.2 MMT to 24.5 MMT, so the USDA are currently 1 MMT above the top end of trade guesses.
“This, in itself, is hardly likely to be enough for the wheat price to make any sort of noticeable recovery, for the plentiful crops in the northern hemisphere, where harvesting is almost complete, have caused supply to grow considerably,” Commerzbank said. The Buenos Aires Grain Exchange left their forecast for 2014 Argentine wheat plantings unchanged at 4.1 million hectares, a more than 13% increase on 3.62 million a year ago. For Tuesday's Sept 1 quarterly stocks report the average trade estimate for wheat is 1.880 billion bushels. The range of estimates are 1.707-1.980 billion and Sept 1 2013 wheat stocks were 1.870 billion. The USDA will also report on US wheat production next week. For all wheat the average trade estimate 2.037 billion bushels.
The range of estimates are 2.004-2.075 billion and US 2013 all wheat production was 2.130 billion. Russia said that they'd now harvested 94 MMT of grains off 78.7% of the planned area. Wheat accounts for 56.5 MMT of the total, with almost 80% of the harvest now in. Average yields are 2.8 MT/ha this year, versus 2.44 MT/ha a year ago at this time, the Ag Ministry said. The weekly commitment of traders report shows fund money adding a net 11,662 contracts to their short position in CBOT wheat, making them now net short of a record 78,928 contracts.
That leaves the market vulnerable to a corrective bounce. Dec 14 CBOT Wheat closed at $4.74 1/4, up 1/4 cent; Dec 14 KCBT Wheat closed at $5.63 3/4, down 1/2 cent; Dec 14 MGEX Wheat closed at $5.33 1/4, down 3 cents. For the week that puts Chicago wheat little changed, down 1/4 of a cent. Kansas wheat is up 3 1/2 versus last Friday, and Minneapolis is down 2 1/4 cents.
