29-11-2012 14:45 PM | Arable, Cereal, Crops, Market Reports, News

Little respite for US winter wheat on arid US Plains



Soycomplex

Jan 13 Soybeans closed at USD14.46 1/4, down 3 cents; Mar 13 Soybeans closed at USD14.35, down 2 1/2 cents; Jan 13 Soybean Meal closed at USD432.70, down USD0.70; Jan 13 Soybean Oil closed at 50.38, down 3 points.


Funds were said to have likely been around even on the day. Even if they don't fancy soybeans too much at the moment China do, with the USDA confirming the sale of 290,000 MT of US soybeans to the world's largest buyer. Weather outlook offers little change, Argentina is too wet and southern Brazil too dry. Talk of a possible developing La Nina signal is supportive. So too is market chatter of an imminent Argentine debt default. Fitch cut their sort-term rating for the South American country to just one level above "default" yesterday.

Celeres said that 74% of the Brazilian soybean crop was planted versus 80% a year ago, adding that half of next year's crop was now sold compared to 39% this time a year ago. Weekly US export sales for tomorrow are expected to be in the range 500-750 TMT.


Corn

Dec 12 Corn closed at USD7.60 1/4, up 1/4 cent; Mar 13 Corn closed unchanged at USD7.64.


Funds were said to have been modest net buyers of around 1,000 contracts on the day. Weekly ethanol production fell to 803,000 barrels per day versus 811,000 a week ago. Trade estimates for tomorrow's weekly export sales report are 400-650 TMT. It will be interesting to see if they get close to that or whether last week's sales of close on 1 MMT were a one-off. There's talk of US corn sales to Japan declining in the face of increased competition from South America. Low water on the Mississippi continues to restrict barge traffic.

Current water levels "already ranks in the bottom 20 all-time, in a record that dates back more than a century. With the flow of the Missouri expected to drop further in the coming weeks and little precipitation forecast across the central U.S. for the next two weeks, water levels will continue to drop along the Mississippi River, reaching near historic lows," say MDA CropCast.

Wheat

Dec 12 CBOT Wheat closed at USD8.76, up 3 cents; Dec 12 KCBT Wheat closed at USD9.18 1/4, up 2 1/2 cents; Dec 12 MGEX Wheat closed at USD9.38 3/4, up 2 1/2 cents.


Fund buying in Chicago wheat was estimated at around 2,000 lots. Russia sold 62,300 MT of intervention wheat onto the domestic market, bringing the total since sales began on 23 Oct to 651 TMT. There's little respite in sight for US winter wheat on the arid US Plains.

"The drier trend will continue across the Plains through next week, though, which will keep significant drought conditions there in place. Very windy conditions are expected across the Plains early next week as well, which will likely increase erosion," said MDA CropCast. Estimates for tomorrow's weekly export sales are 300-500 TMT. The forecast for the next 10 days is warmer than normal and dry. Above average temperatures mean that there's no protective snow cover for poorly established wheat as and when winter finally does arrive.

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