Syngenta UK
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25 August 2016 | Online since 2003
Scrutton Bland


15 January 2013 10:16:44 |

US cold weather increases wheat winterkill fears


Soycomplex
Mar 13 Soybeans closed at USD14.18, up 44 3/4 cents; May 13 Soybeans closed at USD14.05 1/4, up 41 1/4 cents; Mar 13 Soybean Meal closed at USD417.50, up USD13.20; Mar 13 Soybean Oil closed at 50.45, up 121 points.
Funds were heavy buyers, coming in for an estimated 16,000 soybean contracts on the day, plus around 5,000 each of meal and oil. The trade is still digesting Friday's USDA numbers. Despite a small, but expected, increase in 2012/13 US ending stocks to 135 million bushels that still equates to only 2 1/2 weeks of supply. NOPA reported the December US crush at 159.9 million bushels - the second largest o record. Friday's USDA numbers have the US to crush 5.75% fewer soybeans this season than last, yet the current pace is almost 10% ahead of last year.
Exports too continue to run amok. To underline that fact the USDA today announced the sale of 120 TMT of soybeans to China for 2012/13 shipment. Export inspections were strong once again at 39.123 million bushels (37-45 million anticipated). Both exports (80% of the USDA's target is shipped or on the books already as of last week) and domestic crush would therefore appear to have the potential to have been underestimated. And there's only a 2 1/2 week supply cushion. As well as a large South American crop looming, there are also the likelihood of large logistical problems in that region too.
Corn
Mar 13 Corn closed at USD7.24, up 15 1/4 cents; May 13 Corn closed at USD7.23, up 16 cents. Fund buying was estimated at around 9,000 corn contracts on the day.
Export inspections of only 9.239 million bushels were on the low side of expectations of 8-12 million. Unlike soybeans corn sales and shipments continue to lag. Export inspections this week a year ago were 30.055 million bushels. Year-to-date inspections are now 272.357 million bushels which is well under half of where things were a year ago.
The USDA cut their US corn export potential on Friday. but an increase in domestic usage still leaves 2012/13 ending stocks at less than three weeks worth of supply. MDA CropCast raised their Brazilian corn production estimate by 570 TMT from last week to 71.37 MMT citing better crop conditions. They left the Argentine corn production forecast unchanged at 23.1 MMT, which is in line with those of other analysts but well below the USDA's stubborn 28.0 MMT projection. Michael Cordonnier estimates Argentine corn output at 22.5 MMT, with 10% of the crop still left to plant.
Wheat
Mar 13 CBOT Wheat closed at USD7.67, up 12 1/4 cents; Mar 13 KCBT Wheat closed at USD8.23 1/2, up 16 1/2 cents; Mar 13 MGEX Wheat closed at USD8.52 3/4, up 7 1/2 cents.
Fund buying/short covering in Chicago wheat was estimated at around 5,000 lots. Weekly export inspections of 10.598 million bushels were below trade estimates of 12-16 million. Friday's USDA numbers held steady their prediction for 29.5 MMT worth of US exports this season, when some had been expecting a reduction.
A 1 MMT cut in US ending stocks to 19.5 MMT placed them at 15 weeks worth of usage, which is much better than those for corn or soybeans but still a 4 year low. MDA CropCast pegged the US winter wheat crop at 1.822 billion bushels, up 21 million on a week ago. US weather conditions are turning much colder on the Great Plains, increasing winterkill fears. There are similar concerns coming out of Russia too. The Argentine Ag Ministry said on Friday that 97% of their wheat crop has now been harvested. A Reuters poll of 15 analysts on 2013 Canadian planting intentions places all wheat plantings at 24.7 million acres, up 4% from a year ago.

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