US rainfall 'promising'; poultry processors look to Brazil for corn
When prices get this high, daily movements that would previously have been considered extreme become the norm. Funds dumped an estimated 12,000 soybean contracts on the day after weekend rains and as US weather forecasts offered a cooler and wetter outlook.
"Chances for heavy rainfall continue most promising in the Great Lakes-Eastern Midwest this week where 1-1.5 inch amounts are predicted. West of the Mississippi River light to moderate rains are predicted from .25 to .75 inch. Normal weekly rainfall is around .85 inch in mid August. Midwest temperatures would be very cool this week as the heat dome gets nudged westward toward the Pacific Coast," said Martell Crop Projections.
After the close the USDA pegged soybean good/excellent crop condition one point higher than last week at 30%. Weekly export inspections of 15.7 million bushels were above the level required to meet the USDA's 2011/12 full marketing year target of 1.35 billion with only three weeks of the campaign left to go.
Corn: Sep 12 Corn closed at USD7.82 1/2, down 17 1/2 cents; Dec 12 Corn closed at USD7.92 1/2, down 16 3/4 cents. Funds were said to have been featured sellers of around 16,000 corn contracts on the day.
Weekly export inspections of 22.276 million bushels were better than expected although much lower than a year ago at this time. US corn is said to be USD35/tonne more expensive than Brazilian origin material. Japan is said to be in the market for several of cargoes of Brazilian corn for Oct/Dec shipment.
US poultry processors Pilgrim’s Pride and Smithfield Foods are said to be buying or negotiating to buy corn from Brazil. Malaysia and Indonesia are said to be buying corn from Pakistan. The USDA left good/excellent crop conditions unchanged at 23% with poor/very poor raised one point to 51%. Early harvesting results are coming in highly variable, but with plenty of 100 bu/acre or less reports, although in general the poorer crops will be harvested first. Silaging corn, rather than harvesting it for grain, is also common which suggests that the USDA still needs to do some adjustments to their acreage estimates.
Wheat: Sep 12 CBOT Wheat closed at USD8.56 3/4, down 28 1/2 cents; Sep 12 KCBT Wheat closed at USD8.64 3/4, down 28 1/4 cents; Sep 12 MGEX Wheat closed at USD9.12 1/4, down 23 1/4 cents. Funds were said to have been net sellers of around 7,000 Chicago contracts on the day. Egypt snubbed US and EU wheat to buy two cargoes for September shipment from Russia at substantially discounted levels over the weekend.
The latter are clearly not out of the market yet. Egypt promptly issued another tender mid-afternoon US time, the results of which should be known tomorrow.
The USDA put the US winter wheat harvest at 94% complete. Spring wheat harvesting is well ahead of normal at 65% done versus just 24% normally. Spring wheat crop conditions fell two points in the good/excellent category to 61%. Weekly export inspections of 22.205 million bushels were respectable. FranceAgriMer increased their French all wheat crop estimate to 38.8 MMT, broadly in line with the USDA's revised 39 MMT forecast released on Friday. A 7% increase in plantings and improved yields will see US wheat production 13% higher than last season’s drought depressed crop, the USDA said Friday.
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