US spring wheat harvest 'behind schedule'

Soycomplex

Soybeans opened higher in follow through trade following yesterday's sharply higher close. However, some calls for a cooler and wetter outlook for the Midwest weather after the long Labor Day weekend holiday sent the market consolidating lower into the close. The trade is still debating the predictions made last week by the Pro Farmer crop tour.

Essentially their US soybean crop production forecast of 3.158 billion bushels is around 3% lower than the USDA, thanks to a combination of a lower yield and also a smaller harvested area. That potentially drags US 2013/14 soybean ending stocks into the 130-150 million bushels area well below the USDA's current 220 million and barely above those of 2012/13. However, the tour is known to have a habit of trending towards the low side on yields. That said, another well known and respected analyst, Dr Michael Cordonnier, apparently lowered his estimate for 2013 US soybean yields to 41.0 bu/acre today versus a previous estimate of 42.0 bu/acre and the USDA's 42.6 bu/acre. Citi Group said soybean prices may fall to around USD12.00/bu at harvest time. There's talk that Indonesia might quash the current 5% import tariff on beans in an effort to relieve domestic food prices. Indonesia 2013 soybean consumption estimated at 2.5 MMT in 2013 versus 1.9 MMT in 2012. Before the 2013 US harvest is even underway some are already getting the crystal ball out for next year. Farm Futures magazine estimated US 2014 soybean plantings at an all time high 78.75 million acres. South America could also ramp up plantings for next year. Sep 13 Soybeans closed at USD14.14, down 13 3/4 cents; Nov 13 Soybeans closed at USD13.70 1/2, down 19 cents; Sep 13 Soybean Meal closed at USD455.90, down USD2.70; Sep 13 Soybean Oil closed at 44.06, down 38 points.

Corn

Corn gave up around 75% of yesterday's gains on the subtle change in the weather forecast for next week. Although the Pro Farmer crop tour's estimate for a US corn crop of "only" 13.46 billion bushels is 2.2% below the USDA's current forecast, it is still a record crop. Pro Farmer had US corn yields at 154.1 bu/acre, Dr Cordonnier today lowered his estimate to 152.0 bu/acre versus his previous estimate of 154.0 bu/acre and the USDA's 154.4 bu/acre. Citi Group estimated the 2013 US corn crop at 13.783 billion bushels, 20 million higher than the USDA.


They have yield in the "mid to upper 150's" bu/acre. They said that US corn prices may trade be in the USD4.50-USD5.25/bushel range over the next year. South Korea Nofi are tendering for 40-70 TMT of optional origin corn for Feb shipment. Analysts said that South Korea corn needs are covered for January, but they still need to buy around 600 TMT of optional origin corn for Feb shipment. Taiwan's MFIG are tendering for 60 TMT of US, Brazil, Argentina, or South Africa corn for Nov shipment. South Africa’s 2013 corn crop was estimated at 11.513 MMT by CEC versus a previous estimate of 11.394 MMT. Corn harvesting in southern US states is fairly well advanced, with TX 52% done and LA 63% harvested. Farm Futures magazine estimated the US 2014 corn area at 94.11 million acres, down 3.4% versus 2013. "Some growers want to cut back on corn to improve rotations, after years of pushing that crop," they said. The weekly ethanol production report comes out tomorrow. Last week's grind was 844,000 barrels/day, suggesting that the USDA has overestimated corn for ethanol usage in 2012/13. Sep 13 Corn closed at USD4.99 3/4, down 16 cents; Dec 13 Corn closed at USD4.86 1/4, down 14 1/4 cents.

Wheat

There wasn't much in the way of fresh news around for wheat, which closed mixed but mostly a little lower on all three exchanges. Minneapolis wheat was the strongest of the three on ideas that the recent erosion of spring wheat premiums may have been a bit overdone. The US spring wheat harvest is behind schedule and the current hot and dry spell may be hurting some of what is left in the field. What has been harvested so far is generally said to be of lower than normal protein, but with higher than expected yields. The Russian wheat harvest is past halfway, the Kazakh harvest is only just getting going after being delayed by rain.

Yields of both are well up on year ago levels. Despite Kazakh grain yields currently being up 73% on last year, the Ag Ministry there only estimate this year's grain crop at 15.0 MMT versus 12.8 MMT a year ago. APK Inform said Ukraine has exported 145 TMT of wheat to Egypt between Aug 1-27 versus 129 TMT a year ago. After a couple of weeks on the sidelines Egypt's state wheat buyer issued a tender in the afternoon for October delivery. The results are expected tomorrow. Ukraine and Romanian origin wheat have been the recent victors.

Japan seeks 51 TMT of food wheat via a SBS tender for Nov shipment. Tunisia seeks 84 TMT of soft milling wheat and 75 TMT of feed barley of optional origin for Sep/Nov shipment. Argentine analysts said that frost in Argentina over the weekend and yesterday came too early to affect their only just planted 2013/14 wheat crop. Further damage may have been done in Brazil though where the crop is more advanced. Sep 13 CBOT Wheat closed at USD6.50 3/4, down 4 cents; Sep 13 KCBT Wheat closed at USD7.07 1/4, down 1 cent; Sep 13 MGEX Wheat closed at USD7.29 1/2, up 1/4 cent.