US winter wheat crop in 'continued deterioration'
Mar 13 Soybeans closed at USD14.51 3/4, up 4 cents; May 13 Soybeans closed at USD14.39 3/4, up 6 1/4 cents; Mar 13 Soybean Meal closed at USD423.70, up USD3.40; Mar 13 Soybean Oil closed at 51.71, down 18 points.
The market remains fixated on South American weather as they will have to provide the world with soybeans once the US run out. Oil World said that they expect the US to have shipped 83% of their projected exports by the end of February.
Demand from China remains very strong, both for old crop and new crop. They are forecast to import 36% more soybeans in Q2 of 2013 than they do in Q1. Oil World said that they expect US soybean stocks to fall to a 9-year low by the end of the current season. In Brazil, the forecast for Mato Grosso is "super wet" according to Martell Crop Projections, which will continue to hamper early harvest efforts. Southern Brazil meanwhile has received little or no rainfall in the past 10-12 days, they say. Over the border daytime temperatures in Argentina yesterday rose to 92-98 F, which 8- 10 degrees above normal. Hot temperatures are expected to persist for several more days without much rainfall to compensate, they add. Agriculture Consultant Pablo Adreani said he may cut Argentina’s soybean crop estimate to 48.5 MMT from a previous estimate of 51.3 MMT (and the USDA's 54 MMT) if Argentina doesn’t get rain soon.
Mar 13 Corn closed at USD7.29 1/2, up 1/4 cent; May 13 Corn closed at USD7.30, up 3/4 cent.
The same Argentine consultant mentioned above said he may cut his corn crop estimate to 25.5 MMT from a previous estimate of 27.1 MMT (and 28.0 MMT from the USDA) if adequate rains don't arrive soon. The "super wet" forecast for northern Brazil won't help second crop corn get planted. Delays in plantings could be detrimental for corn a few months from now when the dry season begins if the crop hasn't had time to thrive now in these abundant rains.
Japan, the world's largest corn buyer, said that it aims to boost it's animal feed grain reserves by 44% in the fiscal year beginning in April. Much of their needs traditionally come from the US, although they have been casting the net a bit wider in the last twelve months. JC Intelligence said Chinese buyers are reluctant to buy large quantities of Argentine corn because of concerns that it won't pass China's photo sanitary requirements. The weekly ethanol production report comes out tomorrow. The bulls will be looking for an increase on last week's 792,000 bpd, which is well below the level required to hit current USDA projections. A Texas plant became the latest producer to announce a temporary shutdown today, following a spate of similar recent closures.
Mar 13 CBOT Wheat closed at USD7.77, down 2 1/4 cents; Mar 13 KCBT Wheat closed at USD8.30 3/4, down 2 cents; Mar 13 MGEX Wheat closed at USD8.61, down 5 1/2 cents.
A continued deterioration of US winter wheat crops on the Plains was confirmed last night by USDA state offices in Kansas and Oklahoma. A wetter 14-day forecast for these areas offers some glimmer of hope. Egypt's GASC said that they have enough wheat supplies to last until June. Algeria was said to have bought 500-600 TMT of optional origin durum wheat for March/May shipment. MDA CropCast said that wheat conditions favourable across much of the Middle East.
In North Africa "rains this past week continued to improve moisture across northern Morocco, northern Algeria, and northern Tunisia, but dryness continues to stress wheat in southwestern Morocco and central Tunisia," they added. Unlike the UK, not everywhere around the world is in for a disastrous wheat crop in 2013. Agriculture and Agri-Food Canada estimated Canada’s 2013/14 wheat crop at 28.5 MMT, up 4.8% from last year. Ukraine's winter grain production (mostly wheat) could rise by 20 to 30 percent in 2013, a senior Ukrainian weather forecaster said. Allendale estimated the 2013/14 world wheat crop at 694 MMT, up around 40 MMT from this season.
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