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1 April 2014 10:29:52|

2014 US wheat harvest 'lower than anticipated' - USDA


Soycomplex
Beans closed a choppy session sharply higher on the nears and a bit weaker on the deferred months. The USDA's stocks and acreage report came in pretty much bang on expectations. They confirmed that US farmers intend to plant a record 81.5 million acres of soybeans this spring, which is 5 million more than a year ago. The average trade guess was 81 million, from within a range of estimates of 78.5-83.6 million.
The USDA pegged March 1st soybean stocks just below a billion bushels at 992 million (the lowest since 2004) versus an average trade guess of 992 million, a range of guesses of 955 million to 1.087 billion and 998 million a year ago. The confirmation of another very tight old crop year was ultimately responsible for sharp gains on the nears, even if the numbers were largely anticipated. In other news, Safras e Mercado said that the Brazilian bean harvest was 73% complete, up from 67% a week ago, versus 72% a year ago and 64% normally.
They estimated the Brazilian bean crop at 86.924 MMT versus a previous estimate of 86.144 MMT. AgRural went the other way and estimated the Brazilian bean crop at 85.6 MMT versus a previous estimate of 85.9 MMT. Weekly US soybean export inspections came in at 506,039 MT versus the expected 525-675 TMT. Fund money was estimated as being a net buyer of 10-12,000 soybean contracts on the day. May 14 Soybeans closed at $14.64, up 27 1/2 cents; Jul 14 Soybeans closed at $14.29 1/2, up 21 3/4 cents; May 14 Soybean Meal closed at $479.30, up $10.90; May 14 Soybean Oil closed at 40.42, down 6 points.
Corn
The corn market closed a choppy session around 10 cents higher. Heavy fund buying - estimated at around a net 20,000 contracts on the day - was seen after the USDA said that US farmers would "only" plant 91.7 million acres of corn this spring. The average trade guess had been a million higher than this, although the number wasn't completely off the wall, as the range of guesses was 90.5-94.0 million.
Plantings last year were a 75-year high 95.4 million, so this year's estimate represents a drop of nearly 4% versus 2013. March 1st US corn stocks were estimated at just over 7 billion bushels, exactly what the trade was looking for, so there were no surprises there. Safras e Mercado said that the Brazilian first corn crop is 65.6% harvested versus 54.2% a year ago. They said that the Brazilian second corn crop is 98.5% planted versus 99.4% a year ago. Israel is tendering for 85,000 MT corn and 20,000 MT of feed wheat for May June shipment.
Taiwan Sugar Corp is in the market for 20 TMT of US corn and 15 TMT of US beans for May/June shipment. Weekly US corn export inspections came in at a strong 1.328 MMT versus the expected 950 TMT to 1.15 MMT. Russia said that it had exported 3 MMT of corn so far this season. APK Inform said that Ukraine had exported 563 TMT of corn last week, down from 655 TMT the previous week, but still a good volume for this time of year. The Ukraine Ministry said that early corn plantings there had just about begun. They estimated the Ukraine 2014 corn area at 5.0 million hectares versus 4.8 million a year ago when they produced a record crop. Yet current trade estimates are for Ukraine to produce only around 23 MMT this year due to reduced yields and lower inputs. May 14 Corn closed at $5.02, up 10 cents; Jul 14 Corn closed at $5.06 3/4, up 10 1/2 cents.
Wheat
The wheat market only managed to put in modest gains, despite support from corn and beans. The USDA estimated the all wheat area for the 2014 US harvest lower than anticipated at 55.8 million acres. The average trade guess was for plantings of 56.3 million, from within a range of 54.8-57.7 million. The "other" spring wheat area was pegged at 12 million acres versus the average guess of 12.3 million. March 1st US wheat stocks were estimated at just over a billion bushels, and at almost exactly what the trade was expecting.
Weekly US export inspections came in at 492,577 MT versus the expected 450-550 TMT. The Texas wheat crop was reported as 11% good to excellent, down 2% from a week ago. The crop was rated 59% poor to very poor, up 7% from a week ago. The Oklahoma wheat crop was put at 17% good to excellent, down 1% from a week ago. Pakistan have begun harvesting their 2014 wheat crop. Recent favourable weather could see output exceed the official government estimate of 25 MMT it is thought. Production last year was 23.8 MMT. India's wheat harvest has been put on hold due to recent wet weather, and may not begin for another week or two yet, around 10-14 days later than normal.
The forecast there is now drier than normal for the next couple of weeks. Australia's south and east is in for good soaking rains ahead of planting time across the next 14 days. Dryness concerns remain in Western Australia, where there is little moisture in the 14-day forecast. Reuters reported that Ukraine is proposing to end the VAT redemptions on grain exports, which could possibly mean a 20% rise in costs to exporters. This would doubtless be passed back into ex farm prices. The Ukraine VAT refund system has never run smoothly by all accounts. The IGC said that managed money was sitting on it's largest CBOT wheat long position since Nov 2012 based on Friday's Commitment of Traders report. May 14 CBOT Wheat closed at $6.97 1/4, up 1 3/4 cents; May 14 KCBT Wheat closed at $7.64, up 1/2 cent; May 14 MGEX Wheat closed at $7.42 3/4, up 3 cents.

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