Argentine rains 'may have come too late' to save corn
Beans closed around 8 to 12 cents lower as the USDA finally confirmed some Chinese soybean cancellations. They cancelled 272 TMT of US soybean purchases for 2013/14 shipment, although the USDA also immediately announced that they bought 240 TMT of new crop beans for 2014/15 delivery. There have been rumours all week that up to 8 US cargoes have been cancelled - around 400-500 TMT.
Reports are filtering through that US soybean cargoes waiting to unload in China are being delayed as the authorities there scrutinise each consignment for trades of non-approved GMO material. Whether it's non-approved soybeans, or traces of cross contamination with MIR 162 corn, is unclear. There are also rumblings that the bird flu outbreak in China is far worse than the authorities are admitting. JC Intelligence said that China’s poultry industry lost over 100 billion yuan in 2013 due to bird flu. Argentine farmers continue to hoard soybeans. The Brazilian harvest is gathering pace, and vessel line-ups at the ports are already starting to build.
Tomorrow's US weekly export sales report will be interesting, with some suggesting that old crop sales could be negative due to Chinese cancellations. They said that last week too, and old crop sales came in at 577 TMT, with a further 1.5 MMT of new crop. Estimates for tomorrow's report vary from a combined 500 TMT to in excess of 1 MMT. Weekly shipments are expected to come in around 1.5 MMT once more, further increasing the percentage of sales already shipped. Shipments only need to be little more than 300 TMT/week to hit the USDA's goal for the season. Mar 14 Soybeans closed at $13.23, down 11 3/4 cents; May 14 Soybeans closed at $13.09 3/4, down 10 3/4 cents; Mar 14 Soybean Meal closed at $443.50, down $5.70; Mar 14 Soybean Oil closed at 38.99, up 14 points.
The corn market closed around a cent or so lower in two-sided trade. The Energy Dept reported weekly ethanol production at 902k barrels/day, up slightly on last week. Argentina is trending much wetter, but many think it's too late to be of much benefit to corn.
"Heavy soaking rains in Argentina have developed over the past 3 weeks but drenching rains may have come too late to rescue corn. Most corn had already pollinated in a period of intense heat and drought, by the time the heavy rain occurred in late January. Pollination is a key period for the corn yield as kernel not pollinated would never develop into grain.
Buenos Aires, the top corn province, was especially hard hit by drought. A significant portion of corn is expected to be chopped for silage, fed to cattle and pigs, as it is fit to be sold as grain," said Martell Crop Projections. The market is now looking towards next week's USDA Outlook Forum for a clue as to how much corn US farmers will plant this spring. Current thinking suggests that they may not drop their ideas too much from last year (and that was a 75 year high) at around 93-95 million acres. It's only February, but the Forum does have a pretty good track record with being fairly accurate with these predictions. Only time can tell if they can do the same again this year. Trade estimates for tomorrow's weekly export sales report are all over the place - from 400 TMT to in excess of 1 MMT. Mar 14 Corn closed at $4.40, down 1 1/2 cents; May 14 Corn closed at $4.46, down 1 1/4 cents.
The wheat market closed around 2 to 6 cents lower on the day. Fresh news is relatively thin on the ground. The spread between US and world wheat prices is narrowing. Currency weakness in Russia, Ukraine and Kazakhstan is helping the region become more competitive on the export front once again. Kazakhstan's Jul/Dec grain exports were 5.5 MMT, up 1 MMT from a year previously. They are expected to export around 9-10 MMT this year versus 7.1 MMT in 2012/13.
The current cold spell gripping the US is seen moderating a little as the week draws on. Talk of possible winterkill persists, although we won't have a better handle on that until the spring. Persistent dryness is also an issue for US wheat on the Plains. Oh what we wouldn't give for a bit of dryness here in Europe where non-stop rain and widespread flooding is the problem. Japan are tendering to buy up to 286,000 MT of US milling wheat.
It will be interesting to see how US wheat fares in tomorrow's weekly export sales report from the USDA. Trade estimates for that are averaging around the 500 TMT mark, but as with corn and beans, they vary quite widely from anywhere between 250-850 TMT. Jordan bought 100,000 MT of optional origin wheat and passed on a tender to buy a similar quantity of barley. They then immediately re-issued a fresh 100,000 MT barley tender. Mar 14 CBOT Wheat closed at $5.87, down 3 1/4 cents; Mar 14 KCBT Wheat closed at $6.63, down 2 1/2 cents; Mar 14 MGEX Wheat closed at $6.54 3/4, down 6 1/2 cents.
No comments posted yet. Be the first to post a comment
Please enter your name
Please enter your comment
Your comment submitted successfully.Please wait for admin approval.
Some error on your process.Please try one more time.
Scotland’s Rural Affairs Secretary Richard Lochhead is calling on the Europ...
As the country settles down following the turmoil of the general election, ...
New research from the Universities of Bristol and Cambridge has found that ...
A new publication to help farmers prevent sheep lameness and offer advice o...
The Farmers’ Union of Wales is putting the spotlight on Liver fluke at next...
The UK is now third in the global rankings for utility-scale solar energy a...
A recent Rural Watch demonstration and information event gave Farmers’ Unio...
Retailers should confirm their commitments to sourcing UK lamb this season,...
A leading retailer has apologised after selling imported lamb in a Borders ...