Brazil weather slows harvesting wheat market ends higher
Brazil weather slows harvesting; wheat market ends higher
SoycomplexBeans closed lower as mid-day weather forecasts re-iterated a welcome rain event for the Midwest next week after a couple of weeks of dryness. "Upper Midwest field moisture has become depleted with sharply reduced rainfall. Less than half of normal moisture has accumulated the past 2 weeks over much of the farm belt, not only the Upper Midwest but also the Great Plains," said Martell Crop Projectons. Safras e Mercado estimated Brazil’s 2014/15 soybean planted area at 31.213 million ha, up 4.4% versus last year. Planting usually begins in late September. They forecast the 2014/15 Brazilian crop at a new record 94.451 MMT, up 9% versus last year's production of 86.613 MMT. There's talk that a possible Argentine debt default tomorrow would lead to a further weakening of the domestic peso, encouraging farmers to hold onto their beans as a hedge against inflation and the falling value of the local currency. Beans are essentially a dollar-based commodity. The trade is expecting that tomorrow's weekly export sales report will reveal another week of robust interest for US beans and meal, with bean sales forecast to be around 1.0-1.2 MMT and meal sales of 550-750 TMT. Aug 14 Soybeans closed at $12.20 1/2, down 6 cents; Nov 14 Soybeans closed at $10.81 1/4, down 13 3/4 cents; Aug 14 Soybean Meal closed at $387.60, down $7.80; Aug 14 Soybean Oil closed at 36.05, down 20 points.CornThe corn market closed with little change. There's some talk of this year's US corn crop almost being "made" now that we've reached the end of July, but there's still a fair way to go yet. "Corn crop ratings have continued mostly favourable in July due to prevailing cool temperatures. Soil moisture was conserved while corn was pollinating and for soybeans starting to set pods. Corn would be less damaged by August drought, should it develop," said Martell Crop Projections. Dr Cordonnier said that unusually wet weather in Brazil's Mato Grosso has slowed harvesting of their safrinha corn crop to around 50% complete. The USDA attaché in Russia estimated corn production there this year at 13 MMT, that would be an increase of nearly 12% on a year ago. There's some talk of heat/dryness issues developing for Russian corn. Ukraine Weather Forecasters estimated this year's corn crop there at 29.0 MMT, down 6% from last year's record, although still the second highest ever. New crop Ukraine corn offers continue to hover around the $188-190/tonne mark on an FOB the Black Sea basis. US ethanol production this past week came in at 954,000 barrels/day, a 5,000 bpd fall on a week ago, although that was the second highest weekly output of the year so far. Trade estimates for tomorrow's weekly export sales report for corn are quite robust at 800 TMT - 1.2 MMT. Sep 14 Corn closed at $3.61 3/4, up 1/4 cent; Dec 14 Corn closed at $3.71 1/2, up 1/2 cent.WheatThe wheat market ended around 2 to 7 cents higher across the three exchanges. Egypt bought all Russian wheat in it's tender, although US wheat was said to be the cheapest on an FOB basis, it was the freight that kicked it out. The FOB prices paid were similar to last week's tender, although freight rates were a dollar or two higher. The trade is pondering what effect increased Western sanctions against Russia might have on their ability to conduct "business as usual" on the international grain market. The trade is also weighing up what sort of wheat quality we will end up with in Europe this year. Germany's DBV released a crop update, but didn't forecast wheat yields or production. In what has been cut already yields vary "very strongly" they said. "The weather in the coming days is crucial for the remainder of the winter wheat crop," they added. There are said to be question marks over quality in Poland and Romania too, as well of course as France. A Canadian crop tour came up with potential yields of 59.0 bu/acre versus 55.0 bu/acre a year ago and 43.0 bu/acre on average. The USDA attaché in Russia estimated the wheat crop there at 52 MMT, unchanged on last year, but 1 MMT lower than the official USDA figure. The USDA announced 205,500 MT of US wheat sold to Nigeria. Trade estimates for tomorrow's weekly export sales report are around 350-550 TMT. Sep 14 CBOT Wheat closed at $5.27 1/4, up 7 1/4 cents; Sep 14 KCBT Wheat closed at $6.17, up 5 1/2 cents; Sep 14 MGEX Wheat closed at $6.12 3/4, up 2 1/4 cents.
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