Concerns remain for US winter wheat corn market closes higher
Concerns remain for US winter wheat; corn market closes higher
SoycomplexBeans ended the day mixed, lower on the nears and higher on new crop. The very large spec long, which is approaching record levels, is seen leaving the market vulnerable to a significant downside correction even if the supply and demand fundamentals continue to lean bullish. Once again Chinese cancellations were not forthcoming today, prompting Goldman Sachs to say that "the US is running out of soybeans". They forecast US 2013/14 soybean ending stocks at 139 million bushels versus the USDA's 145 million of yesterday. Having had time to digest yesterday's USDA report in detail, fresh news today was scarce. The trade is keeping an eye on developments in Ukraine, with the EU, US, IMF and World Bank all seemingly in the frame to extend them some credit. They've exported just over 3 MMT of oilseeds so far this season, including 2.07 MMT of rapeseed and 0.96 MMT of soybeans. Mar 14 Soybeans closed at $14.11 1/2, down 7 3/4 cents; May 14 Soybeans closed at $14.13, down 5 3/4 cents; Mar 14 Soybean Meal closed at $452.30, down $0.40; Mar 14 Soybean Oil closed at 43.51, down 13 points.CornThe corn market closed around 4 to 6 cents higher on the day, with fund money stepping in for an estimated 8-10,000 corn contracts. As with soybeans, after yesterday's deluge of USDA today, today was a no news sort of a day. Agritel reported that Ukraine had shipped 480 TMT of corn last week, indicating that the current problems with Russia haven't yet made much of an impact on grain exports. Year-to-date Ukraine exports now stand at almost 25 MMT, including more than 15 MMT of corn. Early spring grain planting is underway in both Ukraine and Russia, aided by unusually mild weather. Trade speculation ponders whether Ukraine farmers will plant as much spring grain as the 8.6 million acres that the government say that they will. Ukraine's Ag Minister said that little arable land in Crimea will probably get sown this spring due to a lack of fuel. The region is not a major grain producer though, accounting for only 765 TMT of the country's 63 MMT harvest in 2013. Separately, the Ukraine Ministry increased their forecast for 2013/14 grain exports from 32.5 MMT to a new record 33 MMT. South Korea passed on a tender to import 60 TMT of optional origin corn. Mar 14 Corn closed at $4.78, up 6 cents; May 14 Corn closed at $4.83 1/4, up 5 cents.WheatThe wheat market jumped around 15-20 cents (if we ignore the soon to expire nearby positions) across the three exchanges on fund buying/further short covering. They were estimated to have been net buyers of around 4,000 Chicago wheat contracts on the day, and almost certainly now sit on a net long in CBOT wheat for the first time in more than a year. The market might be getting a little ahead of itself. "There was talk that fuel shortages will limit the ability to plant spring crops in Crimea, which may end up being the case, but is no reason to pay 25 cents higher for wheat," said Benson Quinn Commodities. How true, when you consider that Crimea only produced 1.2% of Ukraine's 2013 grain crop. Concerns remain for US winter wheat. "Winter precipitation in the US breadbasket, the 7 leading states, has amounted to only 1.55 inch, compared to 3.34 inches normally," said Martell Crop Projections. Despite a sharp decline in wheat condition ratings across the winter, these are still significantly better than they were a year ago mind. Meanwhile crops in Europe and the FSU are generally in good health. Mar 14 CBOT Wheat closed at $6.63 1/4, up 18 1/4 cents; Mar 14 KCBT Wheat closed at $7.22, up 17 1/4 cents; Mar 14 MGEX Wheat closed at $7.51, up 5 cents.
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