Concerns remain for US winter wheat on the Plains
Concerns remain for US winter wheat on the Plains
SoycomplexBeans closed higher to start the week, particularly on old crop as the nearby supply and demand situation remains tight for US beans. Talk of a possible tail-off in Chinese demand wasn't helped by news that their PMI had dropped last month. That may however be more of a problem for South America, as the US has already shipped 94% of the USDA target for the season, and outstanding sales take that total to 107%. Meanwhile, having taken a fortnight to refloat a vessel that had run aground on the Parana River, blocking entry and exit to the leading Argentine grains port of Rosario (the vessel was finally able to navigate away on Friday), news broke today that two more vessels (The Sky Dragon and Cleanthe) had also run aground in the same area, once again blocking access to the port. Reuters reported that around 80 ships, both loaded and unloaded, were currently at anchor waiting for the problem to be resolved. Argentine farmers have just begin harvesting what the Rosario Grain Exchange say will be a record 54.7 MMT crop, and are still said to be carrying around 5 MMT of unsold soybeans from last year. Meanwhile, Safras e Mercado said as of Friday the Brazilian bean harvest is 67% complete versus 59% a week ago, 64% a year ago and 56% on average. AgRural estimated Brazil’s 2013/14 bean crop at 86.0 MMT, down on earlier predictions of in excess of 90 MT, but still a record. High soybean prices will almost certainly encourage US growers to plant a record acreage this spring. Farm Futures Magazine estimated the 2014 US bean acreage at a record 82.93 million acres, well above the USDA's 79.5 million from February's Outlook Forum, although some other private estimates from last week are even higher. Bloomberg reported that the Chinese Chamber of Commerce of Foodstuffs said that domestic crushers there had agreed to reduce soybean imports. The report said that, according to the state-backed group, domestic soybean meal supply and demand are "seriously out of balance," and that the industry is incurring "huge losses" and faces unprecedented risks. China is of course single-handedly responsible for the majority of world demand for beans, accounting for around two thirds of global imports. If Chinese demand were to slow up significantly, downside risk for prices would be large - especially with huge US plantings going into the ground - following on from record Brazilian and Argentine production. US weekly export inspections came in at 732,132 MT versus the expected 770-925 TMT. Fund money was given credit for being a net buyer of around 5-6,000 bean contracts on the day. Their net long may now be above 200k lots, leaving the market vulnerable to a downside correction for little or no reason. May 14 Soybeans closed at $14.25 1/2, up 16 3/4 cents; Jul 14 Soybeans closed at $13.99 1/2, up 17 1/4 cents; May 14 Soybean Meal closed at $462.20, up $6.30; May 14 Soybean Oil closed at 40.80, down 22 points.CornThe corn market posted strong gains, with funds stepping in to increase their net long position by an estimated further 8-9,000 contracts. They are now heavily long corn, prompting the question how much further are they prepared to press the pedal? Weekly export inspections for corn came in at 1,142,722 MMT versus the expected 850 TMT to 1.0 MMT. Tensions in Ukraine continue to offer support to corn, even though current shipment levels continue unabated. The country has shipped 2.4 MMT of grains so far this month (mostly corn), according to the Ag Ministry. They said that 2013/14 year to date exports are now 26.8 MMT, including over 16.7 MMT of corn. APK Inform Agency said that Ukraine sea ports shipped out 797 TMT of grains last week, up from 706 TMT the week before. That included 655 TMT of corn. Taiwan are said to be in the market for 60 TMT of US or South American corn for May June shipment. There are some reports that China rejected 21,800 MT of US corn found to contain the non-approved MIR 162 strain. Farm Futures Magazine estimated the 2014 US corn acreage at 92.06 million, which is almost identical to the USDA's February Forum figure. Informa are due out with their estimates tomorrow mid-session. The USDA will release revised planting intentions estimates next Monday. In Brazil, IMEA said that Mato Grosso's "safrinha" corn planting is nearly complete at 99.8% done. The State Secretary of Agriculture in Parana said that some growers there will switch out of second crop corn and into wheat this year. Safras e Mercado said 96% of the Brazilian winter corn crop has been planted versus 95% a year ago. They said that 62% of the Brazilian summer corn crop has been harvested versus 48% a year ago. A Reuters poll estimated South Africa’s 2013/14 corn crop at 12.7 MMT, from within a range of estimates of 12.5-13.0 MMT. CEC come out on Thursday with their South African crop estimates, their previous estimate was 12.403 MMT. The EU Commission's MARS unit said that EU-28 corn yields are seen averaging 7.03 MT/ha this year, up 6.3% on last year and 2.9% above the 5-year average. US corn looks like getting planted late again this year. "Temperatures in the United States are gradually increasing but in many areas conditions are still below freezing. The snow cover is virtually gone except for a narrow band across the Upper Midwest in North Dakota, Minnesota, Wisconsin and Michigan. Soil temperatures are slowly warming . The subsoil last week was still mostly frozen across the heart of the corn belt, Nebraska to Ohio, with average daily temperatures from 30 to 37 F. The northern corn and spring wheat areas were colder with subsoil temperatures of 23 – 30 F. Fieldwork and planting usually gets under way in late April but is expected to be delayed this year in the wake of a super-cold winter. Corn requires 50 F soil temperatures for seeds to germinate," said Martell Crop Projections. May 14 Corn closed at $4.90 3/4, up 11 3/4 cents; Jul 14 Corn closed at $4.95, up 11 1/4 cents.WheatThe wheat market began the week sharply higher, with fund money stepping in for an estimated net 7,000 Chicago contracts, no doubt enthused by how easily they've managed to nudge the market higher since Putin decided to help himself to Crimea. Weekly export inspections came in at 524,857 MT versus the expected 425,000 – 530,000 MT. A decent enough total, but hardly spectacular. Fund money again appears to want to own wheat more than the global end user does at these levels. Farm Futures Magazine estimated the 2014 US all wheat acreage at 56.05 million acres, a small drop on 56.2 million last year, but above the USDA Outlook Forum estimate of 55.5 million. The recent price rally has come just in time to boost spring wheat plantings it would seem. Farm Futures estimate the US 2014 spring wheat acreage at 12.3 million acres and the durum area at 1.8 million acres. In 2013 the spring wheat area was 11.3 million acres and the durum are 1.4 million. Concerns remain for US winter wheat on the Plains. "Hard red winter wheat has begun growing in the Southern Great Plains where conditions have warmed up, but very dry field conditions are holding back wheat development. Winter precipitation ranked among the lowest 10-15% on record in Texas and Oklahoma, and 18th lowest in Kansas out of 119 years. The forecast is hopeful for showers this week in the southern Great Plains, though not much moisture is anticipated in Kansas. Best rainfall would develop along Oklahoma-Texas border where up to 0.70 inch of rain is possible," said Martell Crop Projections. After the close, state reports showed Texas had 11% of its winter wheat crop rated good/excellent, down 2 points on a week ago. Oklahoma was at 17% good/excellent versus 18% last week. The Brazilian State Secretary of Agriculture in Parana said that growers there will step up wheat plantings this year, estimating that they could rise 20% at the expense of "safrinha" or second crop corn. Production could come in at 3.5 MMT in the state, versus only 1.8 MMT last year when the crop was badly damaged by frost in the May/Jun period. Wheat planting in Brazil usually takes place Apr/Jun and harvesting is Oct/Dec. Brazil have ended up as large buyers of US wheat in 2013/14, partly due to the demise of their own crop and also due to production problems in Argentina, their preferred No 1 supplier. Russia reported that they had shipped 954 TMT of grains in the Mar 1-19 period, including 503 TMT of wheat. Their year to date grain exports are now 19.786 MMT, up 40.8% on last year, including over 14.5 MMT of wheat. The Ukraine Ministry said that, despite all the political upheaval there, that early spring grains plantings were already complete on 1.5 million hectares of land. That's over 50% of the planned 2.9 million ha, and includes 1.15 million ha of spring barley. In their first look at yields for 2014, the EU Commission's MARS unit forecast the average EU-28 all wheat yield at 5.47 MT/ha, down 1.8% from last year's 5.57 MT/ha, but 2.5% above the 5-year average. Barley yields (both classes) across Europe were forecast averaging 4.59 MT/ha, a 5% decline on last year, but 2.3% above average. Saudi Arabia were said to have 4.0 MMT of barley in strategic reserves, and 2014/15 barley imports are estimated at 6-7 MMT versus 10.65 MMT a year previously. May 14 CBOT Wheat closed at $7.13 1/4, up 20 cents; May 14 KCBT Wheat closed at $7.93 1/4, up 22 cents; May 14 MGEX Wheat closed at $7.61 1/2, up 18 1/4 cents.
No comments posted yet. Be the first to post a comment
Farms and Land for sale
Farming UK Holiday Rentals
Top stories you may have missed