30-07-2014 09:42 AM | Arable, Cereal, Crops, Market Reports, News

Confidence high over US corn record



Soycomplex

Beans closed lower as the latest weather forecasts for the Midwest adopted a wetter outlook for the beginning of August, the key month for determining soybean yields. The USDA announced 135,000 MT of US new crop soymeal sold to unknown. China only sold 94,009 MT of the 353,843 MT of state-owned soybeans (26.6%) on offer at today’s auction. Dr Cordonnier estimated US 2014 soybean yields at 45.0 bu/acre, unchanged from his previous estimate.


Goldman Sachs forecast US soybean prices to fall to $10.50/bu within the next 3-12 months. Although the USDA cut US soybean crop ratings by 2 percentage points to 71% good/excellent last night, these are still the highest ratings since 1994 heading into August. "The forecast continues very cool in the week ahead. Temperatures are predicted to be 5-7 F below normal in the Midwest and Mid South," said Martell Crop Projections. Aug 14 Soybeans closed at $12.26 1/2, down 10 cents; Nov 14 Soybeans closed at $10.95, down 12 3/4 cents; Aug 14 Soybean Meal closed at $395.40, down $7.40; Aug 14 Soybean Oil closed at 36.25, down 27 points.

Corn

The corn market closed around 5-6 cents lower, essentially reversing all of yesterday's gains. Whilst August is the key month for soybean development, for corn it's July. Benign weather conditions throughout the month mean that confidence is now pretty high that record corn yields will be achieved in the US this year.


That said, there's always the nagging doubt that persistent much cooler than normal temperatures throughout the summer could mean that Jack Frost pays an early visit to the Midwest this year. Any sign of the F word in the forecast would have the shorts scrambling for cover. Dr Cordonnier estimated US 2014 corn yields at 169.0 bu/acre versus a previous estimate of 167.0 bu/acre. The USDA announced 147,000 MT of US new crop corn sold to Columbia under the daily reporting system. Egypt are said to be seeking corn for October shipment. Taiwan's MFIG bought 50,000 MT of South Africa corn for Sept/Oct shipment. Safras e Mercado said Brazil’s second corn crop is 38.2% harvested versus 37.1% this time last year. Sep 14 Corn closed at $3.61 1/2, down 6 1/4 cents; Dec 14 Corn closed at $3.71, down 5 3/4 cents.

Wheat

The wheat market closed sharply lower. CBH Group said that Western Australia's state grain harvest this year would total 15.4 MMT, including 9.4 MMT of wheat. The latter number is 1 MMT more than ABARES current estimate. WA is the largest wheat exporting state in Australia. South Korea's MFG passed on a tender for 65,000 MT of optional origin feed wheat for Oct-Dec shipment.


Russia's grain harvest is progressing well, with yields said to be sharply higher than a year ago. Quality is also said to be good. Ukraine is also getting higher yields than anticipated earlier in the year, when all the talk was of reduced inputs cutting yield potential. UkrAgroConsult estimated the 2014 average Ukraine wheat yield at 3.42 MT/ha versus a previous estimate of 3.33 MT/ha and nearly 7% up compared to 3.20 MT/ha in 2013. They estimated 2014 Ukraine barley yields at 2.41 MT/ha versus a previous estimate of 2.39 MT/ha and up more than 6% compared to 2.27 MT/ha in 2013. The German statistics office said Germany had exported 14.6 MMT of grain between July 2013-May 2014 versus 12.4 MMT a year previously. Egypt's GASC are back in the market tendering for wheat, although US origin material is unlikely to feature. Sep 14 CBOT Wheat closed at $5.20, down 14 3/4 cents; Sep 14 KCBT Wheat closed at $6.11 1/2, down 14 cents; Sep 14 MGEX Wheat closed at $6.10 1/2, down 10 3/4 cents.

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