Corn market crashes to losses of 8-11 cents
Beans closed lower in what looked like "buy the rumour, sell the fact" trade. The monthly April NOPA crush came in right on expectations of 132.5 million bushels at 135.67 million. That was sharply lower than the 153.84 million crushed in March, but significantly higher that the 120.113 million processed in April 2013. It is also well above the April ten year average crush of 128.8 million bushels. The USDA announced 120,000 MT of US beans sold to China for 2014/15 shipment.
Weekly export sales of 73,600 MT of old crop and 324,700 MT of new crop beat trade estimates of zero to 50,000 MT on old crop and sales of around 150,000 to 250,000 MT on new crop. Informa Economics raised its forecast for US soybean plantings in 2014 to a record 82.073 million acres, from its March estimate of 81.204 million and versus the USDA's March figure of 81.5 million. This reiterates the view that, weather permitting, there really is a deluge of soybeans coming along in 2014/15. Various analysts have noted that US soybean yields are typically above normal in an El Nino year, if that is what we are going to get this summer. APK Inform said that Ukraine will produce a record 3.2 MMT of soybeans this year, with growers there lured by high prices. That's up 19% on last year, and compares with production of only 1 MMT as recently as 2009.
The Buenos Aires Grain Exchange estimated the Argentine 2013/14 soybean crop at a record 55.5 MMT (up 14.4% on last year), matching the forecast from the Rosario Exchange from earlier in the week, and beating the existing USDA estimate by 1.5 MMT. They said that harvesting is 66.9% complete. For all the talk of delayed US plantings of the past few weeks, things have now caught up with "normal" and could surpass the 5-year average rate come Monday night's next progress report from the USDA. Similar comments also apply to corn after a decent week this week, and further warming expected over the next few days. Fund selling was estimated at a net 4,000 soybean contracts on the day. Jul 14 Soybeans closed at $14.70 1/4, down 16 1/2 cents; Aug 14 Soybeans closed at $14.01 3/4, down 14 1/4 cents; Jul 14 Soybean Meal closed at $481.40, down $5.10; Jul 14 Soybean Oil closed at 41.04, down 34 points.
The corn market crashed to losses of around 8-11 cents on the day. Weekly export sales came in at 343,000 MT of old crop, and new crop sales of only 47,300 MT. That disappointed a little compared to trade estimates for sales of 200-400,000 MT of old crop and 150-300,000 MT of new crop. Separately the USDA announced the sale of 104,000 MT of US corn to Mexico for 2013/14 shipment. South Korea's NOFI bought 130,000 MT of optional origin corn for November shipment.
South Korea's MFG bought 188,000 MT of optional origin corn for Oct-Nov shipment. China's CNGOIC estimated the 2014 corn crop there at a record 222.1 MMT, up 2% on last year and well ahead of consumption of 196.2 MMT. Imports are seen falling from 5.5 MMT this season to 3.5 MMT in 2014/15. CNGOIC said that China will sell corn from state reserves next week. Strategie Grains yesterday estimated the EU-28 2014 corn crop at 65.9 MMT versus a previous estimate of 65.1 MMT and compared to 64.4 MMT in 2013/14. Informa estimated the US 2014 corn area at 91.581 million acres, down from its previous outlook of 93.029 million, but still close to the USDA's March estimate of 91.7 million. Last year's acreage was a 75-year high of 95.4 million. US corn yields could be a bit lower than trendline yields in an El Nino year, due to lack of heat units, according to some analysts. That could also mean a lower abandonment rate however.
The EU continues to import more corn. This week's weekly import licence total was 448 TMT, up from 301 TMT a week ago. It was also above the volume of wheat going out the other way for a second week. Corn imports so far this season now stand at 12.7 MMT versus 9.85 MMT this time last year, meaning that total imports for the current marketing year should now easily beat the USDA's current forecast of 13 MMT. The Buenos Aires Grain Exchange estimated the Argentine 2013/14 corn crop at 24 MMT, unchanged from their previous forecast, and marginally higher than the Rosario Grains Exchange's 23.9 MMT from earlier in the week. Fund selling was estimated at around 10,000 contracts on the day. Jul 14 Corn closed at $4.84 1/4, down 11 1/4 cents; Sep 14 Corn closed at $4.81, down 9 3/4 cents.
The wheat market extended recent declines, with Chicago wheat actually faring the best of the three exchanges with losses of "only" around 12-13 cents. Weekly export sales of only 54,900 MT for delivery during the 2013/14 marketing year were down 83 percent from the previous week. New crop sales of 197,100 MT were far from spectacular either. That was a bit below modest trade estimates which had been for sales of around 100-300,000 MT of old crop and 150-300,000 MT of new crop. That could enhance the view that US prices had gone up too far, too soon, and a downside correction was needed.
Shipments this week of 635,300 MT take total US exports this season to 28.4 MMT compared to a USDA target for the marketing year of 31.5 MMT. The wheat marketing year finishes at the end of the month, so hitting that target currently looks unlikely. There's currently 3.2 MMT of unfulfilled sales for 2013/14 on the books, but unshipped sales are simply stocks. South Korea's MFG bought 106,000 MT of feed wheat optional origin for October shipment. Japan bought 97,780 MT of wheat from the US and Australia for July shipment. China's CNGOIC estimated wheat production there this year at 122.6 MMT, and said that imports in 2014/15 would fall to 3 MMT versus 7 MMT in the current season. The Chinese government only sold 77,616 MT of wheat at auction, against an offering of 672,871 MT. This poor subscription rate has been a feature of their recent wheat auctions, in fact that's a higher percentage than they'd sold in the previous few of weeks.
The Buenos Aires Grains Exchange estimated Argentina’s 2014/15 wheat area at 4.3 million hectares versus a previous estimate of 4.1 million and up almost 19% on the 2013/14 area of 3.62 million. Strategie Grains forecast the EU-28 soft wheat crop at 137.4 MMT versus a previous estimate of 137.2 MMT and compared to the 2013/14 crop of 135.1 MMT. They see durum wheat output at 7.5 MMT, giving the EU an all wheat crop of 144.9 MMT this year - almost identical to the USDA's 144.88 MMT estimate. The French analysts have all wheat output in 2013 at 143 MMT. Jul 14 CBOT Wheat closed at $6.78 1/4, down 12 cents; Jul 14 KCBT Wheat closed at $7.78 3/4, down 27 1/2 cents; Jul 14 MGEX Wheat closed at $7.55, down 23 1/4 cents.
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