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27 May 2016 | Online since 2003
Briefing Media - FG Classified


2 July 2014 10:45:35|

Corn trade relaxed over US Midwest rains


Soycomplex
Beans closed virtually unchanged on front month Jul 14, and up to 10 cents down further forward. Fund selling in beans was estimated at around a net 4,000 contracts. The trade is still adjusting to yesterday's shock from the USDA that US farmers will/have planted nearly 85 million acres of soybeans this year - a record by 7 million or more.
It is to be hoped for the sake of the soybean market that there are no hiccups with Chinese demand. The Chinese Ministry of Commerce estimated China’s June bean imports at 6.77 MMT, down only slightly on June 2013 imports of 6.926 MMT. They estimated China’s July bean imports at 5.05 MMT versus July 2013 imports of 7.197 MMT. They said that China has imported 57.254 MMT of beans so far this season compared to 48.799 MMT a year ago. The Brazilian Ministry reported that the country had exported 6.89 MMT of soybeans in June, down from 7.61 MMT in May, but up a little on the 6.50 MMT shipped in June 2013. Dr Cordonnier estimated the US 2014 soybean yield at 45.0 bu/acre, unchanged from his previous estimate. If last night's crop condition ratings from the USDA are to be believed then the cool and wet June that most of the Midwest has had to contend with hasn't yet done any harm to crop potential.
The week ahead looks a little drier, which will be welcomed, although temperatures are set to remain below normal. "Most of the Midwest is expecting rain in the 7-day outlook, though the amounts would be less heavy than previously. The Upper Midwest and Great Lakes are slated for at least one inch of rain, locally more, in scattered showers. Much drier weather is expected in a wide swath of the central United States, including Kansas, Nebraska, Missouri and central Illinois. This would encourage strong drying. Sharply cooler weather is also expected to develop in the week ahead, the GFS model predicting temperatures 5-10 F below normal in the Midwest," said Martell Crop Projections. Jul 14 Soybeans closed at $14.00, down 1/2 cent; Nov 14 Soybeans closed at $11.47 1/2, down 9 3/4 cents; Jul 14 Soybean Meal closed at $456.10, down $2.20; Jul 14 Soybean Oil closed at 38.87, up 2 points.
Corn
The corn market closed a couple of cents lower, with fund money selling an estimated net 4,000 contracts on the day. The trade seems relaxed about an overly wet June for much of the Midwest. "The June rainfall map shows how extensive flooding west of the Mississippi River. June rainfall in Iowa was 90% above average with 8 inches of rain. Minnesota rainfall was twice normal with 7.67 inches. Exceptional heavy rain also developed in Nebraska, South Dakota and Wisconsin," said Martell Crop Projections.
"The best analog for ultra-wet Midwest growing conditions in June is 2010, a year that finished with a below-average yield in corn, but slightly above-normal yields in soybeans," they added. Dr Cordonnier estimated the US 2014 corn yield at 165.0 bu/acre, unchanged from his previous estimate. Yesterday's acreage number from the USDA was almost exactly what the market expected, although the June 1 corn stocks figure was higher than anticipated. The Xinhua News Agency reported that China has rejected 1.25 MMT of US corn due to GMO "contamination" for the period ending June 6. Some US corn is getting through, but the volumes are relatively small. Shanghai's JC Intelligence say that China imported 79,000 MT of US corn in May. Safras e Mercado estimated Brazil’s second corn crop at 43.976 MMT versus 45.204 MMT a year ago. They said that harvesting of that is 2.9% complete.
There are some reports of frost in southern Brazil which may have damaged some safrinha corn. Brazil's Trade Ministry said that the country had exported 87,600 MT of corn in June, down from 126,500 MT in May and 276,300 MT a year previously. Russia said that they'd exported just over 4 MMT of corn for the season through to Jun 25. Ukraine's Ag Ministry said that they'd exported 20.1 MMT of corn in 2013/14. New crop Ukraine corn is now said to be offered as low as $200/tonne FOB, with bids around $193-195/tonne. Recent wet weather in Ukraine is stalling the early wheat/barley harvest, but seen aiding newly planted corn. Jul 14 Corn closed at $4.22 3/4, down 1 1/2 cents; Sep 14 Corn closed at $4.16, down 2 3/4 cents.
Wheat
The wheat market closed around 5-10 cents lower across the three exchanges. Egypt's GASC bought 240,000 MT of wheat in a tender for August delivery. They purchased three cargoes of Romanian origin and one of Russian. The prices paid were around $252/tonne FOB. The cheapest French and US offers were around $259-260/tonne FOB, with more expensive freight to also add on top. Ukraine wheat wasn't offered despite reports that 12.5% milling wheat is quoted in the open market at $248 FOB for August shipment ex Ukraine. Russia's wheat harvest is underway, and yields are said to be improving and are now averaging 3.67 MT/ha versus 3.50 MT/ha this time last year.
Barley yields are said to be 4.07 MT/ha against 3.69 MT/ha twelve months ago. There's talk that a frost in southern Brazil may have caused some damage to winter wheat. Their crop was cut sharply by frost around this time of year in 2013. Wet weather on the Plains is holding up the US winter wheat harvest. "Winter wheat producers in Kansas harvested 15% of wheat last week, boosting the total harvested to 40%. Recurring strong showers have bogged down the harvest. Kansas wheat farms received 7 inches of rainfall in June, more than twice the monthly average.
Has wheat quality been compromised by heavy rain? There's not been much standing water due to exceptionally dry field conditions to start with. Kansas, Oklahoma and Texas experienced historic drought for several months, winter into spring. Not until mid May did rainfall sharply increase," said Martell Crop Projections. There's also talk of excessive wetness/flooding being an issue in wheat and canola fields in Saskatchewan and Manitoba. Trade gossip suggests that Libya may have defaulted on Black Sea wheat purchases now that prices have dropped. The Ukraine Ministry said that the country had exported a record 32.4 MMT of grains in 2013/14, including 9.4 MMT of wheat. Jul 14 CBOT Wheat closed at $5.59 3/4, down 5 cents; Jul 14 KCBT Wheat closed at $7.00, down 10 1/2 cents; Jul 14 MGEX Wheat closed at $6.57 1/4, down 10 cents.

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