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23 June 2014 01:51:09|

Heavy rain on the Plains is slowing winter wheat progress


Soycomplex
Beans ended mixed, lower on old crop and higher on the new. The CFTC's Commitment of Traders report shows managed money significantly cutting their exposure in beans for the week through to Tuesday night, in which they cut their length by some 33,519 contracts bringing their overall net long down to just 46,624 contracts. The USDA announced that private exporters had sold 110,000 MT of US beans to unknown for 2014/15 shipment under the daily reporting system.
The Buenos Aires Grains Exchange said that the Argentine soybean harvest was limping over the line, at 92.2% complete versus 88.1% a week ago and 100% a year ago. They stood by their production estimate of a record 55.5 MMT. The persistent rains that have disrupted the harvest have also been said to have damaged quality this year, with low oil and protein levels in the crop.
Excessive Midwest wetness is a cause for concern for newly planted soybeans. The USDA will update us on crop conditions on Monday. Last week the crop was 73% good/excellent, we could see that trimmed 2-3 points on Monday, although that would still be better than a year ago. Coceral increased their forecast for the EU-28 rapeseed crop to a record 22.8 MMT, whilst Copa Cogeca went for a slightly lower (but still a record) 22.2 MMT. Jul 14 Soybeans closed at $14.15 3/4, down 5 cents; Nov 14 Soybeans closed at $12.31 1/2, up 4 1/4 cents; Jul 14 Soybean Meal closed at $459.20, up $8.00; Jul 14 Soybean Oil closed at 40.04, down 57 points. For the week, front month beans fell 10 cents, with meal down $8.70 and oil adding 35 points.
Corn
The corn market closed around 2-4 cents higher on excessive wetness in parts of the US corn belt. Gains for the week were relatively modest though. Monday's crop condition ratings from the USDA will be of interest. Last week they raised the proportion of the crop rated good/excellent by 1 percentage point from the previous to 76%. You'd have to expect that to be cut by maybe 3-4 points on Monday. News that China has 150 MMT of domestic corn stocks, some of which they are looking to dispose of, weighs on the market - even if the quality of much of that material is in question.
This week's Chinese corn auctions didn't go too well, they sold less than 1 MMT of the 5 MMT on offer. CNGOIC estimated China’s 2013/14 corn imports at 4.0 MMT versus a previous estimate of 5.5 MMT. Imports in 2014/15 are seen falling to 3.5 MMT. The Buenos Aires Grains Exchange estimated Argentina's corn harvest is 44.4% complete, up only modestly from 41.6% a week ago and well behind versus 71.8% a year ago. They forecast production at 25.0 MMT, unchanged from their previous estimate.
Coceral forecast the EU-28 corn crop at 64.6 MMT, a 900 TMT increase from previously and 2.2% higher than a year ago. Copa Cogeca went even higher, forecasting an EU-28 crop of 68 MMT, a 7.3% increase on 2013. The CFTC's Commitment of Traders report shows managed money reducing their net corn long for the week through to Tuesday night by over 9k lots, giving them a net long position of 137,280 contracts. Ukraine said that they'd exported a record 20 MMT of corn so far this season. Jul 14 Corn closed at $4.53 1/4, up 2 3/4 cents; Sep 14 Corn closed at $4.48 1/4, up 4 cents. For the week Jul 14 corn was 6 1/4 cents higher.
Wheat
The wheat market ended around 8 to 12 cents lower on the day. Heavy rain on the Plains is slowing 2014 winter wheat harvest progress. Yields are disappointing, but protein levels are high. The Buenos Aires Grains Exchange said that winter wheat planting in Argentina is 34.3% complete versus 20.1% a week ago and 42% a year ago. They estimated the total planted area at 4.3 million ha, unchanged from previously.
The Argentine Ag Ministry say that plantings this year will total 4.5 million ha, a 23% increase on last year due to very good sowing conditions, rotational needs and better prices relative to those for corn. Whilst they wait for their own, and neighbouring Argentina's forthcoming big wheat crops, Brazil are still active in the import market. They are said to have been significant buyers again of US wheat in the past week. Taiwan also bought 96,180 MT of US wheat for Aug–Sept shipment overnight. Coceral increased their forecast for the EU-28 all wheat crop by 6 MMT to 149.4 MMT.
Copa Cogeca also increased their forecast, but to a slightly more modest 147.4 MMT, although both would be the second highest on record. Coceral said that Romania would produce 8.7 MMT of wheat this year, which is far higher than the USDA's current 7.6 MMT estimate. A large crop there would make competition out of the Black Sea region all the more fierce, especially in the early part of the new campaign. Hungary said today that it would harvest around 5 MMT of wheat this year, a figure similar to last year and a 14% increase on the 5-year average. A Reuters survey pegged the Russian wheat crop at an average guess of 52.6 MMT, with Ukraine producing 20.7 MMT and Kazakhstan harvesting 14.2 MMT. Managed money increased it's CBOT short by 1,807 contracts to a net near 29k lots for the week through to Tuesday night. Jul 14 CBOT Wheat closed at $5.85 1/4, down 8 1/4 cents; Jul 14 KCBT Wheat closed at $7.20 3/4, down 8 1/2 cents; Jul 14 MGEX Wheat closed at $6.90 1/2, down 12 1/2 cents. For the week, Chicago was down 3/4 of a cent, with Kansas up 7 1/2 cents and Minneapolis rising 7 cents.

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