Hype over US planting delays continues to support the market
Beans closed mixed. Even though it's only very early days, some are already fretting over cold and wet Midwest weather and the current planting delays that this is causing. Nevertheless, Dr Cordonnier forecast US soybean yields in 2014 at 44-45 bu/acre, which is better than last year, and that was the best year since 2010. He estimated the 2013/14 Brazilian bean crop at a record 86.5 MMT, and the Argentine crop at 53.5 MMT, both unchanged from his previous forecasts.
Argentina’s Ag Min estimated Argentina’s bean crop at a record 55 MMT versus a previous estimate of 54 MMT. Oil World estimated the EU-28's Jan/Jun 2014 soybean imports at 7.6 MMT versus 7.1 MMT in the same period in 2013. They estimated Argentina’s March soybean crush at 2.13 MMT versus 1.7 MMT a year ago, and the country's Jan/Mar soybean crush at 5.6 MMT versus 4.6 MMT a year previously. There are reports of at least one cargo of Argentine meal heading to the eastern US, along with several consignments of Brazilian soybeans. Rabobank forecast US soybean prices falling to $12/bushel in Q4 of 2014. Trade estimates for tomorrow's weekly export sales report for beans are in the region of zero to 100 TMT on old crop and 400-500 TMT on new crop. May 14 Soybeans closed at $15.28 3/4, up 4 3/4 cents; Jul 14 Soybeans closed at $15.11 3/4, down 5 1/2 cents; May 14 Soybean Meal closed at $503.50, up $3.60; May 14 Soybean Oil closed at 41.96, down 81 points.
The corn market closed 2-3 cents lower on what may have been light profit-taking ahead of what is a holiday for many tomorrow (although US markets remain open). Widespread talk/hype over US planting delays continues to support the market, especially with more cold and wet conditions in the forecast for Thursday/Friday, although some warming is predicted for the weekend. This is all very reminiscent of twelve months ago, but as was proven then, modern equipment means that US farmers have the ability to plant one hell of a lot of corn in a week when conditions are conducive.
Remember that US farmers sowed 43% of the 2013 crop in a single mid-May week last year. So it's too early just yet to right yields off. Dr Cordonnier seems to agree, he estimated the 2014 corn yield at 163-165 bu/acre - an all time high and around 3-4% higher than last year. He also forecast the 2013/14 Brazilian corn crop at 72.0 MMT and the Argentine crop at 23.5 MMT, both unchanged from last week. The US Energy Dept reported ethanol production in the past week at 898,000 barrels/day, down from 910,000 bpd the previous week, and below the level needed to hit USDA forecasts for the season. Rabobank forecast Q2 2014 US corn prices averaging $5/bu, falling to $4.10/bu by Q1 of 2015. Trade estimates for tomorrow's weekly export sales report for corn are 500 TMT to 1.3 MMT for both crop years. May 14 Corn closed at $5.13 3/4, down 2 cents; Jul 14 Corn closed at $5.19 1/4, down 2 1/4 cents.
The wheat market closed firmer on the old chestnuts of declining US winter wheat conditions/reduced yield prospects and Ukraine worries. Day two of the Kansas crop tour entered the southwest of the state, and came up with an average yield estimate of only 30.8 bu/acre versus 37.1 bu/acre a year ago. That's a 17% decline. Day one of the tour found yield potential 21% down on a year ago. An Oklahoma crop tour this week found an average yield potential of only 18.52 bu/acre - the lowest since 1967 and 40% down on 31 bu/acre in 2013.
Luckily, things aren't as bad in some other states versus 12 months ago though. The Colorado Association of Wheat Growers estimated the 2014 wheat yield there at 32.0 bu/acre versus 27.0 bu/acre a year ago. In Nebraska they are seen at 40-45 bu/acre versus 35 bu/acre a year ago.
Despite doom and gloom for the US wheat crop this year, prospects elsewhere around the globe look generally much rosier. That was sufficient reason for Rabobank to forecast US wheat prices falling from an average $7/bu in Q2 of 2014 to $5.60/bu in Q4, a slide of around 25% based on tonight's Chicago closing level for the Dec 14 future. Trade estimates for tomorrow's weekly export sales report for wheat are 150,000–350,000 MT of old crop and 250,00-450,000 MT of new crop. May 14 CBOT Wheat closed at $7.13, up 5 cents; May 14 KCBT Wheat closed at $8.09, up 11 3/4 cents; May 14 MGEX Wheat closed at $7.57, up 9 3/4 cents.
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