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Farminguk
26 September 2016 | Online since 2003
Scrutton Bland


11 April 2014 10:23:39 |

Rainfall finally predicted for Kansas wheat


Soycomplex
Beans closed lower on concerns over Chinese demand. Few think that the world's largest buyer will import the 69 MMT of soybeans this season that the USDA forecast yesterday, and with good reason. The jungle drums have been beating loudly concerning credit problems in China recently, and Reuters reported today that there are 5-6 panamax vessels carrying $300 million worth of soybeans sat waiting for the buyers to pay for them before they can unload. The buyers are defaulting due to their inability to obtain Letters of Credit, it would seem. There are said to be more vessels on the way that face similar problems. Reduced demand due to bird flu and negative crush margins are also a factor, along with a huge stockpile of previously imported soybeans.
Chinese trade data overnight revealed that the country had imported 4.62 MMT of beans in March versus the expected 5.69 MMT. Some analysts are now saying that they may import less than 15 MMT in Q3 of 2014 versus 18.25 MMT in the same period last year. China will account for 65% of the world's soybean exports in 2013/14, according to the USDA, so if they catch a cold, everybody is going to get it. CONAB today forecast the 2013/14 Brazilian soybean crop at 86.08 MMT versus a previous estimate of 85.44 MMT. They see 2013/14 soybean exports at 45.3 MMT, unchanged from their previous estimate.
Weekly export sales came in low at 79,100 MT for 2013/14 and 210,400 MT for 2014/15. The trade had been expecting old crop sales of 0-100,000 MT and new crop sales of 300,000–500,000 MT. Funds sold an estimated net 7,000 soybean contracts on the day. May 14 Soybeans closed at $14.82 1/4, down 13 cents; Jul 14 Soybeans finished at $14.65 1/2, down 12 1/2 cents; May 14 Soybean Meal closed at $479.50, down $2.60; May 14 Soybean Oil closed at $42.50, down 41 points.
Corn
The corn market ended narrowly mixed. Weekly export sales of 658,700 MT for 2013/14 and 58,000 MT for 2014/15 were at the low end of expectations for old crop sales of 700,000–900,000 MT and new crop sales of 0-200,000 MT. There has to be a chance that Chinese credit and bird flu problems will also spill over into demand for corn. Not that they're taking delivery of US corn anyway at the moment due to the MIR 162 situation.
CONAB estimated the 2013/14 Brazilian corn crop at 75.46 MMT versus a previous estimate of 75.18 MMT and compared to the USDA's estimate of "only" 72.0 MMT. They appear to be bullish on "safrinha" or second crop corn production potential, for which current conditions are said to be favourable. CONAB have domestic corn use estimated at 53.82 MMT, with exports at 19.5 MMT and ending stocks at 11 MMT. MDA CropCast estimated the 2014/15 US corn crop at 357 MMT, up 9.3 MMT on last year despite a lower planted area. Corn planting hasn't reached the Midwest yet. "Welcome warmth dominated the Midwest this week, but colder temperatures are expected to resume next week when the jet stream carves out a cold trough in the heartland.
While soil temperatures have steadily warmed with stronger solar rays March into April, fields are still too cold to plant with soil temperatures below the 50 F threshold. The typical start to corn planting is late April-early May, but is expected to be delayed this season due to deep penetrating frost," said Martell Crop Projections. However "delayed planting from springtime cold is not necessarily detrimental to the yield," they noted. May 14 Corn closed at $5.01 1/4, down 1 cent; Jul 14 Corn ended at $5.07 1/4, down 3/4 cent.
Wheat
The wheat market closed around 6 to 11 cents lower on the day across the three exchanges. Fund selling was estimated at a net 3-4,000 contracts in Chicago. Weekly export sales offered no assistance whatsoever. They came in at just 41,800 MT – a marketing-year low – and were down 88 percent from the previous week and 90 percent from the prior 4-week average. New crop sales were 349,100 MT. Trade estimates had been for old crop sales of 250,000-375,000 MT and new crop sales of 150,000-300,000 MT. Japan bought 119,178 MT of US/Canadian wheat for May-Sept shipment in their routine weekly tender. South Korea FLC seeks 70 TMT of optional origin wheat for October shipment.
CONAB estimated the Brazilian 2014 wheat crop at 6.7 MMT versus a previous estimate of 5.5 MMT. Domestic wheat usage was estimated at 11.93 MMT and wheat carryover stocks were estimated at 1.92 MMT. US winter wheat is set to get a break in the coming week. "Good rainfall is finally predicted in Kansas, the top US wheat state is expecting at least 0.25 inch state-wide, and up to 1.25 inches locally. Wheat farms in Oklahoma and West Texas would mostly miss out though," said Martell Crop Projections. World Weather said that next Wednesday through to Friday could bring 1 to 2 inches of rain from western Oklahoma into east-central Kansas. Early spring grains planting in Ukraine is just about done already, some rain has fallen there this week, and more is in the forecast for the next five days. May 14 CBOT Wheat closed at $6.62 1/4, down 6 3/4 cents; May 14 KCBT Wheat ended at $7.22 1/2, down 10 3/4 cents; May 14 MGEX Wheat closed at $7.01, down 11 3/4 cents.

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