US corn yields at record; Damage to European crop quality



Soycomplex

Beans closed mixed, a little stronger nearby and a touch weaker further forward. The USDA announced 360,000 MT of US beans sold to China along with 134,700 MT of US meal sold to Mexico, both for 2014/15 delivery. Persistent cool Midwest weather is seen being probably of more benefit to corn than it is to soybeans. August weather still holds the key to determining final soybean yields.


A Reuters poll put the average trade guess for US soybean yields this year at a record 45.5 bu/acre versus the USDA's current forecast of 45.2 bu/acre. The previous record was 44.0 bu/acre in 2009. The range of estimates was 44.2-46.85 bu/acre. The Doane crop tour estimated Iowa average soybean yields at 50-53 bu/acre versus 44.5 bu/acre a year ago. The Buenos Aires Grains Exchange said that the Argentine soybean harvest is virtually all done at 99.5% complete, and left their 2013/14 production estimate unchanged at a record 55.5 MMT.

Safras e Mercado estimated Brazil’s 2014/15 soybean planted area at 31.2 million ha, up 4% from last year. Planting will begin in Mato Grosso in the second half of September. They forecast Brazil’s 2014/15 soybean crop at a record 94.45 MMT versus their 2013/14 crop estimate of 86.6 MMT. Market expectations for Monday's USDA crop progress report are for soybean conditions to be unchanged from a week ago at 73% good to excellent. Aug 14 Soybeans closed at $12.12 1/4, up 4 3/4 cents; Nov 14 Soybeans closed at $10.83 1/2, down 1 1/4 cents; Aug 14 Soybean Meal closed at $398.00, up $2.70; Aug 14 Soybean Oil closed at 36.09, down 15 points. For the week that puts front month beans up 36 1/4 cents, with meal gaining $18.00 and oil falling 38 points.

Corn

The corn market closed with small gains to end the week, but still lower for the week as a whole. The USDA announced 269,084 MT of US corn sold to Mexico split 23,368 MT old crop and 245,716 MT new crop. A Reuters survey estimated 2014 US corn yields at a record 170.476 bu/acre versus a previous estimate of 166.104 bu/acre. The current USDA estimate is "only" 165.3 bu/acre, although that in itself would still be a record. The previous record was made in 2009 at 164.7 bu/acre.


The Doane crop tour was said to have pegged western Iowa corn yields at 200 bu/acre. The Buenos Aires Grains Exchange said that the Argentine corn harvest is 72.4% complete versus 65.4% a week ago and 92.4% a year ago. They have production in 2013/14 estimated at 25.0 MMT, unchanged from their previous estimate. Safras e Mercado said that they expect Brazil’s 2014/15 corn planted area to decline 6% this year.

They still see production at 77.99 MMT versus their 2013/14 crop estimate of 75.95 MMT however. It was reported yesterday that China will only import US DDGs if they can be certified completely free of the disputed MIR 162 corn variety. And by "completely free" that's exactly what they mean, there's no 0.5% tolerance or whatever, it's zero or nothing (no pun intended). The CEO of the US Grains Council said “China is asking for something that cannot be done. This certificate that they are asking for does not exist” according to Reuters. That would appear to draw a line under that then for the time being, and must also surely cast a large black cloud over the prospects for US corn exports to China too. US corn crop condition ratings are expected to be unchanged at 76% good/excellent on Monday. Sep 14 Corn closed at $3.63, up 1 1/2 cents; Dec 14 Corn closed at $3.71 3/4, up 2 1/4 cents. For the week Sep 14 lost 7 cents and Dec 14 fell 5 3/4 cents.

Wheat

The wheat market ended around 8-10 cents higher on the day, although still mixed for the week. Repeated reports of damage to crop quality in Europe are providing support for US wheat, along with ongoing unrest in Ukraine and the corresponding rise in tensions between Russia and the West. European and US leaders are calling for further sanctions against Russia, although it's unclear exactly what form these might take (apart from removing them from hosting the 2018 World Cup).


They appear to be in the middle of harvesting a pretty good 2014 wheat crop, in terms of both quality and quantity. If some of the world's leading buyers were to shun Russian wheat, for whatever reason, then it could certainly provide a shot in the arm for demand for US grain, especially if the concerns about quality in Europe ultimately prove to be founded. FranceAgriMer said that the French wheat harvest had made good progress in the past week (through to July 21st) at 44% complete versus only 5% done a week previously. They also actually raised their forecast for the proportion of the crop rated good/very good by one percentage point from a week ago to 71%.

Meanwhile, the US Spring Wheat Crop Tour projected average yields at 48.6 bu/acre this year, said to be the highest since at least 1992. The Saskatchewan government said that as of July 21st 78% of spring wheat in the province is in good to excellent condition versus 87% a year ago at this time. Taiwan cancelled a tender for 80,900 MT of US milling wheat for Sep-Oct shipment due to high prices. The Buenos Aires Grains Exchange said that the 2014/15 Argentine wheat crop is 87.8% planted versus 80% a week ago and 92.7% a year ago.

In Monday's upcoming crop progress report from the USDA spring wheat crop conditions are expected to be unchanged from a week ago at 70% good to excellent. Sep 14 CBOT Wheat closed at $5.38, up 9 1/4 cents; Sep 14 KCBT Wheat closed at $6.31 1/4, up 10 3/4 cents; Sep 14 MGEX Wheat closed at $6.27 3/4, up 8 cents. For the week that puts Chicago wheat up 5 1/2 cents, with Kansas wheat down 1 3/4 cents and Minneapolis down 2 1/2 cents.

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