US wheat crop may be lower this year
US wheat crop may be lower this year
SoycomplexBeans closed higher, in what you might call "Turnaround Tuesday" trade, a day later than normal due to Monday's Memorial Day holiday. The USDA announced 110,000 MT of US beans sold to China for 2014/15 delivery. They also announced 172,000 MT of US meal sold to the Philippines for 2014/15 shipment. China's weekly soybean auction was well received, with them selling more than 80% of the 300 TMT on offer. Was that due to demand, or because of problems obtaining Letters of Credit to buy imported beans? It's hard to say. Nevertheless the market viewed the information as supportive. Rumour that these weekly auctions may soon cease was also seen as friendly. China’s northeast province of Heilongjiang estimated its soybean planted area at 2.0 million ha, down 10% from a year ago. The US weather seems to finally be co-operating. "Producers in the Midwest and South last week planted 26% of the 2014 soybean crop last week, boosting plantings to 59% complete. This was impressive progress, considering that farmers were also finishing up with corn planting, and in the South, cotton and rice. Increased warmth and sunshine encouraged strong progress," said Martell Crop Projections. Reuters reported that the first two shipments of Brazilian beans to sail to the US east coast had arrived, with more expected to follow. Two vessels of Brazilian beans have already arrived in the Gulf. Ukraine soybean planting is 96% complete, along with 97% of its sunflower crop. Jul 14 Soybeans closed at $14.97 3/4, up 9 cents; Aug 14 Soybeans closed at $14.28 1/4, up 9 1/2 cents; Jul 14 Soybean Meal closed at $498.50, up $4.30; Jul 14 Soybean Oil closed at 39.63, down 31 points.CornThe corn market closed a couple of cents firmer, having traded both sides. Again maybe this was minor consolidation from yesterday's losses. "Corn producers made excellent progress planting last week pushing US corn planting to 88% complete. Corn emergence at 60% was behind schedule, however, reflecting persistent cold spring weather. Corn development in spring of 2013 was seriously retarded but the national average yield still finished above trend. In 2009 corn emergence was among the slowest of the decade, but the national average yield was a record high 164.7 bushels per acre. Conversely the fastest corn planting on record in 2012 led to a severely depressed corn yield, 123.4 bushels per acre, the worst in 17 years," noted Martell Crop Projections. This suggests that early delays in corn development are not necessarily detrimental to the yield, they said. Argentina exported 1.62 MMT of corn in April, a sharp drop on 2.79 in April 2013, according to customs data. The top buyer was Algeria (656 TMT), followed by Egypt (273 TMT). That takes the Jan/Apr calendar year so far corn exports to 2.33 MMT, a 65% decline on a year previously. Ukraine said that it's 2014 corn crop is 96% planted on 4.74 million ha. The USDA attaché in Russia estimated the 2014 corn crop there at 11.5 MMT versus 11.6 MMT last year. This week's regular weekly ethanol production data from the US Energy Dept is delayed a day due to the Memorial Day holiday on Monday and will be released tomorrow. Last week's production came in at 925,000 barrels/day, up slightly on the previous week but below the level required to hit USDA targets. The regular weekly export sales report from the USDA is also deferred until Friday. Jul 14 Corn closed at $4.72 1/2, up 2 3/4 cents; Sep 14 Corn closed at $4.69 1/4, up 3 cents.WheatThe wheat market extended recent losses, and Chicago wheat has now fallen for 14 out of the last 15 sessions. The US wheat crop may be lower this year, but they are still looking to export almost half of it, and the competition for sales is hotting up. Impending big crops from large US wheat export competitors like Europe and the FSU is what is dragging the market lower. Scarcely a day goes by without cheap offers or business on new crop being reported by others. "The French sale of new crop wheat to Algeria at roughly $248 FOB was a fresh negative input that wasn’t really much of a surprise. Reports have them selling 700 TMT at prices below the replacement values, but I doubt the sale price will be under replacement when the vessels are to ship," said Benson Quinn's Brian Henry. Russia picked up a new crop sale to Indonesia this week. The Philippines are tendering for wheat of Black Sea, EU, Australian, and/or Indian origin for July/Aug shipment. Russia’s Ag Minister estimated Russia’s 2014/15 grain exports at 25.0 MMT versus a previous estimate of 22.0 MMT. The USDA attaché in Russia estimated the 2014/15 grain crop there at 92 MMT, similar to a year ago. The Ag Ministry are even higher at 100 MMT, although most view this as optimistic. Production estimates from other analysts are creeping higher, not lower, though. The USDA attaché has the 2014/15 Russian wheat crop at 52 MMT (unchanged from 2013/14) versus the Ministry's 54-55 MMT and with this year's barley crop barley crop estimated at 16.0 MMT versus 15.4 MMT in 2013/14. The attaché sees 2014/15 Russian grain exports at 24 MMT. Rapid Canadian planting progress is being reported now that the weather is starting to co-operate. US spring wheat was 74% planted as of Sunday, the USDA reported yesterday. Whilst that's behind the 5-year average pace of 82% done, it's better than the 65% that the trade was expecting. Jul 14 CBOT Wheat closed at $6.38 3/4, down 2 1/4 cents; Jul 14 KCBT Wheat closed at $7.36, down 2 1/4 cents; Jul 14 MGEX Wheat closed at $7.18, down 1/2 cent.
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