US winter wheat conditions 'mixed'
Beans closed with decent gains heading into tomorrow's USDA report. Maybe the trade was enthused by news that China had imported 6.5 MMT of soybeans in April, up 41% versus March and 63.5% higher than in April 2013. That takes China's Jan/Apr soybean imports to 26.85 MMT, a 41.2% rise on the same period in 2013. There are perhaps two ways of looking at this news.
One, you could step back and go: Wow! Chinese demand really is insatiable. On the other hand, you could say: Yes, but Brazilian shipments were severely delayed this time last year. You could also ponder that these are beans that China doesn't really need (or even want), and that could have a negative impact on demand in May, June and July. China are said to be going to auction off 300,000 MT of beans from state-owned reserves next Tuesday. They are thought likely to be offering a total of 3 MMT spread over the next couple of months. Wilmar Group, which has major interests in China, revealed a large slump in profits which included a more than $57 million loss in it's grains and oilseeds processing division, citing "very poor" Chinese crush margins.
Positive old crop weekly export sales were supportive to the front end at 40,800 MT (the trade was expecting zero). New crop sales of only 14,200 MT weren't quite so friendly. Actual exports themselves continue to slow up, at 132,400 MT these were down 51 percent from the previous week. Still, the US has now shipped 42.12 MMT of soybeans this season, with a further 2.51 MMT of outstanding sales left waiting to go. The USDA's current forecast for the season is for exports of 43 MMT. The FAO's AMIS pegged the world soybean crop in 2013/14 at 281 MMT versus 267 MMT last season and estimated global carryout at 30 MMT against 28 MMT a year previously. The USDA issue their revised 2013/14 and their first 2014/15 crop numbers tomorrow. Conab estimated the Brazilian 2013/14 soybean crop at 86.57 MMT versus a previous estimate of 86.08 MMT. May 14 Soybeans closed at $14.74 1/4, up 23 1/4 cents; Jul 14 Soybeans closed at $14.69 1/2, up 23 1/4 cents; May 14 Soybean Meal closed at $490.60, up $9.30; May 14 Soybean Oil closed at 40.94, up 27 points.
The corn market ended around 2-3 cents higher on the day. Weekly export sales of 161,300 MT for 2013/14 were down 83 percent from the previous week, and well short of trade expectations of 500-800 TMT. New crop sales came in at 121,000 MT against forecasts of 100-300 TMT. It's noteworthy that the old crop sales included net cancellations from China (210,000 MT) and unknown destinations (116,800 MT). The dispute over MIR 162 corn between the US and China appears no closer to being resolved now than it was at the turn of the year. Weekly exports came in at 1.4 MMT. The 2013/14 marketing year to date shipments are now 29.26 MMT, with a further 14.9 MMT worth of outstanding sales.
That takes current total commitments to 44.16 MMT versus a USDA forecast for the season of 45 MMT. Conab put the Brazilian 2013/14 corn crop at 75.19 MMT versus a previous estimate of 75.46 MMT. The USDA are currently only at 72 MMT. MDA CropCast forecast the EU corn cop in 2014 at 58.4 MMT, down from 59 MMT last year and 1.2 MMT down versus a week ago. They pegged the Ukraine corn crop at 24.9 MMT, down 2.2 MMT on a week ago and versus 30.1 MMT in 2013. There's still plenty of conflicting opinions regarding the likely size of this year's Ukraine corn crop. IGC estimate it at 26.8 MMT, Informa recently said 26 MMT, the USDA's FAS forecast 25 MMT and UkrAgroConsult this week went for a figure of 24 MMT. The Ukraine Ministry are still forecasting higher plantings than last year's record. Inputs are of course likely to be reduced, making last year's bumper yields look unlikely to be attained again. Nevertheless, all of those numbers would represent a second highest crop ever for Ukraine this year. Parts of Ukraine, and Russia too, could do with a shot of rain. The FAO's AMIS estimated the world 2014/15 corn crop at 967 MMT, down from 1008 MMT last year, which they say is "mostly on lower output in the US driven by reduced plantings". Ending stocks are seen declining to 162 MMT from 170 MMT this season. May 14 Corn closed at $5.13 1/4, up 3 cents; Jul 14 Corn closed at $5.16 1/2, up 2 1/2 cents.
The wheat market closed mixed, but mostly a little lower. Weekly export sales of 320,500 MT of old crop and 125,000 MT of new crop were in line with trade expectations, if nothing spectacular. Brazil took 76,500 MT of the old crop. MDA CropCast cut their US winter wheat production forecast by 1.9 MMT from a week ago to 38.9 MMT, down from 43.1 MMT last year. They raised their EU wheat production estimate by 900 TMT from last week, and upped Argentina by 800 TMT. They also posted a 1.1 MMT increase for Ukraine barley production versus a week ago. There's a school of thought that Ukraine farmers may scale back on corn sowings in favour of lower maintenance spring barley.
They also upped their EU barley production estimate by 200 TMT versus last week. The FAO's AMIS estimated the world 2014/15 wheat crop at 702 MMT, down from last year's record 715 MMT. Ending stocks however will increase to 180 MMT from 178 MMT, they said. "In the US, winter wheat conditions are mixed, and planted area is slightly down relative to last season. Drought in the Southern Great Plains continues to be a significant concern. Other winter wheat growing areas have closer to normal conditions, and spring wheat planting has started," they added.
Parts of Texas and Oklahoma picked up decent rains overnight, but it could be a case of "too little, too late" for winter wheat there. "Since February 1, Oklahoma wheat farms have received only 2.26 inches of rainfall against 6.4 inches, normally, for 35% of average. Kansas wheat has received 2.3 inches versus 5.2 inches normally and 44% of normal in the same period back to February 1," said Martell Crop Projections. Conab estimated the Brazilian 2014/15 wheat crop at 6.88 MMT versus a previous estimate of 6.7 MMT and up by 25% on last year as growers are wooed back to the crop by current price differentials between it and corn. Brazilian yields should also return to more normal levels this year it is hoped. Recent heavy rains in Western Australia are said to have produced near ideal planting conditions for winter wheat. The threat of an El Nino weather pattern still lies ahead though. May 14 CBOT Wheat closed at $7.26 3/4, down 3 cents; May 14 KCBT Wheat closed at $8.32 1/2, down 4 cents; May 14 MGEX Wheat closed at $7.95, unchanged.
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