18-12-2013 10:06 AM | Arable, Cereal, Crops, Market Reports, News

Wheat market 'couldn't manage a rally'; Drier outlook for S America



Soycomplex

Beans closed around 8-9 cents higher, on the nears at least, on talk of hot and dry conditions developing for Argentina over the next week to 10 days. It was a choppy day, with the overnight session trading lower, but at the finish Mar 14 beans posted their highest daily close since Sep 13. Soybean oil on the other hand is friendless, and the Jan 14 contract finished within 20 points of the lowest close for a front month since July 2010.


Dr Cordonnier estimated Brazil’s 2013/14 soybean crop at 90.0 MMT, which is unchanged from his previous estimate and a record output. He has Argentina’s 2013/14 bean crop at 56.0 MMT, also unchanged from his previous estimate and also a record volume. Informa come out tomorrow mid-session with their 2014 US acreage estimate updates. For beans their previous estimate was 83.81 million acres, almost 10% higher than the estimated 76.5 million planted this year. There's continued speculation that China will cancel some US bean cargoes, but there's no sign of it yet. Indeed there's been gossip this week that they are sniffing for US beans for Feb and Mar shipment this week. Jan 14 Soybeans closed at $13.46 1/2, up 8 3/4 cents; Mar 14 Soybeans closed at $13.34 3/4, up 9 1/2 cents; Jan 14 Soybean Meal closed at $448.00, up $9.00; Jan 14 Soybean Oil closed at 39.31, down 44 points.

Corn


The corn market closed with gains of around 3 cents on a warmer and drier outlook for South America in the week ahead. The USDA announced 278,384 MT of US corn sold to Japan for 2014/15 shipment. South Korea's KFA bought 65,000 MT of US corn for Jan shipment. Israel seeks 45,000 MT of optional origin corn. Iran bought 25,000 MT of Ukraine corn for Dec shipment. Dr Cordonnier estimated the 2013/14 Brazilian corn crop at 68.6 MMT, unchanged from his previous estimate.


He pegged production in Argentina at 24.0 MMT, also unchanged from his previous estimate. South Korean buyers are said to have agreed to take 195 TMT of US corn shipments early (albeit at a reduced price) as quarantine problems getting US corn through Chinese customs continue. Informa are due to release their latest 2014 US planting estimates tomorrow. Last month they estimated the 2014 US corn area at 91.7 million, down almost 4% from the 95.3 million that was said to have been planted this year. Tomorrow will bring the regular ethanol production report from the Energy Dept. Output last week was 944,000 barrels/day - the highest production seen since January 2012 - as margins remain very strong. After that the trade will be looking to Thursday's weekly export sales report to see how international demand for US corn is faring in the face of strong competition from the Black Sea and South America. Mar 14 Corn closed at $4.26 3/4, up 3 1/2 cents; May 14 Corn closed at $4.35 1/4, up 3 1/2 cents.

Wheat

The wheat market couldn't manage a rally, even if corn and beans could, closing with losses of around 2-5 cents across the three exchanges. Jan 14 Chicago wheat posted the lowest close for a front month since June 2012 on the continuous chart. US wheat missed out in the Egyptian tender, even though it was around $5 cheaper than French and $7 below the winning Romanian and Russian offers, due to freight considerations.


Thank God then for Brazil. They imported 671 TMT of wheat in November and 501 TMT of that came from the US. Jan/Nov imports were 6.636 MMT (versus 6.154 MMT in 2012) and the US was the leading supplier, providing 3 MMT of that versus only 55 TMT in the same period in 2012. Argentina was relegated into second place, supplying 2.54 MMT versus 4.86 MMT in 2012. Iran are said to have bought around 250 TMT of Mexican durum wheat, along with 180 TMT of wheat from the Baltic as they take advantage of the recent relaxation of Western sanctions. Tunisia seek 134 TMT of optional origin durum wheat, 109 TMT of optional origin soft wheat, and 25 TMT of optional origin feed barley for Jan-Mar shipment. Jordan are tendering for 100 TMT of wheat for May-Jun shipment. Israel seeks 25 TMT of optional origin feed wheat, and 25 TMT of optional origin feed sorghum for Feb-Apr shipment. Informa are out with their latest forecast for the US wheat area for the 2014 harvest tomorrow. In November increased their forecast from the 57.7 million acres estimated in October to 58.1 million. That's a 1.9 millionacre, or 3.4%, rise versus the area sown for this year. Mar 14 CBOT Wheat closed at $6.19 3/4, down 2 cents; Mar 14 KCBT Wheat closed at $6.60 1/2, down 5 cents; Mar 14 MGEX Wheat closed at $6.50, down 4 1/4 cents.

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