Chicago Grains End Week Higher
W/e 10/02/17 -- Soycomplex: Beans closed higher on the day and for the week. The market was buoyed Friday by the announcement of 140 TMT worth of US soybeans sold to unknown for 2016/17 shipment. In their latest WASDE report the USDA were unchanged on their outlook for Brazilian soybean production this year (104 MMT), but lowered Argentina by 1.5 MMT to 55.5 MMT. They also reported US soybean export commitments so far this season at 51 MMT, a 21% increase year-on-year. This is also only 4.8 MMT away from it's current forecast for full season exports of 55.8 MMT. In other news China reported that they'd imported 7.66 MMT of soybeans in January, 35% more than last year. In Brazil, IMEA reported the soybean harvest 45.8% complete in Mato Grosso, versus only 25.6% done at this time last year. Mar 17 Soybeans settled at $10.59, up 8 1/2 cents; May 17 Soybeans settled at $10.70, up 8 1/2 cents; Mar 17 Soybean Meal settled at $342.10, up $3.70; Mar 17 Soybean Oil settled at 34.61, down 06 points. Mar 17 beans were up 32 cents compared with last Friday.
Corn: The market closed higher on the day and versus last Friday. In Chicago the Mar 17 contract closed at the best levels on a front month since late June 2016. The USDA this week raised their estimate for the size of the global 2016/17 crop by more than 2 MMT to 1040 MMT. However they also upped consumption by 6 MMT and cut carryout by 2.5 MMT. Chinese corn usage was projected 4 MMT larger, mostly from increased feed usage. The USDA also reduced the size of this season's EU-28 corn crop, marking that down to 60.3 MMT, with ending stocks cut to 4.75 MMT, the lowest level since 2007. Record corn production for 2016/17 reflected larger crops in both Ukraine and Mexico more than offsetting lower production in the EU, they said. "Robust demand in both Iran and Vietnam support a higher volume of global exports. Moreover, a smaller barley crop in Iran boosts the demand for (other) imported feedstuffs," they added. Mar 17 Corn settled at $3.74 1/2, up 5 cents; May 17 Corn settled at $3.82, up 4 3/4 cents. For the week that puts Mar 17 corn up 9 1/4 cents.
Wheat: The wheat market closed higher, with Mar 17 CBOT Wheat settling at $4.49, up 5 1/2 cents; Mar 17 KCBT Wheat ending at $4.60 1/2, up 9 1/4 cents and Mar 17 MGEX Wheat finishing the day at $5.72 1/2, up 4 cents. For the week that puts nearby Chicago wheat up 18 3/4 cents, with the Kansas market 20 cents higher and Minneapolis up 14/14 cents. For Chicago wheat this was a more than 7-month closing high for a nearby contract. In their February WASDE report the USDA said that "prices for most wheat classes were up during the month of January, underpinned by 2017/18 US crop prospects as well as a weakening dollar." They also noted that "the growing gap between HRS and most other wheat classes is indicative of tight supplies of high-protein wheat in the global market." US 2016/17 wheat exports were raised 1.5 MMT to 27.5 MMT, whilst Russia's were lowered 0.5 MMT to 28.5 MMT. World ending stocks were lowered from 253.3 MMT to 248.6 MMT.
EU Grains End Higher On Reduced Production/Stocks Numbers
The day ended with Jan 17 London wheat up GBP0.40/tonne at GBP147.80/tonne, Mar 17 Paris wheat was unchanged at EUR171.75/tonne, Mar 17 Paris corn was up EUR0/.25/tonne at EUR173.00/tonne and May 17 Paris rapeseed rose EUR3.25/tonne to EUR421.75/tonne.
For the week that places nearby London wheat GBP0.45/tonne higher, with Paris wheat up EUR2.50/tonne, corn EUR1.50/tonne firmer and rapeseed up EUR9.00/tonne.
The USDA this week cut their estimate for the size of the 2016/17 global wheat crop by more than 4 MMT to 748.2 MMT and raised consumption by 0.5 MMT to 740.4 MMT. World ending stocks were lowered from 253.3 MMT to 248.6 MMT.
That helped Chicago wheat futures climb to more than 7 month highs, supporting the European market.
The USDA also reduced the size of this season's EU-28 corn crop, marking that down to 60.3 MMT, with ending stocks cut to 4.75 MMT, the lowest level since 2007.
Brussels reported 215 TMT worth of EU soft wheat exports this week, taking the cumulative total so far this season to 15.1 MMT, a 7% decline year-on-year
IKAR said that they expect 2017/18 Russian wheat production at 67.5 MMT, down from their estimate of 73.3 MMT for this season, but see exports holding steady at around 28 MMT.
UK prices remain expensive compared to the rest of the world, reflecting relatively tight availability in the face of strong demand from the biothethanol sector.
"Wheat used by the GB milling industry (including starch and bioethanol) over the first half of the season (Jul-Dec), totalled 3.65 MMT, according to latest data published by Defra...this is 10% higher than the same period last season and the highest amount of wheat milled at this point on records going back to 1997," noted the HGCA.
Chicago Grains Mixed For The Week
W/e 03/02/17 -- Soycomplex: Beans closed with Mar 17 Soybeans at $10.27, down 10 1/4 cents; May 17 Soybeans settled at $10.37 1/4, down 10 cents; Mar 17 Soybean Meal settled at $331.60, down $2.20; Mar 17 Soybean Oil settled at 33.86, down 73 points. For the week that puts Mar 17 beans down 31 3/4 cents, with Mar 17 meal down $11.40 and Mar 17 oil down 41 points. The harvest is moving on, and the crop seemingly getting larger in Brazil. Soybean harvest in the lead producing state of Mato Grosso is at 31% complete according to IMEA. FC Stone increased their soybean production estimate for Brazil to 104.1 MMT from 102.8 MMT. Informa Economics increased their forecast for 2016/17 Brazilian soyabean production by 1.5 MMT to 106.5 MMT.
Corn: Corn ended with Mar 17 Corn at $3.65 1/4, down 2 1/4 cents, and May 17 Corn settling at $3.72 3/4, down 2 1/4 cents. For the week that puts Mar 17 up 2 3/4 cents and May 17 up 3 cents. Mato Grosso’s second corn crop planting is currently at 27% completed vs. 11% last year. Argentina’s Buenos Aires Grain Exchange estimated their crop to be 99.3% planted, while production is estimated by Informa to be 35.2 MMT, down from the 36.0 MMT forecast previously. The EU Commission pegged EU corn ending stocks for 2016/17 at the lowest in 9 years. "At 9.9 MMT, the latest estimate is below the levels recorded in 2012/13 and is the result of two consecutive years with below average output, against robust demand," said the HGCA.
Wheat: Mar 17 CBOT Wheat settled at $4.30 1/4, down 4 1/4 cents; Mar 17 KCBT Wheat settled at $4.40 1/2, down 3 cents; Mar 17 MGEX Wheat settled at $5.58 1/4, down 2 3/4 cents. For the week that puts Chicago wheat 9 3/4 cents higher, with Kansas up 6 1/4 cents and Minneapolis down 1 3/4 cents. Managed money in Chicago continues to hold a significant short position, seemingly limiting downside. Positive factors for wheat include reduced winter wheat acres, dry extended forecast for the Plains, and the reduction of spring wheat acres by as much as 1.5 million acres (according to the University of North Dakota), said Water Street Solutions.
EU Grains Post Weekly Losses
"UK old crop wheat market recorded marginal declines last week mainly driven by further currency volatility, while the domestic new crop market showed small increases on the week," said the HGCA.
"From a global perspective, US grain markets closed up on the week, driven by a combination of factors including strong bioethanol demand for maize," they added.
EU corn stocks for the end of the season, at 9.9 MMT, were pegged at the lowest in over nine years by the EU Commission, they noted. This is viewed as supportive for EU wheat prices.
Saudi Arabia bought 1.5 MMT of feed barley in a tender for shipment between March and May.
Strategie Grains cut their monthly estimate for 2017/18 EU rapeseed production by just over 0.5 MMT to 21.56 MMT due to severe cold weather, specifically citing damage to the crop in Eastern Europe.
Statistics Canada placed total wheat stocks there as at 31 December 2016 at 25.03 MMT, over 800 MT above the average trade expectation.
Chicago Grains Close - Friday
W/E 27/01/17 -- Soycomplex: Beans closed virtually unchanged on the day but lower for the week. The Buenos Aires Exchange put projected Argentine soybean production at 53.5 MMT versus 56 MMT a year ago and 57 MMT from the USDA currently. IMEA estimated the Mato Grosso soybean harvest in Brazil at 16.25% complete. Mar 17 Soybeans settled at $10.49 1/4, down 1/4 cent; May 17 Soybeans settled at $10.58 3/4, down 1/4 cent; Mar 17 Soybean Meal settled at $343.00, up $0.60; Mar 17 Soybean Oil settled at 34.27, down 20 points. Versus last Friday nearby beans are 18 1/4 cents lower.
Corn: The corn market closed a touch lower. The Buenos Aires Grain Exchange estimated Argentina corn planting at 98.3% complete. The market is starting to get worried about a trade was with Mexico. With President Trump insisting that Mexico will foot the bill for the controversial wall between the two nations - and Mexico insisting that it won't - it needs remembering that the latter take almost 25% of all US corn exports, a very significant volume. A timely start to the soybean harvest in Brazil suggests good early progress can be made with safrinha corn planting. Mar 17 Corn settled at $3.62 1/2, down 1 1/4 cents; May 17 Corn settled at $3.69 3/4, down 1 1/4 cents. Mar 17 corn was down 7 cents on the week.
Wheat: The wheat market closed lower. It's worth noting that near neighbour Mexico account for around 12% of US wheat exports. Analysts will be keeping an eye on Russian weather this weekend with a strong cold spell expected. EU wheat exports are running 7% lower year-on-year. Russia struck a clean sweep in the latest Egyptian tender, winning a 410,000 MT order. Japan’s Ag Ministry reported that 60,610 MT of US wheat were purchased in their weekly tender. Rusagrotrans predicted Russia's Feb wheat exports at similar levels to a year ago. Mar 17 CBOT Wheat settled at $4.20 1/2, down 6 1/2 cents; Mar 17 KCBT Wheat settled at $4.34 1/4, down 6 cents; Mar 17 MGEX Wheat settled at $5.60, down 6 3/4 cents. Mar 17 CBOT wheat was down 7 3/4 cents on the week.
EU Grains Close - Friday
W/E 27/01/17 -- EU grains closed narrowly mixed Friday with Jan 17 London wheat up GBP0.05/tonne at GBP148.35/tonne, Mar 17 Paris wheat down EUR0.50/tonne at EUR169.50/tonne, Mar 17 Paris corn unchanged at EUR171.25/tonne and Feb 17 Paris rapeseed up EUR0.50/tonne to EUR428.25/tonne.
For the week Jan 17 London wheat was up GBP0.60/tonne, Mar 17 Paris wheat was down EUR0.25/tonne, Mar 17 Paris corn rose EUR1.25/tonne and Feb 17 Paris rapeseed was up EUR3.25/tonne.
London wheat prices remain firm, despite a firmer sterling this week on robust UK growth. This "likely reflects the tightness in UK supplies compared to demand this season," say the HGCA.
EU soft wheat exports are now running at 13.9 MMT, down 1 MMT or 7% on a year ago, according to the latest figures from Brussels. The EU also awarded this week 83,596 MT of Ukrainian wheat imports under a special annual tariff-free quota deal.
EU barley exports total 2.5 MMT, whilst corn imports stand at 6.0 MMT.
Egypt's GASC bought 410,000 MT of Russian wheat in a tender.
Rusagrotrans forecast Russia's Feb grain exports at 2.3-2.4 MMT versus 2.75 MMT a year previously. Wheat exports will make up 1.70-1.85 MMT of that total, a similar volume to that of Feb 2016.
Chicago Closing Comments - Thursday
19/01/17 -- Soycomplex: Beans closed lower. A Farm Futures Magazine survey estimated 2017 US soybean spring plantings at 90.52 million acres, up a hefty 7.12m, or 8.5% versus 83.4 million acres in 2016. The Buenos Aries Grain Exchange cut their forecast for Argentine plantings this season to 19.2m hectares, a drop of 900,000 hectares year on year. The Rosario Exchange cut its forecast for output by 1.5 MMT to 52.9 MMT. Trade estimates for tomorrow's one day delayed weekly export sales report for beans are 400,000 to 750,000 MT. Mar 17 Soybeans settled at $10.70 1/4, down 4 3/4 cents; May 17 Soybeans settled at $10.78 1/2, down 5 1/4 cents; Mar 17 Soybean Meal settled at $348.20, down $2.90; Mar 17 Soybean Oil settled at 35.44, down 14 points.
Corn: The market closed around a cent higher. The USDA reported export sales of 110,400 MT of US corn for delivery to unknown destinations during the 2016/17 marketing year. Trade ideas for tomorrow's weekly export sales are pretty strong at 1.0 to 1.5 MMT. US weekly ethanol production data topped trade expectations at an impressive 1.054 billion barrels/day, setting another new weekly record volume. Ukraine think tank UNIAN forecast the country's 2016/17 corn exports rising to 20.9 MMT this season. Worries remain over the relationship between the US and China, especially vis-a-vis corn, ahead of the inauguration of President Trump tomorrow. Whilst Chinese US corn imports are only minimal, they have been a significant importer of US DDGs and ethanol in the last 12 months. The sudden imposition of anti-dumping import duties threatens to slash this business by half, or more. Mar 17 Corn settled at $3.66 1/4, up 1 1/4 cents; May 17 Corn settled at $3.73 1/4, up 1 cent.
Wheat: The wheat market closed mixed, with Kansas down the most, Minneapolis nudging higher, and Chicago in the middle. Trade forecasts for tomorrow's weekly export sales report are between 250,000-550,000 MT. Japan bought 117,605 MT of US/Canadian wheat in their regular weekly tender. Taiwan are in the market or 93,600 MT of what will probably turn out to be US milling wheat, Morocco are reported to have bought 363,636 MT of EU soft wheat in a tender. Jordan bought 50,000 MT of hard wheat. Egypt are tendering for wheat for Feb 22 - Mar 3 shipment, having bought a mixture of mainly Russian and Romanian wheat recently. Results of that are expected Friday afternoon. The Buenos Aries Grain Exchange estimated final wheat production in Argentina this year at 15 MMT, up 39% on a year ago largely due to increased plantings. Mar 17 CBOT Wheat settled at $4.23 1/2, down 7 1/2 cents; Mar 17 KCBT Wheat settled at $4.42 1/4, down 10 cents; Mar 17 MGEX Wheat settled at $5.76 1/2, up 3 cents.
