Chicago Little Changed In Quiet Trade
08/01/13 -- Soycomplex: Jan 13 Soybeans closed at USD14.13 3/4, up 3 cents; Mar 13 Soybeans closed at USD13.86 1/2, down 2 cents; Jan 13 Soybean Meal closed at USD410.60, up USD2.10; Jan 13 Soybean Oil closed at 49.14, down 36 points. There wasn't a great deal of change on the day, maybe that means that pre-USDA report positioning is mostly done? The index fund rebalancing exercise doesn't seem to have created any fireworks yet either. I'm sure they will come by Friday. Michael Cordonnier estimated Brazil's soybean crop at 80.0 MMT, unchanged from his previous estimate and 1 MMT below the USDA. He placed the Argentine bean crop at 54.0 MMT, also unchanged from previous estimate and 1 MMT lower than the USDA predicted in December. He said 86% of the Argentine bean crop has been planted, unchanged from a year ago. CONAB come out tomorrow with their latest Brazilian crop report. Last report’s gave us soybean production of 82.6 MMT and exports of 36.4 MMT. Output in 2011/12 was 66.5 MMT and exports were 36.3 MMT, according to the USDA.
Corn: Mar 13 Corn closed at USD6.88 3/4, up 3 1/4 cents; May 13 Corn closed at USD6.88 3/4, up 3 1/2 cents. Corn too put in a relatively subdued performance, suggesting that the trade is hoping/needing some new direction from the USDA on Friday. Given the sluggish pace of US export sales since the 2012/13 season began there has to be a decent chance that the USDA will lower export potential this time round. What they will say with regards to 2012 US production, and therefore Dec 1 stocks is perhaps the biggest conundrum. A Bloomberg survey has a difference of 750 million bushels between the lowest trade guess and the highest with regards to Dec 1 US corn stocks. Michael Cordonnier pegged the Brazilian corn crop at 70.0 MMT, unchanged from previous estimate and the same as the USDA. He placed the Argentine corn crop at 22.5 MMT, also unchanged from previous estimate but way below the USDA's 27.5 MMT prediction. The latter may be revised lower on Friday. Cordonnier said that 84% of the Argentine corn crop had been planted, slightly lower than a year ago. IKAR said Russia’s 2012/13 corn crop was a record 7.9 MMT.
Wheat: Mar 13 CBOT Wheat closed at USD7.50 1/2, down 3/4 cent; Mar 13 KCBT Wheat closed at USD8.08 3/4, up 1 1/4 cents; Mar 13 MGEX Wheat closed at USD8.45 1/4, down 1 1/4 cents. Wheat also had little movement on the day. Where the USDA peg US winter wheat plantings for the 2013 harvest will be perhaps the most significant number for wheat on Friday. The trade is expecting an average increase on last year of around 1.3 million acres to 42.6 million acres. The range of estimates is rather wide however at 41.70-44.65 million, according to a Bloomberg survey. The slow pace of US exports during the first half of 2012/13 may see the USDA reduce their full season forecast from the current 29.5 MMT is how many analysts see it. A different survey estimates world wheat stocks at the end of 2012/13 coming in at 174.665 MMT versus the USDA's December estimate of 176.95 MMT. Again though, the range of forecasts is quite varied at 167.5–178.0 MMT, a number towards the lower end of this range would obviously be seen as bullish.