Chicago Reaction To USDA Report
10/11/14 -- Soycomplex: Beans closed lower following a bearish USDA WASDE report. US 2014 soybean yields are now expected to average a record high 47.5 bu/acre, up 0.4 bushel from October and up 3.5 bu/acre from last year, they said. That takes US production this year up to a record 3.958 billion bushels. The domestic crush was increased 100 million bushels and exports raised 20 million to a record 1.720 billion bushels. "Increase production was offset by increased demand with US ending stocks unchanged at 450 million. USDA made only nominal changes to world balance sheet with ending stocks near unchanged at 90.28 MMT, which is 23.4 MMT above carryin of 66.85 MMT," noted Benson Quinn Commodities. There were no alterations to 2014/15 soybean production estimates for Brazil, Argentina or Paraguay. Argentina's export potential was trimmed a little from 8.5 MMT to 8.2 MMT. China's import needs were left at 74 MMT. Later in the day the USDA also released their regular crop progress report, putting the US 2014 soybean harvest at 90% complete, one point behind the 5-year average. CONAB come out tomorrow with their 2014/15 Brazilian crop estimate updates. Nov 14 beans closed 12 3/4 cents lower at $10.27 1/2; Dec meal closed $9.50 lower at $380.90; Dec 14 soybean oil was down 4 points at 32.36.
Corn: The corn market closed with only small gains despite the USDA surprising the market as they cut their forecast for 2014 US corn yields and production. Yields are now expected to average 173.4 bu/acre, down 0.8 bu/acre from the October forecast, although still a record and 14.6 bu/acre above the 2013 average. Production was trimmed 68 million from last month to 14.407 billion bushels. Still easily a record, but not the 14.551 billion that the market was expecting. US 2014/15 corn ending stocks were estimated at 2.008 billion bushels, down from the 2.081 billion predicted in October, but still a big number. Around the world, China's 2014 crop was revised 3 MMT lower to 214 MMT, Europe's was raised 2 MMT to 73 MMT, Mexico's was increased 0.5 MMT to 23 MMT and Ukraine's was hiked 2 MMT higher to 27 MMT. Consumption in China was dropped 4 MMT to 216 MMT, whilst Europe's was raised 1 MMT to 76.5 MMT. Global ending stocks were upped 1 MMT to 191.5 MMT versus the 190.77 MMT expected. China's corn imports were reduced 0.5 MMT to 2.5 MMT. After the close the USDA also estimated this year's US corn harvest at 80% complete, up 15 points from a week ago and now exactly in line with the previous 5-year average. The French Farm Ministry estimated the country's 2014 corn crop at 16.9 MMT versus a previous estimate of 16.3 MMT, and up 13% from the five year average. Dec 14 corn closed up 1 3/4 cents at $3.69 1/4; Mar 15 corn was up 1 1/2 cents at $3.82.
Wheat: The wheat market closed higher across the three exchanges. The USDA trimmed US 2014/15 all wheat stocks from the 654 million bushels forecast a month ago by 10 million. The trade was expecting a slight increase to around 660 million. Nevertheless, the new figure was still described as "very comfortable" by Benson Quinn Commodities. "The reduction stemmed from lower HRS/Durum production justified by a re-survey of the northern plains due to the late fall," they said. Around the world Australia's wheat crop this year was trimmed 1 MMT to 24 MMT, Kazakhstan's reduced by 0.5 MMT to 12 MMT and Egypt's cut from 8.95 MMT to 8.2 MMT. Europe's crop was raised 1.4 MMT to 155.4 MMT. Global ending stocks came in slightly above expectations at a comfortable 192.9 MMT after world consumption was lowered by 1.4 MMT. In other news the USDA said that winter wheat plantings in the US are now 93% complete, which is exactly in line with the 5-year average. They said that 83% of the crop is emerged, 4 points ahead of the norm for this time. Crop conditions in the good to excellent category were raised one point from a week ago to 60%, although that's still 5 points down compared to this time last year. Japan are tendering for 127,355 MT of food wheat for Dec-Jan shipment of US/Australian origin. Jordan have issued another tender for 100,000 MT of optional origin hard milling wheat for April–May shipment to replace the one they passed on last week. Dec 14 CBOT wheat closed 2 3/4 cents higher at $5.17 1/4; Dec 14 KCBT wheat ended 3 3/4 cents higher at $5.73; Dec 14 MGEX wheat was up 8 cents at $5.54 1/4.