COMMENTARY 10/23/14

Very little in the way of precip and mild temps are speeding the U.S. harvest up over the next week to days!! The balance of OCT temps should be above normal!  Light showers for Mato Grosso, Goias and Minas Gerais with the rest of Brazil and Argentina are dry. Northern Brazil to stay drier than normal the next 7-10.

St Louis river levels DROPPING at +15.9 ft  and forecast to be 12.7 by 10/28.

CORN                    

UP 6 

Strong Export Sales and wetter conditions are back in the forecast in the next two weeks.  Less than ideal planting weather in Brazil FUND BUYING.  Export Sales at 40.6 vs expectations of 31-39 mbu range. The additional 23 mbu were sales to Unknown.  There is talk that Argentina may be considering additional export licenses beyond the ½ MMT announced yesterday.

In the US, corn harvest is still trailing average by 22 points with slow movement.  Some are concerned about the Brazil corn potential given the slow start to soybeans and high cost/low returns.   Ukraine Exports remain sluggish:  747 K MT  Oct 1-21, vs 1.3 MMT for all of October 2013.

Monday’s Crop Progress report  at 74% G/E this week, 74% LW, 60%LY. The State of IL   83% G/E vs 83% LW.  US MATURE  was 93% TW, 87% LW, 93% LY, and 94% AVG.  The State of IL MATURE was 97% TW, 94% LW, NA% 96%LY, and 95% AVG.  US HARVESTED 31% TW, 24% LW, 38% LY%, and 53% AVG.  The State of IL HARVESTED 43% TW,35% LW, 49% LY, and 63% AVG.

 

BEANS     

UP 30     

Export sales EXCEED EXPECTATIONS and China buys additional this morning to boot.  So far, much needed Brazil rains are disappointing  and fewer acres in Argentina lent to support.  There is demand!  Export Sales  were 79.6 mbu vs decent expectations of  29-37 mbu with China as the big buyer.  Meal was very light at 23 K vs 150-250 expected, (some cancellations).  The bean oil on the low side at 10.6 K vs expectations of 10-50. Yesterday, talk of meal wash-outs were rampant  (Mexico and Unknown did opt out of a combined 139 K MT in today’s sales report).  Approximate meal values have US cif at a $13 (Brazil) to $24 (Arg) premium to other exporters

Oil World suggests low prices could trim Argentine planted bean area 200 K from LY to 19.6 million (USDA:  20.0).  SAFRAS says Brazilian bean planting gained only 1.6 points this week, to 7.3% and is well off the 18-20% normal pace.  AgRural pegs it at 10%, up 3.   Some areas of Mato Grosso are incurring the hottest, seasonal, driest spell in 20-30 years.   Cordonnier lowered the Brazil bean estimate by 1 to 94— citing delay increase potential for yield problems later in the season. Argentina, was up 1% to 56 with more acres going to beans.

Monday’s US CROP CONDITIONS at 73 % G/E, 73% LW, and 57% LY.  The State of IL was 79% G/E THIS WEEK and 79%LW. US DROPPING LEAVES 95% TW, 91% LW, 93% LY, and 97% AVG.  IL DROPPING LEAVES was 95% TW, 91%  LW, 96% LY, and 97% AVG.  US BEANS HARVESTED 53% TW, 40 % 61%LW, 61% LY, and 66% AVG.  IL HARVESTED 37% THIS WEEK, 29% LW, 65% LY 66% AVG.

 

WHEAT          

UP 4

Lack of producer selling,  more buyers than sellers, and hedge-fund short covering.  Flooding and hail has caused widespread crop damage in Western Australia.  The slow pace of Midwest SRW planting also helped lift futures coupled with the early strength in row crops (compliments of the Funds).  Thursday’s Export Sales Report is expected to be 13 – 18 million bu. Nation-wide wheat planting at 76% trails both LY and the 5-year by a single point.  The slow pace of Midwest corn and soybean harvest is limiting SRW planting with MI, MO and IN.  All are 15 to 20 points behind the normal with IL 37 points off the average.

Informa expects U.S. producers to plant 56.4 million acres, down 400 K from this year.  The BA Grain Exchange expects this year’s crop to exceed last year’s 10.1 MMT total; the USDA is 12.0 versus 10.5 LY.

Monday’s Crop Conditions Report had US Winter Wheat Planted  78% G/E THIS WEEK,  68% LW, and 77% LY, and 77% AVG.  STATE OF IL PLANTED 22% TW, 15% LW, 65% LY, and 59% AVG.  US WINTER WHEAT EMERGED 56% TW, 43% LW, 51% LY, and 50% AVG.  THE STATE OF IL EMERGED was 11% TW, 2% LW, 23% LY, and 23% AVG.