COMMENTARY 4/16/14

SEE TERMINAL HOURS – REGARDING NEW ESTL CITY ORDINANCE MAX LOAD WEIGHT 10,000 lbs ~POSTPONED UNIL APRIL 30th.

 

CORN

DOWN 6

St Louis river on the rise at +10.8 ft and forecast to be 15.5 by 4/21.

The next several days look mostly dry and a little bit warmer with milder patterns developing through most of next week.  Ukraine’s troubles with Russia should help push corn demand to the US as they will be guaranteed the vessels will load and ship.  April 1st Ukraine corn stocks are up 800k mt at 5.9.  This indicates that their exports will likely be 1 mmt tons higher vs last year.  France’s parliament votes to BAN growing ALL VARIETIES of genetically modified corn.  Chinese weather watchers have their eye on possible El Nino conditions causing a cooler summer, which in the past has caused significant freeze damage to both corn and soybean crops.  Thursday’s Export Sales are expected to be 22 – 33 million.

The NGFA says Chinese rejections of corn have cost grain companies 427 million $ on approx 57.1 million bushels.  That’s $7.50 per bushel!  Is your seed company responsible or irresponsible?  Ask them what how they are testing the NGMO purity on the seed you are going to plant to ensure what they are selling you IS pure.  There are some contaminated seed issues out there.

We are only 3% planted currently, 2% last year, and 6% is avg!  That may seem like a small percentage, but do keep in mind that 3% planted is still 150% HIGHER than we were this time last year!  Texas is 57% planted vs 55% avg.  Great Export Inspections on Monday at 57 mill vs expectations of 45 – 53.  It’s a marketing year high!  Good buyers were Japan, S Korea, Mexico, W Hemisphere, and Egypt.

Demand for US corn is still hoppin’.   For the balance of the year, we need 39 million per week.  Argentine corn harvest is 5% ahead of last year at 17% according to BA Exchange.

BEANS

UP 17

More support from yesterday’s NOPA Crush numbers as stocks in the US are still mighty tight.  The Crush numbers were excellent at 153.8 vs expectations of 145.   Funds bought some 9,000 contracts (45 million bu’s ) yesterday and additional contracts today, which also lent support.   Shangai JC indicates Chinese vessel defaults have grown now to as much as 23 vessels that have either been delayed or defaulted on – and counting (although today’s CBOT activity fails to recognize).   Due to Chinese defaults, Thursday’s Export Sales are expected to be -4 to + 4 million.   Safras has Brazil harvest at 86%, 4% ahead of last year.  BA Exchange believes Argentina harvest is at 14% and  about 10% behind last year.  In the US, LA, ARK, and MS are anywhere from 2 – 10% behind normal with soybean planting.

Still watching the damage unfold from last week:  Chinese defaults on up to   1/2 mmt of both US and Brazilian beans is strongly rumored.  These importers have defaulted on some $300 million worth of beans.  This is the biggest default in 10 years.  From Reuters, a string of defaults on loans, bonds, and shadowy banking highlights the high credit risk of doing business with China and are likely fueled by their slowing economy.   Chinese crushers are rumored to be aggressive competition into the SE Asian meal market.   Also from China, via Reuters, Chinese officials believe that the severe issue of bird flu could lower their third quarter bean demand by 18% MORE than it did last year.  With the negative crush margins, Chinese bean crushers are losing between $80 – 100 per ton currently crushing beans for meal.

 

WHEAT

DOWN 14

Wheat took the back seat to soybeans today with very little “new” news barring some follow through freeze damage from yesterday’s temp drops.  The Ukraine has shipped 10 mbu of wheat during the first half of April, up from 4+ million a year ago.   Keep an eye on the Black Sea region as turmoil heats up today with shots fired in Ukraine.  Commodity Weather  – there is possible HRW freeze damage, resulting in up to a 10% reduction from W KS to the TX panhandle due to recent freeze.  There is a small chance for some slight rain in OK and TX this weekend, but sparse.  US Winter wheat conditions declined 1% to 34% Good/Excellent vs 35% last week, and 36% last year. OK and TX and only 13 and 14% Good to Excellent.