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Markets: Another low week for grains

Wheat

Wheat started last week with gains, but collapsed later. There was no major reason for wheat’s decline to new lows, other than spillover pressure from the lower corn and soybean complex. For the week ending Sept. 3, December Minneapolis wheat dropped 11.25 cents, December Chicago dropped 18.5 cents, and December Kansas City gave back 15.75 cents

Wheat opened lower with spillover pressure from the other grains and world economy issues. Financial markets were under pressure, which added to selling. But the U.S. Department of Agriculture’s export shipments report was more friendly than anticipated, and that helped bring wheat around.

Wheat’s gains were short-lived, as losses were the only item of business for the rest of the week. The Sept. 1 session had wheat trading mixed, with Chicago trading with gains and Kansas City and Minneapolis slipping lower. Chicago has been under more pressure as traders unwound long Chicago and short Kansas City and Minneapolis spreads. Spring wheat was under pressure, from a good harvest and the warm, dry weather that dominated the Northern Plains.

The Sept. 2 session still had wheat trying to find its way. Wheat is having trouble breaking away from the negative influence of corn and soybeans. There is not a lot of positive news for wheat, but a lot of the world economy issues should play into being friendly to wheat. Selling pressure Sept. 2 was mainly because of spillover from corn and soybeans, and a stronger U.S. dollar.

Wheat was plagued by nothing but bearish news Sept. 3. Early selling came from another disappointing export sales estimate. The negative export news was amplified with reports of Egypt buying another 170,000 metric tons of wheat from Russia. In its July stocks report, Statistics Canada estimated wheat stocks at 7.1 million metric tons, compared with 10.4 million metric tons last year, and the average trade estimate of 6.4 million metric tons. A higher U.S. dollar added selling pressure. Wheat traded to new contract lows.

For the week ending Aug. 27, USDA estimated the wheat export shipments pace at 22.1 million bushels. The wheat export sales pace was estimated at a disappointing 10.2 million bushels. With 39 weeks left in wheat’s export marketing year, shipments need to average 18.9 million bushels, and sales need to average 14.2 million bushels to make USDA’s export pace of 925 million bushels.

As of Aug. 30, 88 percent of the nation’s spring wheat crop was harvested, compared with 75 percent the previous week, and 62 percent for the five-year average.

Corn

Corn struggled enough to move to a new contract low Sept. 3. Selling remained in place, with strong crop condition ratings and good weather to finish off this year’s crop causing the most pressure. As of the Sept. 3 close, December corn was down 13.5 cents.

To start the week, corn closed slightly higher. Support came from traders expecting to see a lower crop condition rating in the Aug. 31 crop progress report. Additional support came from the strength in the outside markets. USDA reported a slight drop in corn’s crop condition rating, with 1 percent going from good to fair.

Selling interest came into the market on Sept. 1, as corn closed near session lows. Early weakness came from the bearish outside markets with Chinese economic concerns causing the pressure. Corn traded with red ink again on Sept. 2, ending slightly lower. Pressure came from the ethanol report, which showed production down 4,000 barrels per day and higher stocks. The Sept. 3 session started under pressure, posting a new contract low by the close. Early pressure came from a disappointing export sales report. The export sales were below estimates, and it appears shipments will not make USDA’s export projection. A private firm released its estimate for the upcoming report, raising yield to 168.8 bushels per acre, on par with USDA’s number from August. Weather forecasts are nearly ideal, with higher temperatures and above-normal precipitation expected.

Ethanol production for the week ending Aug. 28 averaged 948,000 barrels per day, down 0.42 percent from the previous week. Total ethanol production for the week was 6.636 million barrels. Corn used in production is estimated at 99.54 million bushels and needs to average 95.452 million bushels per week to meet this crop year’s USDA estimate of 5.2 billion bushels. Stocks were 19.002 million barrels, up 2.01 percent, compared with the previous week and up 7.52 percent, compared with last year.

For the week ending Aug. 31, corn was 68 percent good to excellent, 22 percent fair and 10 percent poor or very poor. Corn in the dough stage was 92 percent, compared with 89 percent one year ago and 90 percent for the five-year average. Corn that was dented was 60 percent, compared with 50 percent one year ago and 60 percent for the five-year average. Mature corn was 9 percent, compared with 7 percent one year ago and 15 percent for the five-year average.

For the week ending Aug. 27, USDA’s export inspections report was bearish for corn at 39.4 million bushels, below the 89.4 million bushels needed to meet USDA’s projection. Corn export sales were estimated at 4.4 million bushels, and remain slightly above the amount needed to meet USDA’s estimate of 1.85 billion bushels for the year. Shipments came in at 32.3 million bushels, below the 112.8 million bushels needed to keep pace with USDA projections.

Soybeans

Soybeans traded back and forth, but ended with losses, as the lower session overshadowed the steady to stronger session. For the week ending Aug. 31, November soybeans were off 16 cents.

The soybean complex traded both sides of the fence to start the session week, but most of the session was lower. Early selling was tied to continued Chinese economy concerns. A sale was reported Aug. 31 for 4.6 million bushels of soybeans. The sale coincided with a friendly export shipments report, and pushed soybeans higher late in the session.

The Sept. 1 session had soybeans under pressure from the start. Selling was tied to another major selloff session in the U.S. and Chinese stock markets. Light selling resulted from the Aug. 31 crop condition report. Export demand has remained strong, but with the potential size of this year’s crop, demand will have to remain strong.

The Sept. 2 session had soybeans searching for news, but all the market did was end flat. Selling continues to come from Chinese economy concerns and the lack of a threatening weather forecast as soybeans approached the end of the growing season. Strong export demand limited selling.

The Sept. 3 session brought friendly news to the soybean complex because of export demand. China bought 4 million bushels of soybeans, and an unknown destination bought 28.4 million bushels, all for the 2015 crop year. That helped keep soybeans honest, at least through the early parts of the session. But, late in the day, soybeans slipped, with pressure coming from the expectation this year crop production will be near record levels.

For the week ending Aug. 27, USDA reported the soybean export inspections pace at 6.8 million bushels. The soybean export sales pace was estimated at a negative 2.2 million bushels (cancellation) while 2015 sales were reported at 56.3 million bushels. These are the final export shipments and sales reports for the 2014 crop year. Shipments and sales have exceeded USDA’s 1.825- billion-bushel estimate.

For the week ending Aug. 30, soybeans setting pods were 93 percent, compared with 87 percent the previous week and the five-year average of 95 percent. Soybean condition ratings were unchanged, at 63 percent good to excellent, 26 percent fair and 11 percent poor to very poor (1 percent went from good to excellent).

Barley

Barley’s year-to-date export sales pace is at 1.1 million bushels, compared with 1.8 million bushels last year at this time.

As of Aug. 30, barley harvest was 93 percent complete, compared with 86 percent the previous week and 67 percent for the five-year average.

Sept. 3 cash feed barley bids in Minneapolis closed at $2.35 per bushel.

Durum

For the week ending Aug. 27, USDA reported the durum export inspections pace at 1.18 million bushels, with Italy the only destination. Durum export sales were reported at 800,000 bushels.

As of Aug. 30, North Dakota’s durum harvest was 63 percent complete, compared with 37 percent the previous week and 36 percent for the five-year average. North Dakota’s crop condition rating dropped 3 percent to 79 percent good to excellent, 20 percent fair and 1 percent poor.

Sept. 3 cash bids for milling durum were $6.50 per bushel in Berthold, N.D., and $6.75 per bushel in Dickinson, N.D.

Canola

Canola futures on the Winnipeg, Manitoba, exchange closed with losses in the first four sessions of last week. For the week ending Sept. 3, canola was off $20.30 (Canadian).

As of Aug. 30, North Dakota’s canola harvest was 55 percent complete, compared with 33 percent the previous week and 43 percent for the five-year average. North Dakota’s canola crop condition dropped 1 percent, to 77 percent good to excellent, 20 percent fair and 3 percent poor or very poor.

Sept. 3 cash canola bids in Velva, N.D., were $13.75 per hundredweight.

Sunflowers

As of Aug. 30, North Dakota’s sunflower crop had 15 percent bracts turning yellow. Sunflower crop conditions dropped 1 percent, to 71 percent good to excellent, 21 percent fair and 8 percent poor.

For the week ending Aug. 27, USDA estimated the export sales pace for soybean oil at 4,000 metric tons. This brings the year-to-date export sales pace for soybean oil to 883.2 thousand metric tons, compared with 809.1 thousand metric tons last year.

Sept. 3 cash sunflower bids in Fargo, N.D., were at $16.75 per hundredweight.

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