Advertise in Print | Subscriptions
Published October 11, 2011, 09:14 AM

Markets trade mixed

Wheat opened the week mixed with Chicago and Kansas City steady to higher while Minneapolis opened lower. Technical strength helped to support the winter wheat exchanges as did weather forecasts.

By: Ray Grabanski, Special to Agweek

Wheat

Wheat opened the week mixed with Chicago and Kansas City steady to higher while Minneapolis opened lower. Technical strength helped to support the winter wheat exchanges as did weather forecasts. The Minneapolis market was pressured by position squaring ahead of the Statistics Canada production report. The technical selling overshadowed the news that Egypt is looking to acquire higher protein wheat (but this in itself was ignored as Egypt bought wheat from Russia because Russia dropped the price of its low-protein wheat).

The Oct. 4 session had wheat on the defense throughout the session. Another run higher in the U.S. dollar and weakness in energy and equity markets helped to pressure the market early in the session. Talk of more rain in the forecast into the weekend for the central and southern Plains added additional weakness. Statistics Canada’s Production report was slightly supportive with all wheat production projected at 24.2 metric tons, compared with trade expectations near 24.4 metric tons.

The wheat exchanges started the Oct. 5 session higher with most of the strength coming in the Chicago wheat exchange. Technical buying combined with spillover strength from a weaker U.S. dollar market to help support wheat. Reports that Egypt only has four months of wheat in storage helped to push the Chicago wheat exchange (because of soft wheat being the main wheat Egypt buys). Minneapolis was the weakest performer as traders continue to unwind long Minneapolis short Chicago spreads.

The Oct. 5 session started steady to slightly higher but slipped lower throughout the session. Support came from buying from a stronger overnight session as well as from spillover strength from other grains. Late in the session, wheat gave back all of its gains and slipped into negative territory. The Minneapolis market was able to retain most of its strength because of concerns about tight supplies of high-quality wheat. In the end, world economic concerns continue to apply pressure onto the grains.

USDA reported last week’s wheat’s export inspections pace at 22.1 million bushels. This brings the year-to-date export shipments pace for wheat to 394.1 million bushels compared with 386.1 million bushels for last year at this time. Last week’s wheat export sales pace was estimated a combined total of 18.1 million bushels with 15.8 million bushels being old crop and 2.3 million bushels being new crop. This brings the year-to-date export sales pace for wheat to 538.9 million bushels compared with 657.6 million bushels last year. With 35 weeks left in wheat’s marketing year, shipments need to average 17.5 million bushels and sales need to average 13.9 million bushels to make USDA 1.025 billion-bushel projection.

As of Oct. 2, winter wheat planted progress is estimated at 42 percent complete compared with 26 percent the previous week and 53 percent for the five-year average. Winter wheat emergence is estimated at 16 percent compared with 6 percent last week and 23 percent for the five-year average.

Corn

To start the week, corn opened lower, but once selling interest dried up, corn recovered to end unchanged for the session. The weak outside markets and follow-through selling from the bearish Sept. 30 USDA report pressured corn. The weekly export inspections came in below estimates. Bu, talk of the market being oversold and end user buying brought the market back to trade with small gains and remain there into the close.

Corn opened lower and remained under pressure for the session. The negative tone in the outside markets pressured corn on the open. Harvest pressure, good weather and decent yields added to the weakness. The U.S. Grains Council is projecting China’s corn production at 167 metric tons and China’s corn imports at 5 to 10 metric tons. This estimate is 11 metric tons below USDA’s estimate for corn production and 15.5 metric tons below China’s USDA consumption estimates.

Corn opened the Oct. 5 session higher and closed with double-digit gains. The market rebounded because of technical buying and short covering. The positive outside market also offered support, as crude oil traded sharply higher and the dollar sharply lower. Informa’s estimate for corn’s yield is at 149.5 bushels, down 1.5 bushels from last month, but up from last month’s USDA number of 148.1 bushels.

Corn opened higher Oct. 5 but drifted late to close steady. The market found support on the open from follow-through buying, but it dried up quickly. The lower trading wheat market spilled over to pressure corn. Another private firm estimated corn’s yield at 148.9 bushels, above the 148.1 bushels in USDA’s September estimate. Most estimates are showing an improved yield, and that is limiting upside movement. USDA will release its numbers Oct. 12. Last week’s export sales were very good for corn, and that provide some underlying support.

USDA’s export inspection report was seen as bearish for corn. There were 28.4 million bushels of corn reported shipped, below the 32 million bushels needed to meet USDA’s projection of 1.65 billion bushels. This was below the pre-report estimates of 30 million to 34 million bushels. The export sales report for corn was at 50.8 million bushels, which was above what was needed to meet USDA projection of 1.65 billion bushels. This was above the estimates at 29.5 million bushels to 39.4 million bushels and neutral for corn. Total shipments this week were at 29.7 million bushels, slightly below the 32 million bushels needed this week.

Soybeans

Soybeans started the week lower but firmed throughout the session. Early pressure was a result of weather forecast calling for ideal harvesting weather. Temperatures are expected to be above normal with little chance of rain until the weekend. This will allow for harvest progress to advance. Additional pressure came from a stronger U.S. dollar. But once the corn market firmed, so did the soybean complex. Technical buying stepped in to help corn firm, and that spilled over to help soybeans firm late in the session.

The Oct. 4 session started lower and ended there. The market saw selling pressure from a weaker U.S. stock market and a strong dollar. Weakness in other commodity markets also spilled over to the soybeans. The selling drove the market to the lowest level since Dec. 1. FC Stone raised its estimated soybean yield to 42.8 bushel an acre and production to 3.157 billion bushels, compared with 3.03 billion bushels last month and USDA’s estimate of 3.085 billion bushels. Statistics Canada’s Production report was supportive. Canola production was estimated at 12.9 metric tons, which was up 1.2 percent from last year but down from trade expectations near 13.8 metric tons.

The soybean market opened the Oct. 5 session higher. Support came from technical buying as soybeans bounce off minor support levels. Additional support was a result of spillover buying from a sharply lower U.S. dollar. In the end, the most supportive factor came from technical buying as traders try to correct an oversold market condition. Informa is calling for soybean production to be close to 3.087 billion bushels off of a yield of 41.8 bushels, an increase of 0.3 bushels from earlier estimates.

Soybeans opened sharply higher Oct. 6 with early buying tied to technical support. USDA’s weekly export sales estimate was friendly, and that added buying fuel to the fire. It is evident that the $3 drop has helped to uncover demand. But once the buying dried, the funds returned to the market as sellers, pushing the market back to unchanged levels by the close. USDA confirmed China was in overnight and bought 115,000 metric tons of soybeans.

USDA reported last week’s soybean export inspections pace at 10.6 million bushels. This brings the year-to-date export shipments pace for soybeans to 42.9 million bushels compared with 69.3 million bushels for last year at this time. Last week’s soybean export sales pace was estimated at a combined total of 27.3 million bushels with 25.8 million bushels being old crop and 1.5 million bushels being new crop. This brings the year-to-date export sales pace for soybeans to 617.9 million bushels compared with 816.5 million bushels last year at this time. With 48 weeks left in soybean’s marketing year, shipments need to average 28.6 million bushels and sales need to average 16.6 million bushels to make USDA’s 1.415 billion-bushel projection.

Barley

USDA reported last week’s barley shipments at 12,000 bushels with all of the bushels going to Mexico. Last week. no barley export sales were reported.

Durum

USDA reported no durum export shipments for last week. Last week, no durum export sales were reported. As of Oct. 2, 98 percent of North Dakota’s durum crop was harvested compared with 92 percent last week and 95 percent for the five-year average. North Dakota on average produces about 67 percent of the nation’s durum. Oct. 6 cash bids for milling quality durum were $12 in Berthold, N.D., while bids in Dickinson, N.D., were $12.

Canola

Canola futures on the Winnipeg, Manitoba, exchange ended the week ending Oct. 5 $1 (Canadian) lower. Early pressure was a result of position squaring ahead of the Statistics Canada production report. Late-session strength was a result of buying from the report as the actual numbers were friendlier than expected. Additional support came from user and exporter buying. Oct. 5 cash canola bids in Velva, N.D., were $23.96.

Tags: