Wheat rallies, soybeans stumbleWheat saw small gains last week as technical buying helped push wheat out of the cellar. Most of the wheat exchanges traded to new lows last week as rain in the Southern Plains combined with better-than-expect yield reports in the north to pressure.
By: Ray Grabanski, Agweek
Wheat saw small gains last week as technical buying helped push wheat out of the cellar. Most of the wheat exchanges traded to new lows last week as rain in the Southern Plains combined with better-than-expect yield reports in the north to pressure. Strong demand helped limit losses.
For the week ending Sept. 19, December Minneapolis gained 2.75 cents, December Chicago was up 15.5 cents, and December Kansas City was up 10 cents.
Wheat started the week lower with selling spilling over from corn. Spring wheat harvest is wrapping up and that helped limit the selling in the Minneapolis exchange. Winter wheat seeding pace will start to increase now that good rains have fallen over much of the winter wheat region. Early session losses were limited by another week of strong wheat export shipments.
The Sept. 17 session was flat, with gains in the winter wheat contracts, while Minneapolis struggled. Early support came from the U.S. Department of Agriculture Farm Service Agency’s estimate, which showed slightly more prevent plant wheat acres. Traders are expecting USDA to decrease wheat acreage in its October crop production estimates, as a result of the report.
USDA will also likely increase spring wheat production because of the better-than-expected yields being seen in the Northern Plains. Minneapolis was under pressure from better-than-expected yields.
The rest of the week had wheat trading with decent gains. Support came from strong demand. Wheat tenders started to show up late week and that helped support what. The night of Sept. 18 saw tenders from Taiwan (92,350 metric tons), Japan (120,000 metric tons), and Bangladesh (50,000 metric tons). Japan was in and bought 62,831 metric tons of U.S. wheat.
Late week support also came from traders who are slowly starting to position themselves ahead of USDA’s small grains summary report, due out Sept 30.
As of Sept. 15, spring wheat harvest is estimated at 90 percent, compared with 80 percent the previous week and 87 percent for the five-year average.
Winter wheat planting progress is estimated at 12 percent complete, compared with 5 percent the previous week and 12 percent for the five-year average.
The corn market traded in a sideways pattern last week and very close to unchanged. Bullish traders lack any fresh news to create buying interest and harvest reports are not helping their cause. The crop appears to be larger with yields that continue to come in above expectations. For the week ending Sept. 19, December was up half a cent.
Corn continued to lose ground on Sept. 16 and 17. Selling pressure came from an eroding basis and better-than-expected yields as the combines move north. USDA’s export inspections continue to be disappointing. Traders were expecting a 3 percent decline in corn’s crop rating last week.
The actual decline was 1 percent, which added additional weakness. The ethanol report was also disappointing and continues to use less corn than USDA’s projections.
Corn closed slightly higher Sept. 18 and 19. After four days of losses, traders started to uncover buy orders, which created short covering. Soybeans also recovered and helped drag corn higher. Support also came from news that the Federal Reserve will keep the stimulus going. That helped spark buying in the entire commodity complex, along with a sharp drop in the U.S. dollar.
The FSA planted acreage estimate came in at 91.4 million acres for corn, versus USDA’s current estimate of 97.3 million. This helped limit selling interest. In the past, FSA has been about 4 million acres short of USDA and one reason is that not every farmer participates in the farm program.
Ethanol production for the week ending Sept. 13 reached 5.866 million barrels. Corn used in production the week ending Sept. 13 is estimated at 87.99 million bushels and below the 94.17 million bushels needed each week to reach the USDA projection for 2013 to ’14. Stocks were at 16.178 million barrels, down 0.56 percent from the previous week. Imports were the lowest since June 28.
The crop progress report showed corn that is in the dough stage was at 97 percent versus 100 percent one year ago and a five-year average of 97 percent. Corn that is dented was at 81 percent versus 97 percent one year ago and a five-year average of 86 percent. Corn that is mature was at 22 percent versus 73 percent one year ago and a five-year average of 41 percent. Corn that was harvested was at 4 percent versus 24 percent one year ago and a five-year average of 10 percent. The condition is rated as 53 percent good to excellent, 29 percent fair and 18 percent poor to very poor.
Friendly news failed to move the market. Last week saw a lot of friendly market news for soybeans, but yet the market was not able to take advantage of it. For the week ending Sept. 19, November soybeans were down 42 cents, while January dropped 38.25 cents.
Soybeans traded sharply lower on Sept. 16 and moderately lower on Sept. 17. Fund liquidation and technical selling were strong factors Sept. 16, following favorable weekend rain. Sept. 17 saw soybeans trade higher early in the session with support from the FSA acreage data. Prevented planting was 1.687 million acres for September, up from 1.618 million acres in August.
Planted and failed acreage was raised from 72.061 million acres in August to 74.659 million in September. National Oilseed Processors Association crush was estimated at 110.5 million bushels, down from 116.3 million last month, but within expectations. Sept. 16 export inspections were seen as neutral, coming in near expectations.
Soybeans traded both sides of unchanged early Sept. 18 before closing moderately higher in quiet trade. The extended growing season is thought to have stabilized yields somewhat, while recent weather has been more favorable, pressuring soybeans. But substantial sale announcements Sept. 18 provided support, as they reinforced the belief that soybean supplies remain tight.
USDA announced a sale of 1.903 million metric tons of soybeans to China and another 182,000 metric tons to an unknown destination, all for 2013 and 2014 delivery.
Soybeans traded higher overnight, but moved lower by midday and into the close Sept. 19. Unwinding of corn and soybean spreads was a factor, as was increased stability in yields tied to the extended growing season.
The coming harvest is putting pressure on the market, as well. Sept. 19 export sales were bullish, coming in well above the amount needed to keep pace with USDA’s projection. USDA announced a sale of 120,000 metric tons of soybeans to an unknown destination for 2013 and 2014.
USDA reported soybean export inspections pace for the week ending Sept. 13 at 3 million bushels. Soybean export sales pace for the week ending Sept. 13 was estimated at 33.9 million.
As of Sept. 15, soybeans dropping leaves were at 26 percent, compared with 11 percent the previous week and 35 percent for the five-year average. Soybean’s crop condition rating was down 2 percent at 50 percent good to excellent, 32 percent fair and 18 percent poor to very poor.
USDA reported barley export shipment pace for the week ending Sept. 13 at 9,000 bushels, all going to Korea. No barley exports were reported.
As of Sept. 15, barley harvest was estimated at 96 percent complete, compared with 89 percent the previous week and 90 percent for the five-year average.
Sept. 19 cash feed barley bids in Minneapolis were at $3.35 per bushel, while malting barley bids were $5.50.
USDA reported durum export shipments for the week ending Sept. 13 at 405,000 bushels, with 79,000 bushels going to the Venezuela. Durum export sales pace was estimated at 400,000 bushels.
As of Sept. 15, North Dakota’s durum harvest progress was estimated at 63 percent, compared with 49 percent the previous week and 74 percent for the five-year average. Durum’s crop condition rating was unchanged at 81 percent good to excellent, 17 percent fair and 2 percent poor.
Cash bids for milling quality durum were at $7 per bushel in Berthold, N.D., while Dickinson, N.D., bids were at $6.75.
Canola futures on the Winnipeg, Manitoba, exchange closed the week ending Sept. 19 $7.90 (Canadian) lower. Canola traded with losses for three out of four sessions because of record-setting yields from the Northern Plains canola crop. Additional selling spilled over from the lower U.S. soybean complex. Weather has been close to ideal and that has allowed for harvest to advance at a fast pace.
As of Sept. 15, North Dakota’s canola harvest was estimated at 74 percent complete, compared with 55 percent for the previous week and 74 perecnt for the five-year average.
Sept. 19 cash canola bids in Velva, N.D., were $20.47 per hundredweight.
As of Sept. 15, 25 percent of North Dakota’s dry bean crop (29 percent of nation’s production) was harvested, compared with 10 percent for the previous week and 24 percent for the five-year average. North Dakota’s crop condition rating increased 5 percent to 47 percent good to excellent, 39 percent fair and 14 percent poor to very poor. Minnesota’s dry beans (11 percent of the nation’s production) are 59 percent dropping leaves, compared with 37 percent the previous week. Minnesota’s dry bean crop condition rating decreased 2 percent to 40 percent good to excellent, 41 percent fair and 19 percent poor. Michigan’s (14 percent of nation’s production) dry bean crop is 3 percent harvested, compared with zero the previous week and 19 percent for the five-year average. Michigan’s dry bean crop condition rating decreased 2 percent to 58 percent good to excellent, 28 percent fair and 14 percent poor to very poor.
As of Sept. 15, 36 percent of North Dakota’s sunflower crop had bracts turning yellow, compared with 11 percent the previous week and 59 percent for the five-year average. North Dakota’s sunflower crop condition rating increased 2 percent to 74 percent good to excellent, 21 percent fair and 5 percent poor.
USDA estimated soybean oil export sales pace for the week ending Sept. 13 at 20.6 trillion metric tons.
Sept. 19 cash sunflower bids in Fargo, N.D., for old crop were at $20.15 per hundredweight, while new crop bids were $20.75.