Wheat rallies, soybeans stumbleWheat traded with strong gains last week, leading the grains. Position squaring and technical buying added strength.
By: Ray Grabanski, Agweek
Wheat traded with strong gains last week, leading the grains. Position squaring and technical buying added strength. The last added push came from strong demand as wheat exports have been running better than expected. For the week ending Sept. 26, December Minneapolis gained 24.75 cents, December Chicago gained 32 cents and December Kansas City gained 34.5 cents.
Wheat opened the week flat. Wheat was pressured early by spillover pressure from the lower corn and soybean complex. But a friendly export inspections report helped the winter wheat exchanges firm. Minneapolis continued to lag behind because of the rapid harvest progress with better-than-expected yields being reported. Wheat has taken a pretty good hit and it now appears few traders want to sell wheat at these levels.
Wheat traded on both sides of the fence Sept. 24, but managed to rally going into the second half of the session. Early pressure came from a weaker corn market (which struggled because of a surprising 2 percent increase in crop condition ratings). Wheat was able to shake off the influence from corn by midsession, as traders started to focus more of their attentions on position squaring ahead of the U.S. Department of Agriculture’s small grains summary report, which is due out Sept. 30.
Strength continued to show up in wheat midweek, with wheat taking over as the leader of the grain complex. Wheat opened with gains and rallied to end with sharp gains. Support came from short covering as traders position themselves ahead of USDA’s quarterly grain stocks and small grains summary reports Sept. 30.
The average trade guess has all wheat stocks at 2.11 billion bushels, compared with 2.11 billion from June 2013 and 2.27 billion for last year at this time. Additional support came from reports of freezing temps in Argentina, which will likely affect wheat production.
Wheat traded in a lackluster fashion to start the Sept. 26 session, but started to firm once USDA’s export sales estimate was released.
USDA’s wheat export inspections for the week ending Sept. 20 were estimated at 42.3 million bushels. Wheat export sales pace was estimated at 22.8 million bushels. With 36 weeks left in wheat’s export marketing year, shipments will need to average 17.7 million bushels and sales need to average 12.5 million to make USDA’s export expectations of 1.1 billion.
As of Sept. 22, spring wheat harvest is estimated at 93 percent, compared with 90 percent the previous week and 93 percent for the five-year average. Winter wheat planting progress is estimated at 21 percent complete, compared with 12 percent the previous week and 24 percent for the five-year average.
The corn market continued to trade in a small range last week, as it searches for fresh news. The yields have been better than expected in much of the Corn Belt, which has pushed corn back to recent lows. For the week ending Sept. 26, December was up 4.75 cents.
Corn found support on Sept. 23 and 25, closing slightly higher with news of fresh corn export sales, as Mexico bought 197,200 metric tons and Columbia purchased 180,000 metric tons. Short covering was also noted with the futures trading at $4.50 support.
The wheat markets also traded sharply higher with global quality issues and talk of increased demand from China and Brazil, which spilled over to support the corn trade. Traders were also looking ahead to the USDA quarterly stocks report and estimates for corn are 680 million bushels, which would be a 17-year low and the second-lowest Sept. 1 stocks number since 1976. The International Grains Council also lowered its world production forecast for the 2013 to ’14 season to 943 million metric tons, down 2 million metric tons from last month.
Selling pressure remained evident on Sept. 24 and 26. Weakness came from an increase in the weekly crop condition ratings. Traders were expecting the crop conditions to remain steady, but the report actually showed a 2 percent increase in corn’s good to excellent rating. This year’s crop is rated at 55 percent good to excellent, compared with 24 percent one year ago. Harvest is back into full swing with an open week of weather. Demand remains slow and corn used for ethanol continues to run below USDA’s estimate.
Ethanol production for the week ending Sept. 20 was down from the previous week, with total production at 5.824 million barrels. Corn used in production the week ending Sept. 20 was estimated at 87.36 million bushels versus the 94.3 million bushels per week needed to meet the USDA estimate of 4.9 billion bushels. Stocks were 15.6 million barrels and down from the previous week, but imports jumped to the highest level since early August.
The crop progress report showed corn that is dented was at 91 percent versus 99 percent one year ago and a five-year average of 93 percent. Corn that is mature was at 40 percent versus 86 percent one year ago and a five-year average of 55 percent. Corn that was harvested was at 7 percent versus 37 percent one year ago and a five-year average of 16 percent. The condition is rated as 55 percent good to excellent, 29 percent fair and 16 percent poor to very poor.
Soybeans took a back seat last week, trading sloppy because of the lack of demand news with additional pressure coming from better-than-expected yield results. For the week ending Sept. 26, November soybeans were up 1.5 cents, while January was 75 cents higher.
Soybeans closed near the day’s lows Sept. 23 in slow trade as early yield reports have been mixed. Pressure came in the form of both commercial and noncommercial selling as the harvest gets under way. Ideas that recent rain could boost crop conditions provided additional pressure.
Soybeans closed higher Sept. 24 and 25 on support from solid commercial buying. Spillover support from corn and wheat combined with an announced sale Sept. 25 to lead to the moderately higher close. Favorable harvest weather and long liquidation selling ahead of the USDA report were seen as limiting factors. USDA announced a sale of 140,000 metric tons of soybeans to unknown destinations.
Soybeans traded lower throughout the session Sept. 26, closing near the middle of the day’s trading range. Noncommercial long liquidation provided pressure, though volume was light. The harvest continues to build momentum and the favorable weather forecast provides additional pressure. A bounce in wheat and solid export sales limited the downside. The Sept. 26 export sales were considered neutral.
USDA reported soybean export inspections pace for the week ending Sept. 20 at 16.8 million bushels.
As of Sept. 22, soybeans dropping leaves were at 47 percent, compared with 26 percent the previous week and 56 percent for the five-year average.
Soybeans harvested were at 3 percent, compared with 9 percent for the five-year average. Soybean’s crop condition rating was unchanged at 50 percent good to excellent, 32 percent fair and 18 percent poor to very poor.
USDA reported barley export shipments pace for the week ending Sept. 20 at 28,000 bushels, all going to Mexico. Barley export sales pace was estimated at a marketing year high of 2.1 million bushels. All of the bushels went to Japan.
As of Sept. 22, North Dakota’s barley harvest was estimated at 95 percent complete, compared with 91 percent the previous week and 99 percent for the five-year average.
Sept. 26 cash feed barley bids in Minneapolis were at $3.20 per bushel, while malting barley bids were $5.50.
USDA reported durum export shipments pace for the week ending Sept. 20 at 963,000 bushels. No durum export sales were reported.
As of Sept. 22, North Dakota’s durum harvest progress was estimated at 75 percent, compared with 63 percent the previous week and 85 percent for the five-year average.
Sept. 26 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. 26 with 80-cent losses. Canola started the week and ended the week with losses. The middle of the week saw gains. Canola’s pressure was from a rapidly advancing harvest, as well as from selling from a lower U.S. soybean complex. Support came from short covering, commercial buying, and position squaring ahead of USDA’s quarterly grains stocks report.
As of Sept. 22, North Dakota’s canola harvest was estimated at 82 percent complete, compared with 74 percent for the previous week and 87 percent for the five-year average.
Sept. 26 cash canola bids in Velva, N.D., were at $20.31 per hundredweight.
As of Sept. 22, 40 percent of North Dakota’s dry bean crop (29 percent of the nation’s production) was harvested, compared with 25 percent for the previous week and 40 percent for the five-year average. North Dakota’s crop condition rating increased 3 percent to 50 percent good to excellent, 39 percent fair and 11 percent poor to very poor. Minnesota’s dry beans (11 percent of the nation’s production) are 28 percent harvested, compared with zero the previous week and 54 percent for the five-year average.
Minnesota’s dry bean crop condition rating increased 11 percent to 51 percent good to excellent, 35 percent fair and 14 percent poor to very poor. Michigan’s (14 percent of the nation’s production) dry bean crop is 9 percent harvested, compared with 3 percent the previous week and 36 percent for the five-year average.
As of Sept. 22, 52 percent of North Dakota’s sunflower crop had bracts turning yellow, compared with 36 percent the previous week and 79 percent for the five-year average. North Dakota’s sunflower crop condition rating increased 2 percent to 76 percent good to excellent, 20 percent fair and 4 percent poor.
USDA estimated soybean oil export sales pace for the week ending Sept. 20 at a combined total of -0.3 trillion metric tons (old crop sales of 2.8 trillion metric tons less cancellation for new crop sales of 3.1 trillion metric tons).
Sept. 26 cash sunflower bids in Fargo, N.D., for old crop were at $19.45 per hundredweight, while new crop bids were $19.95.