Export sales show improvementWheat lost ground in almost every session last week.
By: Ray Grabanski, Agweek
Wheat lost ground in almost every session last week. The only session that saw a steady to slightly higher gain was Oct. 29. Technical pressure was the main feature in wheat last week. For the week ending Oct. 31, December Minneapolis dropped 14.75 cents, December Chicago lost 23.25 cents, and December Kansas City dropped 18.5 cents.
Wheat started the week under pressure with selling coming from a lower corn and soybean market. Additional pressure came from weather reports showing decent rains for the Southern Plains states. Technically wheat was in need of a correction, so as of now, all this set back is accomplishing is cleaning up an overbought market condition.
The Oct. 29 session was truly a turnaround from the Oct. 28 session, as it was the only session when wheat traded steady to slightly higher. Gains were limited by weather forecasts calling for rain for much of the Southern Plains states. Winter wheat planting is running about equal to the five-year average pace and the recent rains should help improve the growing crop. Losses were limited by a decrease in the winter wheat crop condition rating. Late in the session, corn popped higher and that helped spill over to help wheat end with small gains.
The rest of the week had wheat trading on the defense. Weather forecasts are calling for continued rain showers in the Southern Plains. Also adding pressure was news that India dropped its minimum export price for wheat $40 per metric ton because of adequate supplies. Wheat’s losses were limited by reports that Russia officials lowered their country’s wheat production to 51.5 million metric tons, a decline of 2.5 million metric tons. The Oct. 31 session brought the much-anticipated export sales estimate. The U.S. Department of Agriculture estimated the past three weeks (Oct. 10, 17 and 24) export sales pace at 48.1 million bushels, which equals to about 16 million bushels of sales per week, more than enough to keep pace with expectations. But wheat did not seem to acknowledge the report as technical selling pressure remained the main feature. Good rains continue to replenish short soil moisture conditions in the Southern Plains. A stronger U.S. dollar completed the bearish items influencing the wheat market.
As of Oct. 27, 86 percent of the nation’s winter wheat crop was planted, compared with 79 percent the previous week and 85 percent for the five-year average. Emergence was estimated at 65 percent, compared with 53 percent the previous week and 64 percent for the five-year average. Winter wheat’s crop condition rating dropped 4 percent to 61 percent good to excellent, 35 percent fair and 4 percent poor to very poor.
December corn traded lower last week, putting in a new recent low at $4.27, a level last seen in August of 2010. Buying interest remains on the sidelines with continued talk of good yields and production at or near record levels. The next big news item for corn will be USDA’s November crop production report on Nov. 8. For the week ending Oct. 31, December contract was down 11.75 cents.
Corn started the week under pressure. Good harvest progress was made over the weekend and estimates for the crop progress report were at 50 percent harvested. The report stated that 59 percent of the corn is in the bin and the condition improved another 2 percent last week in the good to excellent category. This was a 20 percent jump in harvest activity and the improving conditions indicate that yields are better than expected.
The futures closed with small gains on Oct. 29 from short covering coming into play and talk of widespread rain delaying harvest. The export inspections report was good and above estimates, along with news that USDA announced a 103,600-metric-ton sale of U.S. corn to an unknown destination. Japan also purchased 123,040 metric tons and South Korea purchased 500,000 metric tons of U.S. corn last week.
Selling came back into the market on Oct. 30 and 31. Traders remain focused on the crop production report and expect to see an increase in both the yield and production. The South American crop conditions are being monitored as early planted crop conditions appear close to ideal.
Ethanol production for the week ending Oct. 25 averaged 911,000 barrels per day, up 1.6 percent from the previous week. Total ethanol production for the week was 6.377 million barrels and the highest since June 2012. Corn used in production the week ending Oct. 25 is estimated at 95.66 million bushels, compared with the 94.5 million needed per week to meet this crop year’s USDA estimate of 4.9 billion bushels. Stocks were 14.9 million barrels and down 3.5 percent from the previous week.
The crop progress report showed corn that is mature was at 98 percent versus 100 percent one year ago and a five-year average of 97 percent. Corn that was harvested was at 59 percent versus 91 percent one year ago and a five-year average of 62 percent. The condition is rated as 62 percent good to excellent, 25 percent fair and 13 percent poor to very poor.
“Buy the rumor sell the fact” type trade dominated soybeans last week, as the trade pushed higher ahead of what was expected to be a bullish export sales report Oct. 31 and then sold off once the numbers were released. For the week ending Oct. 31, November was off 19.75 cents, while January was 27.25 cents lower.
Soybeans started the week lower, following the trend set by the overnight session. Not even a bullish USDA export inspections estimate could help soybeans. The Oct. 28 shipment estimate was one of the largest on record, and it did nothing to limit the selling. Pressure was tied to reports of good harvest progress as the weekend weather was clear for much of the U.S. Yield reports are also continuing to come in better than expected and that added to the selling. On the export front, reports had China buying 115,000 metric tons of soybeans and an unknown destination buying 115,000 metric tons.
Soybeans closed higher Oct. 29 and 30, as precipitation slowed the U.S. harvest. Rain and light snow hampered the harvest, while continued strong demand and ideas the market was oversold provided additional support.
The Oct. 31 session started higher following the very strong export sales report, but a lack of follow-through buying led the market lower, pushing it to close near the day’s lows. Rains in South America continue to prove beneficial to early crop development. Oct. 31 export sales covered the past three weeks and were bullish, coming in well above expectations and the amount needed to keep pace with USDA’s projection.
USDA estimated soybean export shipments pace for the week ending Oct. 25 an impressive 83.6 million bushels. This brings soybean’s export shipments pace to 257.9 million bushels, compared with 310.2 million last year. The soybean export sales pace for the week ending Oct. 24 was estimated at 174.2 million bushels, bringing this year’s total to 1.184 billion bushels, compared with 946.3 million last year at this time. Shipments were reported at 82.4 million bushels.
As of Oct. 27, 77 percent of the nation’s soybean crop was harvested, compared with 63 percent the previous week and 77 percent for the five-year average. There was no crop condition rating reported for last week.
USDA estimated no barley export shipments for the week ending Oct. 25. This brings barley’s export shipments pace to 2.99 million bushels, compared with 5.45 million last year.
USDA estimated barley export sales for the weeks of Oct. 10, 17, and 24 at 500,000 bushels, with most of the barley going to Japan (9,900 metric tons), Taiwan (500 metric tons) and South Korea (200 metric tons). This brings barley’s export sales pace to 5.2 million bushels, compared with 5.5 million last year.
Oct. 31 cash feed barley bids in Minneapolis were at $3.50 per bushel, while malting barley bids were at $5.50.
USDA reported no durum export shipments for the week ending Oct. 25.
USDA estimated durum export sales pace for the weeks of Oct. 10, 17, and 24 at 900,000 bushels. This brings durum’s export sales pace to 9.2 million bushels, compared with 12.4 million bushels last year.
Oct. 31 cash bids for milling quality durum were at $7 per bushel in Berthold, N.D., and Dickinson, N.D.
Canola futures on the Winnipeg, Manitoba, exchange closed the week ending Oct. 31 with $2.20 (Canadian) losses. Canola started and ended the week under pressure, but gained a little ground during the middle of the week. Canola’s pressure was from spillover selling from a softer U.S. soybean complex, as well as from continued thoughts of a record canola crop in the Northern Plains. Middle of the week gains were supported by strong enduser demand. A middle week push in soybeans added gains.
Canola was pressured by spillover selling from a lower U.S. soybean complex. Light pressure also came from a stronger Canadian dollar. .
As of Oct. 27, 98 percent of North Dakota’s canola crop was harvested, compared with 94 percent the previous week and 100 percent for the five-year average. Minnesota’s was 93 percent harvested, compared with 90 percent the previous week and 100 percent for the five-year average.
Oct. 31 cash canola bids in Velva, N.D., were at $20.53 per hundredweight.
As of Oct. 27, North Dakota’s (29 percent of the nation’s production) dry bean harvest was estimated at 89 percent complete, compared with 88 percent the previous week and 89 percent for the five-year average. Minnesota’s (11 percent of the nation’s production) dry bean harvest was estimated at 96 percent complete, compared with 90 percent the previous week and 98 percent for the five-year average. Michigan’s (14 percent of the nation’s production) dry bean harvest was estimated at 96 percent complete, compared with 91 percent the previous week and 97 percent for the five-year average.
As of Oct. 27, 21 percent of the nation’s sunflower crop was harvested, compared with 12 percent the previous week, and 46 percent for the five-year average.
USDA estimated soybean oil export sales for the weeks of Oct. 10, 17, and 24 at 14.5 trillion metric tons. This brings soybean oil’s export sales pace to 79.3 trillion metric tons, compared with 267.5 trillion last year.
Oct. 31 cash sunflower bids in Fargo, N.D., were at $19.60 per hundredweight.