Wheat exports slowWheat struggled throughout the week, losing ground every session during the week.
By: Ray Grabanski, Agweek
Wheat struggled throughout the week, losing ground every session during the week. Pressure came from improving growing conditions for the recently planted winter wheat and a slowdown in exports (because of the stronger dollar). For the week ending Nov. 7, December Minneapolis dropped 16 cents, December Chicago dropped 14.75 cents and December Kansas City gave back 21 cents.
Wheat started last week on the defense. Early selling was tied to beneficial rains in the South Plains. Rain continued to fall in much of the major winter wheat regions of the U.S., replenishing short soil moisture conditions. A bearish export inspections report was the final nail that put wheat into the red to stay.
The Nov. 5 session saw another round of strong losses because of reports of improving weather conditions. Beneficial rains continued to fall over much of the South Plains last week which in turn is helping conditions to improve. Technically wheat is in trouble as what started off as an overbought market condition correction has turned into a full fledge sell off. Light pressure was also seen from a stronger U.S. dollar.
Wheat continued to see red numbers the rest of the week but the losses were limited slightly as the market seems to be stabilizing.
Wheat demand, which has been strong, has started to decline because of wheat supplies becoming available in other locations around the world. A new crop of wheat is harvested every six months and importers always like to get the newest supply.
U.S. Department of Agriculture’s export sales estimate was neutral wheat, as exports continue to be enough to keep pace with expectations. In the end, position squaring ahead of the Nov. 8 crop production report seemed to help slow wheat’s descent. Early estimates have wheat stocks dropping to 527 million bushels, a decline of 34 million bushels from September.
USDA estimated the past two weeks’ wheat export shipments pace at 7.1 million bushels. This brings wheat’s export shipments pace to 596.6 million bushels compared with 416.9 million bushels last year. Last week’s wheat export sales pace was estimated at a combined total of 15.7 million bushels with 15.3 million bushels being old crop and 400,000 bushels being new crop. This brings wheat’s export sales pace to 768.2 million bushels compared with 548 million bushels last year. With 30 weeks left in wheat’s marketing year, shipments need to average 16.78 million bushels and sales need to average 11 million bushels to reach USDA’s 1.1 billion bushel estimate.
As of Nov. 3, 91 percent of the nation’s winter wheat crop was planted compared with 86 percent the previous week and 90 percent for the five-year average. Emergence was estimated at 78 percent compared with 65 percent the previous week and 73 percent for the five-year average. Winter wheat’s crop condition rating improved by 2 percent to 63 percent good to excellent, 31 percent fair and 6 percent poor to very poor.
Corn traded lower last week, making a new recent low at $4.20. Buying interest remained on the sidelines ahead of the Nov. 8 USDA report. Traders were expecting USDA to increase yield in the report and are estimating ending stocks above 2 billion bushels.
But when we look at the big picture there is not a supply problem for corn in the U.S. or the world. For the week ending Nov. 7, December was down 6.75 cents.
The corn market closed lower for the first three days of last week as traders positioned ahead of the Nov. 8 USDA report. Traders remained focused on the report where there will be adjustments to this year’s corn acres, yield, production and demand numbers.
Private firms continue to release their estimates and the majority show an increase in yield and production. There was also talk that China may not import as much corn as has been estimated and they have also now approved corn from Brazil after recently adding Argentina and Ukraine. The ethanol report showed corn use down last week from the previous week.
Corn traded slightly higher on Nov. 7 with short covering ahead of the USDA report the main feature. The export inspections and sales reports were good for corn last week and helped to limit the downside. Export sales have been good the past month.
Ethanol production for the week ending Oct. 31 averaged 902,000 barrels per day and down 1 percent from the previous week. Total ethanol production for the week was 6.314 million barrels. Corn used in production was estimated at 94.7 million bushels versus the average of 94.5 million bushels per week to meet this crop year’s USDA estimate of 4.9 billion bushels. Stocks were 15.165 million barrels and up 1.4 percent versus the previous week.
The crop progress report showed corn that was harvested was at 73 percent versus 95 percent one year ago and a five-year average of 71 percent.
USDA’s export inspections for corn were estimated at 31.3 million bushels for the week ending Oct. 31. This brings the year-to-date shipments pace for corn to 206 million bushels compared with 159 million bushels for last year. The corn export sales were estimated at 67.7 million bushels. This brings the year-to-date sales pace for corn to 876 million bushels compared with 435 million bushels for last year.
The shipments came in at 28 million bushels and above the 23.9 million bushels that is needed to meet USDA’s estimate.
Soybeans were able to push higher last week as traders positioned themselves ahead of USDA’s November crop production report. For the week ending Nov. 7, January soybeans were 15 cents higher.
Soybeans traded higher Nov. 4 with light volume throughout the session. Tight supplies and strong demand continue to provide support, while higher production estimates ahead of the Nov. 8 USDA report limited the upside. Soybean planting continued to move along in South America. Export inspections were bullish, coming in well above the amount needed to keep pace with USDA’s projection.
Soybeans were lower Nov. 5 in slow trade ahead of the USDA report. Traders were positioning ahead of the report as a large supply number was expected. Good harvest weather in the U.S. and favorable weather for crop development in South America also contributed to the losses as soybeans closed at their lowest level since Aug. 15. Outside markets were negative as well with strength in the U.S. dollar and losses in crude oil.
Soybeans closed with gains Nov. 6 and 7 despite uncertainty ahead of the Nov. 8 report. Weakness in the corn and wheat markets was a limiting factor on Nov. 6, while positive outside markets provided support. Positive export demand news and strong weekly export sales were supportive on Nov. 7. On Nov. 7, USDA announced a sale of 250,000 metric tons of soybeans to China.
USDA reported soybean export inspections for the week ending Oct. 31 at 80.6 million bushels. This brings the year-to-date export shipments pace for soybeans to 338.5 million bushels compared with 371.2 million bushels for last year at this time. The soybean export sales pace for the week ending Oct. 31 was estimated at 37.4 million bushels, bringing this year’s total to 1.222 billion bushels, compared with 953.1 million bushels last year at this time. Shipments were reported at 79.4 million bushels.
As of Nov. 3, soybeans harvested were at 86 percent compared with 77 percent the previous week and 85 percent for the five-year average.
USDA estimated barley export shipments pace for the week ending Oct. 31 at 32,000 bushels, with all of the barley going to Mexico. This brings barley’s export shipments pace to 3.02 million bushels compared with 5.45 million bushels last year. No barley export sales were reported for the week ending Oct. 31.
This brings barley’s export sales pace to 5.2 million bushels compared with 5.6 million bushels last year.
Cash feed barley bids in Minneapolis were unchanged at $3.45 per bushel while malting barley bids were at $5.45.
USDA reported no durum export shipments for the week ending Oct. 31. Durum export sales pace was estimated at 400,000 bushels for the week ending Oct. 31. This brings durum’s export sales pace to 9.6 million bushels compared with 12.5 million bushels last year.
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 Nov. 7 with $1.30 (Canadian) losses. Canola started last week with gains because of strength from the U.S. soybean complex and from strong end user demand. But the rest of the week had canola on the defense. Selling was tied to reports of burdensome supplies because of better than expected harvest yields. Canola also saw position squaring ahead of the Nov. 8 USDA November crop production report.
As of Nov. 3, Minnesota canola was 94 percent harvested compared with 93 percent the previous week and 100 percent for the five-year average.
Cash canola bids in Velva, N.D., were at $20.40 per hundredweight.
As of Nov. 3, North Dakota’s (29 percent of the nation’s production) dry bean harvest was estimated at 96 percent complete compared with 89 percent the previous week and 93 percent for the five-year average. Minnesota and Michigan have completed harvest.
As of Nov. 3, 32 percent of the nation’s sunflower crop was harvested compared with 21 percent the previous week, and 61 percent for the five-year average. North Dakota’s sunflower crop condition rating dropped 4 percent to 60 percent good to excellent, 28 percent fair and 12 percent poor to very poor.
USDA estimated soybean oil export sales pace for the week ending Oct. 31 at 65.9 trillion metric tons. This brings soybean oil’s export sales pace to 145.1 trillion metric tons compared with 304.2 trillion metric tons last year. December soybean oil futures decreased 40 cents ending at $40.74 per hundredweight.
Cash sunflower bids in Fargo, N.D., were at $19.75 per hundredweight.