USDA report still supportiveWheat contracts fell throughout last week to end with small losses. For the week ending Nov. 14, December Minneapolis fell 8 cents, December Chicago was down 5 cents, and December Kansas City fell 5.5 cents.
By: Ray Grabanski, Agweek
Wheat contracts fell throughout last week to end with small losses. For the week ending Nov. 14, December Minneapolis fell 8 cents, December Chicago was down 5 cents, and December Kansas City fell 5.5 cents.
Wheat opened higher Nov. 11 before setting back into midday as early buying subsided. The lower close was followed by another on Nov. 12, bringing the market to lower closes in seven consecutive sessions and to 12 lower closes of the prior 14. The disappointing Nov. 15 U.S. Department of Agriculture report and a strong start for winter wheat were negative factors, as were sluggish demand and a lack of fresh supportive news.
Wheat closed lower in all months Nov. 13, with the exception of the nearby Chicago contract. Trade was choppy as fresh news remains limited. Some short covering was noted as traders see the market as oversold. This was offset by weakness in the corn market. Additional pressure continues to be tied to the strong start to the winter wheat crop as conditions are near ideal ahead of dormancy. The higher close Nov. 13 following a new low for the move is seen as a positive technical sign.
On Nov. 14, wheat closed mostly lower in Minneapolis and Chicago and mostly higher in Kansas City after an early rally failed to attract new buying to the market. Talk that wheat is oversold and improving export demand are supportive, though more export business is needed. Dow Jones reported a sale of milling wheat to Japan that included 60,463 metric tons from the U.S. There was also unconfirmed talk that Brazil bought U.S. hard red winter wheat.
USDA reported wheat export inspections pace for the week ending Nov. 8 at 12.2 million bushels. This brings the year-to-date export shipments pace for wheat to 610.6 million bushels, compared with 427.3 million for last year. Wheat export sales pace for the week ending Nov. 8 was estimated at 10.6 million bushels. This brings wheat’s export sales pace to 778.8 million bushels, compared with 559.6 million last year. With 29 weeks left in wheat’s marketing year, shipments need to average 16.9 million bushels and sales need to average 11.1 million to reach USDA’s 1.1 billion-bushel estimate.
As of Nov. 10, 95 percent of the nation’s winter wheat crop was planted, compared with 91 percent the previous week and 9 percent for the five-year average. Emergence was estimated at 84 percent, compared with 78 percent the previous week and 80 percent for the five-year average. Winter wheat’s crop condition rating improved by 2 percent to 65 percent good to excellent, 30 percent fair and 5 percent poor to very poor.
Corn bounced higher on Nov. 11 and off its three-year lows, with what was considered to be a slightly friendly USDA report, but lacked any follow-through buying for the rest of the week. USDA did increase this crop year’s production, but helped offset it with an increase in demand. The question going forward will be if demand can achieve the expectations and how the market responds to the U.S. Environmental Protection Agency weakening of the Renewable Fuel Standard by reducing the volumes for corn-based ethanol by 1.4 billion gallons. For the week ending Nov. 14, December was unchanged.
Corn started the week with gains from follow-through buying from the slightly friendly USDA report. USDA did raise the yield and production for the 2013 crop, but also dropped the harvested acres and increased feed and export demand to help offset the production increase. Short covering was also noted as speculators hold a near-record number of short positions. The ethanol report was above estimates and helped offer support.
The corn market retreated from its gains Nov. 11 and closed slightly lower the rest of the week. The export inspections for corn were the second-poorest weekly total for this marketing year and below USDA’s estimates, which left buying interest on the sidelines. Additional weakness came from a good week of harvest weather.
Ethanol production for the week ending Nov. 8 averaged 927,000 barrels per day and up 2.8 percent from the previous week. Corn used in production is estimated at 97.34 million bushels versus the average of 94.4 million bushels needed per week to meet this crop year’s USDA estimate of 4.9 billion bushels. Stocks were 15.153 million barrels and down 0.08 percent from the previous week.
As of Nov. 10, 84 percent of the nation’s corn crop was harvested, compared with 73 percent the previous week and 79 percent for the five-year average.
USDA’s export inspections for corn were estimated at 16.7 million bushels for the week ending Nov. 8. This brings the year-to-date shipments pace for corn to 223 million bushels, compared with 168 million for last year. The corn export sales were estimated at 47.4 million bushels. This brings the year-to-date sales pace for corn to 923.3 million bushels, compared with 439.8 million for last year.
Soybeans were able to push higher last week, mainly because of follow-through buying from the friendly Nov. 8 crop production report and strong export demand. For the week ending Nov. 14, January was 17.5 cents higher.
Soybeans closed higher on Nov. 11 and 12 with support tied to speculator buying and strong demand indicated by another round of bullish export inspections from USDA. Talk of the fast export and crush pace provided support, particularly the strong pace of Chinese purchases. The upside was limited by talk of producer selling as the harvest nears completion with the Nov. 12 crop progress report showing 91 percent complete. Favorable South American weather for planting and early crop development limited the gains. Nov. 12 export inspections came in well above the amount needed to keep pace with USDA’s projection. USDA announced a sale of 116,000 metric tons of soybeans to China Nov. 12.
The Nov. 13 session saw soybeans trading in a narrow range before closing with minimal gains. Tight supplies and continued strong demand provided support. Pressure was tied to producer selling and spillover weakness from the corn market. Favorable South American weather and talk of prospects for a record Brazilian crop provided additional pressure. USDA announced a sale of 123,000 metric tons of soybeans to China Nov. 13.
Soybean trade was choppy Nov. 14, eventually settling with small losses near the middle of the day’s trading range. Tight supplies and solid export demand continue to provide support, while favorable South American weather remains a limiting factor. The forecast is favorable into the weekend for the nearly-complete soybean harvest.
USDA reported soybean export inspections pace for the week ending Nov. 8 at 79.7 million bushels. This brings the year-to-date export shipments pace for soybeans to 418.1 million bushels, compared with 435.8 million for last year at this time. Soybean export sales estimate was at 31.2 million bushels old crop and 2.2 million new crop. This brings the year-to-date export sales pace for soybeans to 1.25 billion bushels, compared with 973.7 million last year.
As of Nov. 10, soybeans harvested were at 91 percent, compared with 86 percent the previous week and 92 percent for the five-year average.
USDA estimated barley export shipments pace for the week ending Nov. 8 at 38,000 bushels. This brings barley’s export shipments pace to 3.06 million bushels, compared with 5.45 million last year. No barley export sales were reported for the week. This brings the year-to-date export sales pace for barley to 5.2 million bushels, compared with 5.6 million for last year.
For the week ending Nov. 14, cash feed barley bids in Minneapolis were at $3.45 per bushel, while malting barley bids were $5.45.
USDA reported no durum export shipments or export sales for the week ending Nov. 8. This brings the year-to-date export sales pace for durum to 9.6 million bushels, compared with 12.2 million last year.
As of the Nov. 14 close, cash bids for milling quality durum were at $7 per bushel in Berthold, N.D., and Dickinson, N.D.
As of the Nov. 14 close, January canola futures on the Winnipeg, Manitoba, exchange were $2.30 (Canadian) higher on the week at $498. Markets were closed in Canada on Nov. 11 in observance of Remembrance Day. Support Nov. 12 was tied to strength in Chicago Board of Trade soybeans and weakness in the Canadian dollar. Farmer selling and a technical correction led to a lower close Nov. 13. Strong end user buying provided support on Nov. 14.
As of the Nov. 14 close, cash canola bids in Velva, N.D., were at $20.86 per hundredweight.
As of Nov. 10, 51 percent of the nation’s sunflower crop was harvested, compared with 32 percent the previous week, and 75 percent for the five-year average.
USDA reported soybean oil export pace for the week ending Nov. 8 at 7.2 million metric tons. This brings the year-to-date export sales pace for soybean oil to 152.6 trillion metric tons, compared with 325.2 trillion metric tons for last year.
As of the Nov. 14 close, cash sunflower bids in Fargo, N.D., were at $19.95 per hundredweight.