USDA report uneventfulWheat struggled last week with most of the selling tied to improving growing conditions and a surprisingly bearish U.S. Department of Agriculture crop production report.
By: Ray Grabanski, Agweek
Wheat struggled last week with most of the selling tied to improving growing conditions and a surprisingly bearish U.S. Department of Agriculture crop production report. For the week ending June 12, July Minneapolis dropped 27.25 cents, September Minneapolis dropped 26 cents, July Chicago slipped 23 cents and July Kansas City gave back 30 cents.
Wheat started the week with gains overnight but turned lower during the day session. Strength spilled over from stronger performance on June 13. But once the day session started, traders turned negative, especially once corn came under selling pressure. The June 10 session had wheat lower because of the June 9 crop progress report, which continues to show stabilizing winter wheat conditions, as well as advancing planting progress in the north, which is now reporting spring wheat seeding ahead of the five-year average pace.
The rest of last week, wheat struggled with selling pressure coming from a surprisingly bearish USDA June crop production report. In its June crop production estimates, USDA increased 2013’s ending stocks estimate at 10 million bushels. This was accomplished by cutting the supply by 5 million bushels (decrease in imports), decreasing food demand by 10 million bushels, and decreasing exports by 5 million bushels. The net result was a 10- million-bushel increase in 2013 stocks to 593 million bushels. USDA also increased the national average cash price by 2 cents to $6.87. For the 2014 estimates, USDA cut wheat’s yield 0.4 bushels to 42.3 bushels per acre, which in turn cut production 21 million bushels. The decrease in production was more than offset by a 10 million bushel increase in beginning stocks, 10 million bushel decrease in food demand, 10 million bushel decrease in feed demand, and 25 million bushel decrease in exports. The net result was a 34 million bushel increase in ending stocks, now estimated at 574 million bushels. USDA reduced the average cash price for wheat 30 cents to $7.
USDA estimated wheat export shipments for the week ending June 6 at 19.1 million bushels. This brings wheat’s export shipments pace to 13 million bushels, compared with 20.2 million bushels for last year at this time. Wheat export sales pace for the week ending June 6 was estimated at 20.9 million bushels. This brings wheat’s export sales pace to 239.9 million bushels, compared with 272.1 million bushels for last year at this time. USDA’s expectations for 2014 wheat exports are 925 million bushels.
As of June 8, 95 percent of the nation’s spring wheat crop had been planted, compared with 88 percent the previous week and 93 percent for the five-year average. Spring wheat emergence was estimated at 80 percent, compared with 67 percent the previous week and 82 percent for the five-year average. Spring wheat conditions were estimated at 71 percent good to excellent, 25 percent fair and 4 percent poor to very poor. Nine percent of the nation’s winter wheat crop was harvested compared to zero percent the previous week and 12 percent for the five-year average. Winter wheat crop conditions were unchanged at 30 percent good to excellent, 26 percent fair and 44 percent poor to very poor.
The corn market lost more ground last week with larger world stocks in the USDA report and ideal growing conditions. The weather remains nonthreatening and there is talk of larger yields, but will be more critical in a month as the crop starts to pollinate. The futures will likely trade the weather forecast until the end of the month when USDA releases its planted acreage estimates. As of the June 12 close, July was down 15 cents for the week, while December lost 14 cents.
Corn futures were under pressure on June 9 and 10, with the December contract closing lower for the eighth time out of the last 10 sessions. Selling remained intact with good weather and traders anticipating another good rating for the crop conditions. The report stated the crop is in very good shape and is one of the highest rated crops since 1990. Additional pressure came from news that China stopped issuing permits for dried distillers grains from the U.S. and suspended imports.
The futures closed lower again on June 11 after the USDA report. USDA left corn ending stocks unchanged from last month for the 2013 to ’14 crop at 1.146 billion bushels and the 2014 to ’15 crop at 1.726 billion bushels. They also left new-crop production at 13.935 billion bushels with an average yield of 165.3 bushels per acre on 91.7 million acres. USDA increased 2014 to ’15 global ending stocks by 1 million metric tons. They increased Brazil’s 2013 to ’14 corn crop by 1 million metric tons to 76 million metric tons. June 12 was more of the same, but the futures closed 2 cents higher with short covering into the close.
As of the June 12 close, July soybeans were 41.75 cents lower for the week, while the November contract fell 6.5 cents. At 11 a.m. on June 13, soybeans were trading 9.5 cents higher, while November was up 9 cents.
Soybean trade was higher in most months on June 9 and 10 with supportive commercial buying following the previous week’s move near May’s lows. Old crop supplies remain extremely tight, but questions are developing about commercial demand going forward, while new crop fundamentals remain bearish. The June 9 crop progress report showed planting and emergence both above the five-year average while the first round of ratings was good at 74 percent good to excellent and only 4 percent poor to very poor. On June 9, USDA announced a sale of 117,000 metric tons of soybeans to China for 2014 to ’15 delivery. Export inspections were bullish, coming in above the amount needed to keep pace with USDA’s projection.
Soybean trade was lower June 11 in the morning ahead of the USDA’s June World Agricultural Supply and Demand Estimates report with few changes expected from the May report. U.S. old crop ending stocks decreased to 125 million bushels from 130 million bushels last month because of a 5 million bushel increase in crush. Old crop world ending stocks increased slightly to 67.2 million metric tons from 67 million metric tons in May. New crop projections for production and yield were unchanged at 3.635 billion bushels and 45.2 bushels per acre, respectively. U.S. ending stocks for new crop decreased to 325 million bushels from 330 million bushels while world ending stocks increased to 82.9 million metric tons from 82.2 million metric tons last month.
Soybeans traded sharply lower June 12 as the weather forecast remains favorable for growing conditions. Old-crop supplies remain extremely tight, as shown by the lower ending stocks estimate on the June 12 WASDE report. The fundamental outlook for new crop remains bearish with record production expected and continued speculation about increased acres. June 12 export sales were bullish as the total sales are 3 percent above USDA’s projection for the year.
As of June 8, 97 percent of the nation’s barley had been planted, compared with 93 percent the previous week and 93 percent for the five-year average. Barley emergence was estimated at 86 percent, compared with 76 percent the previous week and 82 percent for the five-year average. Barley crop conditions dropped 3 percent to 64 percent good to excellent, 31 percent fair and 5 percent poor to very poor.
USDA reported barley export shipments pace for the week ending June 6 at 56,816 bushels. Last week’s barley export sales were reported at 578,725 bushels with all of the barley going to Japan. This is the first export report for the 2014 crop year.
In its June supply and demand estimate, USDA increased barley imports 2 million bushels but offset that supply increase by increasing exports by the same. The net result was an unchanged 2013 ending stocks estimate. USDA left the 2014 barley supply and demand estimate unchanged.
Cash feed barley bids June 12 in Minneapolis were at $3.45 per bushel while malting bids were at $5.65.
As of June 8, 73 percent of North Dakota’s durum crop was planted, compared with 62 percent the previous week and 75 percent for the five-year average. Emergence was estimated at 51 percent, compared with 29 percent the previous week and 64 percent for the five-year average.
USDA reported durum export shipments pace for the week ending June 6 at 416,116 bushels. No durum export sales were reported.
Cash bids for milling quality durum June 12 were at $7.50 per bushel in Berthold, N.D., while Dickinson, N.D.’s bid was at $8.25.
Canola futures on the Winnipeg, Manitoba, exchange closed the week ending June 12 with $8.60 (Canadian) in losses. Canola lost ground during every session last week. The losses started slow but expanded toward the end of the week. Early selling was tied to improving growing conditions in the Northern Plains. Early losses were limited by a stronger-than-expected soybean complex. Late last week, canola expanded its losses with additional selling coming from a sharply lower move in the soybeans. Additional selling was tied to an overall bearish tone in the vegetable oil market because of improving crop potential.
As of June 8, North Dakota producers had 94 percent of their canola planted, compared with 77 percent the previous week and 80 percent for the five-year average. Emergence was estimated at 66 percent, compared with 39 percent the previous week and 59 percent for the five-year average.
Cash canola bids in Velva, N.D., on June 12 were at $20.13 per hundredweight.
Dry edible beans
As of June 8, North Dakota producers (37 percent of the nation’s crop) had 79 percent of their dry beans planted, compared to 61 percent the previous week and 69 percent for the five-year average. Emergence was estimated at 37 percent, compared with 13 percent the previous week and 33 percent for the five-year average. Minnesota producers (10 percent of the nation’s crop) had 73 percent planted, compared with 52 percent the previous week and 83 percent for the five-year average. Emergence was estimated at 43 percent, compared with 10 percent the previous week and 28 percent for the five-year average.
As of June 8, 52 percent of the nation’s sunflower crop was planted, compared with 26 percent the previous week, and 51 percent for the five-year average.
USDA estimated export sales pace for the week ending June 6 for soybean oil at 71.8 thousand metric tons. This brings the year-to-date export sales pace for soybean oil to 726.7 thousand metric tons, compared with 883.6 thousand metric tons for last year.
Cash sunflower bids June 12 in Fargo, N.D., were at $21.15 per hundredweight.