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Published August 04, 2014, 09:31 AM

Production estimates grow

As of the July 31 close, September Minneapolis was down 11.75 cents, September Chicago was 7.75 cents lower, and September Kansas City lost 5.5 cents. Wheat futures were trading 7 to 13 cents higher the morning of Aug. 1.

By: Ray Grabanski, Agweek

Wheat

As of the July 31 close, September Minneapolis was down 11.75 cents, September Chicago was 7.75 cents lower, and September Kansas City lost 5.5 cents. Wheat futures were trading 7 to 13 cents higher the morning of Aug. 1.

The September Chicago contract set a new low close on July 29, following lower closes across the board for wheat on July 28 and 29. Expectations for increased global supplies continue to pressure the market. Wheat demand has been weak, though a sale on July 28 of 61,000 metric tons of hard red winter wheat and 40,000 metric tons of soft red winter wheat to Nigeria did provide some support. The July 28 crop progress report showed the winter wheat harvest at 85 percent complete, ahead of the five-year average. Spring wheat maturity was at the five-year average, while spring wheat conditions were unchanged from the previous week.

Wheat trade was higher July 30, following an announced sale to Nigeria. U.S. Department of Agriculture announced Nigeria had purchased a total of 205,500 metric tons of wheat from the U.S. Of the total, 151,500 metric tons were hard red winter wheat (131,500 for 2014 to ’15, 20,000 for 2015 to ’16) and 54,000 metric tons were soft red winter wheat (44,000 for 2014 to ’15, 10,000 for 2015 to ’16). Additional support was tied to commercial buying, following the July 29 new lows in the September Chicago contract. The winter wheat harvest is nearing completion and the forecast remains favorable for spring wheat. Strength in the U.S. dollar was a limiting factor.

Commercial buying provided support to wheat July 30, with the strongest gains being seen in the Kansas City contracts. July 31 export sales were seen as neutral, though they came in above the amount needed to keep pace with USDA’s projection. DTN reported a sale of 84,800 metric tons of milling wheat to Taiwan. Wheat remains oversold and will need to see more demand to spark buying. World wheat weather remains mostly a non issue, despite recent untimely rains in Europe.

As of July 27, 93 percent of the nation’s spring wheat crop was headed, compared with 84 percent the previous week and 93 percent for the five-year average. Spring wheat conditions were estimated at 70 percent good to excellent, 25 percent fair and 5 percent poor or very poor, unchanged from the previous week. Winter wheat harvest was estimated at 83 percent complete, compared with 75 percent the previous week and 80 percent for the five-year average.

Corn

The corn futures lost more ground last week, with ideal weather and buying interest on the sidelines. Estimates continue to surface for large production in the U.S. and world. The weather is also nonthreatening and the month of July will go down as the coolest dating back to the 1890s, which helps mitigate any moisture stress. As of the July 31 close, the September contract was down 6 cents for the week, while the December contract lost 4.75 cents. The December contract lost 58.25 cents for the month.

The corn market bounced higher to start the week, with strength in soybeans and a change in the forecast. The weekend rain fell short of expectations, and the forecast calls for drier weather this week. Traders were also looking ahead to the crop conditions report and expected to see a slight drop. The report did drop 1 percent in the good to excellent category from the previous week and is now rated 75 percent. There was also a new crop export sale announcement to Columbia for 147,000 metric tons.

Selling pressure moved back in on July 29 and remained intact for the rest of the week. The corn crop remains in good condition and is the sixth-highest rated since 1986, when the top five went on to produce record yields. The best-rated crop for this time of year was in 1986 at 86 percent good to excellent. South Africa also raised its corn production estimate for this year to 14.02 million metric tons, and, if realized, it would be the largest crop since 1981. The International Grains Council raised its world production estimate to 969 million metric tons versus 963 million last month, just short of its record 974 million. On July 31, more rain was moved into the forecast for the Midwest. Export sales were good last week, but shipments continue to run behind the needed pace and this could increase old-crop ending stocks.

Ethanol production for the week ending July 25 averaged 954,000 barrels per day, down 0.52 percent from the previous week. Total ethanol production for the week was 6.678 million barrels. Corn used in production the week ending July 25 is estimated at 100.17 million bushels and needs to average 113.934 million bushels per week to meet this crop year’s USDA estimate of 5.075 billion bushels. Stocks were 18.587 million barrels, up 3.61 percent from the previous week.

The crop progress report has the corn rated at 75 percent good to excellent, 19 percent fair and 6 percent poor or very poor. Ratings were 63 percent, 26 percent and 11 percent respectively one year ago. Corn that is silking is at 78 percent versus 67 percent one year ago and a five-year average of 75 percent. Corn in the dough stage is at 17 percent versus 8 percent one year ago and a five-year average of 16 percent.

Soybeans

As of the July 31 close, August soybeans were 12.25 cents higher for the week, while the November contract lost 1.5 cents. At 10 a.m. Aug. 1, August soybeans were trading 9.25 cents lower, while November was down 21 cents.

Soybeans traded higher July 28, with support from dry weather. With beans entering the pod-setting stage, moisture will be important, particularly in areas that are already dry, such as the western Midwest. China’s active demand continues to provide support, as well, with another round of purchases announced July 28. China purchased 420,000 metric tons of new-crop soybeans from the U.S. and another 66,000 metric tons of optional-origin new-crop beans.

Soybeans traded lower July 29 and 30, as the extended forecast eased weather concerns, though doubts about moisture levels did continue to linger with little rain in the near-term forecast. Mild, below-normal temperatures helped ease the concerns. The July 28 crop progress report showed soybean maturity ahead of the five-year averages and conditions down 2 percent from the previous week. Even with the ratings decrease, the 2014 crop remains the highest-rated crop since 1994 and the fourth-highest since 1986. On July 29, USDA announced a sale of 135,000 metric tons of meal and cake to unknown destinations for 2014 and 2015 delivery.

On July 31, soybeans traded slightly higher, with support from another round of bullish export sales. The total for the year is now 1.691 billion bushels, 71 million bushels above USDA’s estimate. Exports could continue through August, following a report from Informa Economics that Brazil’s prices are currently 35 to 64 cents above U.S. gulf prices. The five-day forecast remains cooler and drier than normal, with selling likely to continue when the rains return.

Soybeans blooming were at 76 percent, compared with 60 percent the previous week and the five-year average of 72 percent. Soybeans setting pods were at 38 percent, compared with 19 percent the previous week and the five-year average of 31 percent. Conditions for soybeans were rated at 71 percent good to excellent, 23 percent fair and 6 percent poor or very poor.

Barley

Barley headed was estimated at 96 percent, compared with 92 percent the previous week and the five-year average of 95 percent. Barley crop conditions were rated 67 percent good to excellent, 29 percent fair and 4 percent poor or very poor.

For the week ending July 31, cash feed barley bids in Minneapolis were unchanged at $2.90 per bushel, while malting bids were at $5.60.

Durum

As of July 27, 83 percent of North Dakota’s durum crop was jointed, compared with 99 percent last year and 97 percent for the five-year average. Headed was at 49 percent, compared with 89 percent last year and 82 percent for the five-year average. Turning color was at 10 percent, compared with 18 percent last year and 19 percent for the five-year average. Durum crop conditions were rated 83 percent good to excellent, 16 percent fair and 1 percent poor or very poor.

For the week ending July 31, cash bids for milling quality durum were unchanged at $9 per bushel in Berthold, N.D., while the Dickinson, N.D., bid was unchanged at $8.70.

Canola

For the week ending July 31, canola futures on the Winnipeg, Manitoba, exchange closed lower, with the front month November losing $1.20 to $441.30 (Canadian). Canola futures started the week strong with spillover support from sharp gains in Chicago Board of Trade soybean futures. Farmer selling and improving weather forecasts were negative factors throughout the week, as were ongoing expectations for a record U.S. soybean crop. Weakness in the Canadian dollar provided underlying support.

As of July 27, 25 percent of North Dakota’s canola crop was turning color, compared with 14 percent last year and 29 percent for the five-year average. Canola crop conditions rated at 84 percent good to excellent, 15 percent fair and 1 percent poor or very poor.

For the week ending July 31, cash canola bids in Velva, N.D., decreased 18 cents to $17.08 per hundredweight.

Dry edible beans

As of July 27, North Dakota producers (37 percent of the nation’s crop) had 67 percent of their dry beans blooming, compared with 59 percent last year and 74 percent for the five-year average. Setting pods was at 33 percent, compared with 15 percent last year and 32 percent for the five-year average. Crop conditions were rated at 71 percent good to excellent, 23 percent fair and 6 percent poor or very poor. Nebraska producers (11 percent of nation’s crop) had 50 percent blooming, compared with 60 percent last year and 57 percent for the five-year average. Crop conditions were rated at 80 percent good to excellent, 16 percent fair and 4 percent poor or very poor.

Sunflowers

As of July 27, North Dakota’s sunflower crop was 3 percent in bloom, compared with 5 percent last year and 14 percent for the five-year average. North Dakota’s sunflower crop was rated 79 percent good to excellent, 20 percent fair and 1 percent poor or very poor.

For the week ending July 31, soybean oil futures were 2 cents higher to $36.11 per hundredweight. Cash sunflower bids in Fargo, N.D., were unchanged on the week at $18.85 per hundredweight.

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