Big crop gets bigger
Wheat Wheat traded lower throughout last week. For the week ending Sept. 11, December Minneapolis lost 18.75 cents, December Chicago lost 25.75 cents and December Kansas City lost 22.25 cents. Wheat opened steady, but slipped into negative territ...
Wheat traded lower throughout last week. For the week ending Sept. 11, December Minneapolis lost 18.75 cents, December Chicago lost 25.75 cents and December Kansas City lost 22.25 cents.
Wheat opened steady, but slipped into negative territory early Sept. 8. Early pressure came from spillover selling pressure from the lower corn and soybean complex. The grains struggled as traders removed frost scare premium out of the market. Additional selling was tied to a stronger U.S. dollar, which hurts demand for U.S. products. Late in the session, wheat was able to recover and actually end mixed. Late session support was from news of continued fighting in Ukraine, even though a ceasefire treaty has been signed. Additional support came from weather forecasts calling for a hard freeze in parts of Canada. If realized, it could result in damage to unharvested wheat.
Wheat trade was lower Sept. 9 and 10, ahead of the U.S. Department of Agriculture report, with the December Chicago contract setting another new low on Sept. 10. Beneficial rainfall in Australia limited stress on the crop, pressuring wheat prices. The Sept. 8 crop progress report showed the spring wheat harvest well behind the five-year average, while conditions continue to slip, down another 3 percent. Winter wheat planting is just getting started with 3 percent planted.
Wheat was trading lower ahead of the Sept. 11 report, with spillover pressure from corn and soybeans. Weakness in the U.S. dollar provided some support. Sept. 11 export sales were bullish, coming in well above the amount needed to keep pace with USDA's projection.
USDA's World Agricultural Supply & Demand report showed domestic wheat ending stocks at 698 million bushels, above the pre-report expectation of 684 million and August's 663 million. World ending stocks for wheat were pegged at 196.4 million metric tons, compared with 193.1 million expected and 193 million last month. Canadian wheat production was unchanged from August at 28 million metric tons, while European Union wheat production increased to 151 million metric tons from 147.9 million last month.
As of Sept. 7, 58 percent of the nation's spring wheat crop was harvested, compared with 38 percent the previous week and 78 percent for the five-year average. Spring wheat conditions were estimated at 60 percent good to excellent, 30 percent fair and 10 percent poor or very poor, a decrease of 3 percent from the previous week. Winter wheat planting is estimated 3 percent completed, compared with zero the previous week and 4 percent for the five-year average.
The corn market remained under pressure again last week, with a forecast that eased frost concerns and traders expecting a bearish USDA report. The report was not friendly for the grain markets and that kept selling interest intact to end the week. The early harvested corn crop is also exceeding yield expectations. As of the Sept. 11 close, the December contract was down 15 cents for the week and posted a new contract low at $3.36, while the March contract lost 15.75 cents.
The corn futures were under pressure on Sept. 8 and 9, with a less threatening forecast for an end of the week frost and temperatures will climb back up this week. The crop conditions were left unchanged from the previous week and this year's crop is the best rated since 1994 and the sixth best since 1986. Traders were also looking ahead to the Sept. 11 USDA report and expect larger yield and production numbers, with the estimated yield at 170.74 bushels per acre, production of 14.288 billion bushels and new-crop ending stocks at 2.012 billion. The corn futures were slightly higher on Sept. 10, as traders lifted their short positions ahead of the USDA report.
The corn futures were slightly lower on Sept. 11, ahead of the much-anticipated report. Its results did not help the market into the close. The report was seen as bearish, as USDA posted a record yield at 171.7 bushels per acre, up 4.3 bushels from last month. Corn production is also estimated at a record 14.4 billion bushels, up 3 percent from the August report. The upward revisions increased new-crop corn ending stocks to just more than 2 billion bushels and a stocks-to-use ratio of 14.7 percent. USDA did increase the demand side of the balance sheet by raising feed and residual by 75 million bushels, food and seed and industrial use by 70 million bushels, ethanol use by 50 million bushels and exports by 25 million bushels. The global ending stocks estimate came in at 189.9 million metric tons, 2 million higher than August, which is one of the largest ending stocks numbers in history.
Ethanol production for the week ending Sept. 5 averaged 927,000 barrels per day, up 0.65 percent from the previous week. Total ethanol production for the week was 6.489 million barrels. Corn used in production for the week ending Sept. 5 is estimated at 97.71 million bushels and needs to average 98 million bushels per week to meet this crop year's USDA estimate of 5.075 billion bushels. Stocks were 18.021 million barrels, up 1.97 percent from the previous week.
The crop progress report has the corn rated at 74 percent good to excellent, 19 percent fair and 7 percent poor or very poor. Ratings were 54 percent, 29 percent and 17 percent, respectively, one year ago. Corn in the dough stage is at 95 percent versus 91 percent one year ago and a five-year average of 94 percent. Corn that is dented is at 69 percent versus 61 percent one year ago and a five-year average of 74 percent. Corn that is mature is at 15 percent versus 8 percent one year ago and a five-year average of 66 percent.
As of the Sept. 11 close, November soybeans were 40 cents lower for the week. At 11 a.m. Sept. 12, November soybeans were trading 0.5 cents lower.
Soybeans opened the session lower Sept. 8, but managed to trade with small gains for part of the overnight session. But once updated weather forecasts were released and the frost scare minimized, soybeans broke lower and extended its losses. Soybeans moved below $10 Sept. 9, with noncommercial selling providing much of the pressure. With the most vulnerable regions for frost being in the west, the potential impact on corn and soybeans was minimal. USDA announced a sale of 120,000 metric tons of new-crop soybeans to China Sept. 8. The crop progress report showed ratings still very good at 72 percent good to excellent, while soybeans dropping leaves lagged slightly behind the five-year average.
Soybeans were higher Sept. 10 in quiet trade ahead of the Sept. 11 USDA report. Low temperatures in the forecast and lagging maturity provided some support, but positioning ahead of the WASDE report was the major factor.
Soybean trade was lower ahead of the USDA report Sept. 11, with the November contract hitting a new low at $9.86. The Sept. 11 export sales report was seen as neutral to bullish, as it came in well above the amount needed to keep pace with USDA's projection. USDA announced sales of 240,000 metric tons of U.S. beans to China, 210,000 metric tons of U.S. beans to unknown, and 360,000 metric tons of optional origin beans to China. Following the report, a late round of short-covering helped trim losses into the close.
USDA's WASDE report was bearish, with numbers coming in above pre-report estimates. Soybean production was pegged at 3.91 billion bushels, compared with 3.88 billion expected and 3.82 billion in August. Yield of 46.6 bushels per acre was above 46.2 bushels per acre expected and 45.4 last month. Domestic carryout was 475 million bushels versus 430 million in August, while global carryout was 90.2 million metric tons, compared with 85.6 million last month. Brazilian and Argentinean production both increased to 94 million metric tons and 55 million, respectively.
As of Sept. 7, 12 percent of the nation's soybean crop was dropping leaves, compared with 5 percent the previous week and 17 percent for the five-year average. Soybean's crop condition rating was estimated at 72 percent good to excellent, 22 percent fair and 6 percent poor or very poor, unchanged from the previous week.
As of Sept. 7, barley harvest was estimated at 81 percent complete, compared with 58 percent the previous week and 82 percent for the five-year average.
For the week ending Sept. 11, cash feed barley bids in Minneapolis were up 25 cents to $2.50 per bushel, while malting bids were at $6.20.
As of Sept. 7, 20 percent of North Dakota's durum crop was harvested, compared with 14 percent the previous week and 53 percent for the five-year average. North Dakota's durum crop condition rating was 77 percent good to excellent, 19 percent fair and 4 percent poor, down 2 percent from the previous week.
USDA reported durum shipments for the week ending Sept. 5 at 1.4 million bushels, with Morocco getting 76,646 bushels and Italy getting 1.35 million. USDA reported durum export sales of 200,000 bushels for the week ending Sept. 5.
For the week ending Sept. 11, cash bids for milling quality durum were up 75 cents at $9.50 per bushel in Berthold, N.D., while the Dickinson, N.D., bid was up 40 cents at $9.25.
For the week ending Sept. 11, canola futures on the Winnipeg, Manitoba, exchange closed lower, with the front month November losing $10.80 to $411.20 (Canadian). Canola traded in a tug of war last week between pressure from a sharply lower U.S. soybean complex and support from weather forecasts calling for a killing frost for much of Canada that will likely result in some crop damage to unharvested canola. The bearish USDA report provided additional pressure.
As of Sept. 7, North Dakota canola was 40 percent harvested, compared with 18 percent the previous week and 59 percent for the five-year average. Canola's crop condition rating decreased 4 percent to 84 percent good to excellent, 14 percent fair and 2 percent poor.
For the week ending Sept. 11, cash canola bids in Velva, N.D., decreased 69 cents to $15.79 per hundredweight.
As of Sept. 7, North Dakota's sunflower crop was 4 percent bracts turning yellow, compared with zero the previous week and 27 percent for the five-year average. North Dakota's sunflower crop was rated 83 percent good to excellent, 16 percent fair and 1 percent poor, unchanged from the previous week.
For the week ending Sept. 11, soybean oil futures were 78 cents lower to $31.50. Cash sunflower bids in Fargo, N.D., were down 25 cents on the week at $16.75 per hundredweight.