Markets retreat ahead of report
Wheat Wheat started last week with gains, but slipped lower for the rest of the week. For the week ending Nov. 6, December Minneapolis dropped 20.25 cents, December Chicago slipped 12.25 cents and December Kansas City gave back 14.75 cents. For t...
Wheat started last week with gains, but slipped lower for the rest of the week. For the week ending Nov. 6, December Minneapolis dropped 20.25 cents, December Chicago slipped 12.25 cents and December Kansas City gave back 14.75 cents. For the month of October, December Minneapolis increased 40.75 cents, December Chicago was 54.75 cents higher and December Kansas City gained 35.75 cents.
Wheat traded on both sides of the fence to start the week. Early selling pressure spilled over from a lower corn and soybean complex. Losses were limited by thoughts that U.S. wheat demand could improve because concerns toward world wheat production continue to grow. Weather conditions have not been favorable for crop production in Australia and Russia, and that has traders concerned that production potential in those regions will decrease. Traders are also concerned about U.S. planting progress, as it has been running a little slow in the soft red winter wheat regions of the U.S. because of slow harvest progress.
Selling became the main story for the rest of the week. Corn and soybeans started to struggle, and that led to selling in the wheat market on Nov. 4. Additional selling was tied to the U.S. Department of Agriculture's crop progress report, which put winter wheat plantings at the five-year average. Even though progress has been sluggish in the Corn Belt states, in general, winter wheat planting has been on pace, which was considered negative to wheat. The final pressure point came from a forecast of rain in the driest winter wheat regions of the U.S. Generous rains were reported falling in much of Oklahoma and Texas Nov. 7, which will help recently planted winter wheat.
Wheat has been following the corn and soybean markets. That changed mid-week, as wheat fell, while corn and soybeans stabilized. Pressure came from selling tied to reports that Egypt bought 235,000 metric tons of wheat from France and the Ukraine. The lost export sale and continued strength in the U.S. dollar brought in more selling late in the session, as traders are now starting to wonder if U.S. wheat exports can improve because of the strong dollar. Favorable weather in the Southern Plains added to the selling, as beneficial rains will help wheat development.
As of Nov. 2, winter wheat planting is estimated 90 percent completed, compared with 84 percent the previous week and 89 percent for the five-year average. Winter wheat emergence was estimated at 77 percent, compared with 67 percent the previous week and 72 percent for the five-year average. Winter wheat crop condition was estimated at 59 percent good to excellent, 34 percent fair and 7 percent poor or very poor, unchanged from the previous week.
The corn market took a step back last week after trading to 10-week highs. Harvest progress picked up as we moved into November, and on-farm storage is full. Traders also started to focus on the next USDA supply, demand and production report that will be released on Nov. 10. Expect to see an increase in yield and production. As of the morning of Nov. 7, the December contract was down 11.5 cents for the week, while the March contract lost 11.25 cents.
Corn traded lower on Nov. 3 and 4, with a good weekend of harvest activity. Trade estimates for the Nov. 3 report were 60 percent harvested. The report stated 65 percent is in the bin, a 19 percent increase from the previous week. The export inspections were also disappointing, and below estimates. Private estimates started to surface for the Nov. 10 USDA report, and the numbers were larger than what USDA posted in October. The crude oil market has also been under pressure and is now trading at lows last seen in 2009, while the dollar posted a new recent high.
The corn market closed slightly higher on Nov. 5 and 6, with spillover from the soybean trade. The ethanol report was disappointing last week, but ethanol plays a big part in demand. Exports were up 4 percent in September and year-to-date numbers are ahead of 2013. Traders were also looking ahead to the Nov. 3 USDA report and are estimating larger numbers compared with the October report. Estimates are that the yield will be increased from 174.2 bushels per acre to 175.23 bushels per acre and production from 14.475 billion bushels to 14.551 billion.
Ethanol production for the week ending Oct. 31 averaged 929,000 barrels per day, down 0.85 percent from the previous week. Total ethanol production for the week was 6.503 million barrels. Corn used in production is estimated at 97.55 million bushels and needs to average 98.833 million bushels per week to meet this crop year's USDA estimate of 5.125 billion bushels. Stocks were 17.169 million barrels, up 0.76 percent from the previous week.
The crop progress report has corn harvest at 65 percent complete, compared with the five-year average of 73 percent.
As of the Nov. 6 close, November soybeans were 15.5 cents lower for the week and the January contract was down 21.25 cents. At 11 a.m. Nov. 7, November soybeans were trading 3 cents lower, while January was down 4 cents.
Soybeans started November lower with long liquidation and good harvest progress. The market expected the Nov. 3 crop progress report to show the harvest more than 80 percent complete, and it came in at 83 percent. Weather remains good both for the harvest in the U.S. and for planting and early development in South America. After a dry start to October, Brazilian weather has turned wetter in the past couple weeks, with more rain expected. Nov. 3 export inspections were very strong, coming in at more than three times the amount needed to keep pace with USDA's projection. Export inspections are now 17 percent ahead of last year at this time.
Soybeans traded lower again Nov. 3, as long liquidation continued. Rains from Missouri through Indiana hindered the harvest somewhat, but overall progress remains good. Informa Economics reported an expectation that USDA's Nov. 10 report will increase production estimates to 3.99 billion bushels from 3.93 billion last month.
Soybeans started Nov. 5 lower, but turned around to close with moderate gains. Expectations remain in place for a bearish harvest with FC Stone expecting a 48.4-bushel-per-acre yield and Informa expecting 47.9 bushels per acre, both of which are above USDA's last estimate of 47.1 bushels. But strong soybean demand and tight soymeal supplies continue to provide support to the market. Reports are beginning to surface again of bird flu in southern China, which would likely slow demand somewhat.
Another round of strong weekly export sales led to higher trade Nov. 6. This week's 59.2 million bushels of sales was again well above the amount needed to keep pace with USDA's projection, and combined with Nov. 3 shipments of 101.8 million bushels, brings the total to 77 percent of USDA's projection for the year, just nine weeks in. After much needed moisture arrived in the past couple weeks for Brazilian soybeans, the weather is again turning drier, which should be favorable for planting progress.
As of Nov. 2, soybeans harvested were at 83 percent, compared with 70 percent the previous week and the five-year average of 83 percent.
USDA reported no barley export shipments or sales for the week ending Oct. 31. This brings barley export shipments pace for 2014 to 3.08 million bushels, compared with 3.02 million bushels last year. Barley's export sales for the year are at 4 million bushels, compared with 5.2 million last year. Nov. 6 cash feed barley bids in Minneapolis were at $2.45 per bushel, while malting bids were $7.35.
USDA reported durum export shipments pace for the week ending Oct. 31 at 275,573 bushels. No durum export sales were reported for the week. This brings durum's export sales to 11.7 million bushels, compared with 9.6 million last year. Nov. 6 cash bids for milling quality durum were at $15 per bushel in Berthold, N.D., while the Dickinson, N.D., bid was $15.
Canola futures on the Winnipeg, Manitoba, exchange closed the week ending Nov. 6 $2.30 (Canadian) lower. Canola started the week off on the defense trading lower the first two sessions, but recovered to trade with small gains the last two sessions of the week. Early week pressure spilled over from a lower U.S. soybean complex. Additional selling was tied to profit taking, as traders try to clean up an overbought market condition. Strong commercial buying and light farmer selling combined with spillover strength from a late week rally in the U.S. soybean market to help push canola higher. Additional support came from a weaker Canadian dollar and higher soybean market. Nov. 6 cash canola bids in Velva, N.D., were at $17.38 per hundredweight.
Dry edible beans
As of Nov. 2, North Dakota's dry bean crop (40 percent of the nation's crop) was harvested. Minnesota's crop (7 percent of nation's crop) was harvested. Nebraska's crop (10 percent of nation's crop) was harvested. Michigan's crop (12 percent of the nation's crop) was 94 percent harvested, compared with 89 percent the previous week and 98 percent for the five-year average
As of Nov. 2, 50 percent of the nations sunflower crop was harvested, compared with 30 percent the previous week and 54 percent for the five-year average. North Dakota's sunflower crop was rated 73 percent good to excellent, 19 percent fair and 8 percent poor, a decline of 1 percent from the previous week. USDA estimated soybean oil export sales pace for the week ending Oct. 31 at 13.9 thousand metric tons. This brings the year-to-date export sales pace for soybean oil to 251.9 thousand metric tons, compared with 145.1 thousand metric tons for last year. Nov. 6 cash sunflower bids in Fargo, N.D., were at $17.40 per hundredweight.