Wheat: China buys French wheat
Wheat traded in a mixed fashion last week with the exception of June 19, which had all of the exchanges trading with strong gains. Pressure came from an advancing harvest, while support was from poor planting progress in the Northern Plains. For the week ending June 20, July Minneapolis gained 10 cents, September Minneapolis gained 8.75 cents, July Chicago gained 19.25 cents and July Kansas City gained 25.5 cents.
Wheat started the week trading on both sides of unchanged for most of the session. Seasonal pressure from an advancing winter wheat harvest put wheat on its heels early, but a stronger corn market helped the market rally late in the session.
The June 18 session had wheat trading mixed again. The winter wheat exchanges were able to hold on and end with gains, while Minneapolis slipped in negative territory on the close. The unwinding of short winter wheat and long Minneapolis spreads was a feature. Even though planting progress is lagging and it appears that close to 1 million acres of spring wheat won't get planted, the realization that the crop that is planted is looking much better than expected pressured the market.
Wheat rallied June 19 with early support coming from news that China was buying French wheat. Technical buying was also a factor as traders try to correct an oversold market condition. Fundamental news was also supportive, as rains have delayed the winter wheat harvest, as well as halted planters in the Northern Plains.
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Wheat traded with losses June 20, with most of the pressure coming from what appeared to be a risk off session in the commodities. The June 19 statements from the Federal Reserve about slowing QE3 caused a little stir in the financial markets (gold off $96, crude off $2.85, and the Dow off 340 points). This risk off attitude added to the selling pressure.
The U.S. Department of Agriculture's wheat export inspections for the week ending June 14 were estimated at 21.6 million bushels. Wheat export sales pace for the week ending June 14 was estimated at 16 million bushels with 15.9 million being old crop and 100,000 bushels new. Last week was the second week (50 weeks left) for wheat's 2013 export marketing year. USDA's expectations are at 975 million bushels.
As of June 16, 92 percent of the nation's spring wheat crop was planted, compared with 87 percent the previous week and 97 percent for the five-year average. Eighty-four percent of the nation's spring wheat was emerged, compared with 71 percent the previous week and 94 percent for the five-year average. North Dakota producers have 86 percent of their spring wheat in the ground (868,000 acres left to plant). Spring wheat's crop condition rating improved 6 percent to 68 percent good to excellent, 27 percent fair and 5 percent poor to very poor. Winter wheat harvest is estimated at 11 percent complete, compared with 5 percent the previous week and 25 percent for the five-year average. Winter wheat's crop condition rating was unchanged at 31 percent good to excellent, 26 percent fair and 43 percent poor to very poor.
Corn: unplanted acres and weather
The corn futures bounced back last week, as the trade realized that some planned acres of corn will remain unplanted. Additional support came from weather forecasts showing a high pressure ridge moving into the Midwest in late June. This pushed traders to build some risk premium into the market. For the week ending June 20, July gained 18 cents and December was up 22 cents.
Corn closed with decent gains for the first three days of the week, as buying interest resurfaced. Support came from the unplanted corn acres and a change in the forecast. The crop progress report showed about 2 million acres unplanted in Iowa, Minnesota and North Dakota, along with miscellaneous acres in other states. At this time of year, those unplanted acres will remain unplanted to corn. The condition of the crop did increase 1 percent in the excellent category. The weather forecast is beneficial in the near term for crop development, but traders are building some risk premium into the market in case the pattern remains in place.
The June 20 session was under pressure with talk that the June 19 gains were overdone. Spill-over selling from the outside markets added pressure. The Federal Reserve indicated it is ready to slow down bond purchases, and signals that there is some weakness in the Chinese economy both pressured the outsides. News that South Korea purchased 127,000 metric tons of corn from the Black Sea region for the first time on record added pressure.
Ethanol production for the week ending June 7 averaged 884,000 barrels per day, down 3.9 percent from last year. Corn used in production is estimated at 92.8 million bushels and needs to average 94.9 million bushels per week to meet this crop year's USDA estimate of 4.6 billion. Stocks as of June 7 were estimated at 16 million barrels, which were down 2.6 percent from the previous week and down 22.6 percent from last year.
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The crop progress report showed 92 percent of the corn is emerged versus 100 percent one year ago and a five-year average of 97 percent. The condition is rated as 64 percent good to excellent, 28 percent fair and 8 percent poor or very poor.
Soybeans: better planting weather
Soybeans traded with losses for most of the week. Slowing old crop export demand and improving planting weather pressured soybeans. For the week ending June 20, July soybeans were down 19 cents, while November was off 13.25 cents.
Profit taking led soybeans lower June 17 ahead of USDA's crop progress report. Planting was reported 85 percent complete, less than trade expectations. The first crop condition rating was reported at 64 percent good to excellent, in line with the 60 to 65 percent expected. National Oilseed Processors Association crush was seen as supportive, coming in at 122.6 million bushels, well above the 118.1 million expected. The June 17 export inspections were bearish, coming in below the amount needed to keep pace with USDA's projection.
Soybeans traded mostly higher June 18 and 19 as a result of supportive reports on June 17 and continued planting concerns. Soybeans traded lower June 20 on thoughts that the June 19 rally may have been overdone. Additional pressure came from soft export sales and a better forecast for planting. The outside markets were bearish after the June 19 Federal Reserve statement, providing further pressure to commodities. USDA's export sales were somewhat bearish, with sales coming in below the amount needed to reach USDA's projection.
Planting progress as of June 16 had 85 percent of the U.S. soybean crop planted, compared with 71 percent the previous week and the five-year average of 91 percent. Soybean emergence as of June 16 was at 66 percent, compared with 48 the previous week and the five-year average of 80 percent. USDA's weekly crop condition rating report estimated the U.S. soybean crop rating at 64 percent good to excellent, 30 percent fair and 6 percent poor to very poor.
Barley
As of June 16, 92 percent of the nation's barley had been planted, compared with 88 percent the previous week and 98 percent for the five-year average. North Dakota producers have 79 percent of their barley planted (200,000 acres left to plant). Barley emergence was estimated at 88 percent, compared with 72 percent the previous week and 94 percent for the five-year average. Barley's crop condition rating improved 4 percent to 67 percent good to excellent, 29 percent fair and 4 percent poor to very poor.
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June 20 cash feed barley bids in Minneapolis were at $5.05 per bushel, while malting barley bids were at $7.
Durum
As of June 16, 88 percent of North Dakota's durum crop was planted, compared with 78 percent the previous week and 88 percent for the five-year average.
Durum emergence was at 76 percent, compared with 55 percent the previous week and 83 percent for the five-year average. Durum's crop condition rating dropped 2 percent to 83 percent good to excellent, 14 percent fair and 2 percent poor.
June 20 cash bids for milling quality durum were at $8.25 per bushel in Berthold, N.D., while Dickinson, N.D., bids were at $8.20.
Canola
Canola futures on the Winnipeg, Manitoba, exchange closed the week ending June 20 with $7.50 (Canadian) gains. Canola started the week and ended the week with losses, but had a good performance in between. The canola market seemed content to follow the U.S. soybean complex last week. Additional selling was tied to the near completion of the 2013 planting season. Early week gains were from continued production concerns from late planting.
As of June 16, 71 percent of North Dakota's canola crop had been planted, compared with 57 percent for the previous week and 94 percent for the five-year average. Emergence was at 54 percent, compared with 31 percent for the week and 86 percent for the five-year average. Canola's crop condition rating improved 11 percent to 60 percent good to excellent, 30 percent fair and 10 percent poor to very poor.
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June 20 old crop cash canola bids in Velva, N.D., were at $26.83 per hundredweight, while new crop bids were $24.42.
Dry beans
As of June 16, 66 percent of North Dakota's dry bean crop had been planted, compared with 39 percent the previous week and 95 percent for the five-year average.
North Dakota's crop condition rating improved 13 percent to 57 percent good to excellent, 36 percent fair and 7 percent poor to very poor. Minnesota producers reported planting progress at 86 percent complete, compared with 75 percent the previous week and 96 percent for the five-year average.
Sunflowers
As of June 16, 55 percent of the nation's sunflower crop had been planted, compared with 29 percent the previous week and 77 percent for the five-year average.
June 20 old crop cash sunflower bids in Fargo, N.D., were at $23.30 per hundredweight, while new crop bids were $23.85.
