Rough week for grains
Wheat Wheat started the week on the defense with selling tied to improving weather conditions for a majority of the wheat growing regions of the world. Generous rains fell over much of Europe over the weekend. The only friendly news for wheat cam...
Wheat started the week on the defense with selling tied to improving weather conditions for a majority of the wheat growing regions of the world. Generous rains fell over much of Europe over the weekend. The only friendly news for wheat came from rain in the Northern Plains states and Canada, as this will further delay planting progress.
The June 14 session also had wheat on the defense with selling tied to a lower corn market. Additional selling was because of June 13's bearish crop progress report, which showed a small increase in winter wheat's crop condition rating. The only friendly news hitting wheat was from Pilgrim's Pride and Tyson Foods, large poultry producers. They announced plans to start switching some feed demand from corn to wheat. Egypt also bought 60,000 metric tons of wheat.
Midweek had wheat continuing to take the path of least resistance, trading lower. Early support was because of bottom picking, but once the outside markets started to crumble, wheat did the same, forcing most contracts into sell stops, which only accelerated session losses. In the end, most wheat contracts dropped to support levels not seen since early May. It appears that spring wheat could lose close to 1.5 million acres in the U.S., and Canada could see 3 million to 4 million acres.
The June 16 session had wheat again starting lower. Wheat continued to see pressure from the advancing winter wheat harvest as well as from the debt concerns going on in Europe. Seasonally, wheat sells off this time of year because of the winter wheat harvest. Wheat likely will be under pressure until winter wheat harvest reaches the half way mark, or until a better handle is known on the amount of spring wheat acres planted.
Corn ended lower this week, with July loosing 80 cents and December down 50 cents. The market lacked bullish weather news and concerns that the Greek financial situation will bleed over to Europe and then international banks caused the funds to be aggressive sellers this week, especially old crop.
To start the week, corn opened mixed, but ended the day lower. The market was under pressure from the short-term weather forecast, which is wet for the next several days. This should be beneficial to the planted crop. Also, traders are estimating strong planting progress for last week as well as improving crop rating. The report stated planting progress at 99 percent complete and the crop condition improved 2 percent. The export inspections came out within estimates.
June 14, corn opened lower and remained under pressure for the session. News of better-than-expected planting progress pressured the market. Traders expected planting progress to reach near 96 percent or 97 percent, but the weekly update came in at 99 percent planted, with Ohio jumping from 58 percent to 97 percent planted in one week. In addition, 69 percent of the crop now is rated good to excellent, which was higher than expected.
June 15's session had corn open lower and remain under pressure for the session. News of improving crop conditions and a bearish 10-day weather forecast for the Midwest all helped to spark aggressive long liquidation selling. A sharply higher U.S. dollar and sharply lower crude oil market added additional pressure. On a side note, the U.S. Senate rejected an amendment to eliminate the 45 cent-per-gallon ethanol blenders' credit and the 54 cent-per-gallon ethanol import tariff.
June 16, corn opened lower and traded under pressure for the session. July corn now has fallen more than $1 off of last Friday's highs as long liquidation selling from fund traders drives the market lower. The trade also was nervous about another vote in the Senate on ending the ethanol blender's tax credit. After the close, the Senate voted 73 to 27 to end government incentives for ethanol. This potentially could end the 45 cent-per-gallon subsidy the government gives to blenders and the 54 cent tariff on imported ethanol. This still has to be voted on by the House. Also, the European Union voted to extend the suspension of import duties for feed wheat and barley until Dec. 31, which could hurt U.S. corn exports.
Ethanol production for the week ending June 10 averaged 880,000 barrels per day, which was down 3.8 percent from the previous week and up 4.89 percent vs. last year.
Corn used in last week's production is estimated at 92.4 million bushels. This crop year's cumulative corn used for ethanol production for this crop year is 3.78 billion bushels. Corn use needs to average 104.2 million bushels per week to meet this crop year's USDA estimate of 5 billion bushels. Stocks were 19.7 million barrels. This is up 0.51 percent from last week.
The soybean market was the best performer for the week. For the week ending June 16, July soybeans closed 22 cents lower while the new crop November soybeans dropped 31.5 cents. Support was because of continued concerns on planting progress for not only soybeans but also canola in the Northern Plains. Pressure was because of carry-over selling from a lower wheat and corn market as well as from technical selling.
Soybeans opened the week lower with early selling tied to the other grains. Additional selling was tied to weather forecasts calling for dry weather for the Corn Belt. Light selling also was tied to a lower crude oil market. Soybean losses were limited by thoughts soybean demand could increase because of issues with getting canola planted. Both North Dakota and Canada are having issues getting canola planted, and with the last planting date come and gone for canola, in the U.S. it seems unlikely that more acres will get planted.
The June 14 session had soybeans open on the defense with pressure coming from a lower corn market. Additional selling was tied to a negative USDA crop progress report, which showed a good push in soybean planting progress.
The third bit of negative news came from China as the country again had increased the reserve requirement for banks in an attempt to slow down inflation. The NOPA crush report also came in lower than expected, 120.3 million bushels compared with expectations for 121.6 million bushels.
Soybeans opened the June 15 session higher, with early support coming from planting concerns as recent rains forced many producers in the Northern Plain states and Corn Belt out of the field. Soybeans lost all of its gains once wheat, corn and the outside markets sold off. The outside markets, Dow, dollar and crude were all under pressure from concerns on how Europe was going to handle Greece's debt issue. Late in the session, soybeans were able to return to the plus side because of short covering.
The June 16 session opened on the defense with pressure again tied to spillover selling form a sharply lower corn and wheat market.
Additional selling was tied to spillover pressure form a sharply higher U.S. dollar, which is continuing to get support from Europe debt issues. Light selling was tied to improving weather conditions for next week's weather. Losses were kept in check by concerns that canola production will fall short of expectations and that will result in more demand for soybeans and soybean products.
Cash barley bids in Minneapolis dropped on the week, putting feed barley bids at $5.15 while malting barley bids remained unchanged at $7.50.
June 16 cash bids for milling quality durum were at $14.75 in Berthold, N.D., while bids in Dickinson, N.D., were $14.25.
Canola futures on the Winnipeg, Manitoba, exchange closed at more than $6 (Canadian) lower for the week ending June 16.
The canola market traded with losses for most of the week, with most of the selling tied to spillover pressure from a weaker U.S. soybean and energy complex. A stronger Canadian dollar added to the pressure. Losses were limited by slow planting progress in the Northern Plains.
As of June 12, the Canadian Wheat Board is estimating western Canada at 86 percent planted. North Dakota producers had 72 percent planted. Emergence was estimated at 50 percent. North Dakota producers were intending to plant 1.42 million acres of canola (87.5 percent of the nation's canola). Minnesota is 90 percent planted.
June 16 cash canola old crop bids in Velva, N.D., were at $27.69 while new crop bids were $26.415
As of June 12, dry bean planting progress was pegged at, for North Dakota: 75 percent planted compared with 28 percent the previous week and 93 percent for the five-year average (450,000 acres intended); Minnesota: 84 percent planted compared with 62 percent the previous week and 95 percent for the five year average (140,000 acres intended).
June 17 cash old crop sunflower bids in Fargo, N.D., were at $36 while new crop bids were $27.05.