Wheat
Wheat traded with strong gains for the first three sessions of last week, but lost some ground on Oct. 30. Support spilled over from a stronger U.S. soybean meal market, which continues to see support from tight supplies. For the week ending Oct. 30, December Minneapolis gained 10.75 cents, December Chicago gained 18.25 cents and December Kansas City picked up 8.25 cents.
Wheat continues to follow corn and soybeans. Traders are concerned planting progress has been slow, and that helped add light support, but wheat would not have been able to rally without the help of the corn and soybean complex. Wheat export demand remains lackluster at best as the world remains awash in wheat.
The Oct. 28 session saw wheat trade with its biggest gains for the week. Early support spilled over from a stronger corn and soybean complex. Wheat did give back some of its gains late in the session once selling returned to the corn and soybean complex. Late-session support came from production concerns as traders are starting to become a little nervous about the potential size of the U.S. winter wheat crop, as well as from production concerns in Russia and Australia. In all wheat seems to be content following the corn and soybean complex.
The Oct. 29 session also saw strong gains, with most of the early strength continuing to spill over from a higher corn and soybean complex. The talk in the trade now is focusing around planting concerns. Harvest activity has been slow and that has many traders starting to show concerns toward planting progress. The slow corn and soybean harvest is resulting in a delay in winter wheat planting progress. The end result might be less U.S. winter wheat acres.
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Wheat lost ground on Oct. 30, as all three of the exchanges traded on the defense following the trend set by the soybean market. Corn continued to trade mixed early in the session, and that helped keep wheat in a state of flux, but once corn fell, wheat followed. Light pressure came from weather reports calling for moisture to fall in the winter wheat region. Losses were kept in check by continued dry weather concerns in Russia and Australia. The trouble with wheat staging a huge recovery at this point lies with the fact the world is awash in wheat.
Progressive Ag continues to be neutral to wheat as we expect the cash market to take the lead in setting wheat's price. Basis and quality discounts have been wider than usual and they should start to show signs of improvement as we go into November. Futures will likely retreat if corn and soybeans start to fall.
As of Oct. 26, winter wheat planting is estimated 84 percent completed, compared with 76 percent the previous week and 84 percent for the five-year average. Winter wheat emergence was estimated at 67 percent, compared with 56 percent the previous week and 62 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. This compares with 61 percent good to excellent last year.
Corn
The corn market closed higher for the week and reached $3.81 in the December contract on Oct. 29, which was last seen on Aug. 18. Corn found support from the strong run in the soybean complex and logistical issues. There is talk of transportation issues with railcar shortages, and expectations are that it will continue. As we move into this week, traders will focus on the next U.S. Department of Agriculture supply, demand and production report released on Nov. 10. As of the morning of Oct. 31, the December contract was up 17 cents for the week, while the March contract gained 16.5 cents.
Corn closed with green numbers for the first three days of the week and with double-digit gains on Oct. 27 and 29. Support came from the crop progress report with 46 percent of the corn crop harvested, well behind the five-year average of 65 percent. The ethanol report was also supportive, as it showed corn use up from the previous week and stocks were lower. Buying interest also surfaced from the sharp early week gains in the soybean complex. The market is trying to loosen up some corn from the lack of farmer selling.
Futures closed slightly lower on Oct. 30 as we hit 10 week highs and buying interest dried up. The export sales report was disappointing and the strength in the dollar does not help. It looks to be a busy week of harvest activity as soybeans finish up, but we are still behind the five-year average. It was also the end of the month and some profits were realized. The focus this week will be the next USDA report.
Ethanol production for the week ending Oct. 24 averaged 937,000 barrels per day, up 4.58 percent from the previous week. Total ethanol production for the week was 6.559 million barrels. Corn used in production the week ending Oct. 24 is estimated at 94.08 million bushels and needs to average 98.39 million bushels per week to meet this crop year's USDA estimate of 5.125 billion bushels. Stocks were 17.039 million barrels, down 5.02 percent from the previous week.
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The crop progress report has the corn rated at 74 percent good to excellent, 19 percent fair and 7 percent poor or very poor. Harvested corn is at 46 percent, compared with the five-year average of 65 percent. Mature corn is at 96 percent, compared with the five-year average of 97 percent.
Soybeans
As of the Oct. 30 close, November soybeans were 46.75 cents higher for the week and the January contract was up 46.5 cents. At 10 a.m. Oct. 31, November soybeans were trading 3.5 cents higher, while January was up 1.75 cents.
Soybeans opened lower the morning of Oct. 27, but quickly moved higher to close with strong gains. Oct. 28 followed with strong overnight gains, though the market slipped to close with only small gains by the end of the day. Strong demand continues to provide support to soybeans with another round of strong weekly export inspections reported Oct. 27. In addition, USDA announced sales of 120,000 metric tons of soybeans to China and 110,500 metric tons unknown. The Oct. 27 crop progress report showed the harvest at 70 percent complete, up from 53 percent the previous week, compared with the five-year average of 76 percent.
Soybeans traded sharply higher Oct. 29, with the January contract closing at its highest level in 10 weeks. Strength in soymeal and soy oil futures provided support, as demand for tight supplies of soybean meal remains high. Despite recent gains, there is still a strong bearish side to the market with a record crop on its way. The forecast going forward is favorable for the continuation of the harvest. The forecast looks good in South America, too, as planting tries to catch up to the average pace.
Soybeans turned lower after the Oct. 29 big gains to close with sharp losses on Oct. 30. The market had been following soymeal last week and continued to do so as meal turned lower after hitting new highs overnight. Long liquidation added to the negative tone, as did the harvest continuing to move along with favorable weather. Oct. 30 export sales were good, coming in well above the amount needed to keep pace with USDA's projection. The USDA announced a sale of 132,000 metric tons of soybeans to China.
As of Oct. 26, soybeans harvested were at 70 percent, compared with 53 percent the previous week and the five-year average of 76 percent.
Barley
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USDA reported barley export shipments pace for the week ending Oct. 24 at 6,752 bushels, all going to China. This brings barley export shipments pace for 2014 to 3.08 million bushels, compared with 2.99 million last year.
Oct. 30 cash feed barley bids in Minneapolis were at $2.45 per bushel, while malting bids were $7.35.
Durum
USDA reported durum export shipments pace for the week ending Oct. 24 at 964,506 bushels, with Italy the only destination.
Oct. 30 cash bids for milling quality durum were at $15 per bushel in Berthold, N.D., while the Dickinson, N.D., bid was at $15.
Canola
Canola futures on the Winnipeg, Manitoba, exchange closed sharply higher with the front month November ending the week Oct. 30, with $40.60 (Canadian) gains. Canola traded with double-digit gains in almost every session, with most of the support spilling over from a stronger U.S. soybean complex, which continues to be supported by tight supplies of soybean meal. Additional support came from technical buying as buy stops were triggered once canola traded to support.
Oct. 30 cash canola bids in Velva, N.D., were at $17.50 per hundredweight.
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Dry edible beans
As of Oct. 27, North Dakota's dry bean crop (40 percent of the nation's crop) was 95 percent harvested, compared with 92 percent the previous week and 89 percent for the five-year average. Minnesota's crop (7 percent of nation's crop) was harvested. Nebraska's crop (10 percent of nation's crop) was 97 percent harvested, compared with 92 percent the previous week and 96 percent for the five-year average. Michigan's crop (12 percent of the nation's crop) was 89 percent harvested, compared with 83 percent the previous week and 96 percent for the five-year average.
Sunflowers
As of Oct. 26, 30 percent of the nation's sunflower crop was harvested, compared with 11 percent the previous week and 43 percent for the five-year average. North Dakota's sunflower crop was rated 74 percent good to excellent, 19 percent fair and 7 percent poor, unchanged from the previous week.
Oct. 30 cash sunflower bids in Fargo, N.D., were at $17.90 per hundredweight.
