Stocks report bearish
Wheat: USDA report negative Wheat traded with small gains for the first part of last week, but sold off hard on March 28 from influence from the U.S. Department of Agriculture's prospective acreage report and quarterly grain stocks estimate. For ...
Wheat: USDA report negative
Wheat traded with small gains for the first part of last week, but sold off hard on March 28 from influence from the U.S. Department of Agriculture's prospective acreage report and quarterly grain stocks estimate. For the week, May Minneapolis wheat was off 26.5 cents, May Chicago wheat was off 42 cents and Kansas City May wheat was 34.5 cents lower.
Wheat started the week on the defense as improving weather conditions in the Southern Plains combined with improving crop condition ratings. By mid-week wheat was able to recover and actually gain ground as traders start to price in freeze damage concerns. Recent low temperatures in much of the Southern Plains and Delta regions of the U.S. has resulted in some freeze damage to the advanced crop development staged wheat.
USDA's export inspections for wheat were estimated at 20.79 million bushels for the week ending March 22. Wheat export sales pace for the week ending March 22 was estimated at a combined total of 30.4 million bushels with 21.3 million old crop and 9.1 million new crop. With 10 weeks left in the marketing year, shipments need to average 25.8 million and sales need to average 9.6 million to make USDA's expectations of 1.025 billion bushels.
As of March 24, USDA estimated the Oklahoma wheat crop as 41 percent jointing, compared with 31 percent the previous week, 70 percent last year and 50 percent for the five-year average. Oklahoma's crop condition rating improved 2 percent to 26 percent good to excellent, 41 percent fair and 33 percent poor to very poor. Texas' wheat crop was 1 percent headed, compared with 3 percent the previous week and 4 percent for the five-year average. Texas' crop condition rating improved 3 percent to 19 percent good to excellent, 34 percent fair and 41 percent poor to very poor. Kansas' wheat crop is estimated to be 5 percent jointed, compared with 3 percent the previous week and 33 percent last year. Kansas' crop condition rating was unchanged at 29 percent good to excellent, 40 percent fair and 31 percent poor to very poor.
USDA estimated all wheat stocks in the U.S. at 1.23 billion bushels, 53 million more than the trade expected (1.177 billion) and 31 million more than last year (1.199 billion). This was considered to be negative for wheat.
USDA also released its planted acreage intentions estimate. All wheat acreage was estimated at 56.4 million, which was right in line with trader expectations, but 340,000 more than last year (55.74 million). Spring wheat acreage was estimated at 12.7 million, 350,000 acres more than trade expected (12.45 million) and 411,000 acres (12.29 million) more than last year. These numbers were considered to be negative.
Corn: bearish USDA report
May corn lost 31 cents last week. Corn traded sideways to start the week, as traders looked ahead to the USDA report and weather forecast. The USDA prospective plantings and quarterly stocks report was released March 28 and was bearish, resulting in the front three months ending locked limit down.
Corn traded slightly lower March 25, but firmed late in the session. Light profit taking and unwinding of the old and new crop positions pressured the futures. Additional weakness came from rumors that a cargo of Argentina corn was bought by U.S. feeders at a significantly lower price than U.S. The market did firm into the afternoon with a cool and wet weather forecast until mid-April and continued talk of corn acres being switched to soybeans. The futures traded close to unchanged on March 26 and 27 as traders positioned ahead of the USDA report. The average trade estimates were 97.3 million acres and quarterly stocks near 5 billion bushels.
Old crop corn quickly moved to limit down after the USDA report was released. The stocks number came in at 5.4 billion bushels, which was 400 million larger than the average estimate and even above the highest trade estimate. This was extremely bearish for corn. The acreage number came in at 97.3 million acres, which was as expected by the trade, but the largest planted acreage since 1936.
Ethanol production for the week ending March 22 averaged 805,000 barrels per day, down 9.5 percent from last year. Corn used in production the week ending March 22 is estimated at 84.53 million bushels and needs to average 88.2 million per week to meet this crop year's USDA estimate of 4.5 billion. Stocks as of March 22 were 17.44 million barrels, down 5.6 percent from the previous week and down 22.9 percent from last year.
USDA's export inspections report was bearish for corn, as there were 17.2 million bushels shipped. Shipments need to average 17.9 million bushels to hit the USDA export estimate. The export sales report for corn was at 11.6 million bushels, above the 10 million needed to meet USDA's projection of 825 million. Total shipments last week were at 15.1 million bushels, below the 17.5 million needed for the 2012 to '13 marketing year.
Soybeans: market higher ahead of report, lower after May soybeans were off 35.75 cents last week, while November dropped 12.25 cents. Trade volume was light leading up to the grain stocks and planting intentions report, but selling increased dramatically after the release of the numbers. The stocks report held the worst news (more inventory than expected), while the acreage estimate was actually friendly (1 million fewer acres than expected).
Soybeans traded mixed March 25, with old crop closing slightly lower and new crop slightly higher. Pressure came from thoughts that China's demand for old crop soybeans may be overstated. While there may be doubts about China's old crop demand, new crop demand is still plenty strong, as USDA announced a sale of 234,000 metric tons to China.
Soybeans closed moderately higher March 26 and 27 with support out of South America. On March 26, a well-regarded analyst reduced its harvest forecast for Argentina to 48.5 million metric tons, compared with USDA's estimate of 51.5 million.
The same analyst lowered Brazil's harvest to 81.3 million metric tons, compared with USDA's estimate of 83.5 million. Brazil's harvest is about 60 percent complete, though logistical issues continue to hinder exports. Trade volume remained light ahead of the grain stocks and planting Intentions report.
Soybean stocks were pegged at 999 million bushels, above the average trade estimate of 947 million and down from 1.374 billion a year ago. Planting acreage of 77.13 million acres was below trade estimates of 78.5 million acres and down from 77.2 million acres last year.
USDA reported soybean export inspections pace for the week ending March 22 at 18.5 million bushels. This brings the year-to-date export shipments pace for soybeans to 1.194 billion bushels, compared with 984.2 million for last year at this time. Soybean export sales pace was estimated at 24.8 million bushels (2.4 million for 2012 and 2013), bringing this year's total to 1.311 billion bushels, compared with 1.151 billion last year at this time. Shipments were reported at 20.9 million bushels.
USDA estimated barley acreage for the week ending March 22 at 3.6 million, virtually unchanged from last year. USDA estimated barley export shipments pace at 26,000 bushels with 14,000 bushels going to Korea, 8,000 bushels to Argentina and 4,000 bushels to Mexico. No barley exports were reported for the week. This brings the year-to-date export sales pace for barley to 6.1 million bushels, compared with 3.9 million for last year at this time.
Cash feed barley bids in Minneapolis improved to $5.30 per bushel last week, while malting barley remained with no quote.
USDA estimated durum acreage at 1.75 million, an 18 percent decrease from last year. North Dakota producers are expected to plant 1.1 million acres of durum, compared with 1.34 million last year, an 18 percent decline. USDA reported no durum shipments for the week ending March 22. Durum export sales pace was estimated at 800,000 bushels. This brings the year-to-date export sales pace for durum to 17.9 million bushels, compared with 16.3 million for last year at this time.
Cash bids for milling quality durum were at $7.75 per bushel in Berthold, N.D., with Dickinson, N.D., at $7.85.
Canola futures on the Winnipeg, Manitoba, exchange closed the week ending March 27 with $3.70 (Canadian) gains. Canola started the week lower because of thoughts of demand erosion as harvest progress picks up in South America. But the end of the week brought solid gains to canola as the market followed the U.S. soybean complex higher. Position-squaring ahead of USDA's prospective planting report also was seen. USDA estimated the 2013 canola acreage at 1.65 million, a decrease of 6 percent from last year. North Dakota producers are expected to plant 1.23 million acres of canola, a decline of 16 percent from last year.
March 27 cash canola bids in Velva, N.D., were at $28.30 per hundredweight.
USDA is estimating dry edible beans acreage for 2013 at 1.5 million acres, a decline of 14 percent from last year. North Dakota acreage is estimated at 550,000 acres, a 21 percent decline from last year.
USDA is estimating all sunflower acreage at 1.68 million, a decrease of 12 percent from last year. Oil sunflower acreage is estimated at 1.399 million, a decrease of 16 percent from last year. Nonoil sunflower acreage is estimated at 285,000, an increase of 9 percent. North Dakota producers are expected to plant 636,000 acres of sunflowers, a decline of 36 percent from last year, with oil sunflower acreage estimated at 540,000 acres (30 percent fewer) and nonoil sunflower acreage at 96,000 acres, an increase of 7 percent. USDA estimated soybean oil export sales pace for the week ending March 22 at 12.6 trillion metric tons. This brings the year-to-date export sales pace for soybean oil to 817.7 trillion metric tons, compared with 334.8 trillion for last year at this time.
March 27 cash sunflower bids in Fargo, N.D., were at $22.70 per hundredweight.