• April’s WASDE report, true to history, held little in the way of surprise for the marketplace and raised something of a yawn from traders as interest returns to Chinese supply “indigestion” and central US weather forecasts. It seems that there is little change to anyone’s perception on the outlook for corn, wheat and soybean prices as we head into the the new crop northern hemisphere growing season. Will we see spring lows in May as both US and northern hemisphere crops go into favourably moist seedbeds?

• The USDA has today released its weekly export figures as detailed below:

Wheat: 356,700 mt, which is above estimates of 50,000-150,000 mt.
Corn: 702,500 mt, which is above estimates of 350,000-450,000 mt.
Soybeans: 325,700 mt, which is above estimates of minus 50,000-plus 150,000 mt.
Soybean Meal: 77,000 mt, which is below estimates of 100,000-200,000 mt.
Soybean Oil: 11,900 mt which is within estimates of 5,000-20,000 mt.

• Brussels issued wheat export certificates totalling 201,761 mt, the smallest of the season, which brings the season total to 27,144,360 mt. This is 1.93 million mt (7.6%) ahead of last year’s record pace and the first sign of a reduction in volume for many weeks. The USDA’s latest export forecast at 33.5 million mt looks huge!

• Today’s lower market close will be interesting to view in tomorrow’s trade.

To download our USDA report recap please click on the link below:

USDA Recap 9 April 15

• Markets are generally lower once again in the run up to tomorrow’s USDA update in which many are expecting to see a rise in US 2014/15 corn stocks. With rain also forecast for much of Kansas next week it seems that traders are happy (at present) to sell the grains and also take a profit on short soybean positions. Corn weakness could also be partially attributed to a sharp drop in crude oil prices as Saudi Arabia has record large production and exports as they attempt to maintain market share. US crude stocks continue to build and could well test storage capacity by the middle of next month unless production is slowed by price!

• Additional rainfall which is forecast for the US Delta and mid-south could see farmers contemplating seeding another crop like soybeans or rice vs. corn. Some 4.5 million acres of corn are planted across the Delta region and as much as I million of these could be switched to another crop if financially viable. Also wet conditions could delay planting of corn to the point that the risk of pollination during peak summer temperatures will be too great.

• Argentine farmers are noted as heavy sellers of soybeans with record yields being reported in pretty much all areas. However, it seems that buyers are less willing and fresh global demand is scarce right now leaving Argentine cash basis on the decline, which makes them favourable when compared with Brazil.

• Aside from wet weather conditions in the US Delta region it is difficult to find cause to become bullish right now.

• The Tuesday return to work has seen CBOT prices decline with little in the way of bullish news to lift prices. It appears that the world and his wife want to sell corn below US FOB Gulf levels and the EU is reported to have sold wheat to Saudi Arabia at prices below current replacement (again) and to cap it all China has only two soybean vessels left in the US lineup, which is the lowest number since early August! Little wonder the bulls are hungry for news!

• A possible snippet for the bulls comes from news that China may be looking to but Mexican sorghum, which Mexico may then replace with US corn – but that could be scraping the bottom of the barrel as (at this time) we believe that Mexican grains are not approved for import into China (from a phytosanitary perspective). That said, China is still reputed to be awash with grain amid domestic prices that are significantly above world replacement levels due to minimum price guarantees to farmers by the Chinese government – and all that entails. China is also scheduled to begin its own corn auction in an effort to reduce stock levels.

• Finally, EU wheat prices continue to decline and it is suggested that farmers are concerned over high old crop stock levels, and particularly more so now that new crop is looking particularly favourable even this early in the season. France’s AgriMer reported the French soft wheat crop to be 91% good/excellent, which is a 1% week on week improvement and way ahead of last year’s condition at this time which was 76%. There could well be some concern over the uncertainty of what will/will not happen as far as the Russian export tax position is concerned, and this is certainly not providing confidence or market support – right now. Interestingly, we may well see US farmers facing the same position as their EU wheat counterparts when they have their crops in the ground – time will (as always) tell.

• Thursday will see the latest iteration of the USDA’s crop reports, and markets are unlikely to get too excitable before then.

• We have seen mixed trade into the Easter extended holiday weekend, with wheat and corn in Chicago gaining 4c-5c and nearby soybeans shedding around 5c. It seems that a weather premium is being added to wheat as the EU, and now the GFS weather model, shows drier weather for the US Plains than previously anticipated.

• The USDA has today released its weekly export figures as detailed below:

Wheat: 293,100 mt, which is within estimates of 100,000-300,000 mt.
Corn: 431,700 mt, which is within estimates of 400,000-500,000 mt.
Soybeans: 595,700 mt, which is above estimates of 150,000-300,000 mt.
Soybean Meal: 397,600 mt, which is above estimates of 100,000-200,000 mt.
Soybean Oil: 20,500 mt which is above estimates of zero-20,000 mt.

• Informa Economics, in their latest monthly forecast put the US winter wheat crop at 1.497 billion bu vs. 1.378 billion bu last year. The Brazilian corn crop was estimated 2.4 million mt higher at 74.7 million mt, soybeans 500,000 mt higher at 93 million mt and the Argentine soybean crop was seen down 500,000 mt at 57.5 million mt.

• Other news is pretty thin with many leaving early for the long weekend holiday. It should be borne in mind that estimated fund positions all stand at net shorts, corn at 5,000, wheat at 60,000 and soybeans at 35,000. With US weather becoming a more significant headline right now the bears may well be feeling edgy this weekend. However, as reported above, with a fairly distinct lack of US export demand and fast falling interest in US soybeans rallies may well be difficult to sustain in the longer term.

• Have a good Easter break, the next update will be on Tuesday.

• New month, new quarter, new money and – so it seems – higher prices as a result. Index fund buying has been evident and, by all accounts, robust. Early markets were a touch weaker but fresh long positions, typical of large fund activity, surged as the day progressed.

• A typical general labour strike in Argentina has been in place since yesterday (Tuesday) as is so often the case in springtime. Crushers are reported to have ample supplies following recent heavy farmer selling and the key shipment period typically begins in May, so timing is not crucial (for now). However, the disruption, albeit minimal right now, may be unnerving for Chinese buyers who have not followed prices higher.

• Staying in Argentina, the Buenos Aires Grain Exchange (BAGE) reports their 2014/15 soybean crop estimate 1.5 million mt higher month on month at 58.5 million mt. Their 2014/15 corn crop estimate is also higher by ½ million mt month on month at 23 million mt.

• Brussels has released wheat export data early ahead of the Easter holiday weekend and report another million plus week with certificates totalling 1,106.397 mt, which brings the season total to 26.94 million mt. This is 2.36 million mt (9.6%) ahead of the same time last year. The figures, coupled with a $0.15/bu rebound (higher) in Chicago wheat markets left MATIF wheat €uro 3 higher recouping Tuesday’s losses.

• Post USDA report trading has been interesting to say the least, as predicted it has certainly been volatile! Whether volatility continues remains to be seen, and the upcoming long Easter break may just provide a call to senses and more rational trading – time will tell.