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PM markets: funds buy grains ahead of weekend

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A broad-based rally in commodities, and a drier US outlook, spurred a surge in the grains, with corn reaching its strongest close in nearly a year.

Funds covered shorts, as markets strapped in for any updates to the weather outlook while markets are closed over the weekend.

“Dry and hot conditions have grains trading higher ahead of the weekend,” said Jennifer Webster, at CHS Hedging.

“Today’s outlook will have funds covering any fresh shorts ahead of the key weekend,” said Kim Rugel, at Benson Quinn Commodities.

“Sunday night weather models will be key to next week’s market direction,” Ms Rugel said.

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Asian millers face tight feed grain supply as rain disrupts Argentina exports

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  • Heavy rains disrupt feed grain cargoes from Argentina
  • S.Korea, Vietnam seen as worst-hit by delays in corn shipments
  • India still absent from export market

By Naveen Thukral

SINGAPORE, June 17 (Reuters) – Asian millers that churn out animal feed are expected to face a squeeze in supplies of key ingredients corn and soymeal in coming weeks as heavy rains disrupt shipments from major exporter Argentina.

Cargoes from the South American nation have been facing delays for the past few weeks due to strong rainfall, but millers have been able to operate using exports that were already en route and inventory, two trade sources told Reuters.

But as those stocks dwindle, Asian feed makers are set to feel the pinch from tightening supply, likely boosting benchmark prices already driven up by unfavourable crop conditions in South America.

Chicago soymeal futures SMv1 have surged more than 50 percent since early April, while corn Cv1has jumped by about a quarter.

“I think the real tightness in supplies will come from July onwards,” said a trading manager with an international trading company in Singapore. He declined to be identified as he was not authorised to speak with media.

“The situation seems to be improving slightly in recent days but even if a boat leaves today, it will take 45 days to get to Southeast Asia.”

Vietnam and South Korea are likely to be worst-hit in the region by tightness in corn supplies as they depend heavily on South American feed materials, traders said.

South Korea is the world’s third-largest importer of corn, buying about 10 million tonnes a year. Vietnam has seen a more than six-fold jump in its purchases of the grain to 7.3 million tonnes in 2015/16 from four years earlier, according to U.S. Department of Agriculture data.

For soymeal, buyers in Asia account for almost 30 percent of global imports.

“Indonesia, Thailand and the Philippines will not be impacted that much as far as corn is concerned because they have all been trying to replace corn with feed wheat,” a second Singapore trader said.

“But for meal, I think everyone will take a hit.”

In the past, Asian feed grain importers turned to India for corn and soymeal purchases when South American supply was low. But the South Asian nation has been absent from the international market for the past few years amid growing local consumption.

The shipping disruptions follow on top of unseasonal downpours in April hitting the soy crop in Argentina, the world’s biggest exporter of soymeal, while drought cut corn output in Brazil, the No.2 producer of that grain.

PM markets: grains extend losses as US weather improves

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Grain futures extended their losses, as the forecasts continued to push more moisture into the US Midwest, easing row-crop worries.

And wheat came under pressure as harvest condition improved in the US Plains.

The improving weather outlook encouraged a sell-off, despite some good US export numbers, in a market that has seen very heavy fund buying.

“Weather maps are driving price direction and the funds have certainly accumulated a belly full of length the last several weeks,” said Tregg Cronin, at Halo Commodities.

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GRAINS-Corn eases for 2nd day on improved US weather, wheat at 2-wk low

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  • Corn, soybeans ease as rains bring relief to Midwest crops
  • Wheat hits two-week low on pressure from U.S. harvest

Adds details, quotes

By Naveen Thukral

SINGAPORE, June 16 (Reuters) – Chicago corn futures slid for a second session on Thursday while soybeans lost more ground as much-needed rains across the U.S. Midwest boosted the outlook for crops.

Wheat dropped to a two-week low on pressure from the rapidly advancing harvest of the U.S. winter crop.

Chicago Board of Trade’s most-active corn contract Cv1 fell 0.8 percent to $4.25-3/4 a bushel by 0130 GMT while soybeans Sv1 gave up 0.6 percent to $11.48-3/4 a bushel.

Wheat Wv1 lost 0.4 percent to $4.75-3/4 a bushel after hitting a low of $4.75-1/4 a bushel, weakest since June 2.

Showers across the U.S corn belt have this week brought relief to areas where soil moisture has been waning in the heat, and more rain is expected this weekend.

“Rain fell across much of the Midwest, Delta and Southeast yesterday,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

“Meteorologists have also tempered their forecasts for remainder of the June – now expected to be less harsh than previously advertised.”

Forecasts are for a return to high temperatures this weekend and into next week, although there is also a high chance of precipitation.

Higher demand for U.S. soybean products amid lower South American output kept a floor under the soybean market. The National Oilseed Processors Association in a monthly report said its members crushed 152.8 million bushels of soybeans in May, more than analysts expected and the most on record for the month.

Wheat is being anchored by good yields in early U.S. harvesting and a backdrop of hefty global supplies.

Russian wheat export prices rose further last week on concerns that recent rains could hit crop quality.

Black Sea prices for Russian wheat with 12.5 percent protein content were at $184 a tonne on a free-on-board basis at the end of last week, up $4 from a week earlier, Russian agricultural consultancy IKAR said in a note.

Commodity funds were net sellers of Chicago Board of Trade corn, soybean and wheat futures contracts on Wednesday.

Trade estimates of fund selling in corn ranged from 9,000 to 14,000 contracts, and in wheat from 3,500 to 6,000 contracts. Funds were seen as net sellers of 8,000 soybean contracts.

PM markets: corn rally continues, as traders watch the skies

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Corn continues to be the winner in the grain complex, as the market keeps an uneasy eye on the medium and long term forecasts, which suggest hot dry weather is on its way to the US Midwest.

“US weather is still being viewed bullish as temperatures continue to run above normal in the 6 to 10 day forecast,” said Paul Georgy, at Allendale.

“Near-term, rains do move through the cornbelt, however, moisture then looks to become more sporadic,” said.

“The next couple days will be about watching rainfall returns before the heat comes back late in the weekend,” said Tregg Cronin, at Halo Commodities.

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China sees slight increase in soybean imports this year – grain official

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  • China 2016/17 soy imports seen below USDA current forecast
  • Corn imports set to fall due to large feed grain stocks

LONDON, June 14 (Reuters) – China, the world’s biggest soy buyer, expects to import 85 million tonnes of soybeans in 2016/17, up from the prior season, although bumper stocks in storage should limit the increase, a senior official said on Tuesday.

Li Xigui, division director with state-run China National Grain & Oils Information Center (CNGOIC), told the IGC grain conference in London, soybean imports were expected to reach 82 million tonnes in the 2015/16 year on an October-September season.

That compared with 78.35 million tonnes in 2014/15, CNGOIC figures showed.

The forecast for 2016/17 is slightly below the U.S. Department of Agriculture’s current forecast for Chinese soybean imports of 87 million tonnes.

“There will be increase but not to such a great level,” Li said through a translator.

“Although American soybean exports to China are on the increase, the increase is controllable.”

Li said China had been stockpiling soybeans for a number of years.

“We need to hurry up the sale of these reserves,” he said, adding that the global market was “too optimistic” about further Chinese soybean demand.

China imported 7.66 million tonnes of soybeans in May, up 8.3 pct from 7.07 million tonnes in April, figures from the General Administration of Customs of China showed last week.

Li forecast a marginal decline in China’s wheat production in 2016/17 (June/May) to 130.1 million tonnes from the prior season’s 130.2 million.

Imports were seen stable at 3.0 million tonnes.

China corn production was forecast to fall to 218 million tonnes from the prior season’s 224.6 million, reflecting a 2.6 percent fall in planted area and 0.5 percent drop in yields.

Li said corn imports would, however, decline to 1.0 million tonnes from the prior season’s 2.7 million tonnes due to a glut of supplies of feed grains.

“Our capacity is saturated so we try to reduce our stocks,” he said.

GRAINS-Corn jumps 2.5 pct on supply concerns; soybeans, corn firm

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  • Corn up 2.5 pct in biggest 1-day gain in a month, soy rises
  • USDA cuts ending stocks outlook, funds continue to buy

Adds comment, detail

By Naveen Thukral

SINGAPORE, June 13 (Reuters) – U.S. corn rallied 2.5 percent on Monday and soybeans gained almost 1 percent, with prices supported by concerns over a severe drought in Brazil and unseasonal rains in Argentina curbing global supplies.

Wheat rose, tracking gains in corn and soybeans, although prices were capped by expectations of a bumper harvest of the U.S. winter crop.

“Funds are continuing with their bullish bets on corn and soybean markets,” said Kaname Gokon at brokerage Okato Shoji in Tokyo.

“The USDA has cut its estimates for ending stocks as there is strong demand for U.S. products.”

The Chicago Board of Trade most-active corn contract Cv1 was up 2.5 percent at $4.33-1/2 a bushel by 0217 GMT, its biggest one-day gain since mid-May. Soybeans Sv1 added 0.9 percent to $11.88-3/4 a bushel.

Wheat Wv1 rose 0.7 percent to $4.98-1/2 a bushel.

Agricultural markets have been showing bullish momentum since April as a severe drought has hit Brazilian corn production, while heavy rains have swamped Argentina’s soybean crop.

Domestic supplies of corn and soybeans will be tighter than expected in the United States as problems with crops in Brazil and Argentina have raised demand for U.S. supplies from overseas buyers, the U.S. Department of Agriculture said on Friday.

In its monthly supply and demand report, the government cut its new-crop and old-crop ending stocks outlooks for both corn and soybeans by more than analysts had forecast.

For corn, the USDA said U.S. ending stocks for 2015/16 would be 1.708 billion bushels, down from its May outlook for 1.803 billion bushels. It lowered its 2016/17 corn end stocks view to 2.008 billion bushels from 2.153 billion bushels.

Old-crop soybean stocks were cut to 370 million bushels from 400 million bushels. New-crop soy stocks were lowered to 260 million bushels from 305 million bushels.

The market will focus now on what the USDA will say on June 30, when it releases its estimates for U.S. quarterly grain stocks and planted acres. It will also keep a close eye on the weather that could threaten recently planted U.S. corn and soybean crops.

Large speculators raised their net long position in CBOT corn futures in the week to June. 7, regulatory data released on Friday showed.

The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that noncommercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and raised their net long position in soybeans.

U.S. corn export sales outpace year ago as Brazil woes fuel demand

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CHICAGO, June 9 (Reuters) – Export sales of U.S. corn to be shipped ahead of the fall harvest have topped last year’s pace for the first time this season, government data on Thursday showed, fueled by competitive prices and a lack of available grain from Argentina and drought-hit Brazil.

Buyers from at least 31 different countries booked U.S. corn shipments last week, the most diverse pool of buyers since a record 32 unique destinations made purchases in the week ended Oct. 11, 2007, according to U.S. Department of Agriculture data.

U.S. suppliers are welcoming the export revival. Earlier this season, abundant supplies of cheap South American corn and a strong dollar had global buyers shunning shipments from the United States, the world’s top exporter.

But Brazilian supplies have now thinned dramatically and domestic prices have surged to record highs, forcing troubled poultry and pork producers there to turn to alternatives like feed wheat.

“Things have definitely picked up,” said Darin Friedrichs, analyst with AgTraderTalk.com.

“Brazil way overexported this year and even as they harvest, they need to refill their domestic supply first so they’re going to be hesitant to export. Argentina can do some, but we’re basically the only option for corn right now,” he said.

Old-crop U.S. corn export sales topped 1 million tonnes for a fifth straight week last week, bringing total sales so far in the 2015-16 season to nearly 44.7 million tonnes, 1.7 percent ahead of the same point last year. Sales had lagged the year-ago pace by 20 percent as recently as March.

The surge in demand has set the stage for an upward revision to the USDA’s current-season export forecast, possibly as soon as Friday morning when the agency is scheduled to update its monthly supply-demand reports.

In May, the USDA forecast 2015-16 corn exports at 43.82 million tonnes, down 7.5 percent from the prior year.

  • US corn export sales – number of destinations

(Reporting by Karl Plume in Chicago; Editing by Leslie Adler)

GRAINS-Soybeans extend gains into fourth session, near 2-yr high

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3 hours ago

6/9/2016, 5:05:46 AM

SYDNEY, June 9 (Reuters) – U.S. soybeans rose for a fourth consecutive session on Thursday, with forecasts of unfavourable weather for U.S. production pushing prices towards their highest in nearly two years.

FUNDAMENTALS

* The most active Chicago Board of Trade March soybeans Sv1 climbed 0.11 percent to $11.79 a bushel, having firmed 3.2 percent on Wednesday when prices hit their highest since the end of June 2014 at $11.89-1/4 a bushel.

* The most active corn futures Cv1 fell 0.35 percent to $4.29-3/4, having gained 0.82 percent in the previous session when prices hit a peak of $4.39-1/4 a bushel – the highest since last July.

* The most active wheat contract Wv1 dropped 0.14 $4.18-3/4 a bushel, having closed up 2.1 percent on Wednesday when prices hit a seven-month high.

* Forecasts for dry weather across key U.S. soybean growing regions have been supporting prices.

* The U.S. Department of Agriculture (USDA) has announced spot soybean sales for three days in a row, highlighting the problems that excessive rains have wreaked on the harvest in Argentina.

* USDA said early on Wednesday that exporters booked deals to ship another 132,000 tonnes of soybeans to China during the 2015-16 crop year. China is the top buyer of the oilseed.

MARKET NEWS

* The New Zealand dollar took centre stage in early Asian trade on Thursday, surging to a one-year high after the Reserve Bank of New Zealand defied expectations for an interest rate cut and stood pat. USD/

* Oil prices remained near 2016 highs in early trading on Thursday, buoyed by a fall in U.S. crude inventories, a weaker dollar and strong demand, but some analysts warned that the recent rally was starting to look overblown. O/R

* The Dow ended above 18,000 for the first time since April on Wednesday as declines in the dollar lifted some commodity-related shares and boosted the outlook for multinationals.