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Corn extends losses into fifth session

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  • Corn falls, lingers near lowest since October, 2014
  • Wheat falls 1 percent, soybeans edge lower
  • USDA to report latest crop condition report on Wednesday

By Colin Packham

SYDNEY, July 6 (Reuters) – U.S corn fell for a fifth consecutive session on Wednesday as favourable weather forecasts added to expectations of bumper supplies.

Wheat fell 1 percent, while soybeans fell nearly 0.5 percent.

The most actively traded corn futures on the Chicago Board of Trade CZ6 fell 0.35 percent to $3.56-3/4 a bushel after closing down 2.5 percent in the previous session when prices hit a contract low.

Front-month corn futures Cv1 were little changed, having closed down more than 6 percent on Tuesday when prices fell to a low of $3.33-3/4 a bushel – the lowest since October, 2014.

Analysts said expectations of ample global supplies continue to weigh on prices.

“The reality is there are favourable conditions,” said Phin Ziebell, agribusiness economist, National Australia Bank. “We occasionally get some supply concerns but none of them seem to come through to impacting production.”

The outlook for more rain in key growing areas of the U.S. Midwest during the next two weeks outweighed concerns about some dry conditions in about 15 to 20 percent of the Midwest, including southeast Iowa and western Illinois.

Front-month wheat futures Wv1 fell 1.2 percent to $4.15-1/4 a bushel, having closed down 2.5 percent on Tuesday.

Front-month soybean futures Sv1 eased 0.54 percent to $11.11 a bushel, having closed down 1.8 percent on Tuesday.

Soybeans are under pressure amid signs of weak demand for U.S. supplies.

The U.S. Department of Agriculture on Tuesday morning said export inspections of soybeans totalled just 191,426 tonnes in the latest week, down from 295,816 a week ago and below the low end of analysts’ forecasts.

Analysts said the U.S. Department of Agriculture’s latest weekly update on crop conditions, which will be released at 3 p.m. CDT (2000 GMT), will likely drive the next price trigger.

Analysts are expecting the report to show that good-to-excellent conditions for both corn and soybeans fell 1 percentage point.

GRAINS-U.S. wheat, soybeans, corn fall on rising supply view

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By Mark Weinraub

CHICAGO, July 1 (Reuters) – U.S. wheat futures sank to multi-year lows on Friday, pressured by an ample global stockpile that was expected to grow even larger due to a bountiful harvest, traders said.

Corn and soybean futures also weakened, with soybeans settling back from a rally on Thursday that pushed prices to a two-week high.

The U.S. Agriculture Department’s acreage report from Thursday, which showed a surprise bump in corn and spring wheat acreage, continued to cast a shadow over the grains market.

“The market is back to trading fundamentals,” said Greg Grow, director of agribusiness at Archer Financial Services. “The acreage increase in corn was unexpected, the acreage increase in spring wheat was unexpected. The world is well supplied in feed grains right now.”

The front-month Chicago Board of Trade soft red winter wheat contract Wc1shed 3.5 percent to a nine-year low while K.C. hard red winter KWc1 wheat touched a fresh 10-year low.

Forecasts for benign weather across much of the U.S. Midwest during the next few weeks – a key time for corn development – also weighed on prices.

“Highs warm into the mid to upper 90s (degrees Fahrenheit) for the far southern/western Midwest next Wednesday to Friday, but the rain ahead of this event will recharge soil moisture and lessen stress to pollinating corn,” Commodity Weather Group said in a note to clients.

Private analytics firm Informa Economics forecast U.S. corn production at 14.531 billion bushels and soybean production at 3.89 billion bushels. Both estimates were above the current U.S. Agriculture Department outlook. 

CBOT soft red winter wheat for September delivery WU6 settled down 15-1/4 cents at $4.30-1/4 a bushel, K.C. September hard red winter wheat KWU6 was 11 cents lower at $4.11-1/2 a bushel and MGEX September spring wheat 1MWEU6 was down 9 cents at $4.99-1/4 a bushel.

CBOT December corn CZ6 was off 4-1/4 cents at $3.67 a bushel. CBOT November soybeans SX6were down 15-3/4 cents at $11.37-1/2 a bushel.

For the week, CBOT soft red winter wheat was down 7.7 percent, its biggest weekly decline in two years. K.C. wheat was off 6.7 percent, its fourth straight weekly loss.

CBOT corn fell 4.5 percent this week and soybeans were up 5.5 percent, their biggest weekly gain since October 2014.

Wheat faces fourth week of decline, lingers near 6-year low

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  • Wheat down 10 pct in 4 weeks of decline on supply pressure
  • Corn has lost 15 pct in 2 weeks, USDA boosts planting outlook

Adds details, quotes

By Naveen Thukral

SINGAPORE, July 1 (Reuters) – U.S. wheat lost more ground on Friday with the market set for a fourth week of decline, as a U.S. Department of Agriculture (USDA) report that pegged plantings above expectations dragged on prices.

Corn, which has lost around 15 percent in two weeks of losses, is expected to decline further as excess wheat supply takes its market share in the animal feed market.

Chicago Board Of Trade most-active wheat contract Wv1 is down nearly 5 percent this week. In the previous session, prices hit a low of $4.36 a bushel, the weakest since June 2010.

Corn Cv1, which plumbed an 11-week low of $3.65-1/4 a bushel on Thursday, has given up more than 3 percent this week.

“Corn had rallied due to spillover from gains in the soybean market but the reality is that there is too much corn around and now we have increase in U.S. acreage,” said Phin Ziebel, agribusiness economist at National Australia Bank in Melbourne.

“The supply and demand situation is bearish for grains and more so for corn as feed wheat is going to eat into its market share.”

The USDA, in an acreage report, said domestic all-wheat plantings totaled 50.816 million acres, topping analysts’ forecasts for 49.869 million and the agency’s March estimate of 49.559 million.

Corn seedings were 94.148 million acres, above the high end of analysts’ estimates. On an average, they had expected acreage to fall from the government’s March forecast of 93.601 million.

The USDA, in a separate report, said corn inventories as of June 1 were the biggest since 1988 while soybean stocks for that period were the third biggest ever.

Soybean futures Sv1 are up nearly 7 percent this week, the biggest weekly gain since October 2014.

The acreage report showed farmers planted a record 83.688 million soybean acres, above the government’s March forecast of 82.236 million but below analysts’ estimates for 83.834 million.

Commodity funds were net sellers of CBOT corn contracts on Thursday and net buyers of soybean futures.

Trader estimates of fund selling in corn ranged from 15,000 to 25,000 contracts, and estimates of fund buying in soybeans ranged from 14,000 to 25,000 contracts. Estimates of fund buying in wheat ranged from zero to 5,000 contracts.

Corn eases on stable U.S. crop condition, wheat struggles

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  • Corn falls on better-than-expected U.S. crop condition
  • Soybeans underpinned by strong demand, concerns over dryness

Adds details, quotes

By Naveen Thukral

SINGAPORE, June 28 (Reuters) – Chicago corn futures lost ground on Tuesday, falling for a sixth out of seven sessions, as a U.S. government report showed healthy crop conditions despite concerns over dry weather.

Soybeans rose for a second session, underpinned by forecasts of dry weather in the U.S. crop belt next month while the wheat market faced headwinds from a rapidly progressing U.S. harvest.

Chicago Board of Trade most-active corn contract Cv1 was down 0.3 percent to $3.84-1/4 a bushel by 0215 GMT, while soybeans Sv1 gained 0.3 percent to $11.08-1/2 a bushel. Wheat Wv1 lost 0.1 percent to $4.58 a bushel.

“U.S. corn conditions came in unchanged on the previous week, so prices struggled,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

“Some of the driest areas of the U.S. Midwest received rain over the weekend. The Delta and Southeast mostly trended drier, but meteorologists say the region should see widespread precipitation today.”

After the CBOT closed on Monday, the U.S. Department of Agriculture rated 75 percent of the U.S. corn crop as good to excellent, bucking expectations for a downgrade. US/COR

Wheat futures have come under pressure on reports of large yields from the U.S. winter crop.

U.S. farmers have finished harvesting 45 percent of the winter crop as compared with 25 percent a week ago and above the five-year average of 41 percent, the USDA said.

Soybeans were underpinned by forecasts of a return to hot temperatures in the second half of July.

The USDA rated 72 percent of the U.S. soybean crop in good to excellent condition, down from 73 percent the previous week and in line with analyst expectations.

The agency in a separate report confirmed sales of another 150,000 tonnes of U.S. soybeans to unknown destinations on Monday, following sales announcements of more than 400,000 tonnes on Friday.

The USDA is set to release closely watched stocks and plantings estimates on Thursday.

Those reports will show the extent to which brisk export demand has whittled down corn and soybean inventories, and whether farmers planted more soybeans and less corn than initially expected due to a spring rally in soy prices.

Commodity funds were net buyers of CBOT soybean futures contracts on Monday and net sellers of corn and wheat.

Trade estimates of fund buying in soybeans ranged from 6,000 to 18,000 contracts, and estimates of fund selling in wheat ranged from 4,000 to 5,000 contracts. Estimates of fund activity in corn ranged from net sellers of 6,000 contracts to net buyers of 4,000 contracts.

Corn drops for 4th day as rains boost U.S. crop outlook

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SINGAPORE, June 23 (Reuters) – Chicago corn slid for a fourth session on Thursday with the market hitting its lowest in more than a month as widespread rains across the U.S. Midwest lifted crop prospects.

Soybeans edged lower after firming in the last session on the back of strong demand, while wheat ticked up on support from concerns over Black Sea crops.

FUNDAMENTALS

* Storms rolled through the U.S. corn belt on Tuesday and Wednesday, easing concerns about dryness in some areas. With the crop still heading into its crucial pollination phase, which typically occurs in July in the Midwest, weather remained the focus.

* Thunderstorms were reported over parts of South Dakota, Missouri, Iowa and Illinois, bringing bursts of heavy rainfall totalling more than 2 inches per hour in spots.

* That triggered liquidation of long positions by investors. Commodity funds were net sellers of Chicago Board of Trade corn futures contracts on Wednesday and net buyers of soybean futures.

* Trade estimates of fund selling in corn ranged from 3,000 to 13,000 contracts, while estimates of net fund buying in soybeans ranged from 4,000 to 8,000 contracts. COMFUND/CBT

* The soybean market was underpinned by demand for U.S. supplies. Firming CIF (cost, insurance and freight) premiums for soybeans at the U.S. Gulf export terminal fuelled talk of fresh business, in addition to sales confirmed on Tuesday by the U.S. Department of Agriculture.

* Soybean spot basis bids were higher at U.S. Midwest river terminals on Wednesday, with the basis extending the previous session’s steep gains on strong export demand and slow farmer sales.

* The wheat market drew support from worries about the quality of wheat crops in Russia and Ukraine.

* The rainy weather has reduced protein levels in Russian wheat and raised concerns over fungal disease while also reducing the proportion of milling wheat in Ukraine.

MARKET NEWS

* Asian shares edged up and sterling stood close to its peak for the year on Thursday, as investors were cautiously optimistic that British voters would opt to remain in the European Union at a referendum later in the session.

DATA/EVENT AHEAD (GMT)
Britain holds referendum on membership in European Union
0700 France Markit manufacturing flash PMI Jun
0700 France Markit services flash PMI Jun
0730 Germany Markit manufacturing flash PMI Jun
0730 Germany Markit services flash PMI Jun
0800 Euro zone Markit manufacturing flash PMI Jun
0800 Euro zone Markit services flash PMI Jun
1230 U.S. Weekly jobless claims
1230 U.S. National activity index May
1345 U.S. Markit manufacturing flash PMI Jun
1400 U.S. New home sales May
1400 U.S. Leading index May

Corn ticks up from 1-mth low, wheat firms after 2 days of falls

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6/22/2016, 6:06:49 AM
  • Chicago Corn firms after hitting a near 1-month low
  • Easing concerns over U.S. crop to keep lid on prices
  • Wheat up almost 1 pct after two days of declines

Adds details, quotes

By Naveen Thukral

SINGAPORE, June 22 (Reuters) – Chicago corn edged up on Wednesday after hitting a near one-month low earlier in the session on headwinds from improving prospects for the U.S. crop.

Wheat gained ground with concerns over the Black Sea crop supporting prices, while soybeans inched up on strong demand for U.S. products.

Chicago Board of Trade most-active corn contract Cv1 was up 0.6 percent at 3.98-1/2 a bushel as of 0230 GMT, after dropping to its lowest since May 24 earlier in the session.

Soybeans Sv1 gained 0.3 percent to $11.13-1/2 a bushel and wheat Wv1 added 1 percent to $4.63 a bushel, heading for its first gain in three sessions.

“Good rain has fallen over a significant portion of the U.S. Midwest, with some follow-up falls expected later this week,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

“Consequently, concerns over seriously dry conditions will remain contained within the southwestern Corn Belt for at least a few more weeks. The additional rain will buy crops elsewhere some additional time.”

Corn’s 5.9 percent drop on Tuesday was the biggest since July 2013 for the most-active contract. After the close, the CME Group, parent of the Chicago Board of Trade, said it would change the daily trading limit in corn to 40 cents a bushel for Wednesday’s session, expanding from the normal limit of 25 cents.

Commodity funds had built up a massive net long position in CBOT corn in recent weeks on strong demand tied to tightening South American supplies and uncertainty about the U.S. growing season.

But the U.S. Department of Agriculture’s weekly crop progress report released late on Monday rated 75 percent of the U.S. corn acreage in good to excellent condition, unchanged from the previous week, despite a hot spell in the Midwest. Analysts surveyed by Reuters had expected a decline in crop ratings. US/COR

Forecasters called for much-needed rains this week, easing worries about dryness. The USDA’s report showed topsoil moisture declining in big corn states, including Iowa, Illinois and Missouri.

Soybean futures rose as fresh export sales of U.S. soybeans and soyoil lent underlying support. The USDA said private exporters sold 132,000 tonnes of U.S. soybeans to China for 2016/17 delivery.

Wheat rose on support from renewed concerns over the Black Sea crops.

Rainy weather has reduced protein levels in Russian wheat and raised concerns over fungal disease while also reducing the proportion of milling wheat in Ukraine.

NTERVIEW-Argentine corn area to increase 20 pct in 2016-17, minister – RTRS

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17-Jun-2016 15:00

By Nelson Bocanegra

MEDELLIN, Colombia, June 17 (Reuters) – Argentina’s area planted with corn could increase 20 percent during the 2016-17 growing season, raising production by between 10 million and 15 million tonnes from the previous year, the country’s agriculture minister said.

The boost to corn in the world’s fourth-largest exporter of the crop would come at the expense of soy, Agro-Industrial Minister Ricardo Buryaile said on the sidelines of the World Economic Forum’s Latin America meeting in Colombia late on Thursday, as the two grains compete for cultivation space.

“We estimate that we are going to have an increase in the cultivations of around 20 percent,” Buryaile told Reuters. “We could have between 10 and 15 million more tonnes of corn.”

“We will obviously have a reduction in the area of soy as a consequence of the increase in the production of corn and we estimate that from the 60 million that there were, soy production will surely fall to 55 million tonnes.”

The minister said he based his increase estimates on 2015-16 corn production of 25 million tonnes, below the forecasts of the Rosario grain exchange and the U.S. Agriculture Department, which both predict output of 27 million tonnes.

Argentina is the world’s top exporter of soymeal used in livestock feed and soy oil.

The wheat crop will rise 50 percent in 2016-17 to between 15 million and 16 million tonnes, Buryaile said, up from 10.5 million tonnes.

Higher corn and wheat production will represent some $400 million in additional investment because of an increase in cultivated areas, the minister said.

The Argentine government will “surely” settle a dispute with Monsanto Co  MON.N over the inspection of shipments of genetically modified soybeans next week, Buryaile said.

Monsanto and President Mauricio Macri’s government have been at loggerheads since March over the company’s request to have exporting companies inspect soybean shipments to make sure farmers paid royalties on soybean seed technology.

Monsanto, the world’s largest seed company, threatened to suspend launches of future soybean technologies in Argentina, a move that could limit output of the country’s main cash crop.

“Basically what we’ve said is the state controls the legality of the seeds, deciding the rules of the game of how its arbitrated and private businesses work and earn money as they should,” the minister said.

“We are dynamic defenders of private activity,” Buryaile added. “But the government makes the rules.”

Early cut to U.S. soy stocks signals further tightening ahead

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By Mark Weinraub

CHICAGO, June 20 (Reuters) – The U.S. government’s quick cut to its domestic soybean stocks forecast suggests that supplies, currently under pressure from rising export demand, will remain tight for more than a year.

The U.S. Agriculture Department earlier this month lowered its outlook for 2016/17 U.S. soybean ending stocks by 14.8 percent to 260 million bushels.  The reduction – the USDA’s biggest-ever cut for soybeans in June – came just one month after it issued its initial forecast for the marketing year.

A further tightening of the balance sheet could lend support to an already strong price environment for soybeans, analysts said. The most actively traded Chicago Board of Trade soybean futures contract Sv1 rallied 25 percent this spring, peaking at its highest level in nearly two years.

The spring rally stemmed from a bump in export demand for U.S. supplies amid problems with the South American harvest. Worries about crop development in the U.S. Midwest could fuel further gains.

Uncertainty about the U.S. soybean harvest amid concerns about a dry and hot summer will likely extend the rally for the next few months, said Malinda Goldsmith, a partner at Four Seasons Commodities, which manages a portfolio of about $125 million commodity investment.

Farmers will not have visibility until August on whether their crop will be big enough to replenish the supplies which were drained by the South American shortfalls.

“We are on the razor’s edge for carry-out when it comes to soybeans,” Goldsmith said. “We do not have a cushion for crop adversity in soybeans.”

The market is already turning its attention to U.S. weather even as farmers finish up seeding, with gains in new-crop futures SX6 outpacing gains in the nearby July contract SN6 during June.

During the last 20 years, USDA has cut its new-crop stocks estimate nine other times in its June supply and demand report. In seven of those years, the final stocks figure has turned out to be even lower than the June estimate.

Stocks have come in higher only once following a June cut – in the 2005/06 marketing year. Final figures are not in yet for the 2015/16 crop year but the latest projections show end stocks 105 million bushels less than the forecast the government issued in June 2015 as the increased export demand has soaked up much of the soybean surplus.

EXPORT DEMAND RISING

The government has boosted its old-crop U.S. soybean export projections for three months in a row as rain in key exporter Argentina has slowed soybean harvest there, causing overseas buyers to turn to the United States. USDA also boosted its new-crop soybean export projection by 15 million bushels in its June report.

Some analysts have suggested that demand will rise even further in the coming months as the USDA has not factored in the likelihood that China, the world’s top buyer of the oilseed, will step up purchases. USDA left its import projections for China unchanged, at 83 million tonnes for 2015/16 and 87 million tonnes for 2016/17, in the June supply and demand report.

China imported 7.66 million tonnes of soybeans in May, up 8.3 percent from 7.07 million tonnes in April, according to figures from the General Administration of Customs of China.

On the supply front, the balance sheet faces potential pressure from expectations that a strong La Niña weather phenomenon could hit the U.S. Midwest this summer just as the soybean crop enters key phases of development. The hot and dry weather could roil forecasts that the U.S. soy harvest will be the third-biggest ever.

A hot summer also could cut in to any potential increases in production from farmers who scrambled to boost their soybean seedings amid the spring rally. Late-planted soybeans will likely be most at risk to scorching temperatures and parched fields during August.

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: 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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