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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

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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.

US officials cut Brazil corn crop hopes – and warn of further downgrades

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Brazil’s corn imports will soar five-fold to a 16-year high, thanks to the supply squeeze prompted by a disappointing safrinha crop, US officials said, cutting their harvest forecast and flagging “great challenges” for livestock farmers.

Brazil, better known as the second-ranked corn exporter, will see its imports swell from 330,000 tonnes last season to 1.5m tonnes in 2015-16, the US Department of Agriculture’s Brasilia bureau said, the kind of volumes more typically bought by the likes of Egypt, Israel or Turkey.

Imports at that level would be the biggest since 1999-2000, besides being ahead of the 1.1m tonnes that the USDA has officially forecast, and the 1.0m tonnes expected by Conab, Brazil’s own crop bureau.

The raised estimate reflected a weaker forecast for Brazilian corn production, which the bureau pegged at 75.0m tonnes, below the USDA’s official 77.5m-tonne figure, and the 76.2m tonnes expected by Conab.

More downgrades ahead?

The bureau said its production forecast, “down 12% from the previous year’s record crop”, reflected weaker expectations for the dryness tested safrinha, or second crop, harvest which accounts for some two-thirds of total output.

“An early start to the dry season [had] an adverse effect on the safrinha crop,” the bureau said, cautioning that further downgrades could be in the offing.

“Inconsistent weather patterns continue to challenge producers in corn growing regions in Brazil, and set expectations that the safrinha corn crop could be reduced by up to 10m tonnes from the previous year.”

While the bureau did not break out its own safrinha harvest forecast, Conab currently pegs the crop at 50.0m tonnes, a drop of 4.6m tonnes year on year.

Broker INTL FCStone earlier this month cut its forecast for the safrinha crop by 434,000 tonnes to 49.4m tonnes.

‘Struggling to maintain operations’

With the disappointing harvest coming on the heels of a strong corn export campaign, Brazil has been left with a “significantly-lower-than-anticipated supply” of the grain, driving port prices to some $250 a tonne on bureau estimates, equivalent to $6.35 per bushel.

US Gulf corn exports for spot sale were, according to broker Benson Quinn Commodities, on Wednesday priced at $0.54 a bushel above July futures, which closed at $3.92 ¾ a bushel.

Indeed, Brazilian poultry and pork producers are “struggling to maintain operations due to inflated feed prices”, which account for some 70% of output costs, the bureau said.

“Plants across Brazil responded to the increased input costs by cutting work shifts, enforcing mandatory vacation for employees, shutting down operations, and even prematurely slaughtering animals they are unable to continue feeding.”

Industry data shows a 10% drop in Brazilian chicken output over the past three months, while pig inseminations are down 15% – reductions reflected in a drop of 225,000 tonnes in the country’s monthly meat production.

Corn import origins

Meat producers’ struggle for feed has forced them to turn to neighbouring countries for supplies, although there are doubts as to how far these can stretch.

“While many producers are finding… relief from Paraguay and Argentina, neither country has sufficient corn to export large volumes to Brazil for an extended period of time.”

Imports from the US, the world’s top corn exporter, are complicated by Brazil’s policy on genetically modified crops, with 13-14 biotech varieties grown in the US not passed by the South American country, which operates a zero tolerance policy on traces of unapproved seed.

Meat imports to grow too?

Some livestock farmers are turning as an alternative to high-grade wheat for feed.

“Sources estimate that the meat industry has purchased 220,000 tons of bread-quality wheat since May 2016 for feed,” buying which means that “flour prices may also rise”.

However, Brazil may also see the squeeze play out in terms of higher imports of meat itself, as well as corn.

“US poultry and pork producers are cautiously optimistic for a boost in exports to Brazil.”

Corn falls to near two-week low on positive U.S. crop condition

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By Melanie Burton

MELBOURNE, June 21 (Reuters) – U.S. corn fell to its lowest in more than a fortnight on Tuesday after the U.S. Department of Agriculture rated the Midwest corn crop in better condition than the market had anticipated after a spate of hot weather.

The U.S. Department of Agriculture’s weekly crop progress report rated 75 percent of the corn crop in good to excellent condition, unchanged from the previous week. Analysts surveyed by Reuters had expected a decline after a hot week.

“We continue to see weather driving the market. It’s been much hotter and drier in the U.S in the past few days and the outlook is maybe turning a little more favourable (for growing), and that’s why we are seeing markets trading a little bit lower,” said Graydon Chong, an analyst with Rabobank in Sydney.

U.S. corn Cv1 futures fell 0.6 percent to $4.18-3/4 a bushel by 0333 GMT at the Chicago Board of Trade (CBOT), extending Monday’s 3.8 percent decline following forecasts for much-needed rains in the U.S. Midwest. Prices fell to as low as $4.18, the lowest since June 3.

Speculators raised their net-long positions in the CBOT corn futures in the week to June 14 by 44,327 futures and options contracts, data released on Friday showed.

“We have seen little liquidation of that long position,” Chong added.

Elsewhere, U.S. wheat futures Wv1 rose 0.1 percent to $4.73-1/2 a bushel, with small gains also seen in soy futures Sv1 which rose 0.1 percent to $11.33-3/4 a bushel.

The USDA rated 73 percent of U.S. soybeans as good to excellent, down from 74 percent a week earlier and in line with trade expectations.

Commodity funds were net sellers of Chicago Board of Trade corn, soybean and wheat futures contracts on Monday, traders said. CBOT/FUNDS

Trade estimates of fund selling in corn ranged widely from 9,000 to 25,000 contracts, in soybeans from 6,000 to 10,000 contracts and in wheat from 3,000 to 5,000 contracts.

In wider markets, the dollar paused for breath after a risk on rally on Monday, after latest polls released over the weekend showed the “Remain” camp in the lead, reversing a recent rise in support for Britain pulling out of the European Union.

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

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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.

‘About 80%’ of Ukraine soy grown – illegally – from GM seed

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by agrimoney.com

About 80% of Ukraine’s soybeans, and 10% of corn, are grown – illegally – from genetically modified seed, US officials said, attributing improved seed quality in part for expectations for strong harvests this year.

The US Department of Agriculture – expanding on an initial estimate two weeks ago that Ukraine will produce a record 5.0m tonnes of soybeans this year – said the forecast reflected in part expectations of yield matching an all-time high of 2.17 tonnes per hectare, supported by genetically engineered seed.

“Although the planting of genetically modified crops is officially prohibited, estimates from private commodity analysts suggest that about 80% of Ukraine’s soybeans are genetically modified,” the USDA said.

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Soybeans fall for third day on poor exports, drop in China’s markets

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  • Soybeans face pressure from poor U.S. exports, higher planting
  • Steep decline in China’s commodity markets weighs
  • Soybeans on track for 5th week of gains, up 3 pct on USDA f’cast

Adds details, quotes

By Naveen Thukral

SINGAPORE, May 13 (Reuters) – Chicago soybeans slid for a third consecutive session on Friday with poor U.S. weekly export data adding pressure on prices but the market is poised for a fifth week of gains, underpinned by forecasts of tighter supplies.

Corn and wheat are on track for weekly gains even though prices are expected to remain anchored by abundant global grain supplies.

The Chicago Board of Trade most-active soybean contract Sv1 is set for a 2.9 percent gain this week, corn Cv1 has risen 2.5 percent and wheat Wv1 has gained 0.7 percent. On Friday, soybeans fell 0.6 percent, corn lost 0.4 percent and wheat dropped 0.2 percent.

There was additional pressure on agricultural commodities stemming from a broad decline in Chinese futures.

“U.S. soybean exports were down and Chinese commodity market are taking a hit today which is adding pressure on CBOT,” said Kaname Gokon at brokerage Okato Shoji in Tokyo.

“The market’s upside momentum has reduced because short-covering by funds and commercials is over.”

China’s Dalian soybeans DSAcv1 slid almost 3 percent, soyoil DBYcv1 lost 4 percent and soymeal DSMcv1 gave up about 1 percent.

The U.S. Department of Agriculture’s weekly export sales report put sales of U.S. old-crop soybeans in the latest week at 212,500 tonnes and new-crop sales at just 6,900 tonnes, below trade expectations.

Traders speculate that the USDA’s June 30 acreage report could show a shift of about 1 million acres from corn into soybeans compared to the government’s March 31 planting intentions report.

The U.S. corn crop was 64 percent planted as of May 8, but rainy weather may have slowed progress since then. Soybeans can be planted later than corn, so delays tend to favour soybeans.

CBOT corn on Thursday drew support from weekly U.S. export sales topping 1 million tonnes, and news that private exporters sold 210,000 tonnes of U.S. corn to Saudi Arabia in the last day.

Wheat fundamentals remain bearish, with the USDA forecasting that U.S. inventories will rise above 1 billion bushels by June 1, 2017, the most in 29 years.

Commodity funds were net buyers of CBOT corn and wheat futures contracts on Thursday but net sellers in soybeans.

Trader estimates of net fund buying in corn ranged from 13,000 to 17,000 contracts. They were net sellers of an estimated 7,000 to 10,000 soybean contracts and net buyers of 3,000 to 5,000 wheat contracts.

USDA slashes soy supply view amid S. America crop woes, prices surge

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Updates with price moves, adds analyst quote

By Mark Weinraub

WASHINGTON, May 10 (Reuters) – World and U.S. soybean supplies will be tighter than expected for the next two years due to reduced harvests in South America and rising global demand, the U.S. Agriculture Department said on Tuesday.

The report jolted the soy market, with the most active Chicago Board of Trade futures soybean contract Sv1 surging 4.5 percent and hitting its highest since August 2014. Soymeal futures SMv1rallied to a 16-1/2-month peak.

“I did not see this coming,” said Bob Utterback, chief executive officer at Utterback Marketing. “I do not think anyone did. It is that soybean number that has got everybody’s attention.”

USDA cut its outlook for Argentine soy production by 2.5 million tonnes following heavy rains that damaged crops in that key exporter. It cut its estimate for Brazil’s harvest by 1 million tonnes. It also lowered its corn production forecasts for both countries.

In its first estimate of supplies for the 2016/17 crop year, the U.S. government projected ending stocks of U.S. corn would be the sixth-biggest ever, bolstered by a forecast for record production of 14.43 billion bushels.

U.S. wheat supplies for 2016/17 were seen rising to 1.029 billion bushels from 978 million bushels in 2015/16. The 2016/17 stocks figure was near the high end of analysts’ forecasts.

Both corn and wheat futures followed soybeans higher, but the gains were kept in check by ample global supplies.

USDA estimated the 2016/17 U.S. winter wheat crop at an unexpectedly big 1.427 billion bushels, based on an average yield of 47.8 bushels per acre. If realized, that would match the record average yield set in 1999.

USDA lowered its outlook for 2015/16 U.S. soy ending stocks to 400 million bushels from 445 million, raising its outlook for exports by 35 million bushels and crush by 10 million bushels. Analysts, on average, were expecting 2015/16 soy ending stocks of 426 million bushels, according to a Reuters poll.

For 2016/17 U.S. soybean end stocks were pegged at 305 million bushels, 100 million below the average of estimates in the Reuters poll.

USDA put global soybean ending stocks at 74.25 million tonnes in 2015/16 and 68.21 million tonnes in 2016/17. Both were smaller than analysts’ forecasts.

USDA cut its estimate for 2015/16 domestic corn ending stocks to 1.803 billion bushels from 1.862 billion, reflecting bigger exports. New-crop U.S. corn ending stocks were pegged at 2.153 billion bushels, below the average analyst forecast.