Commodities

MAY 20, 2013
By: Bloomberg

Corn rose for a second day in Chicago before a government report that will show whether U.S. farmers accelerated planting, while more rain in the forecast this week threatens to disrupt fieldwork.
Wet, cold weather in recent weeks left 28% of the crop sown as of May 12, the lowest for that time of year since at least 1980, USDA data show. USDA is set to update its weekly crop progress report today. Eastern regions of the Midwest saw drier weekend weather, while parts of the northern Great Plains, Iowa and Minnesota had more than 4 inches of rain, QT Weather said.
“All focus today will rest on U.S. planting progress,” Jaime Nolan-Miralles, a commodity risk manager with INTL FCStone Inc. in Dublin, said in an e-mailed report. “With weather relatively supportive last week, many are expecting a jump in corn plantings.”
Corn for delivery in July gained 0.7 percent to $6.57 a bushel at 6:41 a.m. on the Chicago Board of Trade. The grain climbed 2.6 percent last week and is up 1.1 percent this month.
The Midwest and Great Plains may see more rain through May 22, slowing fieldwork, AccuWeather Inc. said in a report today. The Plains may see a second storm system late this week and during the weekend, it said.

Soybeans, Wheat

Soybeans for delivery in July rose 0.1% to $14.5025 per bu. The oilseed touched $14.5475, the highest for a most-active contract since March 28. Six percent of the crop was planted in the main growing states as of May 12, against the previous five-year average of 24 percent, according to the USDA.
Wheat for delivery in July slipped 0.1% to $6.825 per bu. In Paris, milling wheat for delivery in November touched 204.75 euros ($263.39) a metric ton, the lowest for a most-active contract since June 18, on NYSE Liffe and was last down 0.4% at 205.50 euros.
Russia’s wheat harvest may be larger than expected at 53.8 million tons, Dmitry Rylko, director of Moscow-based researcher IKAR, said today. Total grain production may be 92 million tons after conditions “improved significantly in April,” he said.
In the U.S., 43% of spring-wheat crops in main growing regions were sown by May 12, behind the five-year average pace of 63 percent, USDA data show. Areas of North Dakota, the biggest growing state for spring varieties, South Dakota and Minnesota are at risk of flooding near the Red River of the North and its tributaries because of heavy rainfall this week, AccuWeather said today.

MAY 2, 2013
By: Bloomberg

May 2 (Bloomberg) — Corn futures climbed in Chicago on concern that slow planting progress in the U.S., the world’s biggest grower, will weigh on yields and curb production.
Corn for delivery in July climbed as much as 1.5 percent to $6.5675 a bushel on the Chicago Board of Trade and was at $6.5375 by 7:45 a.m. local time.
U.S. farmers had planted 5 percent of corn as of April 28, trailing the five-year average pace of 31 percent, the country’s Department of Agriculture said April 29. The highest corn yields come from early sowing dates, according to forecaster Martell Crop Projections.
“The extremely slow pace of U.S. corn seeding may result in lower-than-expected area planted and below trend yields,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, wrote in a report today.
A persistent delay in planting U.S. corn would probably push production below a base forecast of 14.3 billion bushels toward 13.3 billion bushels, keeping stocks “uncomfortably tight,” according to Mathews.
“It is too early to write off corn yields,” Martell wrote. “July weather is far more influential in the yield potential affecting the number of kernels developing on ears. Yet if corn planting delays become too severe, growers may be forced to plant soybeans as an alternative crop.”
Cold temperatures will slow the warm-up of soils and further delay spring field work in the North Plains, while a significant freeze is possible in parts of the Central and South Plains, forecaster DTN said in a report yesterday.

Winter Wheat
About 33 percent of U.S. winter wheat was in good or excellent condition as of April 28, down from 64 percent a year earlier, the USDA said. Wheat yields in southwest Kansas and northwest Oklahoma were estimated at 34.1 bushels an acre yesterday, and crops are about three to four weeks behind normal growth, a survey of 50 fields showed.
Wheat for July delivery advanced as much as 1 percent to $7.28 a bushel before trading at $7.2425 a bushel. Milling wheat for delivery in November traded on NYSE Liffe in Paris slipped 0.5 percent to 212.25 euros ($279.96) a metric ton.
Wheat output in Oklahoma, the second-biggest U.S. grower of winter varieties, may tumble 45 percent this year because of drought and freeze damage, the Oklahoma Wheat Commission said yesterday. Production may drop to 85.5 million bushels from 154.8 million a year earlier, said Debbie Wedel, a spokeswoman for the commission.

Feb. 21 (Bloomberg) — Soybeans fell in Chicago on speculation the U.S. government will forecast record planting this year, boosting prospects for global oilseed supplies. Corn and wheat dropped.
Farmers in the U.S. will probably sow a record 78.1 million acres of land with soybeans, almost doubling inventories before the 2014 harvest, according to the average estimate of 18 analysts surveyed by Bloomberg News. The U.S. Department of Agriculture is set to update its estimates on planting and supply at an annual forum that begins today.
“Prices are very lucrative for farmers to expand planting,” Faiyaz Hudani, a Mumbai-based grains and oilseeds analyst at Kotak Commodity Services Ltd., said today. “That’s pressuring prices lower.”
Soybeans for delivery in May slid 0.3 percent to $14.6425 a bushel at 6:53 a.m. on the Chicago Board of Trade, after rising 4.3 percent in the three prior sessions. Trading volume was 35 percent more than the 100-day average at that time of day.
Corn for delivery in May declined 0.4 percent to $6.9375 a bushel. U.S. farmers may seed 97.7 million acres with the grain, the highest since 1936, spurring record production of 13.863 billion bushels, according to the Bloomberg survey.
Wheat for delivery in May fell 0.6 percent to $7.41 a bushel. On NYSE Liffe, milling wheat for the same delivery month rose 0.3 percent to 239.25 euros ($315.48) a metric ton in Paris and feed wheat for delivery in May was unchanged at 207.75 pounds ($316.90) a ton in London, after gains in three of the last four sessions.

By Tony C. Dreibus and Whitney McFerron, Copyright 2013 Bloomberg.

Soybean futures rose the most this month on signs of improved demand from China and mounting concern that rains missed crops in the driest parts of Argentina. Corn and wheat prices fell.
U.S. exporters sold 120,000 metric tons of soybeans to China, the world’s largest buyer, the U.S. Department of Agriculture said today. Rain and thunderstorms in Argentina, the world’s largest exporter after the U.S. and Brazil, probably missed north-central and northwest Buenos Aires, forecaster Telvent DTN said in a report today.
“Traders are optimistic we’re going to see a surge in soybean sales,” with China resuming purchases after the weeklong New Year holiday, Dewey Strickler, the president of Ag Watch Market Advisers in Franklin, Kentucky, said by telephone. “There were some rains in Argentina, but traders were disappointed with the coverage.”
Soybean futures for May delivery rose 1.8 percent to $14.4025 a bushel at 10:17 a.m. on the Chicago Board of Trade, heading for the biggest advance for a most-active contract since Jan. 30. Trading was 56 percent above the 100-day average for this time of day, according to figures compiled by Bloomberg. The market was closed yesterday for the Presidents Day holiday.
Farmers in Argentina are delaying sales on expectations that the depreciation of the peso against the dollar will accelerate, boosting revenue for exporters, Argentine newspaper Clarin reported yesterday. Farmers have sold 35 percent fewer soybeans from the coming harvest than they did at this time last year, Clarin said, citing Agriculture Ministry data.
Corn futures for May delivery fell 1.1 percent to $6.895 a bushel in Chicago. The price through Feb. 15 was down 5.9 percent since the end of January.
Soybean’s premium to corn has jumped to $7.50 a bushel after falling as low as $7.1325 on Feb. 12. The spread widened to $7.76 a bushel on Feb. 7.
Wheat futures for May delivery declined 1.7 percent to $7.36 a bushel in Chicago. The most-active contract through Feb. 15 was down 3.8 percent this year.

World demand for soybeans will continue to be robust, but South America’s large bean crop will start hitting the market in about 30 days, which could push prices lower.

In its latest World Agricultural Supply and Demand Estimates (WASDE) released Feb. 8, USDA cut projected ending stocks for the 2012-13 soybean crop to 125 million bushels, a drop of 10 million bushels from last month. The new projected carryout was slightly lower than trade expectations.
“The situation is still tight in the U.S., so prices will stay generally strong into the summer,” says Jack Scoville, vice president of The Price Futures Group, Chicago. Scoville was the commentator on an MGEX press briefing following release of the report. “Beans could fall to $10 or single digits this fall if we have a fabulous crop, but if we don’t we could see pretty extreme prices given demand, particularly from China.”
USDA raised its forecast for soybean crush by 10 million bushels to 1.615 billion bushels because of continued strong demand for soybean meal from end users, both foreign and domestic.
Tighter supplies spurred USDA to raise its U.S. season-average soybean price for the 2012-13 marketing year to $13.55 to $15.05 per bushel, up a nickel on both ends of the range. It left the soybean meal price unchanged at $430 to $460 per ton.
South America’s record strong crop

The biggest changes in USDA’s WASDE report for soybeans occurred in Argentina and Brazil. Timely rains that are expected to improve soybean yields convinced USDA to increase its forecast for bean production in Brazil, where growers are expected to produce a record-high crop of 83.5 million metric tons. That’s up 1 million tons from last month’s WASDE forecast. Earlier this week, the Brazilian government released its own estimate for the country’s soybean production at 82.65 million metric tons.
If Brazil’s output is realized, it will surpass projected U.S. output of 82.06 million metric tons.
“Prospects for Argentina’s soybean crop have diminished in recent weeks due to an extended period of dry weather,” USDA says in its report. As a result, the department lowered its forecast for Argentine soybeans by 1 million metric tons to 53 million.
“There will be plenty of beans coming out of South America starting in about 30 days,” Scoville says. Despite wet weather earlier in the season and persistently dry conditions now, harvest is progressing adequately in Argentina. “Even with all the weather problems, Argentina will be harvesting an awfully big crop,” he adds.
Changes in the global outlook, primarily in Brazil, raised world output for soybeans to 269.5 million tons, up slightly from last month’s 269.41 million, and ending stocks to 60.12 million tons, up from last month’s 59.46 million tons. While the 2012-13 projected ending stocks of soybeans are stronger than last year’s estimated 55.25 million tons, they are more than 15% lower than 2010-11’s 69.92 million metric tons.