(Farm and Ranch Guide) – Wheat – As of close July 31 September Minneapolis was down 11.75 cents, September Chicago was 7.75 cents lower, and September Kansas City lost 5.5 cents. Wheat futures were trading 7-13 cents higher Aug. 1.
The September Chicago contract set a new low close on July 29 following lower closes across the board for wheat on July 28 and 29. Expectations for increased global supplies continue to pressure the market. Wheat demand has been weak, though a sale on July 28 of 61,000 mt of hard red winter wheat and 40,000 mt of soft red winter wheat to Nigeria did provide some support. July 28 export inspections were bearish, coming in below the amount needed to keep pace with the USDA’s projection. The July 28 Crop Progress report showed the winter wheat harvest at 85% complete, ahead of the five-year average. Spring wheat maturity was at the five-year average while spring wheat conditions were unchanged from the previous week.
Wheat trade was higher July 30 following an announced sale to Nigeria. The USDA announced Nigeria had purchased a total of 205,500 mt of wheat from the U.S. Of the total, 151,500 mt was hard red winter wheat (131,500 for 2014/2015, 20,000 for 2015/2016) and 54,000 mt was soft red winter wheat (44,000 for 2014/2015, 10,000 for 2015/2016). Additional support was tied to commercial buying following new lows on July 28 in the September Chicago contract. The winter wheat harvest is nearing completion and the forecast remains favorable for spring wheat. Strength in the U.S. dollar was a limiting factor.
Commercial buying provided support to wheat July 31 with the strongest gains being seen in the Kansas City contracts. July 31 export sales were seen as neutral, though they came in above the amount needed to keep pace with the USDA’s projection. DTN reported a sale of 84,800 mt of milling wheat to Taiwan. Wheat remains oversold and will need to see more demand to spark buying. World wheat weather remains mostly a non-issue despite recent untimely rains in Europe.
USDA estimated wheat export shipments pace at 14.5 MB for the week ending July 25. This brings wheat’s export shipments pace to 133.9 MB compared to 188.0 MB for last year at this time. That week’s wheat export sales pace was estimated at 29.4 MB. This brings wheat’s export sales to 357.6 MB compared to 473.7 MB last year. USDA’s expectations for 2014 wheat exports are 900 MB.
As of July 27, 93% of the nation’s spring wheat crop was headed compared to 93% for the five-year average. Spring wheat conditions were estimated at 70% g/e, 25% fair, and 5% p/vp unchanged from the previous week. Winter wheat harvest was estimated at 83% complete compared to 80% for the five-year average.
Corn
The corn futures lost more ground last week with ideal weather and buying interest remains on the sidelines. Estimates continue to surface for large production in the U.S. and world. The weather is also nonthreatening and the month of July will go down as the coolest dating back to the 1890s, which helps to mitigate any moisture stress. As of close, July 31 the September contract was down 6 cents for the week, while the December contract lost 4.75 cents. The December contract lost 58.25 cents for the month.
The corn market bounced higher to start the week with the strength in the soybeans and a change in the forecast. The weekend rain fell short of expectations and the forecast calls for drier weather over the next week. Traders were also looking ahead to the crop conditions report and expected to see a slight drop. The report did drop 1% in the g/e category from the previous week to now be rated 75%. There was also a new crop export sale announcement to Columbia for 147,000 mt.
Selling pressure move back in on July 29 and remained intact for the rest of the week. The corn crop remains in good condition and is the 6th highest rated since 1986, while the top 5 went on to produce record yields. The best rated crop for this time of year was in 1986 at 86% g/e. South Africa also raised their corn production estimate for this year to 14.02 mmt and if realized it would be the largest crop since 1981. The International Grains Council raised its world production estimate to 969 mmt vs. 963 mmt last month and just short of their record 974 mmt. On July 31, more rain was moved into the 1 to 5 day forecast for the Midwest and Northern Midwest States. Export sales were good last week, but shipments continued to run behind the needed pace and this could increase old crop ending stocks.
Ethanol production for the week ending July 25 averaged 954,000 barrels/day, down .52% vs. the previous week. Total ethanol production for the week was 6.678 million barrels. Corn used in that week’s production is estimated at 100.17 million bushels and needs to average 113.934 million bushels/week to meet this crop year’s USDA estimate of 5.075 billion bushels. Stocks were 18.587 million barrels, up 3.61% vs. the previous week.
The crop progress report has the corn rated at 75% g/e, 19% fair, and 6% p/vp. Ratings were 63%, 26%, and 11% respectively one year ago. Corn that is silking is at 78% vs. 67% one year ago and a five-year average of 75%. Corn in the dough stage is at 17% vs. 8% one year ago and a five-year average of 16%.
USDA’s export inspection report was bearish for corn at 31.7 mb vs. the 47.6 mb needed to keep pace with USDA projections of 1.900 bb. Corn export sales were estimated at 6.8 mb, which was above the .6 mb needed to stay on pace with USDA’s estimate of 1.90 bb. The shipments came in at 34.1 mb, below the 47.2 mb that was needed to keep pace with USDA projections.
Soybeans
As of close July 31, August soybeans were 12.25 cents higher for the week while the November contract lost 1.5 cents. At 10 a.m. Aug. 1, August soybeans were trading 9.25 cents lower while November was down 21.0 cents.
Soybeans traded higher July 28 with support from dry weather. With beans entering the pod-setting stage moisture will be important, particularly in areas that are already dry like the western Midwest. There is little moisture evident in the five day forecast. China’s active demand continues to provide support as well with another round of purchases announced that morning. China purchased 420,000 mt of new crop soybeans from the U.S. and another 66,000 mt of optional-origin new crop beans. July 28 export inspections were bearish, coming in below the amount needed to keep pace with the USDA’s projection.
Soybeans traded lower July 29 and 30 as the extended forecast eased weather concerns, though doubts about moisture levels did continue to linger with little rain in the near-term forecast. Mild, below-normal temperatures helped to ease the concerns. The July 28 Crop Progress report showed soybean maturity ahead of the five-year averages and conditions down 2% from the previous week. Even with the ratings decrease the 2014 crop remains the highest-rated crop since 1994 and the 4th highest since 1986. July 29 the USDA announced a sale of 135,000 mt of meal and cake to unknown destinations for 2014/2015 delivery.
On July 31 soybeans traded slightly higher with support from another round of bullish export sales. The total for the year is now 1.691 BB, 71 MB above the USDA’s estimate. Exports could continue through August following a report from Informa Economics that Brazil’s prices are currently 35-64 cents above U.S. gulf prices. The five-day forecast remains cooler and drier than normal, with selling likely to continue when the rains return.
USDA reported the previous week’s soybean export inspections pace at 4.1 MB. This brings the year to date export shipments pace for soybeans to 1.581 BB compared to 1.298 BB for last year at this time. That week’s soybean export sales pace was estimated at 53.5 MB (6.9 MB for 2013/2014). Soybean export sales remain above the USDA’s demand projection of 1.620 BB. Shipments were reported at 3.9 MB.
Soybeans blooming were at 76% compared to five-year average of 72%. Soybeans setting pods were at 38% compared to the five-year average of 31%. Conditions for soybeans were rated at 71% g/e, 23% fair, and 6% p/vp.
Barley
Barley headed was estimated at 96% compared to the five-year average of 95%. Barley crop conditions were rated 67% g/e, 29% fair, and 4% p/vp.
USDA reported the barley export shipments pace at 1,000,873 bushels for the week ending July 25. This brings barley’s export shipments pace to 1,403,041 bushels compared to 237,920 bushels for last year. Net sales of 500 mt of barley were reported for Taiwan.
For the week ending July 31, cash feed barley bids in Minneapolis were unchanged at $2.90 while malting bids were at $5.60.
Durum
As of July 27, 83% of North Dakota’s durum crop was jointed compared to 99% last year and 97% for the five-year average. Headed was at 49% percent compared to 89% last year and 82% for the five-year average. Turning color was at 10% compared to 18% last year and 19% for the five-year average. Durum crop conditions were rated 83% g/e, 16% fair, and 1% p/vp.
There were no export shipments reported for durum for the week ending July 25. USDA reported no durum export sales for that week.
For the week ending July 31, cash bids for milling quality durum were unchanged at $9.00 in Berthold while Dickinson’s bid was unchanged at $8.70.
Canola
For the week ending July 31, canola futures on the Winnipeg exchange closed lower with the front month November losing $1.20 to $441.30 CD. Canola futures started the week strong with spillover support from sharp gains in CBOT soybean futures. Farmer selling and improving weather forecasts were negative factors throughout the week, as are ongoing expectations for a record U.S. soybean crop. Weakness in the Canadian dollar provided underlying support.
As of July 27, 25% of North Dakota’s canola crop was turning color compared to 14% last year and 29% for the five-year average. Canola crop conditions rated at 84% g/e, 15% fair, and 1% p/vp.
Cash canola bids in Velva decreased 18 cents to $17.08 for the week ending July 31.
Dry edible beans
As of July 27, North Dakota producers (37% of the nation’s crop) had 67% of their dry beans blooming compared to 59% last year and 74% for the five-year average. Setting pods was at 33% compared to 15% last year and 32% for the five-year average. Crop conditions were rated at 71% g/e, 23% fair, and 6% p/vp. Nebraska producers (11% of nation’s crop) had 50% blooming compared to 60% last year and 57% for the five-year average. Crop conditions were rated at 80% g/e, 16% fair, and 4% p/vp.
Sunflower
As of July 27, North Dakota’s sunflower crop was 3% in bloom compared to 5% last year and 14% for the five-year average. North Dakota’s sunflower crop was rated 79% g/e, 20% fair, and 1% p/vp.
USDA estimated export sales pace for soybean oil at 12.8 TMT for the week ending July 25. This brings the year to date export sales pace for soybean oil to 795.2 TMT compared to 911.6 TMT for last year.
For the week ending July 31, soybean oil futures were 2 cents higher to $36.11. Cash sunflower bids in Fargo were unchanged on the week at $18.85.
