(Farm and Ranch Guide) – Wheat traded with decent gains last week. Support was due to thoughts that U.S. wheat exports will increase due to reports that Russia is slowing down on wheat exports (due to winter wheat production concerns).
For the week ending Oct. 9, December Minneapolis increased 10 cents, December Chicago increased 7.5 cents, and December Kansas City gained 4.75 cents.
USDA released there October Crop Production estimate Oct. 10. The report was friendlier to wheat than expected. USDA increased planted acreage 300,000 but decreased harvested acreage 300,000 and decreased yield .10 bushels to 43.8. Net result was a 5 MB cut in production. Demand was increased 50 MB, with USDA increasing feed demand 25 MB and export demand 25 MB. In the end USDA cut wheat ending stocks 44 MB to 654 MB, compared to 704 MB expected by the trade (friendly).
Wheat started the week with gains as both Oct. 6 and 7 sessions were stronger. Support spilled over from a stronger corn and soybean complex as well as from Oct. 6 friendly export inspections report, which continues to show wheat shipments staying in line with USDA projections. Wheat continues to see some help from thoughts that wheat export demand will increase once the supply of exportable wheat bushels in the world tightens up. Additional support came from a sharply lower U.S. dollar.
The rest of the week had wheat trading sloppy. Oct. 8 was mixed while Oct. 9 was just lower. The oct. 8 push was tied to the idea that wheat demand will increase. This thought is being encouraged by reports of a sharp slowdown in Russian wheat exports (due to winter wheat production concerns). Gains were kept in check by position squaring ahead of the Oct. 10 USDA Crop Production report.
Selling on oct. 9 was tied to a disappointing USDA export sales estimate. Traders were expecting U.S. wheat exports to be a little better due to the recent drop in the U.S. dollar. Additional selling was tied to weather forecasts calling for rain over much of the Southern Plains (which will help newly seeded winter wheat). Technical selling was also evident as wheat has traded higher for the past 6 sessions and a slight retracement was needed to clean the market up.
As of Oct. 5, 96% of the nation’s spring wheat crop was harvested compared to 99% for the five-year average. Winter wheat planting is estimated 56% completed compared to 53% for the five-year average. Winter wheat emergence was estimated at 28% compared to 24% for the five-year average.
USDA estimated the wheat export shipments pace at 23.9 MB for the week ending Oct. 3. This brings wheat’s export shipments pace to 350.7 MB compared to 526.2 MB last year. That week’s wheat export sales pace was estimated at 13.7 MB. This brings wheat’s export sales to 512.2 MB compared to 704.8 MB last year. With 34 weeks left in wheat’s export marketing year, shipments need to average 16.2 MB and sales need to average 11.4 MB to reach USDA’s 900 MB estimate.
Corn
The corn market closed with green numbers for the first four days of the week with short covering and harvest delays. Traders were also positioning ahead of the USDA monthly supply/demand and production report. But as we ended the week, most of the weekly gains were given back on Oct. 10 with the report. As of that morning, the December contract was up 10 cents for the week, while the March contract gained 10 cents.
The corn futures found some buying interest on Oct. 6 as the market moved above the 10 day moving average. The weather was also supportive as it remained wet over the weekend to slow harvest and there was frost in the northern tier states, which created short covering. The export inspections were good and there was a new sale announcement of 200,000 mt to an unknown destination.
Traders expected the crop progress report to show the conditions unchanged from last week and that 20% of the crop was harvested. Futures were up again on Oct. 7 as the conditions remained unchanged for the 6th week in a row at 74% g/e and harvest is projected at 17% complete. Support came from slow harvest progress and below the five-year average of 32%.
Corn closed slightly higher on Oct. 8 with spillover from the recent strength in the wheat complex. The ethanol report also showed corn use up from the previous week and stocks were down. Short covering supported the futures on Oct. 9 and ahead of Friday’s USDA report. Traders expect the yield to be increased but the wildcard could be the harvested acres.
The futures were under pressure Oct. 10 with the USDA report. USDA raised the corn yield by 2.5 bu/acre to 174.2 bu/acre, but also dropped the harvest acres by 700,000 to 83.4 million acres. The result was that ending stocks for the new crop year were increased by 79 mb to 2.081 bb. The stocks-to-use ratio increased to 15.2%, up from 14.7% last month and well above the 9.1% for 2013/14.
Ethanol production for the week ending Oct. 3 averaged 901,000 barrels/day, up 2.27% vs. the previous week. Total ethanol production for the week was 6.307 million barrels. Corn used in that week’s production is estimated at 94.61 million bushels and needs to average 98.617 million bushels/week to meet this crop year’s USDA estimate of 5.125 billion bushels. Stocks were 18.651 million barrels, down .94% vs. the previous week.
The crop progress report has the corn rated at 74% g/e, 19% fair, and 7% p/vp. Corn that is harvested is at 17%, compared to the five-year average of 32%. Corn that is mature is at 77%, compared to the five-year average of 81%.
USDA’s export inspection report was bullish for corn at 34.8 mb, above the 22.0 mb needed to meet USDA’s projection. Corn export sales were estimated at 30.9 mb, this is above the needed amount of 24.6 mb to stay on pace with USDA’s estimate of 1.75 bb. The shipments came in at 38.5 mb, above the 33.9 mb that was needed to keep pace with USDA projections.
Soybeans
As of close Oct. 9, November soybeans were 29.75 cents higher for the week and the January contract was up 29.5 cents. At 10 a.m. Oct. 10 November soybeans were trading 9.0 cents lower while January was down 9.0 cents.
Soybeans were higher Oct. 6 as they recovered the Oct. 3 losses, and then some. A number of factors provided support, not the least of which was sharp losses in the U.S. dollar as it fell nearly $0.01. Better commercial interest and noncommercial short-covering supported as well. South America’s planting continues to expand while rains are likely to slow the U.S. harvest further in the near-term.
Additional support came from some concerns about reports of weekend frost in the southeastern portion of the country. Oct. 6 export inspections were strong, coming in above the amount needed to keep pace with the USDA’s projections.
On both Oct. 7 and 8 soybeans started with gains but ultimately closed lower. Solid commercial buying provided early support, but the drier 6-10 day forecast and harvest pressure turned the market lower. The oct. 6 Crop Progress report showed soybeans dropping leaves near the five-year average while the harvest continues to lag behind the average pace. Crop ratings were up 1% to 73% g/e.
Soybeans moved higher Oct. 9 ahead of the Oct. 10 USDA reports. The October WASDE report is expected to peg yield at 47.6 bpa, up from 46.6 bpa in September. Carryover is expected to be steady at 475 MB. Shorts taking profits ahead of the report and another solid week of export sales provided support. Export sales were above the amount needed to keep pace with the USDA’s projection and have now reached 64% of the projected total.
South America continues to move forward with little rain in the near-term forecast for Brazil. On Oct. 9 Brazil’s crop agency Conab said Brazilian farmers will grow another record soybean crop due to an expected 3.5% increase in planted acres.
The Oct. 10 USDA report was friendlier than expected as harvested acres were decreased more than expected to 83.4 million acres while production and yield were both increased less than expected to3.927 BB and 47.1 bpa respectively.
USDA reported the soybean export inspections pace at 35.8 MB for the week ending Oct. 3. This brings the year to date export shipments pace for soybeans to 90.95 MB compared to 66.95 MB for last year at this time. That week’s soybean export sales pace was estimated at 33.9 MB. This brings soybean’s export sales to 1.093 BB compared to 1.010 BB last year. With 47 weeks left in soybean’s export marketing year, shipments need to average 34.2 MB and sales need to average 12.9 MB to reach USDA’s 1.700 BB estimate.
Soybeans dropping leaves were at 83% compared to the five-year average of 84%. Soybeans harvested were at 20% compared to 10% last week and the five-year average of 35%. Conditions for soybeans were up 1% to 73% g/e, 21% fair, and 6% p/vp.
Barley
USDA reported barley export shipments pace at 1.29 MB for the week ending Oct. 3, with 28,109 bushels going to China and 1.26 MB going to Morocco. That week’s barley export sales pace was estimated at 1.5 MB, with most of the barley going to China.
Cash feed barley bids on Oct. 9 in Minneapolis were at $2.45 while malting bids were $7.35.
Durum
As of Oct. 6, 85% of North Dakota’s durum crop was harvested compared to 94% for the five-year average.
USDA reported the durum export shipments pace at 337,412 bushels for the week ending Oct. 3. No durum export sales were reported for that week.
Oct. 9 cash bids for milling quality durum were at $13 in Berthold, while Dickinson’s bid was at $14.
Canola
Canola futures on the Winnipeg exchange closed ended the week ending Oct. 9 with 80 cent gains. Canola started the week with strong gains with support spilling over from a stronger U.S. soybean complex. The rest of the week canola lost ground with pressure coming from a lower U.S. soybean complex as well as form position squaring ahead of the Oct. 10 USDA Crop Production report.
As of Oct. 6, North Dakota canola was 95% harvested compared to 96% for the five-year average.
Cash canola bids in Velva on Oct. 9 were at $16.05.
Dry edible beans
As of Oct. 5, North Dakota’s dry bean crop (40% of the nation’s crop) was 62% harvested, compared to 71% for the five-year average. North Dakota’s crop was rated 59% g/e, 31% fair, and 10% p/vp. Minnesota’s crop (7% of nation’s crop) was 74% harvested compared to 82% for the five-year average. Minnesota’s crop was rated 51% g/e, 34% fair, and 15% p/vp, 1% less than last week.
Sunflower
As of Oct. 6, 1% of the nation’s sunflower crop was harvested compared to 9% for the five-year average. North Dakota’s sunflower crop was rated 75% g/ex, 20% fair, and 5% poor.
USDA estimated the export sales pace for soybean oil at 5.1 TMT for the week ending Oct. 3.
Oct. 9 cash sunflower bids in Fargo were at $17.45.
