Good afternoon,
First and foremost, this month’s WASDE report. There were a few changes for each commodity group to go over. On the wheat side, U.S. wheat ending stocks for 2014/15 are projected 7 million bushels lower with reduced imports (-15mb) and higher domestic use (+10mb) mostly offset by lower exports (-20mb). Global exports were raised by 1.5MMT (cheap vessel freight) with the EU gaining the biggest share. U.S. corn carryout was raised by 50 million bushels. Like wheat, world trade is projected higher for corn. U.S. soybean ending stocks are projected 15 million bushels lower than last month. Global oilseed production for 2014/15 is projected at a record 532.8 million tons, up 0.6 million from last month
This week’s export sales report was mostly disappointing, particularly for the soybeans as net cancellations of 176,700 MT of old crop beans indicates that the Chinese shift to SA supplies is in full swing. New crop sales weren’t bad at 502,400 MT but there are some analysts expressing concern that new crop sales are only slightly over 50% of last year’s pace. It seems disconcerting on the surface; a 3,320,700 MT difference is significant. It’s important to remember however that the Chinese are notoriously difficult to predict over a short time-frame. Their purchases always come in fits and starts. Will they buy this week? God only knows. The point is, I don’t think we’ll see a major trend adjustment in Chinese soybean procurements this year. They are opportunistic and may simply be waiting for lower prices. As for corn and wheat, net sales of 639,600 and 319,900 respectively were disappointing but not overtly bearish in my opinion.
As the first full week of April comes to a close, weather is becoming more of a focus as the trade attempts to guess how crops will be impacted. Most noteworthy were the freezing temperatures in parts of the HRW belt that look to have caused some winter kill. Already, pictures are circulating of yellowed fields but the market hasn’t responded in force. Of course, we won’t know the full extent of the damage until bushels are cut and counted but, suffice it to say there is some winter kill in the HRW.
In general, spring planting is well behind where we’d like to see it at this point but there’s a lot of time left before we start worrying. Farmers in the Dakota’s have started planting small grains though the bulk of the work is still ahead. There is a distinct lack of subsoil moisture in both states so an expected rain delay in North Dakota in the coming days will be very welcome.
Ethanol production slowed for the week ending April 3rd. Today’s report showed production at 936,000 bpd, a reduction of 16,000 bpd from the prior week.
Spot basis values:
Chicago Gulf PNW
Soybeans Option K .69 K .80 K
Corn: .15 K .62 K .90 K
SRW: .10 K .75 K N/A
HRW: N/A .80 K (12 pro) 1.20 K (11.5 pro)
DNS 14 pro: 1.25 K N/A 2.90 K
SWW: N/A N/A 1.60 K
International grain business this week:
· Japan bought a total of 122,249 MT of wheat via a tender this week. The total included the following:
· US- 16,135 MT of Western White and 18,330 MT of HRW
· Canada- 24,950 MT and 34,624 MT of western red spring in 2 lots.
· Australia- 28,390 MT of standard white.
· Bangladesh bought a total of 100,000 MT of food wheat including the following:
· 50,000 MT of 10 pro wheat at $238.28 C&F
· 50,000 MT of 12.5 pro wheat at $247.09 C&F
· Maldives tendered for 6,000 MT of wheat flour.
· Japan bought 20,420 MT of feed wheat and 29,735 MT of feed barley in an SBS tender.
Please don’t hesitate to contact me with any questions or comments. [email protected]
Happy trading!
First and foremost, this month’s WASDE report. There were a few changes for each commodity group to go over. On the wheat side, U.S. wheat ending stocks for 2014/15 are projected 7 million bushels lower with reduced imports (-15mb) and higher domestic use (+10mb) mostly offset by lower exports (-20mb). Global exports were raised by 1.5MMT (cheap vessel freight) with the EU gaining the biggest share. U.S. corn carryout was raised by 50 million bushels. Like wheat, world trade is projected higher for corn. U.S. soybean ending stocks are projected 15 million bushels lower than last month. Global oilseed production for 2014/15 is projected at a record 532.8 million tons, up 0.6 million from last month
This week’s export sales report was mostly disappointing, particularly for the soybeans as net cancellations of 176,700 MT of old crop beans indicates that the Chinese shift to SA supplies is in full swing. New crop sales weren’t bad at 502,400 MT but there are some analysts expressing concern that new crop sales are only slightly over 50% of last year’s pace. It seems disconcerting on the surface; a 3,320,700 MT difference is significant. It’s important to remember however that the Chinese are notoriously difficult to predict over a short time-frame. Their purchases always come in fits and starts. Will they buy this week? God only knows. The point is, I don’t think we’ll see a major trend adjustment in Chinese soybean procurements this year. They are opportunistic and may simply be waiting for lower prices. As for corn and wheat, net sales of 639,600 and 319,900 respectively were disappointing but not overtly bearish in my opinion.
As the first full week of April comes to a close, weather is becoming more of a focus as the trade attempts to guess how crops will be impacted. Most noteworthy were the freezing temperatures in parts of the HRW belt that look to have caused some winter kill. Already, pictures are circulating of yellowed fields but the market hasn’t responded in force. Of course, we won’t know the full extent of the damage until bushels are cut and counted but, suffice it to say there is some winter kill in the HRW.
In general, spring planting is well behind where we’d like to see it at this point but there’s a lot of time left before we start worrying. Farmers in the Dakota’s have started planting small grains though the bulk of the work is still ahead. There is a distinct lack of subsoil moisture in both states so an expected rain delay in North Dakota in the coming days will be very welcome.
Ethanol production slowed for the week ending April 3rd. Today’s report showed production at 936,000 bpd, a reduction of 16,000 bpd from the prior week.
Spot basis values:
Chicago Gulf PNW
Soybeans Option K .69 K .80 K
Corn: .15 K .62 K .90 K
SRW: .10 K .75 K N/A
HRW: N/A .80 K (12 pro) 1.20 K (11.5 pro)
DNS 14 pro: 1.25 K N/A 2.90 K
SWW: N/A N/A 1.60 K
International grain business this week:
· Japan bought a total of 122,249 MT of wheat via a tender this week. The total included the following:
· US- 16,135 MT of Western White and 18,330 MT of HRW
· Canada- 24,950 MT and 34,624 MT of western red spring in 2 lots.
· Australia- 28,390 MT of standard white.
· Bangladesh bought a total of 100,000 MT of food wheat including the following:
· 50,000 MT of 10 pro wheat at $238.28 C&F
· 50,000 MT of 12.5 pro wheat at $247.09 C&F
· Maldives tendered for 6,000 MT of wheat flour.
· Japan bought 20,420 MT of feed wheat and 29,735 MT of feed barley in an SBS tender.
Please don’t hesitate to contact me with any questions or comments. [email protected]
Happy trading!
