November 28, 2012

Brazil's corn harvest forecast down over dry weather

Private analyst Michael Cordonnier reduced his estimate for the Brazilian corn crop by one million tonnes to 71 million tonnes due to dry weather.

December 12 corn closed at US$7.4725, up US$0.0175 while March 13 corn closed at US$7.5125, up US$0.015. Fund buying was estimated at around 4,000 corn contracts on the day.

Cordonnier's estimate for Argentina was left unchanged at 22.5 million tonnes - although that's still well below the USDA's prediction of 28 million tonnes. The Ukraine corn harvest is said to be 93% complete or 18.9 million tonnes.

ProAgro said that Ukraine has exported four million tonnes of corn so far this season, and that export restrictions on corn may be possible by April 2013. Weekly export inspections of 15.92 million bushels were an improvement on last week but fell well below the 23.8 million needed to meet the USDA's 2012-13 export target. The Commitment of Traders report shows funds sitting on a net corn long of 178,823 lots.

January 13 soy closed at US$14.2475, up USAS$0.06 while March 13 soy closed at US$14.1225, up US$0.0925. January 13 soymeal closed at US$426.90, up US$3.50. January 13 soyoil closed at 49.58, up 26 points.

Fund buying in beans was estimated at 2,000 contracts on the day. The USDA announced 20,000 tonnes of US soyoil sold to unknown destinations for 2012-13 delivery - the latest in a sudden spike in such sales. Total net commitments are already running at around 83% of the USDA's target for the full 2012-13 season.

Weekly export inspections for beans slowed to 45.5 million bushels from last week's 62 million, although that's still pretty respectable as this was for a holiday shortened week. Ag Rural said as of November 25 77% of the Brazilian bean crop had been planted versus 86% a year ago. As of the same date 37% of the Argentine bean crop has been planted versus 47% a year ago, they added. The Commitment of Traders report showed funds liquidating 12,755 lots of soy long positions in the week through to last Tuesday, cutting their net long down to just 82,779 lots.

December 12 CBOT wheat closed at US$8.49, up US$0.0125. December 12 KCBT wheat closed at US$8.8425, up US$0.06. December 12 MGEX wheat closed at US$9.15, up US$0.0125.

Weekly export inspections were poor at 7.8 million bushels, placing year-to-date inspections at 446.5 million against 519.0 this time last year. After the close the USDA cut good/excellent winter wheat crop ratings by one percentage point to 33% - an all-time low for this time of year. The previous low for late November was 43% in 1999. Poor/very poor was increased two points to 26%.

These are the last wheat crop ratings until the spring, so the market now has a long time to dwell on how US crops will come out of winter dormancy next year. In a flurry of international tenders Iraq are back in the market less than a week after booking 350,000 tonnes of wheat. Jordan, Syria and Algeria are also said to be shopping for wheat. A partial victory for US wheat in one or two of those would support the market.