“Really the story of wheat this year is about corn,” said Mike Wong, senior vice president and merchandising manager for Columbia Grain Inc. in Portland, a leading world grain exporter.
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USDA is forecasting a new record average yield for soybeans this year, but whether the crop will live up to expectations all depends on the weather.
Expectations of a U.S. average soybean yield above trend value in 2014 seem justified by current crop condition ratings. A yield above trend by as much as the average (3.0 bushels) of the previous seven highest yielding years relative to trend since 1960 would be 46.6 bushels per acre. However, June weather conditions in those high yielding years tended to be moderately dry and cool, while June 2014 in was wet and warm. This was particularly true for Iowa, which received over twice its long-term average precipitation in June. Weather conditions so far in July have been mixed. Temperatures in major growing areas were below average early in the month, moved to above average this week, but are forecast to retreat again next week. Average July temperatures are expected to be about 2.5 degrees below average. Rainfall in the first three weeks of July was slightly above to slightly below average for most areas, but was well below average in some key northern states. History suggests that cool, moist conditions are needed in August for the U.S. average yield to be equivalent to that of the other high yielding years examined in this article.
Canada will carryover more grain than usual when the crop year ends July 31, but analysts say it may be less than some people think.
Weekly RecapUS Wheat futures traded mixed last week with the KCBT September contract gaining three cents for the week. On Tuesday, the contract fell to its lowest level since early February on technical selling and spillover weakness from corn. Throughout the rest of the week the futures rotated between positive and negative closings mostly due to technical selling, bargain buying, rising global supplies and strong export competition from the Black Sea Region. Downward pressure in the market continued on Monday as the September contract fell another three cents. On Monday afternoon, September 2014 HRW wheat futures closed at $6.25.
September 2014 HRWW - 7/28/14Around the World
Last week the International Wheat Genome Sequencing Consortium (IWGSC) announced that they are approaching a milestone in man’s ability to improve wheat by fully sequencing its genome. A group of scientists, breeders and growers reported that they have completed more than half of the genome project and the entire sequence is on the horizon.
Last week the annual wheat crop survey, organized by the Wheat Quality Council, projected the 2014 HRS wheat crop would produce 48.6 bushels per acres. The spring wheat estimate is the highest in the history of the Wheat Quality Council dating back to 1992.
Many US farmers are reluctant to sell in the down market. Farmers without adequate storage facilities are using giant polyethylene storage bags that are 300 feet in length and 10 feet in diameter. Reports are that demand for these bags has surged this summer. The lack of selling has led basis higher.
The European Union and Ecuador finalized a trade deal last Thursday. The EU will extend their current preferential export tariffs to Ecuador, which are due to expire in December, until the new trade deal takes effect in the second half of 2016.
Despite tensions between Germany and the United States over spying accusations, Foreign Minister Frank Walter Steinmeier wants to restart the Transatlantic Free-Trade (TTIP) agreement talks.
European Markets are now focused on rain in Germany and France during the past two weeks that could possibly lower wheat quality. In France, reports are that Hagberg Falling Number (FN) values of a significant percentage of the French wheat crop will be in the 140-160 seconds this year due to untimely rains.
China had a record grain harvest this summer, but experts are concerned about the growing threat of water scarcity and soil degradation. This marks the eleventh consecutive year of increased grain output. However, the country continues to struggle to feed its 1.3 billion people, and water and soil resources are in jeopardy. Heavy use of chemical fertilizer for decades, has decimated soil fertility and raised food safety risks. China's arable land, which accounts for less than 10 percent of the world's total, consumes over one third of the world's chemical fertilizer.
Black Sea Region:
Black Sea countries like Russia, the Ukraine and Kazakhstan have managed to capture a large percentage to the North African market because of a freight advantage. For example, Egypt’s top grain importing port of Damietta is located less than 1,200 nautical miles from the Ukrainian port of Odessa, compared to more than 10,500 nautical miles from Portland, Oregon and 6,700 miles from New Orleans.
Russia has harvested 35.6 MMT of grain, most of which is wheat from a reported 22 percent of its total area. The average yield this year is reported to be 3.47 tons per hectare, up from 2.88 tons per hectare last year.Closer to HomeAccording to the National Agricultural Statistics Service, scattered showers occurred in South Texas and the Lower Valley, stretching across the Coastal Bend and into the Blacklands. The majority of the state averaged no more than half an inch in rainfall, though North East Texas and the Upper Coast received up to two inches in some areas. Other areas of Texas experienced hot and dry temperatures with minimal moisture.
Small Grains: Winter wheat harvest for this season reached completion statewide. Wheat fields were currently being worked for the early planting season in the Northern High Plains and the Cross-Timbers.
From an income statement perspective, other income increased by 157% and brought total sales up by 200 basis points, turning total sales into a positive number. Other operating charges decreased by 12% from last year and interest expenses decreased by 18%, helping continuing operations income before taxes to a 5% increase from last year. After tax income from continuing operations had a 4% increase from last year but when taking into consideration the non-GAAP items we see a 9% drop in operating earnings. After the drop in operating earnings we see a 9% drop in earnings per share as there was no effect from a share buyback.
Ukraine exported 32.3 million tonnes of grain in 2013-14, including 20.3 million tonnes of corn, 9.2 million tonnes of wheat and 2.4 million tonnes of barley.
Farmland, whose current holdings are concentrated largely in the Corn Belt, is looking to use the proceeds to expand its farmland holdings in the Delta region; the Southeast, including North Carolina and South Carolina; and the Western Plains.
Rice was 42% headed, versus the 44% average and was unchanged at 71% good to excellent.
SETTLEMENTS-2014 JULY 28 MONDAY
market-prices supply/demand with relative strength trading
trend line: joins highs with highs, lows with lows=direction
trading-movement+activity+length of hilo price range+force
targets-price projections (up) or (dn) in direction trend line
net position/last tues, big users-less short, funds-less long
trend line-DN+open interest-UP+supply-UP
trading-up+net buying+deceleration+@277 as resistance
targets, 406-377-328-290 momentum=bearish
net position/last tues, big users-less short, funds-more short
trend line-FLAT/NEW+open interest-FLAT+supply-UP
trading-up+consolidating+deceleration+@541 as resistance
targets, 570-541-519-497 momentum=neutral
net position/last tues, big users-more long, funds-less long
trend line-UP/NEW+open interest-DN+supply-UP
trading-up+covering+acceleration+away from t-line-overbot
targets, 1142-1172-1230-1288 momentum=bullish
net position/last tues, big users-more short, funds-less long
trend line-DN+open interest-UP
trading-dn+net buying+deceleration+near bottom of move
targets 9309-9287-9250-9220 momentum=less bearish
net position/last tues, users-less short, funds-less long
trend line-FLAT+open interest-UP
trading-up+break out from bottom of move unconfirmed
targets 304-300-292-286 momentum=bearish
Lundi 28 juillet 2014
Le maïs et le soya ont bénéficié d’une correction haussière en ce début de semaine. Les modèles météo prévoient un temps un peu plus sec dans le Midwest pour les 2 prochaines semaines, ce qui pourrait freiner les rendements du soya. Par ailleurs, les exportateurs ont annoncé la vente de 420 000 tonnes de soya américain en 2014-15.
Le blé, par contre, a été sous pression en raison de rapports faisant état d’une récolte abondante de blé en Russie - le battage y est complété à 36 %. Les prix du blé russe continuent de chuter alors que la firme Iktar a augmenté sa prévision de production de 1,2 million de tonnes (MT) à 57,5 MT, comparativement à la projection de l’USDA de 53 MT et une production de 52 MT en 2013. Depuis le 1er juillet, le début de la nouvelle saison, la Russie a exporté plus de 2 MT de grains, incluant 1,6 MT de blé. La situation en Ukraine et les sanctions des pays occidentaux à l’encontre de Moscou n’ont pas affecté ce secteur à date.
Grain Farmers of Ontario rapporte que l’Ontario est en train d’importer des tonnages limités de maïs américain. Cela est assez surprenant puisque, au même moment, le maïs ontarien est en train d’être exporté à partir du port de Hamilton. Cette situation inhabituelle serait due au fait que les producteurs ontariens restreignent la vente de leur maïs suite à la chute des contrats à terme. Les bases ontariennes se sont fortement redressées pour l’ancienne récolte. Avec les superficies du maïs en baisse, les bases de la nouvelle récolte pourraient atteindre la valeur d’importation au printemps, ou même plus vite si les rendements déçoivent.
Soybean futures rose the most in nine weeks on concern that dry weather forecast into August will curtail yields in the U.S., the world’s biggest grower. Corn climbed, while wheat fell.
Weekend rain was less than expected across parts of the Midwest, and drier weather in the next 10 days will expand crop stress to about 25 percent of the region, Commodity Weather Group LLC in Bethesda, Maryland, said in a report. Cool temperatures will help avert serious damage if precipitation forecast for late next week arrives, the forecaster said.
“People want to see a widespread Midwest rain before pressing the soybean market” after prices through July 25 fell 16 percent this year, Dan Cekander, the director of grain-market analysis at Newedge USA LLC in Chicago, said in a telephone interview. “Soybean yields are determined by August rain.”
Soybean futures for November delivery rose 2 percent to $11.05 a bushel at 12:11 p.m. on the Chicago Board of trade. A close at that price would mark the biggest gain for a most-active contract since May 21. The oilseed has climbed 4.8 percent from a 45-month low of $10.55 on July 23.
China bought 486,000 metric tons of U.S. soybeans for delivery after Sept. 1, the Department of Agriculture said today in a report. In the week ended July 17, U.S. exports more than tripled to 2.68 million tons from a year earlier, agency data show.
In the two weeks ended July 22, hedge funds and other large speculators bet on a price decline for the first time since December 2011, Commodity Futures Trading Commission data showed on July 25. The net-short position of 18,543 contracts was the biggest since October 2006.
Corn futures for December delivery rose 1 percent to $3.755 a bushel. On July 24, the price touched a four-year low of $3.6425.
Wheat futures for September delivery fell 0.5 percent to $5.355 a bushel.
Through July 25, corn dropped 12 percent this year, and wheat fell 11 percent.
“Is that the trade off? Is that what you’re willing to deal with? If I was a farmer, I’d be pissed off at this because I don’t see that argument ever put forward. The notion is that is … the farmer’s problem.”