We have a rain moving across the upper plains states into Minnesota, Wisconsin and into Northern Illinois this morning providing a nice drink to finish crop development in those areas. It would appear that even north and northeastern Iowa is experiencing moisture overnight which is an area that has seen little precipitation over the last 30 days.
The overall news is sparse again this morning with the biggest story at the moment being export sales and for wheat at least, it is difficult to use the word "big." For the week ending August 14th we sold 209,200 MT of wheat or 7.69 million bushels. This number was down 38% from the previous week and was 62% below the 4-week average. The largest purchasers were the Philippines at 83.5k MT, Nigeria at 62.4k MT and Japan with 34.6k MT. This brings the year to date sales up to 396,201,750 bushels, which lags the pace for this time last year by 26%. As we have noted numerous times, right now the Black Sea is the place to go for wheat.
Stats Canada released updated production estimates this morning with no real surprises but the wheat number did line up closer to the lower estimate. They currently project a total crop of 27.70 MMT, which is down just over 26% from a year ago. Keep in perspective that last year was an exceptional crop. The average production for the past 5 years has been 28.05 MMT, which is weighted heavily by 2013.
This market has been able to bounce just a touch in the overnight trade but this of course after testing the base of support yesterday. I would still like to believe that we have pressed wheat far enough to the downside for the time being and with the funds already short that is will be difficult to attract much new selling. That said, for now we lack a stimulus that could carry us back higher as well.
The corn market has been stable overnight in face of the showers that are passing across the upper Midwest. Northeastern Iowa remains a place of concern, as it would appear that they missed the overnight showers but the maps this morning look as if they are catching a drink.
Exports sales were not quite as disappointing as wheat but certainly do not provide any excitement for the bull either. For the 2013/14 marketing year we sold 99,800 MT or 3.9 million bushels and for 2014/15 crop year 719,300 MT or 28.3 million bushels. The primary purchasers for new crop were Columbia at 223,300 MT, Mexico at 193,600 MT and unknown destinations at 161,900 MT. It would appear that China is not content to just put a stop to imports of corn, it was reported overnight that there are some promoting increased scrutiny on imported US sorghum and barley.
Canada has been steadily increasing their production of corn over the past several years but is expecting a setback this year. The Stats Canada report estimates total corn production of 14.43 MMT, which is down 19.5% from last year. The five-year average production total has been 12.09 MMT.
In face of what would appear to be all negative new this morning, corn futures have held support once again and bounced. I suspect any strength though will be fleeting and with December future encountering very stiff resistance against the 3.75/3.80 zone.
While the weather outlook continues to be a negative influence on the bean market, near-term demand from crushers and solid new crop export sales have been able to lift prices back higher this morning.
For only the second time this marketing year, old crop soybeans sales registered in the negative column, this time for -89,700 MT or -3.3 million bushels. For new sales though, we sold 1,420,600 MT or 52.2 million bushels. The major buyers were China at 947.9k MT, Spain at 120k MT and unknown destinations with 111.1k MT.
While not a major player in the greater scheme of things, Canada has been pushing up bean production and Stats Canada projects that they will again this year. The estimate places production at 5.9 MMT, up 13.5% over last year and would be 30% above the 5-year average. If you recall, many of the beans we were importing into the US in the first quarter were coming from Canada.
As with corn, I suspect the strength we are witnessing in the bean market this morning will be temporary. While still somewhat grudgingly, beans continue to poke into lower lows and I believe we have room to see a 9 in front of prices between now and harvest.