The corn market traded higher into the closing bell, led by gains in the September contract. Traders noted active bull spreading in the Sept/Dec spread today.
Bids were firm in the western Corn Belt midday while softer on the river for nearby shipment due to slow export demand.
Ethanol production for the week ending July 26th averaged 832,000 barrels per day, down 2.5% vs. last week but up 2.8% vs. last year.
Total production for the week was 5.82 million barrels. Corn used in last week's production is estimated at 87.4 million bushels which takes this crop year's cumulative usage for ethanol production to 4.08 billion.
Corn use needs to average 100.50 million bushels per week to meet this crop year's USDA estimate of 4.6 billion bushels. Stocks were estimated at 16.45 million barrels, down a whopping 4.67% vs. last week and also down 15.20% vs. last year.
The reported noted that the US imported ethanol for the 4th consecutive week but implied demand jumped to 6.72 million barrels, up from 5.58 the week prior. Ethanol margins remain exceptional in IA which is helping to keep production going and this is supportive to the cash market.
A private crop forecaster estimated that the US corn crop will hit 14 billion bushels, up from their prior forecast of 13.65 billion and against the USDA estimate of 13.95.
The average yield was estimated at 158.5 bushels per acre vs. the USDA forecast of 156.5. Many see a yield increase coming on the August 12th USDA report given the favorable weather conditions during pollination and the good crop conditions for a majority of the growing region.
September Rice finished down 0.07 at 15.825, 0.075 off the high and 0.075 up from the low.
Soy Futures Closed Higher
August Soybeans finished up 24 at 1374, 1 1/2 off the high and 30 1/2 up from the low. November Soybeans closed up 3 1/4 at 1206 1/4. This was 12 up from the low and 5 1/4 off the high.
August Soymeal closed up 5.9 at 435.1. This was 11.6 up from the low and 2.4 off the high.
August Soybean Oil finished down 0.02 at 42.09, 0.52 off the high and 0.06 up from the low.
The soybean market traded mostly higher on the day, led by double digit gains in the August contract. November soybeans traded both sides of the unchanged but ended the day with modest gains.
The Malaysian palm oil market was higher overnight and has scratched out 2 consecutive days of gains which helped to support soybean oil futures. The basis in the US was steady to slightly higher for some processors as supply coverage dwindles to 2 weeks.
Farmers remain on the sidelines with additional sales given the drop in futures and basis over the last week.
The USDA reported that US private exporters sold 120,000 tonnes to an unknown destination for the 2013/14 marketing year this morning.
Weather leans negative for the market with a cooler temperature trend prevailing and long term forecasts hint at better heat in the last part of August and early September which bodes well for growth and yield potential.
A private crop forecaster trimmed their estimate for US soybean production in 13/14 to 3.310 billion bushels, down from prior forecasts of 3.315 billion, and this is also down from the USDA estimate of 3.420 billion.
The US soybean yield was estimated at 42.9 bushels per acre vs. the USDA estimate of 44.5 bushels per acre. World soybean production was left unchanged at 283 million tonnes, down slightly from the USDA forecast of 285.89 million.
There's talk that Argentina soybean planted acreage will rise to near 20 million hectares in 2013/14, up from 19.5 in 2012/13.
The USDA sees Argentina soybean production next year at 53.5 million tonnes, just short of a record high and against 50.3 million in the current marketing year.
Wheat Futures Closed Higher
September Wheat finished up 9 at 664 1/4, 1 1/2 off the high and 10 3/4 up from the low. December Wheat closed up 9 1/4 at 677. This was 11 1/4 up from the low and 2 1/4 off the high.
Wheat futures traded sharply higher on the day and the market rallied for the 3rd day in a row. The upside action was being led by the KC market and the Chicago December wheat vs. December corn spread traded up just shy of +200, a new 2-month high.
Quality issues are beginning to flare up in the European wheat market as harvest moves forward in France and are just beginning in Germany.
Traders noted that protein in some areas might be an issue with reports indicating some of the crop is coming in below 11% protein, which is considered the minimum for milling quality exports. The production outlook remains healthy and more will be known in the next couple of weeks as the harvest picks up speed.
A private crop forecaster estimated world wheat production at 694 million tonnes, unchanged from their prior forecast and compared to the USDA estimate of 697.80 million. Their Russian production forecast declined to 48.4 million tonnes, down from 50 million previously and below the USDA estimate of 54 million.
The official estimate from the Russian Ag Minister is no less than 50 million. Strong demand for soft wheat from China and hard wheat from Brazil continues to underpin the supportive demand-side sentiment in the market.
The KC basis was steady midday but traders noted a pickup in farmer sales as they become more comfortable with planting conditions for next year's crop due to increased precipitation in the western US.
September Oats closed up 2 1/4 at 340 1/4. This was 1 3/4 up from the low and 1 3/4 off the high.
