Wednesday opened on a negative note, although less so for wheat,
amid some continued market talk over restrictions, some say temporary, on
The rumour has gathered some support on ideas that any
limitations would be down to the reduced quality of this year's harvest in
Ukraine, as in the neighbouring European Union, and a desire to keep tabs on
At Iowa-based broker Market 1, Mike Mawdsley flagged "talk
of Ukraine's flour millers asking their government to halt exports until this year's
crop can be better assessed".
At Benson Quinn Commodities in Minneapolis, Brian Henry put
the speculation in terms of "Ukraine potentially taking a step back from the
export market to audit quantities of milling quality wheat".
The idea is of Ukraine "having to back away from an export
market they haven't been very involved in to date.
"There's concern about their overall supply of milling
quality wheat and a study of what they have a milling quantities makes sense."
'Too much rain'
The talk followed a report on Tuesday that Ukraine's prime minister,
Arseny Yatseniuk, had estimated at 15% losses to the country's grains production
from turmoil in the east of the country, although a later clarification
established that the losses referred only to the troubled Donetsk and Luhansk
And Ukraine is not the only factor offering some support to
the wheat market, with continued concerns over the impact of rain in at least
delaying, and potentially damaging the quality, of the US spring wheat harvest.
"Harvest remains delayed in the northern states as too much
rain dampens efforts," CHS Hedging noted.
As far as Canada's spring wheat crop goes, Agrimoney.com is
hearing talk of average yields and quality in Manitoba, but the market will gain
more of an insight on Thursday with the release of a Statistics Canada crop
This is expected to peg the Canadian all-wheat crop at 28.5m
tonnes, well below the high-yielding 2013 result of 37.53m tonnes, but an
upgrade from StatsCan's July forecast of 27.74m tonnes.
Within that, the durum crop is pegged at 5.2m tonnes, up
from 5.04m tonnes in July.
Hopes have also improved for Australia, where some dry
eastern areas have received rains, as has Western Australia, where moisture
concerns had been ticking up a bit.
In Chicago, wheat dropped, if modestly, by 0.1% to $5.45 ½ a
bushel for September delivery, as of 09:45 UK time (03:45 Chicago time).
Indeed, losses were greater in corn, where the December contract, dropped 0.6% to $3.70 a bushel, attempting
to cling on to its 20-day moving average.
The ProFarmer Midwest crop tour overnight came out with more
in the way of strong corn yield data, pegging the Nebraska result at 163.77
bushels per acre, above the 154.93 bushels per acre estimated a year ago.
For Indiana, the yield was put at a record 185.03 bushels
per acre, up from an estimate of 167.36 bushels per acre from last year's tour.
(The US Department of Agriculture foresees a yield of 170 bushels
per acre for Nebraska and 177 bushels per acre for Indiana, after results last
year pegged at 173 bushels per acre and 179 bushels per acre respectively.)
'Smoking hot margins'
Still, there could be strong data on the demand side too
today, with weekly US data on the production of ethanol, for which corn is the country's
"Smoking hot ethanol margins and robust ethanol exports for
the first six months of the year have helped keep a floor under the corn market
in the face of this large crop," CHS Hedging said.
As for China, where dryness which could cause a drop in corn
production this year is being monitored by the market, some rain is expected in
parts of the Yangtse valley and parts of the North East this week.
"Showers will improve moisture a bit in far south western
North East China, but dryness will continue to stress corn and soybeans in
south central North East China," MDA said.
"Dryness will also continue in south central and northern
North China Plains, and north central Yangtse valley."
China is mainly a concern in Chicago on the demand side, with the country the
top importer of the oilseed.
A 0.7% drop to 4,530 yuan a tonne in January soybean futures
on China's Dalian exchange was hardly a help,
And staying abroad, the Kuala Lumpur palm oil market, which has become reliably bearish, saw a 0.9% drop
to 2,050 ringgit a tonne in the November contract, which earlier hit 2,049
ringgit a tonne, the lowest for a benchmark lot since October 2009.
The market was depressed this time by data from cargo surveyor
Intertek showing a drop of 5.4% in Malaysian palm oil exports in the first 20
days of the month, although that actually represented an improvement, after the
15% fall for the first 15 days of August.
And it has to be said there is some upbeat talk in Kuala Lumpur, in terms of crude oil prices giving the palm oil market help, following on from supportive comment elsewhere on Tuesday.
Still, the US crop tour was not all bearish, with the
Nebraska pod count put at 1,103.26 per
square yard (ie 3 feet by 3 feet), below last year's finding of
For Indiana, an improvement was seen, to 1,220.79 pods per
square yard, up from 1,185.14 last year.
And there is some concern over the tightness in near-term US
soybean supplies causing market ripples.
"We have to concede that the stocks-to-use ratio is
extremely low for 2013-14," one US broker said.
"This may be what is holding the November contract back from
collapsing like corn did."
CHS Hedging said: "Rain remains in the forecast across the
Midwest this week and should limit new crop rallies.
"However, if old crop explodes there's no telling what may
In fact, the November lot shed 0.6% to $10.47 a bushel,
while the old crop September contract eased 0.1% to $11.18 ¾ a bushel.