Typically crop condition deteriorates a touch heading towards
For US corn, for
instance, the average drop between the end of July, the pollinating month, and
early September is 4 points over 2009-2013, in terms of the proportion rated "good"
or "excellent" in weekly US Department of Agriculture reports.
(Actually, 2003 saw a particularly sharp decline, of 23
points. The drought year of 2012 didn't, with the crop already poorly rated by
the end of July.)
But on USDA data overnight, the rating improved for both US
corn condition, lifted by 1 point to 74% seen as good or excellent, and soybean health, upgraded by 2 points to
Both figures are the highest since at least 1994, and
reflect the continued strong Midwest growing conditions, with plentiful
moisture helping grain and pod filling.
And they weren't the only overnight new pointing to lower
prices, with broker INTL FCStone coming in with some upbeat estimates for US
The broker raised by 1.9 bushels per acre to 174.1 bushels
per acre its forecast for the US corn yield, estimating production at 14.455bn
The USDA has a figure 423m bushels lower for output, based
on a yield of 167.4 bushels per acre.
For soybeans, FCStone pegged the US yield at 47.6 bushels
per acre, an upgrade of 1.6 bushels per acre, and above a USDA figure of 45.4 bushels
On soybean output, FCStone was, at 4.0bn bushels, 84m
bushels more generous than the USDA.
And, after the surprisingly strong US crop ratings, Chicago-based
Futures International lifted its output forecasts too, pegging the soybean
harvest at 3.88bn bushels, on a yield of 46.2 bushels per acre.
For corn, Futures International lifted its production
estimate to 14.28bn bushels, on a yield of 170.8 bushels per acre.
'Talk of a potential frost'
The strong yield ideas countered the growing talk of soybean
disease, and chimed with early harvest reports, from the US south.
"Early yield reports have been strong," one broker said,
adding that "the forecast doesn't suggest an early frost," potentially the last
threat to huge harvest expectations being realised.
In fact, "there is talk of a potential frost/freeze event in
the northern reaches of the US and portions of western Canada," Brian Henry at
Benson Quinn Commodities said.
But this is not too unexpected, with Alberta for instance
typically seeing its first frost from late August to mid-September, and "wouldn't
significantly impact production of row crops", with early-maturing varieties popular.
The impact on corn was a drop in prices of 0.9% to $3.60 ½ a
bushel for the December contract, as of 09:20 UK time (03:20 Chicago time), treading
its lowest levels in three weeks.
November soybeans dropped 1.0% to $10.21 ½ a bushel, gaining
no support this time from the old crop September contract, which fell 0.7% to $10.90
a bushel, as many crushers gave up on the chase for tight supplies left over
from the 2013 harvest.
"A number of soybean processors are planning to shut down
for maintenance early to mid-September depending on location. Some processor bids backed off slightly," CHS
In China, the top soybean importing country, Dalian futures
for January dropped 6 yuan to 4,621 yuan a tonne.
Elsewhere in the oilseeds complex, palm oil did put in a positive performance, adding 0.7% to 1,967
ringgit a tonne in Kuala Lumpur, after Oil World restated its forecast that values,
near five-year lows, are reaching the bottom.
"We believe that this year the price lows will be
established not far from current levels and significantly above those
registered six years ago," Oil World said, citing the boost to demand.
Rising European Union purchases show "the ability of the
European energy sector to react to attractive prices", the consultancy said.
In the Netherlands, for instance, palm oil consumption in
the October-to-May period rose 22% to a record 1m tonnes.
'Slowest on record'
Back in Chicago, for wheat,
the overnight news was significantly more bullish than for row crops, with the
wet weather supporting corn and soybean condition a negative for the grain
which, in being mature, is vulnerable to deterioration from rainfall.
Indeed, the condition of the US crop dropped 3 points to 63%
good or excellent.
The harvest, at 38% complete, is the "slowest on record", Benson
Quinn Commodities' Brian Henry said.
Furthermore, as an extra boost, Egypt unveiled another
tender, showing there is some demand around current price levels, after the
decent US export data on Tuesday.
However, the early Wednesday news was less supportive for
prices – if a big relief for the cause of world peace – with Ukraine's
president saying he has agreed with Russia's president, Valdimir Putin, on
"permanent ceasefire" in the east of Ukraine.
With Russia and Ukraine both major exporters of
competitively-priced wheat, the wheat market has been something of a barometer
of regional tensions.
Wheat futures, which had held firm earlier, tumbled as the
ceasefire headlines came through at about 09:00 UK time (03:00 Chicago time) to
stand 1.2% lower at $5.48 ½ a bushel in Chicago for December delivery.
Kansas City hard red winter wheat for December dropped 0.6%
to $6.28 ¾ a bushel, and Minneapolis hard red spring wheat for December fell
0.4% to $6.20 ½ a bushel.