Morning Grain Comments, 02/24/2016

Wednesday, February 24, 2016

Corn and beans were on the run from the open last night, but it’s Chicago wheat that comfortably added to contract and multi-year spot lows with no remorse overnight; domestic and global supplies remain overwhelming there despite Black Sea concerns for the 2016 crop. It’s still corn and bean acreage numbers that will draw the most attention later this week.

The head of the Russian Grain Union reported that some of the country’s farmers were switching acreage from spring wheat to corn due to the wheat export tariff, originally imposed a year ago. Russian domestic wheat prices rose last week as the government remained undecided on said export tax.

South African corn exports were reported at 644k tonnes at the end of January, with total stocks at 3.258 MMT at end of the month, compared to 3.905 MMT at the end of December. The country’s Crop Estimates Committee is expected to report another 2016 production decline tomorrow morning, while import needs are seen at around 5 MMT in 2016 and food prices are expected to rise by about 10%, according to the S.A. Treasury office.

A Reuters poll of grain analysts ahead of the USDA Ag Outlook Forum found 2016 U.S. corn plantings at 89.65 million acres, up from 88.0 mln in 2015 but below the USDA’s initial 90.5 mln ac figure; estimates ranged from 88.5-91.0 mln ac. Soybean acreage was seen at 83.3 mln, up from 82.65 mln LY and the 82.0 mln ac government working number, with guesses there ranging from 82.0-85.2 mln ac. All wheat planted area came in at 52.4 mln ac, below 54.64 mln LY and the 53.0 mln ac USDA working estimate, with the trade range there spanning from 51.15 to 56.0 million acres.


Today’s chart shows historical Ukraine grain productionsince 2000/2001, according to the USDA, with ‘15/16 andnow ‘16/17 numbers from UkrAgroConsult. The wellfollowed consults see Ukraine suffering a second straight year of production declines this season, following the 2014 record harvest, due to poor winter wheat planting weather and output. Total wheat production in ‘16/17 was pegged at 17.25 MMT, 7.5 MMT below LY and a four-year low.



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