Corn and bean futures were down slightly overnight following Wednesday’s strong rally.

Private exporters reported the sale of 360,000 MT of U.S. corn to China. Another 180,000 MT was sold to an unidentified buyer which traders said was likely China. In ethanol, weekly production was up 18,000 BPD TO 875,000 BPD for the highest mark of the year and the highest since 883,000 BPD during the week of June 22, 2012

In soybeans, yesterday’s rally hit an eight-month peak, with a port strike in major exporter Argentina increasing the focus on tight short-term supply. Argentine port workers strike in grains hub Rosario is in for its fourth day today. The parties met Wednesday  but failed to reach a deal on wages, as dozens of cargo ships are stranded in the Rosario ports of San Lorenzo and San Martin, unable to leave with their loads. Dozens more are lined up outside of the ports waiting to get in. Another negotiating session is set for today.

Wheat markets were also supported by signs of buying interest from importers after a price pullback this week.   Algeria bought 400,000 MT of milling wheat in a tender for August shipment. Analyst Strategie Grains cut their EU Soft Wheat Crop forecast 200,000 MT from last month to 130.9 MMT, although it is still expected to be up 5% on the year.

WEEKLY EXPORT SALES (in thousand MT)

Corn and wheat prices found modest strength overnight while nearby soybeans were off slightly.

For corn, export demand continues to be limited. Overnight, Taiwan’s MFIG corn purchasing group  rejected all offers and made no purchase in a tender to buy up to 60,000 MT of corn, citing too high prices. However, China likely bought 5 cargoes or more of corn for Sep and Oct shipment on Tuesday, a trader said. That followed the 2 cargoes USDA reported sold to unknown on Monday, which was believed to be China as well. On the weather front, some showers are expected throughout he Midwest over the next 10 days, but not enough to disrupt planting progress. In addition,  warmer temperatures are expected which should help speed crop development.

In soybeans, cash basis levels continued to crash at key buyers yesterday. In many cases, basis levels are off 40 to 60 cents a bushel in the last week as strong sales and slowing export demand help build pipeline stocks for end users.  In Argentina, striking port workers, who went on strike Monday, say they are set to talk with management today. The government is keen to see the strike end so that grains exports can resume from main shipping hub Rosario. On Tuesday, Oil World projected that tight stocks before the new-crop harvest will cause the US to import 32 MB of soybeans in Aug/Sep from Canada and South America.

For wheat, recent price drops have helped find some new buying interest, but overall global supplies seem to be abundant keeping prices on the defensive. Jordan has again issued an international tender to purchase 150,000 MT of milling wheat to be sourced from optional origins but  disagreements about a new quality inspection scheme has reduced tender participation by grain export houses in recent tenders.  Russia’s Grain Union has raised the top end of its 2013 harvest forecast range due to the good condition of winter grains, its head said on Tuesday, indicating that crop risks due to dry weather this month were limited.

Grains were sharply lower overnight thanks to the latest planting pace. Corn and wheat posted 10-cent losses while front-month July soybeans was unchanged but new-crop November fell 7 cents.

U.S. farmers took advantage of good weather in the last week to plant corn at a record-fast rate, pushing progress to 71% versus 28% last week.  Seedings, which had been record slow as of May 12, were nearly back to average levels as of Sunday. With soil moisture levels recharged and planting pace back on track there seems little to divert the trend from its downward move over the near-term. On the export front, corn exports will need to average about 15 MB a week for the remainder of the marketing year to reach USDA’s annual forecast of 750 MB for the year. This seems unlikely as exports in the last two months have averaged about 12 MB a week.

For soybeans, spot basis levels came under pressure again on Monday, extending the two-day loss to around 30 to 45 cents a bushel at many key processors and river terminals.  In Argentina, port workers at the main grains hub of Rosario went on strike over wages on Monday. Although most of the work stoppages are short-lived, those that go on for days can impact the global flow of grains.

In wheat, the US winter wheat crop condition slipped slightly last week as 31% of the crop is rated in good-to-excellent condition.  Russia’s Institute for Agricultural Market Studies raised its 2013 wheat crop forecast by 2.5% due to a bigger-than-expected harvest in its largest growing region and despite hot and dry weather in other regions. In Australia, wheat planting is expected to accelerate as much-needed rains are forecast to hit the country’s dry east coast.  Timely rains would ease the threat of significant losses amid an uncertain global crop outlook after analysts warned Australian yields could be hurt if the dry weather that delayed planting on the east coast persisted

Grains started the week in positive territory following Friday’s strong close.

In corn, a stronger than expected cattle on feed number Friday afternoon showed May 1 cattle on feed at 97% of this time last year, versus trade estimates of 96.1%. Also on Friday, private Informa Economics projected U.S. 2013 corn plantings at 96.827 million acres, below the USDA’s current estimate of 97.3 million. Informa said it reduced corn acreage in the western Corn Belt states of North Dakota and Minnesota compared with the USDA’s figures, while adding acres east of the Mississippi River. Despite the smaller corn seedings, Informa forecast the U.S. 2013 average corn yield at 160.9 bushels per acre , above the USDA’s current forecast for 158 and put corn production at 14.398 billion bushels, topping USDA’s forecast of 14.14 billion. Analysts expect seedings to be 50 to 65% complete by the end of last week, up from 28% a week earlier, although that would still be a record slow pace for this point in the season

For soybeans, Friday’s rally in the futures market saw cash basis levels tumble as grain buyers had active  bean sales. Soy basis plunged 15 to 25 cents a bushel at many key buyers in the Midwest on Friday.

In wheat, the US HRW crop received welcome rains late last week and into the weekend, while rainfall in Australia is helping improve planting prospects and better crop weather is being reported in the Black Sea region.

Soybeans extended their rally overnight gaining 10 cents a bushel while corn posted a 2-cent gain. Wheat was down, falling 2-cents a bushel.

Soybeans are on track for the biggest weekly gain since January, on signs of sustained Chinese demand and on speculation a pickup in U.S. corn planting may leave less acreage for sowing the oilseed. China purchased 79% of the 346,634 MT sold by U.S. exporters in the week ended May 9 for delivery in the new-crop 2013/14 year. That takes total U.S. sales for the next marketing year to 8.86 million tons before most farmers even planted their crops, USDA data show. In addition, a turnaround in corn plantings has some traders looking for fewer soybean acres being planted this spring.

In corn, traders are looking for 55% to 60% planted when USDA releases their next progress report, after the last estimate showed 28% planted. Some showers are expected over the weekend but turns drier after that for much of the Midwest. Leading ethanol maker POET Biorefining this week shut down its ethanol plant in Alexandria, Indiana, due to a maintenance issue. The ethanol plant is closed for deliveries of corn and is expected to be shut down for as long as two weeks.

For wheat, prices continue to come under selling pressure. Rains in Russia’s dry areas and expectations of huge Black Sea production and a cheap new crop offer from this region keep wheat prices on the defensive.

Soybean and wheat prices were up, posting 6 and 4-cent gains respectively in the overnight session while corn was mostly unchanged.

For soybeans, Wednesday brought more buying by Chinas as private exporters reported export sales of 171,000 MT for the 2013/2014 marketing year. However, domestic demand data showed the U.S. soybean crush fell more than expected to 120.11 MB in April, from 137.08 MB in March. Analysts had expected a monthly crush of 125.5 MB, according to a Reuters poll, down from 131.7 MB in April 2012 as processors slowed output due to tight supplies of old-crop soybeans

In corn, weekly ethanol output was up 14,000 BPD TO 857,000 BPD matching the marketing year high from 2 weeks ago. The USDA raised their annual corn use for ethanol by 50 million bushels to 4,600 MB in the latest May WASDE report, and for 2013/14 USDA is projecting 4,850 million bushels going to ethanol production – a 5.4% increase year over year. Weather is expected to take a turn to wetter conditions, after drier and warmer weather helped push planting in recent days. The heaviest rains will be Saturday through Monday in the west and Monday through Wednesday in the east.

For wheat, Egypt, the world’s top wheat importer, wants to stop importing wheat within four years and rely on its growing local production, President Mohamed Mursi said on Wednesday.  Southeast poultry producers are said to be looking to price SRW wheat aggressively before harvest as corn stocks remain tight in the face of high prices.

WEEKLY EXPORT SALES (thousand metric tons)

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Grain prices slipped overnight as better weather is allowing farmers to make progress on planting. New-crop corn and soybean futures lost 2 cents, while wheat was off 5 cents.

In corn, weather conditions are favorable for planting and look to be relatively good through the end of the month. Weather group CWG projected that 85% of the corn crop should be planted by the end of the month, which could lead to small losses in acreage as well as some yield potential losses but overall it will do little to change the 14 billion bushel supply picture painted by USDA.

In soybeans, the National Oilseed Processors Association’s monthly soybean crush data scheduled for release on Wednesday should show the U.S. crush for April at 125.5 MB based on a survey of analysts. Trade estimates ranged from 121 million to 129 million bushels. NOPA reported the March crush at 137.08 MB. China is forecast to import a record 66 MMT of soybeans in 2013/14 due to robust domestic demand and low stocks, an official think-tank said. That is 11.9% higher than estimated imports for the current marketing year. Workers in Brazil’s ports of Santos, Parangua and Rio de Janeiro plan a stoppage. Workers are protesting a government proposal to change port regulations to lure investments. Brazil is expected to ship a record 7.6 MMT of soybeans in May after permitting ports to operate 24 hours a day, from a previous 8-hour limit, Oil World said yesterday.

For wheat, UK wheat imports jumped past the 2 MMT mark with three months of the season yet to go, according to customs data. The UK – the European Union’s third biggest wheat producer, and typically a net exporter – imported 251,000 MT of wheat in March, on the heels  of a poor harvest  last year, when much of the crop failed to meet even feed specifications.

Grain prices were modestly higher overnight as USDA data showed continued planting delays in the Midwest.

As of Sunday, US farmers had planted 28% of the corn crop, which was up from 16% last week but still the slowest pace on record. In Illinois were only 17% of the crop is planted, University of Illinois researchers suggest that any sowings beyond May 20 will incur a 15% yield penalty, and beyond June 1 a 25% penalty.  The Rosario Grains Exchange said on Monday in its monthly crop report that the season’s corn harvest is expected at 24.5 MMT, down from a previous forecast of 25.3 MMT due to lower-than-expected yields.

For soybeans, US plantings were at 6% as of Sunday as compared to 2% last week and 24% for the 5-year average. The Rosario Grains Exchange pegged the country’s soybean harvest at 48.3 MMT slightly higher than their 48 MMT forecast last month.  Basis levels continue to hold at record heights although farmer selling has picked up as cash prices have eclipsed the magic $15 mark, their highest in nearly two months.

In wheat some harvesting of winter wheat is being reported in Southern Texas . Winter wheat conditions were mostly stable from last week with 32% of the crop rated good-to-excellent.

Grains were mostly unchanged overnight following Friday’s sharp selloff.

In corn, USDA’s new-crop supply and demand forecast showed ending stocks for 2013/14 would hit 2.004 billion bushels, nearly three times the 759 million forecast for the Aug. 31 end of the marketing year. The forecast was also above the trade estimate for 1.993 billion and the highest in nine years. Although bearish on its face, large stocks will depend on record high production which is anything but a sure thing as slow farmer planting brings into question the acreage forecast and the yield potential. Scattered rains across the Midwest continue to delay spring planting. On the demand side, a think tank from China projected overnight that the country would need to increase corn imports to 5 MMT up from 2.7 MMT this year.

For soybeans, USDA pegged production at a record high of 3.39 billion bushels with 2013/14 carryout doubling to 265 MB from the 125 MB estimated for the end of this season. USDA’s yield forecast of 44.5 was on par with trend yields in comparison to their corn yield forecast of 158 which was below the trend yield of 163.

In wheat, USDA’s first survey based forecast of wheat production for 2013/14 showed winter wheat production at 1.49 BB off from last year’s number of 1.65 BB. All wheat production in USDA’s WASDE report was forecast at 2.057 BB and ending stocks falling to 670 MB from this year’s 731 MB. However, a rebound is expected in World production as global ending stocks are projected at 186.38 MMT about 2 million above pre-report projections, and a massive 45-MMT annual increase in global output amid a rebound in the Black Sea region.