Nogger's Blog

16/03/12 -- Soybeans: May 12 Soybeans closed at USD13.74, up 5 cents; Nov 12 Soybeans closed at USD13.28 1/4, up 2 cents; May 12 Soybean Meal closed at USD374.40, up USD3.00; May 12 Soybean Oil closed at 55.50, up 2 pips. On the week as a whole front month beans gained 42 1/4 cents, meal added USD15.80 and oil 155 points. Funds were said to have bought around 7,000 soybean contracts on the day propelling the May contract to closed higher for 8 out of the last 9 weeks. Large funds added almost 17,000 contracts to their net long position for the week through to Tuesday, according to today's commitment of traders report. Trade estimates have them putting on another 17,000 since then. Yesterday's strong export sales report has the trade feeling that US ending stocks will probably be tighter than the USDA currently estimate.

Corn: May 12 Corn closed at USD6.73, up 4 cents; Dec 12 Corn closed at USD5.74 1/4, up 2 cents. On the week May 12 was up 19 cents and Dec 12 up 11 3/4 cents. Funds were said to have bought 7,000 contracts on the day, which would equate to around 28,000 on the week. Chinese corn stocks are substantially lower than official estimates, that is what suddenly has the trade abuzz, despite the fact that this notion has been around for years. The state-run agency Sinograin said this week that they had only bought 1.2 MMT of corn for government coffers compared to the 11.0 MMT it had procured this time last year. A curious announcement to make if you are in the market to buy corn, but there we have it. Domestic prices there are at record levels and far above the cost of imports. Even so there have been no confirmed sales of US corn to China this week, only 240,000 MT to "unknown".

Wheat: May 12 CBOT Wheat closed at USD6.72, up 7 1/4 cents; May 12 KCBT Wheat closed at USD7.05 1/2, up 1 cent; May 12 MGEX Wheat closed at USD8.22 3/4, up 2 1/2 cents. On the week overall Chicago wheat was 33 1/4 cents higher, Kansas up 26 cents, with Minneapolis adding 21 cents. Sharply higher than normal temperatures has winter wheat in the US emerging from dormancy early, leaving it vulnerable to a potential freeze in April. Allendale project the US wheat acreage for 2012 at 56.61 million, significantly lower than the USDA’s suggested 58 million, although still around 2.2 million higher than last year. A month or two ago, before corn and soybean prices started to spike other private estimates had been suggesting wheat plantings in the region of 58.5-59.2 million acres. The concern is clearly of spring wheat losing out primarily to corn, aided by the potential for early plantings.