Nogger's Blog

28/01/13 -- Soycomplex: Mar 13 Soybeans closed at USD14.47 3/4, up 6 3/4 cents; May 13 Soybeans closed at USD14.33 1/2, up 7 1/2 cents; Mar 13 Soybean Meal closed at USD420.30, up USD3.90; Mar 13 Soybean Oil closed at 51.89, down 21 points. Funds were said to have been modest net buyers of around 2,000 soybean contracts on the day. The anticipated mass exodus of buying interest to South America doesn't seem to have begun yet, with China buying 220 TMT of soybeans for 2013/14 delivery, the USDA announced today under the daily reporting system. It is interesting that they have been recent featured buyers of new crop beans as news starts to circulate of vessels lining up in Brazil waiting to load beans. Truck freight rates are said to have risen in the last week and those increases are expected to accelerate as harvest progress. The early soybean harvest in Mato Grosso is said to be 7.1% complete with yields variable, but generally in line with expectations. Last week's robust US export sales mean that weekly old crop sales now only need to be 111,000 MT to hit the USDA target for 2012/13. Weekly export inspections today were 40.667 million bushels - 1.1 MMT. Weather forecasts for South America offer little change, abundant rains for northern Brazil which will hamper the early harvest, and dryness in Argentina.

Corn: Mar 13 Corn closed at USD7.29 1/4, up 8 1/2 cents; May 13 Corn closed at USD7.29 1/4, up 7 3/4 cents. Fund buying was estimated at a net 3,000 corn contracts on the day. The excessive rains in northern Brazil that are hindering the early harvest of soybeans could also therefore have a negative impact on second crop corn plantings in those areas. Export inspections of 21.127 million bushels (around 537 TMT) beat expectations of 5-15 million for a change, adding a bit of support. This total actually beat the level required to hit the USDA's target for exports of 26 MMT in 2012/13, something that hasn't been happening too much lately. Vietnam is tendering for 50 TMT of optional origin corn, with Malaysia looking for 60 TMT of the same. US exports have been dragging all season so far, recent data from the Energy Dept and last week's announcement of another ethanol plant closure may mean that demand for corn from that sector will fall short of the USDA projections of 4.5 billion bushels too. It will also therefore be a concern that livestock numbers in the US are falling based on Friday's cattle on feed report.

Wheat: Mar 13 CBOT Wheat closed at USD7.79 1/4, up 2 3/4 cents; Mar 13 KCBT Wheat closed at USD8.32 3/4, up 3 1/4 cents; Mar 13 MGEX Wheat closed at USD8.66 1/2, up 1 1/2 cents. Weekly export inspections of 22.283 million bushels (around 606 MMT) beat trade expectations and may provide another small hint that the anticipated pick up in demand for US wheat finally has arrived. Jordan and Bangladesh are tendering for wheat, the results of the recent Syrian tender are also expected any time now, although it may be unlikely that US wheat will feature into any of these. Nevertheless, whoever wins it leaves less wheat in circulation. European exports are well ahead of last year, Ukraine and Russia are effectively sold out and Australian prices are rising. US winter wheat on the Plains got only very light rains over the weekend, and the outlook is for continued dryness. The Canadian Wheat Board said that the 2013 wheat area there may be 5-10% higher than last year’s area of 23.8 million acres.