Nogger's Blog

15/03/13 -- Soycomplex: Beans closed lower for a fifth session in a row, helped on their way by a Feb NOPA crush of only 136.322 million bushels versus trade expectations of around 141.6 million and well below the Jan crush of 158.195 million. Concern about Chinese feed demand continues amidst falling pork prices. Trade talk suggests that they have been cancelling Brazilian purchases this week. At least some of that may be getting switched to the US. Rumour suggests that China bought at least one cargo of US beans yesterday out of the PNW for March/April shipment. Other reports suggest that getting vessels out of North America isn't easy at the moment however, which may limit further soybean sales. With existing commitments currently running at 97% of the USDA target for the season then maybe that isn't such a bad thing. The Buenos Aires Grains Exchange estimated the 2012/13 Argentine soybean crop at 48.5 MMT, unchanged from their previous estimate. Very early harvesting is now underway, they added, although the main harvest effort only begins in a couple weeks. Argentina's Ag Ministry estimated the 2012/13 bean crop at 51-52 MMT. Allendale estimated the 2013 US soybean area at a record 78.324 million acres versus the USDA's Outlook Forum's projection of 77.5 MMT. They estimated the 2013/14 US crop at 3.349 billion bushels, up 11% versus 3.015 billion in 2012/13 and versus the 3.405 billion suggested by the USDA's Outlook Forum last month. For the week beans lost around 45 cents and meal over sixteen dollars. On the day May 13 Soybeans closed at USD14.26, down 9 1/2 cents; Jul 13 Soybeans closed at USD14.10 3/4, down 5 1/4 cents; May 13 Soybean Meal closed at USD418.80, down USD6.20; May 13 Soybean Oil closed at 49.91, up 57 points. Funds were said to have been net sellers of around 5,000 soybean contracts on the day.

Corn: The corn market continues to move in the opposite direction to soybeans. The Buenos Aires Grains Exchange said as of March 14th 12.4% of the Argentine corn crop has been harvested, up from 4% a week ago. They estimated Argentina’s 2012/13 corn crop at 25.0 MMT, unchanged from their previous estimate. They said that early yields in La Pampa, south Cordoba, Buenos Aires, and Entre Rios are around 125bu/acre. Argentina's Ag Ministry estimated the 2012/13 corn crop at 27.0 MMT versus the 2011/12 crop of 21.0 MMT. Brazil’s second corn crop (safrinha corn) is said to be off to a fantastic start with some local analysts suggesting Mato Grosso conditions look "exceptional" so far. The USDA currently has Brazilian corn production at 72.50 MMT, just under last year's record 73 MMT. There are said to be up to 4.6 MMT of soybeans and corn waiting to be loaded at the Brazilian port of Paranagua. Allendale estimated the 2013 US corn area at 96.956 million acres versus the USDA's Outlook Forum projection of 96.5 million. They estimated 2013/14 US corn yields at 156.97 bu/acre versus the USDA's hoped for "trendline" of 163.6 bu/acre, although a decent recovery on 123.4 bu/acre in 2012. That would produce a US corn crop of 13.912 billion bushels this year, up 29% on 10.780 billion in 2012, although significantly lower than the USDA's Forum prediction of 14.53 billion. Coceral estimated the 2013/14 EU-28 corn crop at 64.4 MMT, up 14% versus 56.3 MMT in 2012. UkrAgroConsult said Ukraine exported 1.4 MMT of corn in February versus 1.6 MMT in January. For the week May 13 corn was up 14 cents. On the day May 13 Corn closed at USD7.17, up 1/2 cent; Jul 13 Corn closed at USD7.00 1/4, up 1 3/4 cents. Fund buying was estimated at around 3,000 contracts on the day.

Wheat: This week's gains in wheat are tied to widespread talk of significant increases in US domestic feed usage as corn availability gets tighter. The quarterly stocks report due at the end of the month may provide some answers as to exactly how much wheat feeding has been going on. Yesterday's export sales were also supportive, backing up the notion that US wheat is now the cheapest in the world. The sizable short that the funds have built up in CBOT wheat may also be limiting downside. Allendale estimated the 2013 US wheat area at 56.261 million acres versus the USDA's Forum projection of 56.0 million. They estimate this year's US all wheat crop at 2.204 billion bushels, down slightly versus 2.269 billion in 2012/13, but an improvement on the USDA's Forum projection of 2.1 billion presumably due to improved weather conditions on the Plains recently. Coceral estimated the 2013/14 EU-28 soft wheat crop at 127.8 MMT versus 124.6 MMT a year ago. Japan's Farm Minister estimated 2013/14 feed wheat imports at a record 1.07 MMT as wheat continues to nudge corn inclusion levels in feed rations lower. Russia's Ag Ministry said that Russia intends to buy wheat locally to replenish intervention stocks in the August/October time frame. The wheat market gave up a little of the week's gains today but May 13 CBOT wheat still closed the week 26 cents higher than it began it, with Kansas up 18 cents and Minneapolis up 4 cents. Funds were said to have been net sellers of around 2,000 CBOT wheat contracts on the day which saw May 13 CBOT Wheat close at USD7.23, down 1 3/4 cents; May 13 KCBT Wheat closed at USD7.51 1/2, down 1 1/4 cents; May 13 MGEX Wheat closed at USD7.96 1/4, down 4 3/4 cents.