Nogger's Blog

25/07/13 -- Soycomplex: At this point it is tempting to just re-post yesterday's market report and simply change the date and see whether anybody can tell the differnce. Soybeans down heavily, with the biggest losses at the front end? Check. Meal locked in limit down? Check. Soybean oil at new lows not seen since October 2010? Check. Heavy fund selling across the board? Check. That's that then. Spec longs are scrambling for the exit, end users seem to have surprised them all by leaving themselves with adequate cover and nothing to buy. And all the time the harvest is drawing closer, and with it the prospect of a record US soybean crop. Aug 13 beans are now at the lowest for a front month since Jun 2012. The run-up to the highs of only a few days ago is said to have unearthed a surprisingly large volume of old crop soybeans on farm for sale. With new crop looming and the huge inverse that we've been seeing lately there's little point carrying old crop much longer, that has flushed physical sellers out at a time when the spec longs also want out ahead of first notice day. Fund selling today was estimated at 9,000 in beans and 7,000 in meal. Over the past two sessions funds are thought likely to have been net sellers of around 20,000 soybean lots and some 11,000 in meal. Aug 13 beans have now slumped USD1.65 in the past three sessions. Weekly export sales today were 128,300 MT of old crop and 665,200 MT of new crop, above trade expectations of a combined 300-650 TMT. Chinese industry analysts forecast China's July soybean imports at a record 7.3876 MMT, but these are then seen falling with August bean imports estimated at 5.6 MMT, September at 4.1 MMT and October at 3.9 MMT. Rumours have been in the market all week of China’s government planning to release 3 MMT of beans from reserves, although China’s Sinograin has denied these reports. Aug 13 Soybeans closed at USD13.55 1/4, down 37 1/4 cents; Nov 13 Soybeans closed at USD12.24, down 32 3/4 cents; Aug 13 Soybean Meal closed at USD447.80, down USD20.00; Aug 13 Soybean Oil closed at 43.81, down 45 points.

Corn: The corn market also mirrored yesterday, falling, although not as heavily as soybeans - but also with the heaviest losses again coming in front end old crop Aug 13. That is now 32 1/2 cents below Monday night's close. Weekly export sales were sluggish at negative 27,900 MT on old crop, with sales of 515,900 MT for 2013/2014 delivery which were primarily for unknown destinations (319,800 MT). Trade expectations were for combined sales of 600-950 TMT. Yesterday's disappointing weekly ethanol grind numbers are also ringing in the bull's ears from a demand perspective. New crop Dec 13 corn set a new 2 1/2 year low as the prospect of a huge record US corn crop draws ever nearer. There are reports that the harvest is already underway in parts of Texas and Louisiana. The Commodity Weather Group, a US weather forecasting firm, estimated 2013 U corn yields at 159.5 bu/acre, that's 3 bu/acre ahead of the USDA's current estimate of 156.5 bu/acre and more than 29% up on the 2012 average yield of 123.4 bu/acre. MDA CropCast increased their US corn production estimate from 340.2 MMT last week to 343.1 MMT, a 32% increase on last year "due to improved conditions in the northwestern and eastern belt." Meanwhile US corn is missing out in various Asian tenders, Japan bought 300 TMT of Ukraine and Brazilian corn last week. South Korea's KFA today bought 60 TMT Black Sea origin corn for Jan shipment. South Korea's MFG bought 60 TMT of Black Sea origin corn for Jan shipment, and South Korea's Kocopia rejected all offers in a tender for 70 TMT of optional origin corn for Nov shipment. ProAgro estimated Ukraine’s 2013 corn crop at 23.6 MMT versus 20.9 MMT a year ago. They see Ukraine’s 2013/14 corn exports at a record 15.9 MMT. Indonesia’s Feed Millers Association estimated 2013 corn imports at 2.8 MMT, up from a previous estimate of 2.0 MMT and versus 2012 imports of 1.55 MMT. They said that Indonesia had imported 1.4 MMT of corn during the first half of 2013. Sep 13 Corn closed at USD4.96, down 12 1/4 cents; Dec 13 Corn closed at USD4.78 3/4, down 1 1/2 cents.

Wheat: As with yesterday, wheat remains a follower. There are some bullish fundamentals for wheat, but re-establishing the traditional premium that it has historically commanded over corn isn't going to be an overnight job. Weekly export sales of 661,400 MT were ahead of trade estimates of 400-600 TMT and also included the welcome sight of China as the biggest buyer of the week a (177,900 MT). Today was the last day of the Wheat Quality Council’s US spring wheat tour. They estimated the US 2013 spring wheat yield at 44.9 bu/acre, exactly the same as a year ago and up on the 5 year average of 43.3 bu/acre. South Korea's KFA bought 60 TMT of Black Sea origin wheat for Oct/Nov shipment at USD258.45 C&F from Toepfer. Syria seeks 200 TMT of milling wheat with payment via frozen Syrian cash in EU and Arab banks. ProAgro estimated Ukraine’s 2013 wheat crop at 20.7 MMT versus 15.8 MMT a year ago. They estimate Ukraine's 2013/14 wheat exports at 8.4 MMT up 29%. Morocco said that they'd harvested a record 5.1 MMT of soft wheat along with a further 1.9 MMT of durum and 2.7 MMT of barley this year. That gives them a net grain harvest of 9.7 MMT, almost double production of 5.1 MMT in 2012, which will clearly limit their import requirements in 2013/14. The Moroccan state buyer is tendering for 160 TMT of soft wheat on the local market. The Saskatchewan government said most of their spring wheat and canola crops are in good to excellent condition. There are some reports that Brazil's 2013/14 wheat crop may have suffered frost damage this week. The Russian grain harvest is around 25% done, with early yields said to be up a similar percentage. How the remaining 75% of the harvest goes will be interesting as there is a widespread belief that the best of the crop is what has been cut so far and that spring sown wheat will yield poorly - in some cases even worse than last year. You never quite know with the Russians though. Are local governments are over-exaggerating losses to increase aid from Moscow? Time will tell. Sep 13 CBOT Wheat closed at USD6.49 1/4, down 4 cents; Sep 13 KCBT Wheat closed at USD6.92 1/4, down 5 cents; Sep 13 MGEX Wheat closed at USD7.37 3/4, down 5 3/4 cents.