Nogger's Blog

09/06/11 -- Corn: July corn closed up 21 1/2c at USD7.85 1/2; Dec 11 corn closed at USD7.14, up 120 1/4 cents. Corn hit fresh lifetime contract highs after the USDA cut US 2011/12 ending stocks by more than analysts estimated to 695 million from 900 million last month. Persistent wet weather and the associated planting delays now see the 2011 US corn acreage falling 1.5 million acres to 90.7 million. Global corn ending stocks were cut by much more than expected for both old and new crop, the latter falling by more than 17 MMT from last month. At the end of the day July corn closed more than 40c higher than July wheat.

Soybeans: Jul 11 soybeans closed at USD13.93 3/4, down 7 3/4 cents; Nov 11 soybeans closed at USD13.86 3/4, down 5 3/4 cents; Jul 11 soybean meal closed at USD372.90, up USD0.10; Jul 11 soybean oil closed at 57.37, down 57 points. The corn numbers may have been bullish, but the bean data was bearish. The USDA raised Brazil's crop by 1.5 MMT to a record 74.5 MMT. New crop US soybean ending stocks were raised by 30 million, more than expected, to 190 million. Old crop stocks also rose 10 million to 180 million bushels. Weekly export sales were disappointing again at 120,500 MT against expectations of 150-350 TMT.

Wheat: CBOT July wheat dropped 3c to USD7.45; KCBT July fell 13 3/4c to USD8.71 1/4 and MGE July slipped 3/4c to USD10.20 3/4. US winter wheat production was shockingly raised from last month, contrary to widespread expectations for a fall. World wheat ending stocks were also raised for both 2010/11 and 2011/12. Spillover support from corn stopped wheat falling out of bed however. The highly unusual corn premium over wheat makes wheat look cheap from a feeding perspective. This is said to be the biggest discount that wheat has been to corn since 1996. Either wheat is cheap or corn is very expensive.