Nogger's Blog

10/06/11 -- Soybeans: Jul 11 soybeans closed at USD13.87 1/4, down 6 1/2 cents; Nov 11 soybeans closed at USD13.81 3/4, down 5 cents; Jul 11 soybean meal closed at USD373.30, up USD0.40; Jul 11 soybean oil closed at 56.85, down 55 points. On the week as a whole old crop beans fell 27 1/4 cents, with new crop Nov down 15 1/4 cents. The market looks tired in the aftermath to yesterday's slightly bearish (for beans) USDA report which raised both old and new crop ending stocks and increased Brazilian output to a record 74.5 MMT. Flooding along the Mississippi and Missouri Rivers is old news. Data showing that China's export growth slowed in May was new news, and news that raised question marks over the well-being of the global economic recovery. A strong dollar and crude oil tumbling by more than USD2.50/barrel added bearish sentiment.

Corn: Jul 11 corn closed at USD7.87, up 1 1/2 cents; Dec 11 corn closed at USD7.12 1/2, down 1 1/2 cents. Not a lot of changes on the day there. Old crop corn was up 33 cents on the week, with new crop Dec rising 26 1/4 cents. Corn put most of those gains in yesterday when both new and old crop corn set contract highs. Corn is now trading at it's largest premium to wheat in fifteen years. In fact it's very rare that corn trades at any sort of a premium to wheat, but based on tonight's closes it currently stands at 27 3/4 cents. On the export front it is being reported that US corn is now around USD90/tonne dearer than Australian feed wheat into the east Asian market, which will surely lead to a reduced demand for US corn from the feed sector there. On Monday all eyes will be on how the USDA see corn planting progress (94% done last Sunday night), in particular in Ohio (only 58% done as of Sunday night).

Wheat: Jul 11 CBOT wheat closed at USD7.59 1/4, up 14 1/4 cents; Jul 11 KCBT Wheat closed at USD8.68, down 3 1/4 cents; Jul 11 MGEX Wheat closed at USD10.00, down 20 3/4 cents. Although old crop Chicago wheat closed higher, new crop Dec was 12 cents lower. On the week as a whole Jul CBOT wheat was 14 1/2 cents lower, with KCBT losing 46 1/4 cents and MGEX 60 1/2 cents. That would appear to indicate spread unwinding between CBOT and MGEX during the week. The unusual corn premium may encourage demand for wheat from the feed sector in the US. Russian spring grain planting has reached 95% done and the country will produce 85 MMT of grain this season unless adverse weather intervenes, says the Minister of Agriculture.