Nogger's Blog

10/04/12 -- Soybeans: May 12 Soybeans closed at USD14.26, down 5 cents; Nov 12 Soybeans closed at USD13.64 3/4, down 17 1/4 cents; May 12 Soybean Meal closed at USD389.80, up USD1.00; May 12 Soybean Oil closed at 56.97, up 26 points. A bullish slant to today's USDA numbers from the soybean perspective initially saw beans push to new 7-month highs. However weakness in corn, where the numbers were seen as bearish, eventually dragged the soy complex lower. The USDA cut Argentine soybean production by 1.5 MMT to 45 MMT and Brazil's output by 2.5 MMT to 66 MMT. Whilst both were in line with other trade estimates around, the latter in particular was a bit more aggressive than the trade expected from the USDA. Brazilian analysts CONAB issued an even lower number - 65.6 MMT today. US soybean ending stocks were cut 25 million bushels to 250 million. Continued demand from China, even with prices where they are, was evidenced by them buying 165,000 MT of new crop US soybeans overnight.

Corn: May 12 Corn closed at USD6.34 3/4, down 14 1/4 cents; Dec 12 Corn closed at USD5.43 1/2, down 6 3/4 cents. The USDA seemingly can't find it in themselves top cut old crop ending stocks below the 800 million bushel mark, so they left 2011/12 carryout unchanged at 801 million, contrary to trade expectations for a cut to around 720 million. Even so this still represents the tightest stocks/use ratio since 1996. Unimpressed, funds sold an estimated 13,000 corn contracts on the day. Unlike their soybean crop, Brazil's corn potential could be rising due to hopes for a bumper second crop. CONAB upped their estimate from 61.7 MMT in March to 65.1 MMT this time round, that's now 3.1 MMT more than the USDA project. The rapid pace of US spring plantings looks likely to cap any corn rally attempts for the time being, although frost is in the forecast for Illinois, with temperatures seen falling as low as 28C overnight.

Wheat: May 12 CBOT Wheat closed at USD6.25 3/4, down 17 1/4 cents; May 12 KCBT Wheat closed at USD6.41, down 19 cents; May 12 MGEX Wheat closed at USD8.33 3/4, down 13 1/4 cents. The USDA pegged the 2011/12 US wheat carryout of 793 million bushels, down 32 million from last month and in line with expectations. World ending stocks were also reduced to 206.3 MMT, although that is still an historically high number. Funds were said to have sold an estimated 5,000 CBOT wheat contracts on the day. Last night's 61% good/excellent rating for winter wheat and the rapid progress with spring wheat plantings weighed on the market. So too did lower European grains after some decent weekend rains for the UK and France, which are seen continuing for much of the rest of the week.