Nogger's Blog

02/04/12 -- The overnight markets saw a bit of consolidation with wheat ending 6-9 cents lower on old crop and with losses of 10-12 cents on new crop. Corn was 4 cents higher in front month May, but slightly weaker in new crop positions. The strongest leg, soybeans, were around 8 cents higher for old crop and 10-14 cents firmer for new crop. Crude is around half a dollar lower.

April heralds the start of the regular Monday night crop progress reports, the first of which will be out after the close this evening. Winter wheat crop conditions will be of interest, so too will be a corn planting progress comparison with normal.

Based on Friday's acreage numbers soybeans look set to remain the strongest leg of the complex for some time, even if the final planting figure is significantly higher than 73.9 million given South America's recent production losses.

For corn we have the bullish tight old crop stocks story and the bearish highest plantings in 75 year bearish new crop story.

For wheat we have much better than a year ago crop conditions, a harvest that isn't that far away now we are into April, and ample world stocks. We also have a still significant short position in Chicago and a European crop that looks like it's shrinking rather than growing.

A new month usually also means new money. Funds are already record long soybeans, will they fancy coming in for more? For corn, they exited a decent slug of their length in the run-up to Friday's reports and for wheat they've held a sizable short for some time now, the magnitude of which has underpinned the market.

The USDA report today the sale of 120,000 MT of old crop beans to China, that should add underlying support. They also report a similar volume of new crop meal sold to unknown.

Early calls for this afternoon's CBOT session: corn up 2-4 cents, wheat down 8-10 cents and soybeans up 10-12 cents.