Nogger's Blog

06/06/12 -- Soybeans: Jul 12 Soybeans closed at USD13.86 1/4, up 36 3/4 cents; Nov 12 Soybeans closed at USD12.99 1/4, up 22 1/4 cents; Jul 12 Soybean Meal closed at USD414.60, up USD14.60; Jul 12 Soybean Oil closed at 49.25, up 75 points. Funds bought an estimated 8,000 soybean contracts on the day. Reports from Celeres that this season, and even next season's Brazilian soybean crops are well sold along with a report that record Jan/May shipments indicate that this season's sales have been heavily slated in favour of the nearby months. The suggestion is that Brazil will have done most of it's exporting by the end of July and that availability will dry up to a trickle after that. Meanwhile, the Argentine crop is ever reducing - Informa cut their soybean crop estimate to 40 MMT today - 2.5 MMT less than the USDA said last month. That puts a lot of emphasis on the US crop to see the world through until 2013. Just to reiterate the point the USDA today reported the sale of 120,000 MT of old crop beans to China. Once we do get to 2013 though things could look very different. Informa estimate Brazilian production at a record 80 MMT next year, with Argentina also contributing a record 60 MMT. Both predictions are based on current prices encouraging increased plantings along with a return to normal yields/weather patterns. Estimates for tomorrow's weekly export sales for soybeans are 600-850 TMT.

Corn: Jul 12 Corn closed at USD5.86 1/4, up 18 3/4 cents; Dec 12 Corn closed at USD5.19 1/2, up 11 3/4 cents. Funds were said to have been net buyers of around 12,000 corn contracts on the day. Spillover support from beans was a feature as too were hopes of more QE to come from the US and Europe. Informa pegged the Argentine corn crop at 20 MMT, down 1.5 MMT from last month, but raised Brazil's corn crop estimate to a record 67.5 MMT, up 1.5 MMT from last month. Chinese corn production was cut 3.5 MMT from last month's estimate to 195 MMT. The US weather is still throwing up less than ideal conditions with the Midwest drier than average but at least with more moderate temperatures. There's some suggestion of frost potential in southern Brazil over the next few days too, although the suggestion is that that would be more likely to harm quality rather than quantity at this stage of the corn crop's development. Trade estimates for tomorrow's weekly export sales report for corn are 450-750 TMT. It will be interesting to see if China shows up given the recent rumours of sales of 300,000 MT of US corn to them. Brazilian corn is still said to be around USD20-30/tonne cheaper than US corn on an FOB basis.

Wheat: Jul 12 CBOT Wheat closed at USD6.24 1/4, up 11 cents; Jul 12 KCBT Wheat closed at USD6.55, up 17 cents; Jul 12 MGEX Wheat closed at USD7.44, up 15 1/4 cents. Funds were said to have been net buyers of around 2,000 Chicago wheat contracts on the day. The The USDA attaché in Moscow estimated the Russian grain crop at 88 MMT versus 94 MMT in 2011. Their wheat crop was put at 54 MMT, 2 MMT below the current official USDA number and 2.2 MMT below last year's output. The 2012/13 world wheat crop was estimated at 678.4 MMT by Informa, a tad higher than the USDA's 677.6 MMT. They placed EU-27 wheat output at 131.65 MMT, down 800 TMT from the previous month and slightly lower thna the USDA's 132.0 MMT. Aussie wheat production was placed at 25.5 MMT, down 500 TMT from last month and also 500 TMT lower than the USDA recently forecast. Informa also raised their US winter wheat production estimate to 1.676 billion bushels (45.6 MMT), although that is still slightly below the USDA's May forecast. Trade estimates for tomorrow's weekly export sales report for wheat are 400-500 TMT.