Nogger's Blog

25/07/12 -- Soycomplex: Aug 12 Soybeans closed at USD16.94 1/4, up 45 cents; Nov 12 Soybeans closed at USD16.15 1/2, up 46 cents; Aug 12 Soybean Meal closed at USD529.80, up USD20.00; Aug 12 Soybean Oil closed at 52.24, up 66 points. The sell off of the last couple of days extended into early trade, but the market quickly turned around to close sharply higher in the end. Extremely choppy trade looks set to continue depending on whatever the daily weather forecasts throw up. The GFS weather model continues to forecast heavier rains than other sources, but consistently keeps failing to deliver. Funds were said to have been net buyers of around 12,000 soybean contracts at the end of the session. Estimates for tomorrow's weekly export sales report are 350-550 TMT.

Corn: Sep 12 Corn closed at USD7.94 1/2, up 4 1/2 cents; Dec 12 Corn closed at USD7.88, up 9 3/4 cents. Weekly ethanol production was reported as 796,000 barrels per day, down 1% on last week and 9% lower than a year ago, so these prices are choking off some demand. Estimates for tomorrow's weekly export sales report are also seen at a pretty low 250-350 TMT. Production estimates for 2012/13 are literally all over the place though. Think of a number, divide it by three and take away the first number you thought of sort of a thing. We all know it's going to be low, but how low? Crop tours currently going the rounds in Indiana and Illinois were reporting some pretty shocking yields. Whilst old crop availability remains tight and huge uncertainty surrounding new crop, farmer selling is understandably at a standstill. Rumours of feed manufacturers importing Brazilian corn have been confirmed. The Brazilian attaché to the USDA raised their 2011/12 corn crop estimate there to 71 MMT.

Wheat: Sep 12 CBOT Wheat closed at USD9.03 1/4, up 24 1/2 cents; Sep 12 KCBT Wheat closed at USD9.04, up 23 1/2 cents; Sep 12 MGEX Wheat closed at USD9.89, up 21 cents. Unlike corn, an ongoing spring wheat crop tour is reporting potentially very good yields. US wheat missed out on an Iraqi  tender, although it is on Morocco's shopping list, whilst Libya is in for 50,000 MT of optional origin wheat.  Fund buying was placed at 6,000 contracts on the day in the case of Chicago wheat. Rumours that some form of Russian restrictions on wheat sales aren't too far away are supportive, as too of course is spillover support from this year's unfolding corn story. Outside markets, and European debt woes in particular, offer the greatest downside threat. The strength of the dollar won't help either, so it will be interesting to see how close trade estimates for tomorrow's weekly export sales report of 400-600 TMT turn out to be.