Nogger's Blog

15/08/12 -- Soycomplex: Sep 12 Soybeans closed at USD16.59 3/4, up 36 1/4 cents; Nov 12 Soybeans closed at USD16.34 1/2, up 36 1/2 cents; Sep 12 Soybean Meal closed at USD520.00, up USD13.40; Sep 12 Soybean Oil closed at 53.07, up 28 points. Funds were thought to have been net buyers of around 9,000 soybean contracts on the day. Continued strong demand from China may have seen them back in the market this week to buy on this latest dip that saw Nov 12 CBOT levels fall below USD16/bu, according to trade gossip. China's CNGOIC estimated their 2012 soybean crop at 13.0 MMT, down more than 10% from a year ago, as farmers switched to corn plantings. The USDA currently sees China importing almost 60 MMT of soybeans in 2012/13, almost two thirds of all the world soybean trade. That's a 57% increase in the last five years and three and a half times the volume that they were importing less than ten years ago. Trade estimates for tomorrow's weekly export sales report are 750-950 TMT.

Corn: Sep 12 Corn closed at USD7.94, up 14 1/4 cents; Dec 12 Corn closed at USD8.04, up 15 cents. Funds were said to have been net buyers of around 12,000 corn contracts on the day. US weather is turning cooler, but not necessarily wetter. "A very strong weather disturbance is coming to the Midwest from Canada, expected to deliver the coolest air of the season to the US heartland. Strong cooling does not guarantee heavy rainfall. The plunging cool front would set off only light showers in the western two-thirds of the Corn Belt, the area most in need of heavy rainfall," say Martell Crop Projections. There are reports of a pest infestation called army worm in China's corn crop, which some analysts estimate could cut up to 4 MMT off production this year. China’s Ag Ministry said as of yesterday that 3.3 million hectares of farmland has been affected. The usual weekly report from the US energy dept showed a slight increase in ethanol production for the third week in a row. Tomorrow's weekly export sales report will be interesting to see if there are any signs of demand rationing. Trade estimates are for sales of 350-550 TMT.

Wheat: Sep 12 CBOT Wheat closed at USD8.46 3/4, up 7 cents; Sep 12 KCBT Wheat closed at USD8.58, up 6 cents; Sep 12 MGEX Wheat closed at USD9.13 1/2, up 10 3/4 cents. Funds were given credit for buying some 3,000 Chicago wheat contracts on the day following what was said to be the biggest three day decline in more than a year. Tomorrow's weekly export sales will also be of interest, with wheat sales expected at 450-550 TMT, as there has been some evidence of US wheat missing out on export business this week. Egypt bought three cargoes of Russian wheat and one of Ukraine origin this week. Algeria has bought 500TMT of durum wheat this month, thought to be mostly from Canada. More than one report in circulation suggests that Russia may impose an export tax on wheat/grain as early as next month, and/or come up with some plan to limit exports by November. It's certainly plausible as they could easily have shipped 10-12 MMT of grains by the latter date - the volume currently being touted as their entire 2012/13 exportable surplus.