Nogger's Blog

10/08/12 -- Soycomplex: Aug 12 Soybeans closed at USD17.09 1/2, up 15 cents; Nov 12 Soybeans closed at USD16.43 3/4, up 12 1/2 cents; Aug 12 Soybean Meal closed at USD544.50, up USD5.80; Aug 12 Soybean Oil closed at 53.60, up 121 points. For the week that puts Aug 12 beans up 53 1/4 cents and Nov 12 beans 15 cents higher. Aug 12 meal rose USD12.90 and Aug 12 oil 156 points. Nov 12 beans finished 29 cents off the early session highs on spillover weakness from corn and wheat. Funds were said to have been net buyers of 6,000 soybean contracts on the day. The USDA cut US soybean yields and production by more than expected. US soybean output this year was pegged at 2.692 billion bushels, down 12% on last month. Yields were cut from 40.4 bpa to 36.1 bpa, 1.1 bpa lower than the average trade estimate. They USDA countered the lower supply by also slashing demand by 363 million bushels, that pegged new crop ending stocks at 115 million bushels, exactly what the trade was expecting. Separately, underlying strong global demand for US soybeans, we had the USDA announcing fresh export sales of 290,000 MT of soybeans to China for 2012/13 shipment, taking their total confirmed purchases for the week to 715,000 MT. China's soybean imports in July were 5.87 MMT, up 4.4% from June, up 10% on July 2011 and the highest monthly total in 25 months. Argentina raised their export tariff on biodiesel to 32% from 20%.

Corn: Sep 12 Corn closed at USD8.00, down 18 1/4 cents; Dec 12 Corn closed at USD8.09 1/4, down 14 1/2 cents. For the week Sep 12 corn was 10 cents lower and Dec 12 corn 1 3/4 cents higher. It was a very choppy session with the highs set in early trade before a "buy the rumour, sell the fact" mentality kicked in. Dec 12 corn closed almost 40 cents off the early highs. Funds were said to have eventually wound up as net sellers of 16,000 corn contracts on the day. US 2012 corn production was cut more than anticipated to 10.779 billion bushels, down 2.2 billion on last month. Yields were pegged at 123.4 bpa versus the expected 126.2 bpa and 146.0 bpa in July, the lowest yield since 1995/96. Demand from the US ethanol sector however was cut 8% from 4.9 billion bushels to 4.5 billion. US exports were also slashed 16% to 33.5 MMT in the face of stiffer competition from Argentina and Brazil, whilst imports were raised 150% from last month and almost 200% from 2011/12. Brazil's corn crop for 2012/13 was raised 3 MMT to a record 70 MMT and Argentina's up by a similar amount to an also record 28 MMT. That helped place world 2012/13 corn ending stocks a little higher than expected at 123.3 MMT, a 14% stocks to use ratio.

Wheat: Sep 12 CBOT Wheat closed at USD8.85 1/4, down 27 3/4 cents; Sep 12 KCBT Wheat closed at USD8.93, down 22 cents; Sep 12 MGEX Wheat closed at USD9.35 1/2, down 23 1/2 cents. For the week Chicago wheat was 6 cents lower, with Kansas wheat unchanged and Minneapolis 11 1/2 cents easier. Funds were estimated as net sellers of 6,000 Chicago wheat contracts on the day. US 2012 wheat production was raised from 2.224 billion bushels to 2.268 billion, contrary to expectations for a small reduction to 2.220 billion. Better than expected early US spring wheat yields were reflected in a spring wheat production well above the trade’s estimate of 484 million bushels at 500 million. Global wheat supplies for 2012/13 were projected 2.1 MMT lower. Russian output was cut by more than expected to 43 MMT from 49 MMT last month. Kazakhstan was seen down 2 MMT to 11.0 MMT whilst Ukraine was raised 2 MMT to 15.0 MMT. Global wheat consumption for 2012/13 was raised 3.2 MMT on the anticipated switch from corn to wheat usage. That sees world 2012/13 ending stocks reduced from 182.4 MMT to 177.2 MMT, around 1.75 MMT lower than anticipated, although still a comfortable stocks to use ratio of 26 percent. After the close Egypt tendered for an unspecified volume of wheat for mid-September shipment, it's first tender since April.