Nogger's Blog

05/09/12 -- Soycomplex: Sep 12 Soybeans closed at USD17.48, down 23 cents; Nov 12 Soybeans closed at USD17.47 1/2, down 20 3/4 cents; Sep 12 Soybean Meal closed at USD532.00, down USD9.40; Sep 12 Soybean Oil closed at 57.36, down 21 points. Profit-taking continued, with funds selling an estimated 7,000 soybean contracts on the day. Maybe the trade is a little nervous of what the USDA might say ion next week's WASDE report in the light of the recent Isaac rains? FCStone were the latest analysts to offer up their estimates ahead of next Wednesday's report, and they actually increased soybean yields by half a bushel/acre from their previous estimate to 36.7 bu/acre, which is 0.6 bu/acre more that the USDA forecast last month. Production was predicted at 2.739 billion bushels versus their previous estimate of 2.730 billion and 2.692 billion from the USDA in August. Celeres estimated Brazil’s 2012/13 soybean crop at a record 78.1 MMT, up 18% from a year ago, although around 3-5 MMT lower than most other trade forecasts. Because of Labor Day, the USDA's weekly export sales report will be delayed until Friday morning. Informa Economics are also due out mid-session Friday with their latest estimates on soybean and corn yields.

Corn: Sep 12 Corn closed at USD7.89 3/4, down 17 1/4 cents; Dec 12 Corn closed at USD7.90 3/4, down 14 1/4 cents. Funds were estimated to have been net sellers of around 9,000 corn contracts on the day. It seems that rival corn crops around the world may be generally a little lower in 2012, but not dramatically so. This will provide competition for US corn on the world export stage, unlike the soybean market which the US more or less has to itself for the remainder of 2012. UkrAgroConsult estimated Ukraine, Russia, Bulgaria, and Romania's 2012 corn crop 37.0 MMT versus 39.7 MMT in 2011. They placed Ukraine’s 2012/13 corn exports at 12.5 MMT versus 15.0 MMT a year ago. SovEcon estimated Russia’s 2012 corn crop at 6.8 MMT versus 7.0 MMT a year ago and more than double the 3.1 MMT harvested in 2010. Mexico's Ag Ministry estimated Mexico’s 2012 corn production at 23.0 MMT versus a previous estimate of 21.8 MMT and 1.5 MMT above the USDA's forecast. Mexico are the world's largest corn importer after Japan, and the USDA already see them buying 24% less corn in 2012/13 than last year. FCStone cut their forecast for US corn yields this year to 121.4 bu/acre versus their previous estimate of 124.3 bu/acre and 123.4 bu/acre from the USDA. US corn production was pegged at 10.607 billion bushels versus a previous estimate of 11.043 billion and 10.779 billion from the USDA in August.

Wheat: Sep 12 CBOT Wheat closed at USD8.45 3/4, down 20 1/4 cents; Sep 12 KCBT Wheat closed at USD8.62, down 19 1/4 cents; Sep 12 MGEX Wheat closed at USD9.17, down 11 3/4 cents. Funds were said to have been net sellers of around 3,000 CBOT wheat contracts on the day. This was the ninth lower close for Chicago wheat in the last ten sessions. The USDA attaché in Moscow estimated the Russian 2012 wheat crop at 41 MMT, with the APK-Inform agency suggesting 41.3 MMT. Whilst both are well down on last year's crop of 56.2 MMT, neither are as low as last week's sub-40 MMT estimates from SovEcon and IKAR. The trade is still none the wiser as to how the Russian government will tackle the current rate of exports. The USDA attaché in Moscow went on to estimate Russia’s 2012/13 grain exports at 11.5 MMT (including 8 MMT of wheat) versus 28.1 MMT in 2011/12. Their total grain crop in 2012 was forecast at 73 MMT versus 94 MMT in 2011, although again a bit higher than SovEcon and IKAR suggest. It is also well above the 61 MMT output that sparked the export ban in 2010. After the close Egypt's GASC issued a tender for wheat for Oct 21-31 and Nov 1-10 delivery. It will be very interesting to see if Russian origin is offered for the November position, as they've reported no export sales past October yet. US wheat was priced out by around USD40/tonne, before freight, in Egypt's last tender at the weekend.