Nogger's Blog

20/09/12 -- Soycomplex: Nov 12 Soybeans closed at USD16.18 3/4, down 50 3/4 cents; Jan 13 Soybeans closed at USD16.17 3/4, down 51 1/2 cents; Oct 12 Soybean Meal closed at USD482.30, down USD17.40; Oct 12 Soybean Oil closed at 54.63, down 120 points. It was a third mauling out of four for the soycomplex this week, with funds dumping an estimated 16,000 soybean contracts on the day, that would place them exiting around 40,000 contracts on the week so far. This was the lowest close for a front month on soybeans in more than six weeks. There's continued talk of better than expected yields as the US soybean harvest moves north, with some analysts now estimatinbg average yields in the 37-38bpa range versus the USDA's 35.3bpa. Weekly export sales of 717,700 MT were in line with trade estimates of 600-800 TMT and take 2012/13 commitments to around three quarters of the USDA's projections for the entire marketing year. Oil World estimate the combined soybean production of Brazil, Argentina, Paraguay, Uruguay and Bolivia at around 152 MMT in 2013, an increase of 32% on 2012.

Corn: Dec 12 Corn closed at USD7.46, down 10 1/2 cents; Mar 13 Corn closed at USD7.49 1/2, down 9 1/4 cents. Fund selling was placed at 10,000 corn contracts on the day, which would also place them net sellers of around 40,000 on the week so far. Unlike soybeans though, there appears to be less of a chance of any upside to final US corn yields this year. Weekly export sales were very poor at less than 70,000 MT compared to the 300-400 TMT that the trade was expecting. The brings net commitments for 2012/13 to around 32% of the USDA's projected total for the marketing year, which is about normal at this stage of the season. Japan's corn usage in animal feed reportedly reached a 20-year low in July at 42.9% versus 45% in June. Customs data shows Japan’s August grain imports were 2.2 MMT, down 6.2% from a year ago including 1.2 MMT from the US, down 21.3% from a year ago. Clearly there is some corn substitution going on, with switches to alternative grain sources and origins. Ukraine have made significant inroads into Japan with their corn this year.

Wheat: Dec 12 CBOT Wheat closed at USD8.79 1/2, down 2 cents; Dec 12 KCBT Wheat closed at USD9.09 1/2, down 1/2 cent; Dec 12 MGEX Wheat closed at USD9.40 1/2, down 1 1/2 cents. Wheat did a magnificent job of attempting to resist the negative pull from corn and soybeans on the day, with funds estimated at being around even on the day. Weekly export sales of 488,900 MT beat trade expectations of 300-400 TMT, that brings the marketing year-to-date commitments to 38% of the USDA's forecast for the full season. Normally they would be expected to be past halfway at 55% by now. India’s weather office said that monsoon rains were 44% above average this past week. India's Ag Minister says that the late arrival of this year's monsoon has been offset by the late departure of rains, and that they are confident of a wheat crop of "at least" 90 MMT again in the coming season. Plantings there will be underway around a month from now. Meanwhile they keep plugging away selling some of their surplus wheat from the 2011 and 2012 harvests, issuing another tender to sell 50,000 MT of wheat today.