Nogger's Blog

07/12/12 -- Soycomplex: Jan 13 Soybeans closed at USD14.72 1/4, down 19 cents; Mar 13 Soybeans closed at USD14.72, down 14 cents; Dec 12 Soybean Meal closed at USD450.50, down USD7.50; Dec 12 Soybean Oil closed at 50.82, down 5 points. Having gone into today's open outcry session over 50 cents higher on beans and USD16 firmer on meal then some pre-weekend profit-taking was the order of the day. Despite today's losses beans still closed the week with net gains of 33 1/4 cents, with meal up USD8.10 and oil adding 142 points. Very strong world demand for all three products was highlighted by another round of robust export sales yesterday. Fund selling was estimated at around 4,000 soybean contracts on the day despite the USDA announcing the sale of 115,000 MT of soybeans to China before the opening bell. Rumour suggests that they may have purchased more than just a couple of cargoes. Argentine soybean planting still lags at 54% complete compared to 69% a year ago, according to the Buenos Aires Grains Exchange. Next Tuesday we get the latest WASDE report from the USDA. In amongst all the data the trade will be looking to see if they raise US soybean export hopes seeing as 78% of the current projections is already either shipped or on the books. Soyoil exports will also need to be increased as the target for these has been exceeded already. Both point to a reduction in 2012/13 US soybean ending stocks from the already tight 140 billion predicted last month. A Reuters survey suggests that they may trim another 10 million off this figure, further encroaching on their comfort zone. We shall see.

Corn: Dec 12 Corn closed at USD7.32 3/4, down 15 cents; Mar 13 Corn closed at USD7.37 1/4, down 14 1/4 cents. For the week Dec 12 corn fell 15 1/4 cents with another week of very poor export sales hanging over the market. Funds were said to have dumped an estimated 11,000 contracts on the day. Taiwan bought 60 TMT of Brazilian corn overnight at levels said to be around USD25/tonne cheaper than US origin material. The Buenos Aires Grains Exchange say that only 55% of the Argentine corn crop has been planted versus 69% a year ago. That has the trade wondering if the USDA may revise downwards it's forecast for Argentine corn production on Tuesday. They currently go 28 MMT, but other analysts such as Michael Cordonnier are lining up as low as 22.5 MMT. The average trade guess for Tuesday is 26 MMT. US corn exports meanwhile are lagging the pace needed to hit USDA targets for 2012/13, so maybe there is a chance that they will raise carryout at the end of the season from last month's 647 million bushels? The average trade estimate this time round is 663 million from within a fairly wide range of guesses of 493-752 million. No change to demand from the domestic US ethanol sector is anticipated.

Wheat: Dec 12 CBOT Wheat closed at USD8.44 1/4, down 1 cent; Dec 12 KCBT Wheat closed at USD8.96, down 2 cents; Dec 12 MGEX Wheat closed at USD9.17 1/4, unchanged. For the week Chicago wheat was half a cent lower, with Kansas down 1 /12 cents and Minneapolis down 1 1/4 cents. Not a lot of change there then. Yesterday's weekly export sales were in line with trade estimates although not overly impressive. As with corn US sales need to pick up somewhat to reach the current USDA target of full season exports of 30.5 MMT. The trade is therefore expecting a small upwards revision to US ending stocks for 2012/13 in next week's USDA report. World ending stocks however are seen falling slightly, from 174.2 MMT to 173.4 MMT. The Buenos Aires Grains Exchange say that the wheat harvest in Argentina is 36% complete, placing the crop at only 10.1 MMT. That's well below the USDA's 11.5 MMT and would represent a 35% reduction on last year. The Commonwealth Bank of Australia poured cold water on ABARES surprise suggestion from earlier in the week that the country could still export almost as much wheat as it produces in 2012/13 at 20.9 MMT, coming up with a forecast of 17.9 MMT, a fall of 27% year-on-year. The CBA placed this year's Australian wheat harvest at 20.8 MMT versus 22 MMT from ABARES and 23 MMT from the USDA.