Nogger's Blog

24/01/13 -- Soycomplex: Mar 13 Soybeans closed at USD14.35 1/4, down 1 3/4 cents; May 13 Soybeans closed at USD14.23 3/4, down 3 cents; Mar 13 Soybean Meal closed at USD414.70, down USD1.80; Mar 13 Soybean Oil closed at 52.11, up 8 points. Funds were said to have been net sellers of around 4,000 soybean contracts on the day. The USDA reported the sale of 510 TMT of US soybeans sold to China and 113 TMT sold to "unknown" both for 2013/14 delivery - there was no confirmation of any old crop sales, yet. That may come in tomorrow's delayed weekly export sales report, trade estimates for which are a robust 700 TMT-1.2 MMT. A slightly wetter outlook for Argentina is what has the trade on the defensive, even though MDA CropCast cut their forecast for soybean production there by 580 TMT from last week to 51.53 MMT (versus 54 MMT from the USDA). They left their Brazilian production estimate unchanged at 82.03 MMT (versus the USDA's 82.5 MMT). Oil World said that "the transition from US to S American soybean supplies could turn out to be more difficult than expected in the next 1-3 months. Insufficient South American exports in Feb and March could have an explosive impact on the US soybean futures in the March contract,"they suggested.

Corn: Mar 13 Corn closed at USD7.24 1/4, up 3 1/2 cents; May 13 Corn closed at USD7.24 1/4, up 1 1/2 cents. Corn proved to be the strongest leg of the complex, which is interesting given the appalling run of sorry exports since the 2012/13 marketing year began. The USDA are expected to reveal weekly sales of only 150-350 TMT in tomorrow's report. Domestic demand from the ethanol sector isn't great either. The US Energy Dept said that ethanol production increased by just 8,000 barrels/day versus last week's low to 792,000 bpd, which is still well below the level required to hit USDA projections. Ethanol production margins are however said to have improved in recent weeks. MDA CropCast cut their Argentine corn production estimate by 330 TMT from last week to 23.10 MMT, and left their Brazilian estimate unchanged at 71.37 MMT. The USDA's Foreign Agricultural Service estimated Brazil’s corn crop at 72.5 MMT versus the official USDA forecast of 71.0 MMT. "Rains remained active across northern Brazil this past week, which further improved moisture across Mato Grosso, Mato Grosso do Sul, Goias, Minas Gerais, and Bahia. Rains should remain abundant across northern areas this week, and additional improvements in moisture are expected there. These showers will be very beneficial for second crop corn early growth as well as late growth of soybeans," said MDA CropCast.

Wheat: Mar 13 CBOT Wheat closed at USD7.68 1/2, down 6 1/4 cents; Mar 13 KCBT Wheat closed at USD8.21 1/2, down 8 3/4 cents; Mar 13 MGEX Wheat closed at USD8.55 1/2, down 5 cents. Wheat prices have faltered this week after posting their biggest weekly gain since July last week. Weekly export sales for wheat tomorrow are expected to be in the 300-550 MT region. Sales of around 435,500 MT are needed to keep pace with the current USDA target. Japan bought 119 TMT of a mixture of US, Australian and Canadian wheat. Taiwan is tendering for 78 TMT of US wheat for Mar/Apr shipment. India is tendering to sell 150 TMT wheat for Feb/Mar shipment to make some room for the impending arrival of what is expected to be another bumper new crop. The USDA's Foreign Agricultural Service estimated Brazil’s 2012/13 wheat crop at 4.3 MMT, a 5-year low, versus the USDA estimate of 4.8MMT and 26% down year-on-year. They will need to import more wheat than normal this year, and cast the net somewhat wider than their regular supplier Argentina who have problems in terms of volume and quality. The FAS estimated Brazil's what imports from the US at 1.5 MMT and those from Canada at 1.0-1.5 MMT. MDA CropCast estimated the world 2013/14 wheat crop at 678.2 MMT. The USDA have production this season at 654.3 MMT, so that would represent a 3.7% increase.