Nogger's Blog

22/01/13 -- Soycomplex: Mar 13 Soybeans closed at USD14.51 3/4, up 22 1/2 cents; May 13 Soybeans closed at USD14.39 1/4, up 22 1/2 cents; Mar 13 Soybean Meal closed at USD421.60, up USD7.20; Mar 13 Soybean Oil closed at 52.43, up 75 points. Funds were said to have been net buyers of around 6,000 soybean contracts on the day, pushing prices to a 5-week high. Dryness concerns in southern Brazil and Argentina are what is getting the market a little excited. Meanwhile northern Brazil is wet, delaying early harvest attempts there. There's talk of fresh old crop soybean sales to China, but no confirmation. The USDA did today however announce the sale of 120 TMT of new crop optional origin beans to China. There's also gosspip that delays to the early harvest in Matto Grosso has China in the market shopping for soybeans for near immediate shipment. A possible sign of things to come that one. Weekly export inspections underlined the very strong demand for nearby beans coming in at 48.075 million bushels versus the expected 34-44 million. It looks like we are in for another bullish weekly export sales report on Friday, following on from last week's marketing year high total of 1.6 MMT of old crop, plus a further 118 TMT of new crop.

Corn: Mar 13 Corn closed at USD7.28 1/2, up 1 cent; May 13 Corn closed at USD7.30 1/4, up 1 cent. The dryness issue in parts of South America was supportive. Spillover weakness from wheat was not. Weekly export inspections of 10.959 million bushels were in line with the expected 7-15 million, but still pretty poor nevertheless. They need to average 20.8 million/week to meet the 950 million bushels of exports projected by the USDA. Safras e Mercado estimated Brazil’s corn crop at 70.7 MMT versus their previous estimate of 69.0 MMT and 72.7 MMT in 2011/12. UAE bought 20 TMT of South American corn, with Kuwait taking 40 TMT of the same. The recent Japanese trend towards using less corn in feed rations continues, with Nov usage slipping to 42.5% versus 45.1% in Nov 2011. The US share of that market has also slipped sharply, from 91% to 78% in the first eleven months of 2012. Ukraine has exported seven times more corn than wheat so far this month (980 TMT vs 140 TMT), with corn now responsible for almost half of their total grain exports (47%). That figure is likely to be around 60% by the end of the season.

Wheat: Mar 13 CBOT Wheat closed at USD7.79 1/4, down 12 cents; Mar 13 KCBT Wheat closed at USD8.30 3/4, down 13 cents; Mar 13 MGEX Wheat closed at USD8.64 1/4, down 9 3/4 cents. Early strength in the overnight market soon gave way once they daytime session opened, although it's hard to put a reason as to why this was the case. India said that it wants to export more wheat ahead of what it says will be another record crop, the harvesting of which is now only a couple of months away. Bangladesh bought 50 TMT of optional origin wheat (probably Indian) for Feb/March shipment. South Korea bought 60 TMT of South American/Indian wheat for shipment in May. UAE bought 20 TMT of Australian hard wheat. US wheat is competitive versus EU origin, but there are clearly still other better offers out there depending on where the buyers are. Weekly export inspections of 21.857 million bushels were better than the expected 13-19 million, but below the 25.2 million needed each week to reach the current USDA export estimate. Japan are in for 119 TMT of US/Canadian and Australian wheat in their regular weekly tender to be concluded on Thursday. Continuing dryness on the US Plains remains a worry for the 2013 winter wheat harvest.