Nogger's Blog

13/03/13 -- Soycomplex: The market was sharply lower for a second session in a row in what seems to be long liquidation ahead of the upcoming quarterly stocks and planting intentions report due at the end of the month. The strong dollar didn't help, neither did suggestions that Chinese cancellations could be on the way. "Talk that Brazil could eliminate a tax credit for domestic soyoil and in effect capping prices and hurting crush margins by up to $20," was also negative said Benson Quinn Commodities. The upcoming record Brazilian soybean harvest is now past the halfway point. Some reports suggest that even allowing for the current shipping delays, Brazilian beans are still a cheaper option than importing from the US. Tomorrow's weekly soybean export sales report will be of interest. Last week we got sales of 392,000 MT of old crop and 990,600 MT of new crop, which beat trade expectations. Estimates for tomorrow are around 700 TMT-1.1 MMT. Old crop commitments are already at 95% of the USDA target for the season. The USDA attaché in Beijing says China will import a record 65.5 MMT of soybeans in 2013/14, up 4% on this year as their domestic production falls 4% to 12 MMT - the lowest since 1992/93. The Brazil Port Union still plans on a strike on March 19th. Funds were said to have been net sellers of around 8,000 soybean contracts on the day. Mar 13 Soybeans closed at USD14.75, down 14 3/4 cents; May 13 Soybeans closed at USD14.47, down 21 3/4 cents; Mar 13 Soybean Meal closed at USD427.00, down USD9.40; Mar 13 Soybean Oil closed at 49.36, down 47 points.

Corn: Front month Mar 13 just about managed a fifth successive higher close, but only just. Further forward months were dragged lower by tumbling soybean values. The weekly ethanol production rate was down 8,000 barrels/day to 797,000 bpd, below the level required to hit the USDA's target of 4.5 billion bushels worth of demand from the ethanol sector this season. Corn used in last week's production was estimated at 83.7 million bushels versus the 87.8 million needed per week to reach the USDA estimate. Ukraine said that they have exported 10 MMT of corn so far this marketing year, a rise of 22% on year ago levels. India is reported to have been making new crop corn sales into Asian buyers. Michael Cordonnier left his Brazilian and Argentine corn production estimates unchanged from week ago at 72 MMT and 24 MMT respectively. Trade estimates for tomorrow's weekly export sales report are 200-500 TMT. Last week's expectations were similar, although in the end all we got was net cancellations of 49,800 MT of old crop and sales of only 206,400 MT for new crop. Fund selling was estimated at around 5,000 contracts on the day. Mar 13 Corn closed at USD7.41 1/4, up 1/4 cent; May 13 Corn closed at USD7.10 1/4, down 4 cents.

Wheat: The wheat market closed higher on short-covering and unwinding of long beans/short wheat spreads. CBH Group say that Australia's wheat crop will rise 11.6% to 24.0 MMT in 2013/14. Ending stocks this season will finish at a 4-year low of 4.0 MMT (and well below the USDA's forecast of 5.7 MMT), they added. They only forecast Australian wheat exports at 16.0 MMT this season and 18.0 MMT next, seeing increased competition from the Black Sea and India into traditional Asian homes. India say that they'd like to get onto Egypt's list of approved wheat suppliers. Maybe the cash-strapped Egyptians will not be quite so fussy as they have been in the past couple of years? Egypt say that they have sufficient wheat stocks and purchases to last them until Jun 9th. Traditionally they carry around 6 months worth of supplies. Despite international sanctions against them (which of course don't apply to food commodities), Iran are said to be actively seeking 100-110 TMT of US HRW wheat for April shipment. India are tendering to sell 100 TMT of wheat for Apr/May shipment. Trade estimates for tomorrow's weekly export sales are 500-800 TMT versus last week's combined crop year total of 828,100 MT. Fund buying in CBOT wheat was pegged at 1-2,000 lots on the day. Mar 13 CBOT Wheat closed at USD7.07 1/4, up 6 3/4 cents; Mar 13 KCBT Wheat closed at USD7.29 1/4, down 5 3/4 cents; Mar 13 MGEX Wheat closed at USD8.00 1/2, down 1/4 cent.