Nogger's Blog

02/04/13 -- Soycomplex: The soybean and meal market managed a bit of consolidation after two days of sharp losses, although at the end of the day gains were relatively minimal and for beans confined to old crop. Oil World were quoted as saying "Brazil exports have started to pick up and it can be expected that the worst of the Brazilian export delay is over." They also said that Argentina’s soybean export program is underway, and that they are expected to ship 1-2 cargoes of beans to China this month. Michael Cordonnier said that the Brazilian bean harvest is about 70% complete - in line with average. He estimated Brazil’s 2012/13 bean crop at 81.5 MMT, down 0.5 MMT from his previous estimate. He pegged the Argentine bean crop at 50.0 MMT, unchanged from his previous estimate, although he said that yields have been better than expected so far. He said that around 7% of the Argentine bean crop had been harvested as of late last week. The USDA attache's office in Canada pegged rapeseed plantings there down half a million hectares to 8.1 million this year. Even so a sharp recovery in yields will see production rise 12% from 13.3 MMT to 14.9 MMT. Exports will increase by 0.6 MMT to 7.8 MMT in 2013/14, they added. Funds may have been light soybean buyers on the day it is thought. May 13 Soybeans closed at USD13.94, up 3 1/4 cents; Jul 13 Soybeans closed at USD13.74 1/2, up 2 1/4 cents; May 13 Soybean Meal closed at USD402.10, up USD3.60; May 13 Soybean Oil closed at 49.59, down 47 points.

Corn: The corn market tried to rally, but was ultimately dragged lower in the May 13 by the weight of last week's USDA stocks numbers. May 13 closed at the lowest levels for a front month since last June. Michael Cordonnier estimated Brazil’s 2012/13 corn crop at 74.0 MMT, unchanged from his previous estimate. He also left his estimate for Argentine corn production unchanged at 24.0 MMT, saying that about 20% of the Argentine corn harvest is complete, although other analysts suggest it might be higher than that. Argentina return from holiday tomorrow. The Brazilian corn harvest has progressed to the south, with Emater saying that 60% of Rio Grande do Sul corn crop has been harvested. South Korea bought 120 TMT of optional origin feed corn from Noble for May shipment, along with 65 TMT of optional origin corn for August shipment as the recent price tumble stimulates a bit of demand. The Energy Dept will be out with their weekly ethanol production figures tomorrow. Last week's weekly ethanol grind was down 4,000 barrels/day from the previous week to 805,000 bpd, the tenth week in a row that it's failed to reach the USDA goal for demand of 4.5 billion bushels from the sector. The shell-shocked bulls will be hoping for an improved performance tomorrow, but they may be disappointed. Fund selling in corn was estimated at around 3-5,000 contracts on the day. May 13 Corn closed at USD6.40 1/2, down 1 3/4 cents; Jul 13 Corn closed at USD6.27 1/4, up 1/2 cent.

Wheat: The wheat market managed a fairly decent rebound, although weakness in corn held it back. Having just about got used to wheat trading at a discount to corn it is now a 30 cent or so premium nearby and over a dollar and a half premium on the Dec 13 position. News after the close last night that for all the talk of beneficial rain/snow over the last couple of months good/excellent US winter wheat ratings have only improved by one percentage point since late November, and that poor/very poor was up by 4 percentage points. Monday's strong export inspections also hint at renewed demand for US wheat and that maybe the USDA target for the season could be reached, or even surpassed. Egypt’s Ag Ministry said that 2013 wheat imports will fall 8-10% from 2012. They appear to be pinning their hopes on a forecast 9-10 MMT domestic wheat crop this year, although many think this estimate to be unrealistic. An acute lack of cash is the problem, they hope to strike a deal with the IMF at the end of the current financial year which ends in June. They say that they have enough wheat stocks to last until then. Bangladesh bought 50 TMT of optional origin wheat, most likely Indian, for April shipment. Jordan re-tendered for the 100 TMT of milling wheat and 100 TMT of feed barley of optional origin that they passed on due to price last week. Tunisia also re-tendered for 42 TMT of durum wheat. Fund buying in CBOT wheat was estimated at 2-3,000 lots on the day. May 13 CBOT Wheat closed at USD6.70 3/4, up 6 3/4 cents; May 13 KCBT Wheat closed at USD7.16 3/4, up 7 cents; May 13 MGEX Wheat closed at USD7.76 1/4, up 10 1/2 cents.